JUL 12 SIT EC y POL
ZERO HEDGE
How
Fascist Capitalism Functions: The Case Of Greece. Authored by Eric Zeusse
S- by Tyler Durden
on 07/12/2015
There is democratic
capitalism, and there is fascist capitalism. What we have today is fascist
capitalism; and the following will explain how it works, using as an example
the case of Greece. Simply out - The whole system is a money-funnel, from the
public, to the aristocracy.
The independent economics-writer, Charles Hugh Smith — who
was one of only 29 economists worldwide who predicted the 2008 crash in advance
and who explained accurately how and why it was going to occur — has provided a more honest description of the
sources of Greece’s depression:
1. Goldman Sachs conspired
with [actually: were hired by] Greece’s corrupt kleptocracy to
conjure up an illusion of solvency and fiscal prudence so Greece could join the
Eurozone [despite Greek aristocrats’ massive tax-evasion, which created
the original problem].
2. Vested interests and insiders
gorged on the credit being offered by German and French [and
other] banks, enriching themselves to the tune of tens of billions of
euros, which were transferred to private accounts in Switzerland at the first
whiff of trouble. When informed of this, Greek authorities took no action;
after all, why track down your cronies and force them to pay taxes when tax
evasion is the status quo for financial elites?
3. If Greece had defaulted in 2010
when its debt was around 110 billion euros, the losses would have fallen on the
banks that had foolishly lent the money without proper due diligence or risk
management. This is what should have happened in a market economy: those who
foolishly lent extraordinary sums to poor credit risks take the resulting (and
entirely predictable) losses.
The Greek Government
currently owes 323 billion euros — almost three times as much.
The debt rose 213 billion euros, during 5 years of IMF-imposed “austerity” —
the Greek depression.
What even Smith
fails to recognize is that this money was not ‘foolishly lent.’ (No more, for
example, than the Wall Street banks that had tanked the U.S. economy but grew
even larger by doing so, had ‘foolishly lent’ it.) The foreign lenders were
deceived by lies from the Greek aristocrats’ agent, Goldman Sachs, but, even
so, were ultimately able to sell their garbage to Eurozone taxpayers, not
always at a loss as compared to what they had originally paid for those bonds;
and the original owners of those bonds were receiving interest from those bonds,
throughout. Even Smith has been somewhat duped by the aristocracy’s
blame-the-victim basic message, that the people who walked off with this money
were the Greek public — not Greek aristocrats.
Another
well-informed economics-writer, Peter Schiff, likewise is suckered by that
false message from aristocrats. He writes: “It's hard to feel sorry for the [Greek]
people standing in lines at the ATMs when they knew this was coming every day
for the last four years.” As if they necessarily did. But, even though some
did, the accusation that those people are to blame is still off-base. Schiff, a
libertarian, goes on to say: “When you borrow more than you can pay back and
your creditors have cut you off there are no good options. Your
life tomorrow is going to be worse than it is today; it is just a
question of how you want to take the pain.” He’ too, implicitly cast blame at
the public, not at the aristocrats, who actually have been
bailed-out by the public.
In way of contrast, democratic capitalism is bailing
out only the public, when times
go bad, just like FDR did during the Great Depression, and like socialist
countries (Norway, Sweden, Denmark, and Finland, being examples) still do. The
aristocracy have managed to fool the public to equate aristocrats’ fascism with
‘capitalism,’ and to equate democracy with ‘socialism’ (meaning, to them and
their suckers, communism, or even fascism itself), so that the public will falsely
think that what we now have is ‘the free market’ — something that cannot even
possibly exist, anywhere, because every economy (every market) is
based upon laws that determine who owns what, and who owes what, and under what
circumstances, in accord with what laws and economic regulations, all of it
being subject to the police power of the State. This ‘free market’ is all
a big aristocratic con. It’s just as big as the con that the present Greek
government — which had promised, and whose voters a few days ago reaffirmed
with a 61% to 39% vote for no more “austerity” — are now delivering, to their
victims.
This is not democratic capitalism. It is not
socialism. It is, instead, fascism. It is dictatorial capitalism. We have it in the United States. And it predominates also in the
Eurozone.
In fact, it predominates around the world. And its grip gets tighter every year now in the United States.
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Russia
Readies Fuel Deliveries To Athens, Will Support Greek "Economic
Revival". S- by Tyler
Durden on 07/12/15
"Russia
intends to support the revival of Greece's economy by broadening cooperation in
the energy sector. Accordingly we are studying the possibility of organising
direct deliveries of energy resources to Greece, starting shortly."
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Tsipras
Responds To Eurogroup Proposal, Demands Changes. S- by Tyler Durden on 07/12/2015
Facing abject
humiliation at the hands of the German finance ministry, Alexis Tsipras arrived
at Sunday’s Eurosummit a broken man. Still, the PM did his best to fight the
good fight, debating both the IMF's role in the third Greek program and the
treatment of the country's debt with German Chancellor Merkel late Sunday
evening in Brussels.
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Why
Greece Is The Precursor To The Next Global Debt Crisis. S- by Tyler
Durden on 07/12/2015
The one undeniable
truth about the debt drama in Greece is that each of the conventional
narratives - financial, political and historical - has some claim of
legitimacy. These facts matter not only because contagion from Greek debt
defaults may ripple in dangerous ways through the financial system, but because
they are also true for many other members of the Eurozone. The Euro is a
fatally-flawed monetary concept and what we now seeing playing out was
eminently predictable from the start.
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The
Purge Begins: Tsipras To Expel Hard Core Left Wingers, Including Energy And
Deputy Labor Ministers. Submitted
by Tyler Durden on 07/12/2015
The first targets of
Tsipras purge of "party rebels opposed to an austerity package that will
have to go through parliament within days" include the most prominent
rebels, Energy Minister Panagiotis Lafazanis, leader of the so-called
"Left Platform" within Syriza and Deputy Labour Minister Dimitris
Stratoulis, a former unionist and a fierce opponent of pension cuts. The
next scalp Tsipras would love to have is that of the "uncompromising
speaker of parliament, Zoe Constantopoulou, who also defied Tsipras and
abstained from the vote" although she would require a no confidence vote
to be replaced "but the other rebels would be expected to resign their
seats, the same people say."
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'Greek'
Finance In America: Pensions, Medicaid, & Entitlements Will Bankrupt State
And Local Governments. Submitted
by Tyler Durden on 07/12/2015
If you can't print money or slash expenses, you have to
borrow more money. That's the
template not just for Greece, but for many state and local governments in the
U.S who share key characteristics with Greece: they have soaring pension,
Medicaid and employee healthcare obligations, but their tax revenues are either
stagnant or prone to boom and bust cycles--and the current boom cycle is now
entering the inevitable bust phase, when tax revenues plummet but the
obligations just keep piling up. The template of over-indebtedness as a
response to soaring obligations is scale-invariant, and it always ends the same
way: default, more financial tricks to mask the default, and eventually,
insolvency, bankruptcy and massive losses being distributed to everyone
foolish enough to choose financial trickery over dealing with reality back when
the pain would have been bearable.
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Germany's
Most Noted Euroskeptic Is Now In Control. Submitted by Tyler Durden on 07/12/2015
This weekend's
events in Europe have clarified who is really running the show across the
'union'. Hans-Werner Sinn, Chairman of the Ifo Institute for Economic
Research, vehemnt euroskeptic, and head of the so-called 'five wise men'
advising the German government and specifically Angela Merkel, confirmed his
call from 2012 for a "temporary grexit from the euro." The right wing
economist
previously explained "Greece and Portugal have to become 30-40%
less expensive to be competitive again. This is being attempted through
excessive austerity measures within the euro zone, but it won't work. It
will drive these countries to the brink of civil war before it succeeds.
Temporary exits would very quickly stabilize these countries, create new jobs
and free the population from the yoke of the euro." Anyone positioning
for more centrist union-supporting rhetoric, hope is no longer a strategy as
the hardest conservatives are now in charge.
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Greece
May Sue Goldman Over Bank's Role In Greek Collapse. S- by Tyler
Durden on 07/12/2015
Former Goldmanite George Jabbour thinks Greece should
take legal action against Goldman for the bank's role in helping the country
hide its debt. We can only hope
that if Greece does indeed decide to take Mr. Jabbour up on his offer to help
clawback some of the half billion euros the bank reportedly pocketed from the
deal, that the discovery process will help shed some light on whether the man
now in charge of the ECB personally oversaw and endorsed the perpetuation of
the Greek lie.
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Eurogroup
Officially Threatens Greece With 5 Year Grexit "Time Out". S- by Tyler
Durden on 07/12/15
"In case no
agreement could be reached, Greece should be offered swift negotiations on a
time-out from the euro area with possible debt restructuring."
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Eurogroup
Fails To Reach Deal, Gives Greece 24 Hours To Accept Draconian Terms. Submitted by Tyler
Durden on 07/12/2015
After a day-long
meeting of the Eurogroup, the European FinMins were unable to reach a
conclusion on the third Greek bailout and instead once again punted the revised
term sheet, this time with absolutely draconian terms, back to Tsipras, and
told him he has until tomorrow to agree to the terms, and until Wednesday to
pass them into law, for talks to even begin!
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"It's
Not Possible To Reach A Deal Today" - EU Summit Canceled As Leaders
Scramble To Keep The Dr€am Alive.
Submitted by Tyler Durden on 07/12/2015
It was a weekend in which,
according to traders, Greece facing an "absolutely final" was going
to be saved. Instead, it may go down in history as the weekend in which the
Eurozone finally split and its long-overdue disintegration began.
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Leaked
Eurogroup Statement Demands Much More From Greece, Keeps "Temporary
Grexit" Option. Submitted
by Tyler Durden on 07/12/2015
While there is
"hope" in the unforgettable words of France's Moscovici, it is once
again up to Greece to convince Europe it really wants to stay in the
Union. According to Reuters, the Eurogroup is about to release a statement,
whose draft it has seen, which will demand much more from the tiny country
caught in a state of permanent depression. To wit: Greece will not be able
to start negotiations on a third bailout until it makes changes to its sales
tax and pension systems and strengthens the independence of its statistics
office, a draft statement of euro zone finance ministers said on Sunday.
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EUROGROUP DRAFT ON DEMANDS FOR
GREEK REFORMS
Sun Jul 12, 2015. Here the
original leaked doct by Renee Maltezou and Alastair
Macdonald published in Reuters
Euro
zone finance ministers meeting in crisis talks in Brussels want Greece to
commit to more measures to reform its economic system and government finances
before they agree to negotiate a bailout loan.
Following is a partial draft Eurogroup statement, seen by
Reuters. It was discussed by the ministers late on Saturday, before they
resumed talks on Sunday.
Euro zone sources said it was likely to be amended but
formed a basis for further discussion on Sunday. Sources also said ministers
had pressed Greece to take other measures, including passing early legislation
increasing value-added tax and making the national statistics agency
independent:
"The Eurogroup takes note of the request by the Greek authorities
for a three-year ESM stability support and the accompanying list of policy
commitments, including a comprehensive list of prior action. The Eurogroup
reiterates the need for continued full involvement of the IMF.
The Eurogroup welcomes the assessment by the institutions that the list
of policy commitments of the Greek authorities represents a basis to start the
negotiations on a new program. The Eurogroup also agrees with the institutions
that the package needs to be significantly strengthened and broadened in order
to provide for appropriate conditionality for a possible three-year ESM
program. The Eurogroup thus welcomes the additional following commitments of the
Greek authorities on the basis of a clear timetable:
- fully comply with the medium-term primary surplus target of 3.5 percent
of GDP by 2018, according to a yearly schedule to be agreed with the
institutions;
- carry out ambitious pension reforms and specific policies to fully
compensate for the fiscal impact of the Constitutional Court ruling on the 2012
pension reform and to implement the zero deficit clause;
- adopt more ambitious product market reforms with a clear timetable for
implementation of all OECD toolkit I recommendations, including Sunday trade,
sales periods, over-the-counter pharmaceutical products, pharmacy ownership,
milk, bakeries. On the follow-up of the OECD toolkit II, manufacturing needs to
be included in the prior action;
- on energy markets, the privatization of the electricity transmission
network operator (ADMIE) must proceed, unless replacement measures can be found
that have equivalent effect, as agreed by the institutions;
- on labor markets, undertake rigorous reviews of collective bargaining,
industrial action and collective dismissals in line with the timetable and the
approach suggested by the institutions. Any changes should be based on
international and European best practices, and should not involve a return to
past policy settings which are not compatible with the goals of promoting
sustainable and inclusive growth;
- fully implement the relevant provisions of the Treaty on Stability,
Coordination and Governance in the Economic and Monetary Union, in particular
to make the Fiscal Council fully operational;
- adopt the necessary steps to strengthen the financial sector, including
decisive action on non-performing loans, transposition of BRRD and measures to
strengthen governance of the HFSF and the banks;
- develop a significantly scaled up privatization program with improved
governance. A working group with the institutions shall provide proposals for
better implementation mechanisms;
- amend or compensate for legislation adopted during 2015 which have not
been agreed with the institutions and run counter to the program commitments;
- implement the key remaining elements from the December 2014 state of
play of the fifth review of the second economic adjustment program."
(Reporting by Renee Maltezou and
Alastair
Macdonald)
NOTES added by Zero Hedge:
All of which, of course, assumes that Europe wants to
keep Greece in the Eurozone. Which
is a very aggressive assumption if, indeed, as Dow Jones reports the Draft also
includes the "Temporary Grexit" clause at Germany's request.
So if we had to
summarize the current state of play: Germany and 5 other "northern"
states want Greece out, but they generously offer Greece the opportunity to
push the "Grexit" button itself (especially since it is only
"temporary"). Unless, of course, Greece is willing to cede all of its
sovereignty to Germany in which case it can generously stay. Oh, and please
remit all Greek left kidneys as part of the deal.
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LATEST EURONEWS at
11pm East time
Eurozone leaders have
argued late into the night with near bankrupt Greece at an emergency summit in Brussels.
They are trying to
thrash out a deal that will open talks on a financial rescue to keep the county
in the euro zone.
Leftist Prime
Minister Alexis Tsipras has been told to push legislation through parliament to
convince his 18 partners in the euro zone to release immediate funds of 19
billion euros to avert a state bankruptcy and start negotiations on a third
bailout programme estimated at up to 86 billion euros.
At one point an
option enabling Greece to leave the eurozone temporarily if a bailout is not
agreed was being put forward by Germany, Greece’s biggest creditor.
Our reporter Sandor
Zsiros,who is in Brussels says: “According to leaked information the German
proposal of a temporary Grexit is now off the table. However the creditors may
well ask for more privatisation and more reforms in return.”
Any deal – if one is
reached – will have to be ratified by Greece’s parliament within days.
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BBC
Greece debt crisis: Leaders try
to thrash out deal
Eurozone leaders have
talked through the night in Brussels in a bid to agree terms for a new bailout
for Greece
Without a new bailout, Greece's banks face collapse and the
country could exit the euro.
Eurozone finance ministers submitted a list of measures to
the leaders following two days of fraught discussions. But one Greek government official called the proposals
"very bad"
Another unnamed official said some of the proposals appeared
designed to "humiliate" the Greek Prime Minister Alexis Tsipras and
his left-wing Syriza government.
The summit was paused for several hours overnight to allow
talks between Mr Tsipras, German Chancellor Angela Merkel, French President
Francois Hollande and European Council President Donald Tusk.
Early on Monday, Mr Tusk's spokesman announced the summit
was reconvening to discuss a "compromise proposal".
The four-page document of draft proposals put forward by
eurozone finance ministers include:
- Reforms set out by Greece to be ratified by parliament by Wednesday, 15 July
- "Ambitious" reforms to pensions and labour markets
- International creditors to work on the ground in Athens and have full oversight of draft legislation
- Possible transfer of €50bn in "valuable" Greek assets to external fund for eventual privatisation
- Possible talks on "swift negotiations on a time-out from the euro area, with possible debt restructuring" if a bailout is not agreed
However, one senior EU official said there was no chance of
"time-out" proposal surviving in any final document to be approved by
eurozone leaders. Another official said there was no provision and therefore no
legal basis for such an arrangement in the EU treaties.
Reports also emerged that Greece was holding out over the
proposed role of the IMF in the new programme and over the independent fund to
hold Greek assets.
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Tough choices for Greece - by
Paul Kirby, BBC News website Europe editor
There may only be four pages, but if this draft document is
agreed, it would be an extremely difficult pill for Greeks to swallow.
For Alexis Tsipras and his left-wing Syriza-led administration,
some of the ideas would be little short of humiliation.
Even if Greek MPs pass sweeping reforms by Wednesday, the
government would have to allow international creditors full monitoring of its
work in Athens and agreement of draft laws in advance.
Syriza came to power promising an end to such oversight.
Another possible step is to "amend or compensate"
for any laws Syriza pushed through that ran counter to what
was agreed with the eurozone in February
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PRESS TV
Greek
official calls deal terms 'very bad'. Mon Jul 13, 2015 A Greek government official says the deal terms
offered by Greece’s European creditors have been “very bad” and humiliating.
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US
Gen. remark on Russia ‘irresponsible’
Sun Jul 12, 2015 The statement made by US Chief of Staff General Ray
Odierno, who warned Russia not to create a crisis, is “irresponsible.”
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