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Starvation Is the Price Greeks Will Pay for Remaining In the EU
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Syriza, the new Greek government that intended to rescue Greece from austerity, has come a cropper. The government relied on the good will of its EU “partners,” only to find that its “partners” had no good will. The Greek government did not understand that the only concern was the bottom line, or profits, of those who held the Greek debt.

The Greek people are as out to lunch as their government. The majority of Greeks want to remain in the EU even though it means that their pensions, their wages, their social services, and their employment opportunities will be reduced. Apparently for Greeks, being a part of Europe is worth being driven into the ground.

The alleged “Greek crisis” makes no sense whatsoever. It is obvious that Greece cannot with its devastated economy repay the debts that Goldman Sachs hid and then capitalized on the inside information, helping to cause the crisis. If the solvency of the holders of the Greek debt, apparently the NY hedge funds and German and Dutch banks, depends on being repaid, the European Central Bank could just follow the example of the Federal Reserve and print the money to secure the Greek debt. The ECB is already printing 60 billion euros a month to save the European financial system, so why not include Greece?

A conservative might say that such a course of action would cause inflation, but it hasn’t. The Fed has been creating money hands over fists for seven years, and according to the government there is no inflation. We even have negative interest rates attesting to the absence of inflation. Why will creating money for Greece create inflation but not for Goldman Sachs, Citibank, and JPMorganChase?

Obviously, the Western world doesn’t want to help Greece. The West wants to loot Greece. The deal is that Greece gets new loans with which to repay existing loans in exchange for selling municipal water companies to private investors (water rates will go up on the Greek people), for selling the state lottery to private investors (Greek government revenues drop, thus making debt repayment more difficult), and for other such “privatizations” such as selling the protected Greek islands to real estate developers.

This is a good deal for everyone but Greece.

If the Greek government had any sense, it would simply default. That would make Greece debt free. With just a few words, Greece can go from a heavily indebted country to a debt-free country.

Greece could then finance its own bond issues, and if it needed external credit, Greece could accept the Russian offer.

Indeed, if the Russian and Chinese governments had any sense, they would pay Greece to default and to leave the EU and NATO. The unravelling of Washington’s empire would begin, and the threat of war that Russia and China face would go away. The Russians and Chinese would save far more on unnecessary war preparation that saving Greece would cost them.

(Republished from PaulCraigRoberts.org by permission of author or representative)
 
• Category: Foreign Policy • Tags: Eurozone, Greece, Syriza 
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  1. Interesting piece, but not as easy as it sounds. A default would have a negative ripple effect in many other ways, affecting Greek exporters, tourism, its merchant fleet, etc. Greece is also the largest economy in the Balkans with substantial investment in the region. What is the “Plan B” to cover all that after a default? And why would Russia or China step into such a situation with all those negatives in a default event? It would be nice if they had a credible alternative package waiting that would assist a credible “Plan B” but they don’t.

    • Replies: @Kiza
  2. Mike Zwick [AKA "Dahinda"] says:

    “The Fed has been creating money hands over fists for seven years, and according to the government there is no inflation.” Apparently, the employees of the Fed don’t do their own grocery shopping!

  3. Too simple PCR, if the Greeks default and exit the Euro, all sorts of new dirty tricks will be brought to bear, ‘color revolution’ will be in the works with attending ‘terror’ .. all the same crap that has been used to tamp down on those who ‘don’t play’ the game according to the unwritten rules.

    http://ronaldthomaswest.com/2015/06/13/greek-hubris/

    ^ The biggest mistake the present Greek leadership has made is to string out the Greek people with ‘hope’ (fairy-tales) as they played into a trap intended to destroy the ‘pesky left’ .. instead of facing reality and telling their people the truth, there was never any intention (at all) to do right by Greece

  4. Kiza says:
    @Enrique Cardova

    I believe that PCR answered your question “why would Russia or China step into such a situation with all those negatives in a default event” clearly:

    Because pulling Greece out of NATO would weaken NATO and reduce the need to spend resources on preparing for a war. Both Russia and China are acutely aware of the NATO threat and are ramping up their (unproductive) military spending.

    Yet, there is a problem with this too. The Russian and the Chinese military are purely defensive. Losing Greece would hurt NATO, but putting military bases in Greece would benefit neither Russia nor China. Russia and China are a defensive monolith, Greece is outside of their defensive envelope. Military basis in Greece would be good for offence, not for their defense. This is why neither has jumped in, the empire is still too strong and too vicious, self-preservation is the order of the day.

  5. As David Ricardo argued years ago, when it is an issue of sovereign debt, default is a distributive choice NOT an economic one. In order to repay a sovereign debt, the government must decide on whom to levy a tax. A default merely levies the entire tax to retire the debt precisely on those who hold the debt. There are two reasons that has no immediate economic consequences; (1) all the people that don’t hold the debt avoid having to pay new taxes. Their economic activity continues uninterrupted; (2) the real cash position of the debt holder is unchanged. That is to say, the indebted government today holds the bond holders cash. The bondholders voluntarily gave that cash to the government in exchange for the bonds. When you default the relative cash positions of the parties remain unchanged.

    What does change? There is a wealth effect, that effect is double and may produce no negative consequences. The bondholders who suffered the default feel poor. They expected to receive money in the future and they now won’t receive it. But there is a countervailing wealth effect, the folks who expected to be taxed now feel richer. They engage in more economic activity.

    Default on sovereign debt is always merely a distributive choice, NOT an economic one.

  6. Anonymous • Disclaimer says:

    Yeah, the Germans are a save option as perrennial villains. No risk there. But why are the Dutch now singled out? Because they got to uppity about that airliner shot down over Ukraine?

  7. Anon • Disclaimer says:

    Oh come on. Greeks are a bunch of thieves.

    They’d been borrowing and living off other people’s money for a long time.

    It’s time they grew up and suffered the consequences.

  8. Tom_R says:

    GREEKS WILL BE STARVED AND RAPED AND KILLED BY EU POLICIES–MUST GET OUT OF EU.

    Thanks for the great article. I agree.

    But the Jewish controlled EU not only wants to starve the Greeks, but it wants to flood entire Europe with 3rd world invaders who will rape and murder whites. The boatload of “migrants” coming in are in EU because they know they will be allowed to stay under EU rules made by the Jewish EU parliament, so they are being incited to invade.

    The Jewish President of the European Union brags that they set up the EU so the Judaists can control all European Nations:

    As per an interview in Haaretz:

    European Union established ‘on the lessons of Auschwitz’ as a framework for ‘mutual control to avoid one member passing uncontrollably in a dangerous direction’, Martin Schultz says.

    http://www.haaretz.com/jews-live-in-fear-in-europ…!

    The Judaists want to flood EU with 3rd world aliens to destroy whites and make them a minority so they can control and exploit all goyim, eg. Barbara Lerner Spectre who wants more blacks to invade Sweden.

    Greece and others must get out of the EU immediately!

  9. alexander says:

    Dear Mr Roberts,

    Understanding the fundamentals of sovereign states “book balancing” is the key to understanding why Greece should or should not default.
    In a normal sovereign state ” credit crisis” a state has four options :
    1. raise revenues (taxes)
    2. cut spending.
    3. sell assets (state owned resources)
    4. print money (borrow from the future)
    these are the basic tools a State has to solve its credit issues !
    Greece can do all these things except one….Print Money !
    Greece cannot print Euros!
    You are exactly right, Mr Roberts, in understanding the problem of sovereign debt crises within the Euro is a question of when and when not to print more Euros !

    If the EU chooses NOT to print more Euros to assist one of the states within its umbrella…then Greece should secede from the EU and begin printing its own Drachmas again !

    How a state of roughly 10 million people generated a national debt in excess of 300 billion euros…is still a mystery in my book…

    Why Greece has not seceded, given the effect of the brutal austerity measures on its people and its economy is also a mystery !? !

    When the EU was created it should have made very clear guidelines on sovereign states joining , sovereign states debts, and when and why to print more Euros !

    Imagine where the United States would be if we could not print 18.26 trillion dollars to satisfy our debt ! (or , rather,the debt foisted on us through feckless war and banking fraud, by those in power!)

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