Greece, the nation that brought democracy and capitalism to the Western world 2,500 years ago, is about to go bankrupt and exit the Eurozone. Now, stock markets around the world are falling – and the Greek people face economic uncertainty.
Significantly, however, Wall Street is not suffering quite as much. In fact, some market analysts are looking at the situation as a golden opportunity for investors to feast on Greece’s economic carcass. You can bet that Wall Street vultures are flying at a low altitude above Greece, and are anxious to swoop down and pick over the bodies before it’s all over. It will be similar to a Ferrari owner picking the pockets of the homeless.
How did this all come about?
Fifteen years ago, Greece was among the fastest growing economies in the European Union. The country enjoyed high levels of foreign investment. Nonetheless, budget deficits were “unacceptably high.” This situation had been going on since 1981, when these deficits started running above 3% of Greece’s GDP. The right wing conservatives in Greece like to blame this on public employment, pensions and social welfare programs. However, considering the country’s geographic location, it should come as little surprise that a huge amount of it went to the Greek military. In fact, among the 27 members of NATO, Greece had the second-largest military budget, exceeded only by that of the United States (which has been its primary arms dealer).
Of course, this was financed on the backs of the poor and the middle class. For many years, the Greek government was able to continue borrowing by devaluing its currency. However, when Greece joined the “Euro Zone,” this was no longer an option.
Next, Wall Street brought down the global economy with its own antics, including Goldman-Sach’s “currency swap” scheme. This was a large part of the equation. The manufactured crisis adversely affected two key sectors of the Greek economy: shipping and tourism. Add into that mix the fact that political corruption is rampant and the Greek national treasury loses as much as €30 billion (approx. $33.5 USD) annually to tax evasion, and it becomes clear as to how the country came to this point.
Now, as Greece teeters on the edge of insolvency, creditors want their pound of flesh. And as is always the case, it is average middle class, working and poor Hellenes that are bearing the cost. Greeks woke up Monday morning to find banks closed, with long lines at the few ATMs in operation – along with severe withdrawal limits. To add insult to injury, consumer commodities – particularly motor fuel and food – are becoming scarce.
Last week, 40-year-old socialist Prime Minister Alexis Tsipras, who was elected this past January on promises to reverse years of austerity measures, has been attempting to reach a deal with creditors. That deal must also pass muster with members of his own government. So far, Tsipras has been getting resistance from both sides. Alexis Mitropoulos, parliament speaker and member of the left-wing Syriza Party, told the media that Tsipras’s proposals would result in “social carnage.” At the same time, Jean-Claude Juncker, who presides over the EU Commission, has informed Tsipras that unless Greece accepts its deal to cut pensions and raise taxes – including a deeply-unpopular value-added tax that would hit the poor and the middle class hardest – the deal is off.
In short – the prime minister who ran on promises to roll back austerity measures is being pressured to inflict even more on the people of Greece. In the meantime, there’s a payment due to the International Monetary Fund (IMF). Greece needs to come up with €1.5 billion (approx. $1.7 USD) by June 30th or risk default on its obligations.
Calls by the Greek people and others to cancel the debt is largely falling on deaf ears (including those of German chancellor Andrea Merkel – who apparently has forgotten the generosity Greece showed her own nation in the wake of events that ended seventy years ago).
Maybe Greece should take a lesson from Iceland.