The Troika’s Policy in Greece: Rob the Greek people and give the money to private banks, the ECB, the IMF and the dominant States of the Eurozone
On
20 August 2018, the Greek government of Alexis Tsipras, the IMF and
the European leaders celebrated the end of the Third Memorandum.
On
this occasion, the major media and those in power spread the
following message: Greece has regained its freedom, its economy is
improving, unemployment is on the decline, Europe has lent Greece 300
billion and the Greeks will have to start repaying that debt in 2022
or in 2032.
The
main claims are completely unfounded as Greece remains under the
control of its creditors. In compliance with the accords that the
Alexis Tsipras government signed, the country must imperatively
achieve a primary budgetary surplus of 3.5% which will force it to
continue brutal policies of reduction of public spending in the
social sector and in investment. Contrary to the dominant message
that Greece will not begin to repay its debt until some time in the
future, it should be clearly understood that Greece has been repaying
considerable amounts constantly all along to the ECB, the IMF and to
private creditors, and this prevents it from responding to the needs
of its population.
by
Eric Toussaint
Part
19 - The scam of the 2012 debt restructuring
In March
2012, European leaders announced that €107 billion of public debts
were cancelled. On paper private creditors renounced 53.5% of
their debt obligations. But contrary to appearances the operation was
actually good news for the Greek and European (mainly French and
German) banks, and not for the Greek people whose living conditions
were to further deteriorate.
Indeed
private creditors, the Troika and the Greek government had set up a
complex mechanism: private creditors would exchange their Greek
securities against others at a lower nominal value. For a €100 bond
they would get one for €46.5. But instead of losing at that game
creditors were actually exchanging securities they could sell for €15
to €30 on the secondary market against much safer securities.
Moreover they received compensations for tens of billions of euros.
Now to
finance compensations to the banks as well as the furthering of
neoliberal policies, the Troika granted another loan in the amount of
€130 billion on condition that it be used to repay the debt and
support the banks.
While
all major media intoned the official anthem that said that the Greek
debt had been reduced by €107 billion, they forgot to include the
loan of €130 billion granted by the Troika. At the end of the day
private creditors had made a good bargain and were replaced by
international public creditors (ECB, Eurozone member states, IMF)
that were going to exert an unrelenting pressure on the Greek
authorities to implement ever worse antisocial measures.
Furthermore,
while in case of litigation 85% of the former securities were subject
to Greek law, all the new securities came under Luxembourg law. The
creditors’ aim was to curtail Greece’s possibility to default or
cancel its debt.
The
major losers of the 2012 restructuring were public social-security
entities and small shareholders. Adopting the two laws enforced by
the Troika had as a consequence that hundred of public entities had
to bear losses for a total amount of €16.2 billion. Most of
those losses were borne by public pension funds (€14.5 billion, out
of their €21 billion provision). The other group that registered
significant losses consisted of small holders.
The
number of households who lost most of their savings overnight is
estimated at over fifteen thousand. Such a situation can be explained
from the fact that for years state securities were sold as absolutely
safe.
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