Finance as warfare: The IMF lent to Greece knowing it could never pay back debt

“For the last 50 years, every austerity program that the IMF has made has shrunk the victim economy. No austerity program has ever helped an economy grow. No budget surplus has ever helped an economy grow, because a budget surplus sucks money out of the economy. As for the conditionalities, the so-called reforms, they are an Orwellian term for anti-reform, for cutting back pensions and rolling back the progress that the labor movement has made in the last half century. So, the lenders knew very well that Greece would not grow, and that it would shrink.

So, the question is, why does this junk economics continue, decade after decade? The reason is that the loans are made to Greece precisely because Greece couldn’t pay. When a country can’t pay, the rules at the IMF and EU and the German bankers behind it say, don’t worry, we will simply insist that you sell off your public domain. Sell off your land, your transportation, your ports, your electric utilities. This is by now a program that has gone on and on, decade after decade.

Now, surprisingly enough, America’s ambassador to the EU, Ted Malloch, has gone on Bloomberg and also on Greek TV telling the Greeks to leave the euro and go it alone. You have Trump’s nominee for the ambassador to the EU saying that the EU zone is dead zone. It’s going to shrink. If Greece continues to repay the loan, if it does not withdraw from the euro, then it is going to be in a permanent depression, as far as the eye can see.”

Wolf Lepenies: Deutsche Lust am Alleingang

Ein wenig off-topic, aber dennoch erhellend:

“In der ‘Willkommenskultur’ zeigte sich erneut die deutsche Lust am Alleingang. Nie hätte sich in den Gremien der EU eine mit diesem Etikett versehene Politik durchsetzen lassen. Verstärkt durch die historische Semantik des Kulturbegriffs gewann das nationalpolitische Projekt der Willkommenskultur seinen exemplarischen Anspruch: Nur wir Deutschen tun, was alle Europäer tun sollten. Dabei war es ein Irrtum anzunehmen, durch die großmütige Haltung in der Flüchtlingskrise werde Deutschland nach der ökonomischen und politischen auch die moralische Führungsrolle auf dem Kontinent übernehmen. Deutsche Arroganz in der Fiskal- und Schuldenpolitik werde durch die Empathie gegenüber den Flüchtlingen mehr als kompensiert werden. Das Gegenteil ist eingetreten: Deutschland gilt als moralischer Parvenü, der sein Gutmenschentum auf Kosten der anderen Europäer zur Schau stellt.”

The dangerous economic thinking that’s killing Greece and threatening the European Union

„Among the puzzling aspects of the MoU [Memorandum of Understanding] are demands for reforms on things as seemingly trivial as milk. While pensioners are eating out of garbage cans, the troika has been haggling over how old a carton of milk can be if it is to be labeled ‚fresh.‘ [Joseph] Stiglitz observes that if you look closely you see that special interests—in this case the big dairy companies of Holland—appear to be behind the reforms. Dutch milk sellers would prefer that their milk, which travels long distances to reach Greece, be labeled fresh, a move that will only hurt local dairies. By discouraging local production, the MoU paves the way for even more Greek unemployment and less demand for goods and services — hardly a recipe for economic health. (The chairman of the Eurogroup, it may be worth noting, is Jeroen Dijsselbloem, the Dutch finance minister.) […]

Instead of remembering the terrible consequences of mass unemployment following WWI, many Germans insist that it was hyperinflation that led to Hitler, and so they tend to support central bank policies that guard against that problem rather than the far more worrisome specter of joblessness.

As Stiglitz describes, the result of all this historical amnesia and economic blindness is a ‚Dickensian‘ nightmare that recalls 19th-century debtors prisons where people were punished for the inability to pay debts and locked (literally) into a situation in which paying them was, of course, impossible. Only now, the prisoner is an entire country.“

“Deutschland ist der größte Schuldensünder des 20. Jahrhunderts” [Interview, 21.6.2011]

“Ritschl: Gemessen jeweils an der Wirtschaftsleistung der USA war allein der deutsche Schuldenausfall in den dreißiger Jahren so bedeutsam wie die Kosten der Finanzkrise von 2008. Im Vergleich dazu ist das griechische Zahlungsproblem eigentlich unbedeutend.

SPIEGEL ONLINE: Mal angenommen, es gäbe ein globales Ranking der Pleitekönige. Auf welchem Platz würde Deutschland landen?

Ritschl: Deutschland ist Schuldenkaiser: Nach der Schadenshöhe im Vergleich zur Wirtschaftsleistung gerechnet ist Deutschland der größte Schuldensünder des 20. Jahrhunderts – wenn nicht überhaupt der jüngeren Finanzgeschichte.

SPIEGEL ONLINE: Selbst Griechenland kann nicht mit uns mithalten?

Ritschl: Nein, das Land spielt an sich eine nebensächliche Rolle. Nur die Ansteckungsgefahren auf andere Euro-Länder sind das Problem.


Ritschl: Die Pleiten Deutschlands im vergangenen Jahrhundert zeigen: Das Vernünftigste ist, jetzt einen echten Schuldenschnitt zu machen. Wer Griechenland Geld geliehen hat, müsste dann auf einen beträchtlichen Teil seiner Forderungen verzichten. Das würden einige Banken nicht verkraften, also müsste es neue Hilfsprogramme geben. Für Deutschland könnte das teuer werden, aber zahlen müssen wir so oder so. Und immerhin hätte Griechenland dann die Chance auf einen Neuanfang.”

How the Greek deal could destroy the euro

“Indeed, the European institutions led by Germany seem to have decided that waging an ideological battle against a recalcitrant and amateurish far-left government in Greece should take precedence over 60 years of European consensus built painstakingly by leaders across the political spectrum.

By imposing a further socially regressive fiscal adjustment, the recent agreement confirmed fears on the left that the European Union could choose to impose a particular brand of neoliberal conservatism by any means necessary. In practice, it used what amounted to an economic embargo—far more brutal than the sanctions regime imposed on Russia since its annexation of Crimea—to provoke either regime change or capitulation in Greece. It has succeeded in obtaining capitulation. […]

In essence, Germany established that some democracies are more equal than others.

John Cassidy: Greece’s surrender: a return to 1919, or to 1905?

“For all of their U-turns and failures, Tspiras, Varoufakis, and their colleagues did succeed in highlighting the illogic of endless austerity policies, and they also succeeded in putting debt restructuring on the table. (On Thursday, Mario Draghi, the chairman of the European Central Bank, became the latest expert to say that debt relief is necessary.) For those who viewed the last five months as not just a dispute about the finances of a small country but as part of a much larger battle about the future of Europe, these are important developments. And they will affect not only Greece but other other heavily indebted countries, such as Ireland, Portugal, Italy, and France.

From this perspective, this week’s agreement with the creditors isn’t the end: it is the beginning of a movement to wrench Europe away from technocracy, debt deflation, and Teutonic fiscal orthodoxy. This was the vision that Varoufakis spoke about in a speech he gave in Berlin last month, when he called for an end to the vicious cycle of austerity and depression and for a new Europe. And it is the vision that motivates Tsipras and other members of Syriza. […] ‘“These are political mechanisms that, in the end, disenfranchise whole nations, and you can’t change them all within four months.’”

What was good for Germany in 1953 is good for Greece in 2015

“‘The Marshall plan had an outer shell, the European recovery programme, and an inner core, the economic reconstruction of Europe on the basis of debt forgiveness to and trade integration with Germany. The effects of its implementation were huge. While western Europe in the 1950s struggled with debt/GDP ratios close to 200%, the new West German state enjoyed debt/GDP ratios of less than 20%. This and its forced re-entry into Europe’s markets was Germany’s true benefit from the Marshall plan.’

In the days to come, the Greek prime minister, Alexis Tsipras, will be arguing that was good for Germany in 1953 would be good for Greece in 2015.”