24 May 2024 06:07 PM


Humayun Gauhar | 12 JULY, 2015

Greeks Expose Bailout givers as Gravediggers, Creditors as Predators

Greek referendum

Greetings from London, now sunny, now cloudy, now rainy, now still, now windy, now hot, now cold – all on the same day. That’s the English summer for you, but mercifully there is no ‘load-shedding’ – power outages.

I arrived here on July 4 for a long overdue first meeting with my new grandson. Nothing has changed ostensibly, but beneath the surface much has changed. There’s a tube strike on – nothing new here – so one is doing a lot of walking and sadly contemplating Britain’s continuing decline over the last 46 years when I since I first came here to study. I’ve lived here for a total of 14 years, so I know the country well. The “summer Pakistanis and Indians” are still all over the place but its not what it used to be. We are all getting long in the tooth, fat, hairless, grey and more boring than we imagine. Some of my favourite restaurants are gone and been replaced by new-fangled wonders with characterless food made tasty with high falutin verbiage. Waiters and chefs speak in fake French accents, just like our Jinnah Super kids do in Islamabad – you see them on television all the time. As comic shows they can be great.

How could Britain not change when everywhere there is with incredible change happening in fast forward, the flux of morphing of the global status quo and the power pendulum shifting from West to East. Britain is worrying about what’s happening to Greece, though gleefully watching the decline of China’s stock markets and, of course, the latest budget in which the Chancellor of the Exchequer has pulled the rug out from under the Labour Party’s feet and positioned himself best to the next Tory prime minister. Pakistan is not on their radar right now, thank the Lord.

Last Sunday the Greeks bravely voted ‘No’ to the EU’s third ‘bailout’ proposal with more savage austerity in them than there was in the earlier two failed bailouts. The proposal was already off the table anyway after Greece’s default to the IMF when the vote took place. The two earlier ‘bailouts’ with their inhuman austerity destroyed the Greek economy in five years. This third one would have killed it.

It was a slap on the face of the German hegemon. But after victory Greek Prime Minister Alexis Tsipras seemed to start groveling, leaving some feeling that he was afraid of what he had wrought; others said that he is indulging in gamesmanship to make it look that a Grexit would be an EU-IMF failure after he had tried so hard to prevent it even in victory. The EU on the other hand is trying to make it look that it is Greece’s fault entirely. Actually, it is the fault of both: the EU for crafting such unsustainable and unrealistic proposals in which they should have know that debt would become unpayable and the Greeks for agreeing to them in the first place and then not managing their economy well. Maybe Germany didn’t want Greece in the EU any longer but doesn’t want it to look that is kicking it out. But the German finance minister has wanted Greece out for long; that he is not removed for it gives the game away.

The surprise was the Greek Finance Minister Yanis Varoufakis resigning after victory. The reason was that the EU creditors, politicians and bureaucrats’ refusal to sit on the same table with someone who spoke the truth when he called them “financial terrorists”. People resent the truth because it hurts. The Varoufakisresignation is smooth: he has risen from superstar to rock star not only in Greece but outside as well and could be prime minister one day.

Tsipras said that he wanted to stay in the Eurozone and looked forward to a better proposal from the EU-IMF combine. However, the delusional EU leaders were convinced of a ‘Yes’ vote and were taken aback by the resounding ‘No’. In a kneejerk tantrum they first showed irritation and then dug in their heels. Yet German Chancellor Angela Merkel and France’s Hollande were worried enough to meet the next day to work out a response. However, if they don’t manage to come to an agreed solution by tomorrow or the day after, its curtains and you will see a Grexit – Greek exit from the Euro.

The Greek people said ‘No’ to the devil, showing up bailout givers as gravediggers, creditors as predators. Those who were expecting anything else were exposed as delusional wishful thinkers who live in cloud cuckoo land. I cannot understand how the ‘leaders’ of the EU could have imagined that the Greeks would vote ‘Yes’ to the EU and IMF’s carnivorous austerity measures after having suffered so much for five years because of imposed austerity that hit the poor and old the hardest. What kind of ‘leaders are these who perpetually mislead. But that’s become a worldwide malaise bar a few countries. It shows how decrepit western electoral systems masquerading as democracies have become that they throw up heartless, delusional leaders such as these who don’t have the sense to realize that their nostrums and prescriptions only make things worse, not better. Any wonder that the world is in such a mess, mired as it is in immoral wars of State terrorism launched under lies and false pretenses, militant non-State terrorism as a reaction and economic and military terrorism within and without states and their leaders?

A quarter of a century ago we saw the demise of Soviet communism. Now we are seeing the demise of western free-for-all market capitalism. Only China has managed to avoid such a fate by marrying the best of political communism with the best of economic capitalism i.e. grafting the morality of communism that is centered round humanity to the efficiency of controlled regulated capitalism. However, the unmitigated profit motive and innate hegemony drive seem to be overtaking China as well and affecting it’s economic growth too as witness its current capital markets meltdown and fears of a below 7 percent economic growth rate that has to be based largely on investments and job creation to breakeven. Else they could have millions of disaffected, frustrated, angry youth on their hands that can be dangerous to social stability which China’s enemies will exploit to the hilt.

The best news is that the Greek vote has shown that Marxism is still alive and making a comeback. Good, if it does not trample on people like Soviet State Capitalism did – totalitarianism in the guise of communism. They should learn from China that has brought the largest number of people out of hunger and poverty in the shortest time in history.

Sure the Greek people and the governments they chose before this one are to blame most for the open grave they find themselves in to be buried alive, but the IMF, the EU, the ECB, their related institutions and EU member state creditors are at least as culpable. The Greeks got into the EU under false pretenses, helped by – who else but western investment banksters? – Goldman Sachs and others, who fudged the figures to show a lower debt to make Greece eligible for EU membership. But don’t tell me Brussels didn’t know what was going on. It was the EU’s desire to enlarge itself as much as it could after the Cold War to show the US that Europe was also a big boy on the block. In the last five years Greece has been given two ‘bailouts’ that, instead of making things better have worsened its economic condition till they finally had to decide whether to accept the EU’s latest bailout conditions or reject them, basically a choice between a rock and a hard place, between the deep blue sea and the devil masquerading under various guises and misnomers to hide its perfidy – ‘aid’ agencies as if it were free, ‘donors’ as if they give charitable ‘donations’ when actually they are loan sharks that trap countries in mountains of debt and then enslave them pretending they are going to provide a safe landing when they are actually going to make life more turbulent for them till they crash. Isn’t it obvious that they are perfidious devils, not angels of mercy? If you can’t see this you have to be mentally blind.

The devil is in trouble now. The question is: how badly does the EU want Greece to remain in the Eurozone? We will find out soon if the creditors relent enough to ease their proposals. The German Chancellor and the French President were distinctly irritated by the vote but worried enough to meet the next day. The British prime minister called an emergency meeting with his Chancellor of the Exchequer and Governor of the Bank of England even though his country sensibly stayed out of the Eurozone. If the attitude of the German Finance Minister is anything to go by, he has wanted Greece out for long. It depends most on Merkel, Hollande, the IMF, the ECB, the bureaucrats of Brussels, the creditor EU countries and the US government of course. If they want Greece to remain in the Eurozone there is only one way: write off at least half Greece’s odious debt and restructure and re-profile the rest for long enough to make its net present value zero. Anything less won’t do.

Greece won’t leave the Eurozone immediately and is ready for a better proposal. If that is not forthcoming and its banks are not made liquid fast, the Drachma will replace the Euro – what about the ‘Greek Euro’ instead of the Drachma just to needle them? But Grexit or no Grexit, China will move into the Greek vacuum and invest there, buy their public sector companies and create their first economic beachhead in Europe. I’m sure Merkel is having nightmares about this. If Greece does better after Grexit there will be contagion and many exits from the Eurozone – end of Euro, end of the EU. This is why the EU should be determined not to force a Grexit. If there is, it will also lead to the beginning of the degradation of the US dollar after it rises for a time. America has to be careful. As people also find refuge in Sterling Britain’s artificially inflated property bubbles will start bursting again. When a garage converted into a studio apartment sells for a million pounds and you are persuaded to believe that it’s a great buy, there’s something very wrong. Investing in real estate isn’t productive investment anyway, which is what countries need to understand to make a healthy economy. Then what happens to the global economy is hard to predict in minutiae, but whatever it is will not be good or painless. The dollar will first rise as will interest rates but then US public debt that outstrips its GDP will become unsustainable, especially when the dollar stops being the sole global reserve currency. Other economies on the skids made to look as if they are ‘rising’ by slight-of-hand economists will be exposed. What happens thereafter depends largely on China. Predator will become prey. Just you see.