Michael Hudson on the Showdown in Greece

Reader Sufferin’ Succotash asked whether Papandreou would turn out to be Pericles or Petain. We now have our answer. His finance minister, Evengelos Venizelos, went to the G20 in Cannes (going directly after being discharged from the hospital, meaning he almost certainly did not inform and therefore intended to betray Papandreou) and issued a statement arguing that the need to get the next cash dole from the bailout program and maintain “international credibility” trumped all other considerations. Papandreou backed down and canceled the referendum.

Even though everyone who is not part of the problem recognizes that an eventual Greek default (or much deeper debt restructuring) is inevitable, it seems the Greek population must be ground into the dust first to discourage any rebellion against the new order of rule by creditors. The wild card is whether the level of civil disobedience rises to the point where the government has to change course. We’ve already read of serious signs of breakdown: widespread failures to collect trash, frequent power interruption, such reduced schedules for public transportation that it becomes difficult for those who still have jobs to get to work.

Although this segment was taped before the Papandreou volte face, this discussion on Democracy Now with Michael Hudson illuminates some of the underlying dynamics behind this showdown.

Here is a transcript (boldface per Michael Hudson):

AMY GOODMAN: World leaders are gathering in Cannes for the opening of the Group of 20 summit today. That’s the G20 summit. On the top of the agenda is Greece and the European debt crisis. The Greek prime minister, George Papandreou, is coming under intense criticism from European leaders for allowing the Greek people to decide if they want to accept the conditions of a $179 billion E.U. bailout. Papandreou has announced the referendum will take place in early December, but it now looks like his government is in danger of collapsing before then. He faces a vote of no confidence tomorrow. According to polls, most Greeks are opposed to the bailout plan, and there have been protests across the country against deepening austerity.

Papandreou addressed a press conference following a crisis meeting with eurozone leaders in Cannes.

PRIME MINISTER GEORGE PAPANDREOU: The essence is that it is—this is not a question only of a program; this is a question of whether we want to remain in the eurozone. That’s very clear. That should be clear to everyone. I believe that this will be a positive outcome. I believe the Greek people want us to remain in the eurozone. And I believe that this referendum will show so.

REPORTER 1: Are you confident—
REPORTER 2: If they say no, do you have a plan, if they say no?
PRIME MINISTER GEORGE PAPANDREOU: I want to say that we—we will have a “yes.”

AMY GOODMAN: Meanwhile, the leaders of Germany and France said Greece would not receive another cent in European aid until it decides whether it wants to stay in the eurozone. Head of the Eurogroup, Jean-Claude Juncker, said Greece will likely miss out on billions of euros of aid as a result of the scheduled referendum on the bailout plan.

PRIME MINISTER JEAN-CLAUDE JUNCKER: [inaudible] is depending on the “yes” or “no” to the question which will be submitted to the Greek people. So Greece has lost—Greece had eight billion. Greece has lost eight billions after having made the decision to put all these questions to referendum.

AMY GOODMAN: Jean-Claude Juncker is prime minister of Luxembourg and head of the Eurogroup of 17 eurozone finance ministers.

To talk more about this, we’re joined by Democracy Now! video stream from Germany by Michael Hudson, who’s been closely following the Greek crisis. Professor Hudson is president of the Institute for the Study of Long-Term Economic Trends, distinguished research professor of economics at University of Missouri, Kansas City, author of Super Imperialism: The Economic Strategy of American Empire.

Welcome to Democracy Now!, Michael Hudson. What is happening right now? The significance of Obama being in the south of France at the G20 meeting, and the possibility of the Greek prime minister being thrown out?

MICHAEL HUDSON: Well, you’ve asked about three questions there. Obama is here to represent the interests of the American banks. And the Europeans are very angry that a few weeks ago Tim Geithner, the bank lobbyist, came over and insisted that Europe not forgive Greece’s bank loans, not let Greece write down the loans, and indeed that it not even claim that Greece should do what Argentina is and write down the loans as a premise. Mr. Geithner explained to the Europeans that the largest insurers of the Greek debt are American money market funds and hedge funds. And he said American hedge funds and banks would lose money and actually would crash the U.S. economy, if Europe made a concession to Greece to bring debts down to the ability to pay. So, instead of a debt write-down or a haircut, the banks said, “OK, we will agree with what the Americans are insisting on, and we will ask for a voluntary write-down by the banks on the Greek debt they hold.” Obviously, European banks who are not part of the credit default swaps have disagreed with this. So the Americans are putting immense pressure on Europe, saying, “We will wreck your economy, if you don’t wreck Greece’s economy.”

Because of the problem in Greece you have had the riots in the street, you have had the demonstrations. The demonstrations in Athens are much like the Occupy Wall Street demonstrations here, and similar ones in Iceland. They were to show that the Greek people were not behind the bailout, and to let the international banks know that if the so-called rescue operation—that is, the German and European rescue of the French banks and the German banks and the American banks that hold the Greek bonds, not the rescue of Greece—were to go through, this was unpopular. Under international law this meant that the Greeks could repudiate the debt. So, you heard on Monday, Mr. Papandreou said: “We’re going to have a referendum on whether to go along with the austerity plan or not.” The principle is the same that the president of Iceland said earlier this year: if you’re going to plunge an economy into a decade of depression and force much of its population to leave the country to find jobs, the population has to have a vote.

But the clip that you played just a few minutes ago at the beginning of the program was something quite different. Yesterday, when Mr. Papandreou met with Angela Merkel and Sarkozy in France, they said: “Look, all the opinion polls show that the Greeks are going to vote against the referendum, so let’s think of something nice. Would they rather be human beings or monkeys? What would they rather do?” And they came up with another question: Do the Greeks want to be part of Europe or not?

Polls report that 66 percent of the Greeks do want to stay in the eurozone. They want to stay in the euro. So, by trying to rephrase the question in a way that will get a “Yes” vote, they avoid asking the really important question: Do you Greeks want to push yourselves into a decade of depression and impose austerity? Do you vote to sell off the public domain, sell off the Athenian water supply, sell off your islands, sell off your mineral rights in the sea, sell off even the Parthenon—do you want to do that so that French banks and American bond insurers will not lose money?

Phrased this way, this obviously would get a “No” vote. So there is some kind of semantic trickery going on here. Nobody knows exactly how the referendum will be worded, or right now whether there even will be a referendum, because, as you also noted earlier, the other politicians in Greece are now jockeying for position and are trying to get rid of Papandreou and to replace him, in a very opportunistic mood, to prevent any kind of a referendum happening at all.

Yesterday, the headline in the Frankfurter Zeitung was “Democracy is Junk.” The meaning was the financial sector was saying that democracy is incompatible with collecting debts and, when debtors can’t pay, with foreclosing on the public domain and privatizing a country. You can’t have democracy when debts grow beyond the ability to pay and the IMF imposes austerity, like it used to do in third world countries. So, what’s at stake is whether Europe—Greece and other countries—are going to be democratic, or whether they’re going to be run by a financial oligarchy via the E.U. bureaucracy, basically the European Central Bank. It is neoliberal, anti-labor, anti-government, and in the pockets of the most predatory bank ideologues.

AMY GOODMAN: And what does it mean if Papandreou is out?

MICHAEL HUDSON: It could mean a number of things. Either it means that other members of his party—the finance minister, who is against the referendum—will come in and not hold a referendum at all, and try to keep Greece on the austerity plan, or there will be a fall in the government, a no-confidence vote, and people will presumably vote for the Conservative Party, which is very much like the Republican Party in the United States.

The reason there have been all of these demonstrations is the same reason that the Occupy Wall Street movement is in New York and the rest of the United States. The frustration is not only at the financial overhead, the debt overhead; it’s at the political fact that there is no choice. Both the Conservative Party and the Socialist Party in Greece, just like the Republicans and Democrats here, are both taking the side of the banks. So people don’t even have a chance to express a democratic alternative to essentially being ground down by debt peonage and letting the economy polarize even further between creditors and debtors.

AMY GOODMAN: And the significance of President Obama being there, and what this means—the meeting of the G20, what is happening in Greece—for the United States?

MICHAEL HUDSON: He’s making the threat that Europe has to cut its own throat in order to save the United States hedge funds and banks from taking a loss on the Greek bonds that they’ve insured. One of the reasons that people have been willing to buy Greek bonds is they bought credit insurance. And the European banks, mostly—maybe not Barclays or Deutsche Bank, but most banks—are not willing to write credit insurance, because everybody at the Böckler Foundation conference here in Berlin, every single economist says there is no conceivable way in which Greece can pay its debts. But the American hedge funds and bankers have come in and said, “We’ll write a guarantee.” Then they lean on President Obama and Tim Geithner to tell the Europeans: “You have to make Greece pay, so that we win the bets that we’ve made, because if we lose the bets, then we go under and the stock market crashes, and a lot of people can’t collect on their money market funds.” So this is just naked brute force that Mr. Obama is doing. He’s basically telling Europe, “Don’t go the democratic route. Support Wall Street.”

AMY GOODMAN: Michael Hudson, economist, president of the Institute for the Study of Long-Term Economic Trends, distinguished research professor of economics at University of Missouri, Kansas City, author of Super Imperialism: The Economic Strategy of American Empire.

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  1. Cathryn Mataga

    “Obama is there to represent the interests of US Banks.” yeah, sounds about right.

    So there’s not going to be a referendum in Greece? Oh
    dear, this is so so sad.

    1. Ramon Creager

      Indeed. God forbid the Greek people should decide their own fate. Can’t have that now, can we? Because if everyone started getting uppity notions like that the banksters would soon stop getting their tribute.

      There can be no question now which master these “leaders” serve. It obviously isn’t the people who elected them.

    2. 2little2late

      The ruling class used to support us the world over in our various forms of allowed self-governance. What happened? What did we do wrong? Will they ever forgive us?

    1. Hugh

      That post’s title is misleading because as the citations used indicate leaving the eurozone would not necessarily entail leaving the European Union.

      This all reminds me of the “sanctity of contracts” issue we saw in this country. If you are a CEO, your contract is sacred. If you are anybody else, it is a piece of paper easily rewritten. Berlin and Paris are playing the role of CEO this time around, and Greece is the poor schmuck union worker. In the case of contracts, just as with the various European treaties, it is not a question of law. It is about power. Paris and Berlin only care about the law when they think they can twist it to their advantage. Otherwise, they don’t give a shit about it. Their invocations of law should be viewed with deep suspicion.

      And we should remember this is not about just Greece. What happens when Spain and Italy go? France has played the role of intermediary between Germany and much of the rest of the EU but what happens to Greece now will happen to a majority of EU members in the not too distant future so A) will they stand with Berlin and Paris or with Greece which better reflects their own situation and B) how comfortable will France be when it has not counterweight to Germany?

      1. jake chase

        The whole post is misleading because Hudson implies that the problem for US financial institutions is insurance on the Greek bonds. The problem is that the CDS exposure on the Greek bonds is probably 100 times the principal amount of the Greek bonds. Ditto for the Spanish and Italian bonds. Thus Greece is only an appetizer for what is soon to come for Italy and Spain. As for democracy, what exactly has democracy produced since Andrew Jackson reinvented it? What exactly did Andrew Jackson produce except wildcat banks and the spoils system? Boss Tweed was democracy in action. Honey Fitz was democracy in action. What we need these days is intelligence and morality and law. I keep looking for signs of these, but all I see is public relations flaks on the one hand and Jacobins on the other.

        Those looking forward to chaos might profit from rereading Carlyle.

        1. Cugel

          Screw Carlyle. We need a LOT MORE JACOBINS.

          “Too many laws are made and too few examples are given.” — Saint-Just

          Perp walk a couple of hundred Wall Street criminals into holding pens and throw them into federal prison for a few years apiece and we can impose some self-restraint upon the masters of the universe. Maybe next time they will remember the spectacle of a previous generation of tycoons being manacled together and decide NOT to destroy our economies with their massive fraud.

          1. SR6719

            “A nation regenerates itself only upon heaps of corpses.”

            – Saint-Just quoting Mirabeau before members of the Committee of Public Safety, October 17, 1793.

          2. Maju

            More Sans Culottes actually. The Jacobins were always at the wake of this popular vanguard (and had some nasty vices like excessive centralism).

    2. Maju

      The same rule impedes EU or the Eurogroup from throwing Greece out without their consent. A whole new treaty would have to be negotiated, meanwhile Greece stays in EU and euro no matter what.

      The Eurogroup is bullying Greece with threats to kick them from the euro but the euro treaty is so poorly redacted that it does not allow even for that. Again it requires a new treaty or a de facto breach from the extant treaties, much as NATO not retaliating against Israel for the attack against Mavi Marmara (legal Turkish soil) or (even more clear) against USS Liberty. When you start bending the treaties that way any sort of legal security vanishes.

  2. Hugh

    What happens or does not happen in Greece will not fix any of Europe’s problems because Greece is fairly marginal to those problems. What Greece does show is that the elites aren’t just white collar criminals but common thugs. And as Michael Hudson points out, Greece hints at the total political corruption engineered by the kleptocratic enterprise. Where it is not just the whole of the Greek political Establishment, but the European Establishment above them, and the American political Establishment above that. The only way you can undo such a heavily stacked deck is through revolution. This is as true for the Greeks as it is for us. Elections won’t do it. OWS won’t do it although it is a start. But when all the levers of power and redress have been subverted, it is all that is left.

    1. Not Smart Enough For This Blog

      I think you’re wrong there; OWS is having an impact and is already changing things. I would agree that it isn’t over yet.

      1. Hugh

        Get back to me when OWS starts electing candidates and/or defeating those of the corporatist status quo and when politicians begin modifying legislation and policy in response to OWS.

        I think OWS is great in so far as it goes. But I have seen and heard a lot groups claim to have an impact and yet when the smoke clears nothing has changed. It is still early days yet with OWS but it still has to face the hurdle of moving from retail actions to mass action. Again the Oakland strike was a good first step but that needs to be ramped up to state-wide, then regional, then national actions, and not just one off ones but get to a point where they can be called at will and sustained. That is orders of magnitude bigger than what we have seen.

        1. Lefty

          The left was much stronger in the US when it wasn’t so concerned with electoral victories. It doesn’t mean that electoral politics don’t matter, what is happening now though shows how little the population matters when making economic policy. In the US, what percentage of the population wants cuts to vital programs, little to no taxes on the rich, more “free trade”, amongst other things? Does it matter? Does the general public matter in Greece as far as economic policy? Spain? Latin America seems to be moving in the opposite direction, away from this neoliberal basket case. Maybe it is because the region already had to deal with these horrible policies already. Capitalism was fine as long as OTHER people had these policies forced on them. As long as it benefited people in the West few cared or noticed. Now the guns are turned on us and we’ve all of a sudden realized how horrible and anti-democratic the system is. Well look who showed up to the party?

          The left was much stronger when it wasn’t an appendage to the Democratic Party. The Socialist Party got 6% of the vote in the early 20th century. Other parties on the left had support far beyond their stated numbers. Many on the left didn’t bother voting. They organized unions, social movements, educated others if they were able to accumulate intellectual capital and took the battle to the streets and the workplaces.

          I personally don’t think OWS will grow from here by getting people elected to a horribly corrupt system. It will grow and gain in importance when larger groups of people get involved and they start to truly build institutions outside of the control of either party and outside of the capitalist system, or at least how the system is currently structured. IF the movement bothers to vote for one of the two corrupt party’s candidates those people will have to have something to offer them. Being better than the other guy has not cut it, we have seen nothing but decline thanks to the lesser of two evils.

          The left will have to come up with a coherent alternative to neoliberalism though. Economists like Robin Hahnel have been working on this and he has created some interesting critiques and alternatives. Until we have a coherent alternative though, and until many people rally around that or a few closely related alternatives, we are stuck in a horrible, dead end TINA moment.

          1. Sufferin' Succotash

            It’s true that the Left was in many ways better off when it wasn’t functioning as a kind of auxiliary for the Democrats. The problems with that began with the advent of the New Deal programs in the 30s. Now the Left naturally felt obligated to defend these gains (even if they did seem like half a loaf) and the only practical short-run way to do so was to help the Democrats win elections.
            This is still a difficulty today and it’s reflected in the current schizophrenic attitudes regarding Obama and the Democrats generally. Is it really a good idea for activists on the Left to get caught up in endless election cycles fighting interminable rear-guard actions on behalf of Social Security, Medicare, etc.? Shouldn’t leftists be trying instead to move beyond this sort of trench warfare with more sweeping social reforms based upon a comprehensive critique of the present economic system? But what happens in the meantime to all of those people who badly need the current safety net (as inadequate as it is)and who would stand to lose big time if the Right could achieve its long-cherished goal of destroying it?
            Oh well. If answering questions like these were easy we wouldn’t have blogs like these, would we?

          2. Hugh

            As I have said here very often, a vote for any Democrat or any Republican is a vote for kleptocracy and corporatism. My point is that the 99% need to take over the current political system (by running their own candidates) or overthrowing it.

            Developing alternate institutions sounds nice, but those who have stolen trillions and looked with complacency and even satisfaction on their ruining the lives of tens of millions of Americans are not going to go quietly. They will use the state’s machinery of violence not just to defend their ill-gotten gains but to extend them. So we come back to the original choice: take over the current system or overthrow it.

          3. Lefty

            Good questions with no clear answers. I am someone who would not be here if it weren’t for Medicaid. I’m decently young too, early 30’s. The simple fact is that continuing down the same road economically isn’t possible, unless it is at the barrel of a gun. So a painful transition is unfortunately a given at this point no matter what we do. The question is what lies beyond that? Do we go through a painful transition and live in misery or do we create these institutions and policies knowing what we are in for and have a possibility of a better tomorrow? Realistically, we are up against it.

            Something to think about though. Latin Americans are much poorer than us, they’ve had to deal with very violent dictatorships and Western aggression for centuries. They have fought and organized under much worse circumstances and are moving in a positive direction. There are of course bumps in the road and challenges ahead, but they are organized and the social movements are powerful. Whatever we face others in far worse circumstances faced and got through it. We should keep that in mind.

          4. Lefty

            Huh, developing alternative institutions isn’t “nice”. If, or when, the economy fully implodes there will be a power vacuum. Whenever that happens the most powerful groups in society fill that vacuum with their policies and ideas. As of now the most powerful groups are not on the left, they are on the right. OWS is a great sign, but it has to get moving, fast.

            I am an economist. When I get into discussions with people I do a decent job of critiquing capitalism, especially neoliberal capitalism. They always though ask the same thing afterwards. Ok, if not this system then what? If you don’t have an answer, if you can’t fill the void left by the crumbling institutions, you won’t win the battle.

            Showing people that the system is flawed is pretty damn easy these days. Doesn’t take much effort, just open your eyes. Proposing coherent alternatives is another matter all together. We have to create a coherent alternative, or alternatives, or we’ll have no answers as to what comes next. The right and corporate interests do, no matter how horrible.

          5. F. Beard

            We have to create a coherent alternative, or alternatives, or we’ll have no answers as to what comes next. The right and corporate interests do, no matter how horrible. Lefty

            1) Ban further credit creation by the banks. This would be massively deflationary by itself as existing credit was repaid with no new credit to replace it. Genuine loans of existing money would still be allowed.

            2) Bailout the entire population equally at a rate that just replaced existing credit as it was repaid. Continue till all private credit debt is paid off. This would eliminate all existing debt with no significant risk of price inflation. It would also fix the banks.

            3) Allow genuine alternative private money supplies, especially common stock which “shares” wealth rather than reaps it. Genuine private money alternatives would allow the government to deficit spend freely without worries about harming the private sector.

          6. CaitlinO

            We had a working alternative system to today’s in the ’50’s. At least, it worked well for whites. Why can’t that be offered as the alternative, but extended fully across all members of society? Re-institute policies of the time such as frankly confiscatory taxation of the rich, strong laws supporting union formation and continuation, stronger laws restricting the size and geography of the FIRE industry, major investment in regulatory agencies, FBI investigators, judiciary, caps on the size of any corporation, repeal of Citizens United and teeth in a resuscitation of Sherman anti-trust. For starters.

            The situation we’re in is reversible. It will take an enormous amount of focused will but it seems that every day more of us are coming to the conclusion that the current system is rotted to the core and can no longer be borne.

          7. F. Beard


            I am indebted to Stephen Zarlenga for his book “The Lost Science of Money” but otherwise I don’t follow AMI. Basically, I am for liberty in private money creation AFTER a general bailout of the entire population, including savers, from all debt to the present unjust system. As for government money, I think the MMT folks are on track. As for the need for both government and private money supplies, I believe we should be guided by Matthew 22:16-22 (“Render to Caesar …”). Otherwise, the usury class will screw us as they usually do via a government enforced money monopoly.

          8. Linus Huber

            SCARE 20.12.2012
            (Stop Corruption And Repression Effective 20.12.2012)
            Banks were given a very important privilege to create money in the form of extending credit. This function requires diligence and careful consideration in regard to individual credit risks as well as to overall credit levels in the system. The financial crisis revealed that the banks were operating at too high a leverage and with too much risk. They were used to be saved by the Central Banks and certain that in times of difficulties the Central Banks were there to save them. They were like trained dogs and their master Greenspan or Bernanke would always be there to rescue them when unforeseen difficulties arose.
            That may be true but that does not absolve them from their obligation to monitor overall debt levels in the system as well as being diligent in evaluating the debtors ability to not only service a debt but to be able to repay it over time. The banks clearly failed in this function that is the core function of banking but focused mainly on their compensation packages. The way these bankers enriched themselves in the process of driving the financial system into a wall was appalling and the average income earner was never able to comprehend their schemes but preferred to simply ignore them. Of course, the bankers explained their outrages income levels with free market principles of supply and demand, where the best simply could be hired with those kinds of benefits only. In hindsight those superior managers seem to have missed their mark considerably. The most interesting aspect of all of this is the fact that, after we have been more than 3 years in this financial crisis, the bankers continue to loot the system as if nothing ever happened.
            True to form the Central Banks “saved” the financial system by saving those great financial institutions without whom the system would have collapsed, as was argued. Hardly were we out of the danger of collapse, the banks immediately went back to their old ways and were certain that this was a problem that would occur just once in a lifetime and now all was clear again. The real problem, however, had not been addressed but had simply been muddied.
            In actuality, the losses produced of extending unsustainable levels of credit by the banks have been transferred to the public. Different ways were chosen to achieve this task in the form of free money for the banks, injection of government funds into some institutions, increase of basic money supply and so on.
            The threat of system collapse would have been labelled blackmail if it would have occurred in another setting. However the bankers were able to influence the media, the legislators and regulators in their favour with all the financial resources available to them. Nobody was made to take any responsibility and no one was taken to account.
            This represents a serious violation of the spirit of the Rule of Law that is the basis of western society. It seems that now the new rule is Might is Right. This changes many parameters in the compass of the social system within the western world. No one can be sure on what level and when one will be subjected to the financial abuse of those elites. Presently, the people in charge are trying to enhance financial repression of which one form is to keep interest rates below the level of inflation which affects mainly those that lived within their means over the past many years; another clear violation of the spirit of the Rule of Law as it transfers losses from bad investments to the innocent and decent part of the population. In addition, the increased level of government debt puts in doubt all those benefits promised by governments the world over.
            It is interesting how the banks were able to confuse the public who was/is unable to grasp the actual situation. But considering the banker’s great financial resources, it seems not that much of a miracle to influence the media and the legislator and having politicians do their bidding. The question is what the heck can WE, THE PEOPLE do about it.
            Usually, we could address such things on a political level as we are a democracy, right? But it seems that the system has been corrupted by all the money sloshing around and it is extremely difficult to find any electable person that will act against those powerful interests. In addition, it will take many years until sufficient numbers of persons with the new thinking and with integrity not to be corrupted by those lobbying efforts will be elected to office that will implement the changes needed. So, what should we do? Start a revolution?
            Well, the blackmail used by the banks may be the only way to address the injustices that have occurred over the past few years. They showed us how to leverage one’s limited resources to achieve one’s goal. Therefore the following proposal to start the movement “SCARE 20.12.2012” should be seen in this context. The idea is that if by that time (20.12.2012) some serious injustices have not been removed from the system, people will start to withdraw their money from all financial institutions driving them into default. And it might work, because those who hesitate to support this threat may be left with no money as the banks will have to close down before all has been paid out.
            Now, what demands are made if that scenario is to be avoided.
            1. Bankers and past Bankers (all those working in the financial industry that earned in excess of $500k plus annually for more than 2 years during the past 15 years and this without any downside risk i.e. risk of financial losses, except the possibility of losing their job) have to be made personally accountable for their past activities and be removed from any such position that might directly or indirectly have influence on the money creation and lending aspects of the economy (this includes regulating agencies and politics) before 20.12.2012.
            2. Present and past regulators have to be made personally accountable for their past activities and be removed from any such position that might directly or indirectly have influence on the money creation and lending aspects of the economy (this includes financial institutions and politics) before 20.12.2012.
            3. Politicians that accept any financial support from institutions that are involved in the money creation and lending aspects of the economy will have to face a jail term of no less than 2 years without the possibility of parole.
            When these 3 points are implemented before 20.12.2012, we the public will not destroy the financial system but support the way to find back to the RULE OF LAW and away from the idea of MIGHT IS RIGH

          9. JTFaraday

            To say that the new democratic movement’s options are to engage in institution building OR electoral politics outside the Duopoly, through external pressure or party building or something else we haven’t thought of yet, is a false dichotomy.

            Occupy everything. Just don’t occupy the D-Party because it’s a waste of time and energy.

            I do agree that too many people have been trained to think that electoral politics *alone* will make a dent in the fascist dictatorship, even though sending a few people into the maw of the beast just means they’ll get ground up into the same results.

            That doesn’t mean we should voluntarily disenfranchise ourselves the way the Duopoly and its owners want us to.

  3. Debber

    Once again, the world is held hostage by an oligarchy of criminal bankstas and their lackey, skanky political hacks.

  4. Archie

    Hudson (like Bill Black) does not equivocate and I think he has been spot on throughout the GFC. So, I find it very hard to see how the status quo can be substantially changed peacefully since we are dealing with ruthless thugs. It seems that as the peaceful occupations grow and the “truth” gradually disseminates, the ruling elites, and the financial owners they are beholden to, just double down on the rape of the 99%. The continued QE by the FED only exacerbates the wealth inequity by favoring the primary dealers over the citizens. The creation of the money supply MUST be returned to the citizens of the USA and every other country. Until this happens, there will be no justice nor any hope of establishing an egalitarian society.

    1. joebhed

      The oligarchy will not only allow but welcome the escalation through unruly demonstration to chaos to police state.
      Any move in that direction is political folly.
      What is needed is a new road taken.

      The mark of their success is borne by all of us – too much debt and not enough money.
      That’s how fractional-reserve banking works.
      It creates more debt than money.
      And the only way to create money is to create debt.

      The solution lies in the abandonment of the debt-based system of money that has ruled the global financial system for a hundred years.
      It has long ago run its course.
      A dead man walking is the debt money system.

      Congressman Kucinich has proposed its replacement .
      A public money system, issued without debt.

      And the means to avoid the chaos of that much-traveled road.

      For the Money System Common

        1. joebhed

          Yes. And, thanks.

          For me, it was Soddy who began to place the foundation under what became socio- and political-economics.

          Today we need to understand, in a deep sense, that it has been the private shadow bankers’ license to create virtual wealth of derivatives(etc.), supported by a $-denominated claim(debt) against the real future wealth of this country, that has gotten us to today’s fork in the road.

          We need to look down that public money road that Soddy advocated in order to end this sham.

          For the Money System Common

      1. CaitlinO

        “The mark of their success is borne by all of us – too much debt and not enough money.”

        I consider that fact an enormous, so far unused, source of power for the 99%. The mere threat of a referendum in Greece caused a panic in the elite that I’ve never seen before. Imagine what a one month national or global debt strike would do.

        1. Maju

          Exactly what I was thinking: the Rockefellers and Goldman Sachs of the world are shivering in fear… of democracy. This in dangerous in a sense, because it means that they will attack any form of democracy almost viscerally but it is good in the sense that they are so patently weak and about to fall.

          And it is excellent in the sense that the true contradiction between oligarchy (government by a few, proper of Capitalism, even if under the cover of formal democracy, a mere concession to the power of the Working Class) and democracy becomes every single day more and more evident.

    1. Maju

      I’ve been saying for a while that military coups are out of the realm of the possible: they can only accentuate the class war but can’t solve the problem in any efficient way for the Capitalist oligarchy. However external military aggression by some puppet like Turkey is not just possible but is actually happening at by the moment rather subtle levels (Cyprus is, as always, the cornerstone in this farce-conflict engineered originally by Britain to keep its naval bases).

      However, even if Turkey can attack Greece maybe, forcing it to stay quieter than would be normal, what about Italy? In few months I’d expect Italy to be almost exactly like Greece is now. But it’s a much bigger fish and has no such traditional foes.

      1. Nathanael

        Turkey is nobody’s puppet and its military will do nothing which is against its national interests. Those are currently defined by its leading party as creating its own sphere of economic dominance, which means Turkey would actually prefer the collapse of the Euro system, which excludes it.

        Therefore Turkey is not going to interfere militarily anywhere in Europe.

        1. Maju

          Nah! Turkey is part of NATO and its army and political class is part of the Gladio network of NATO, which in that country is known as Ergenekon.

          Turkey can be manipulated into playing as counter-revolutionary force (and gain some islands in the meantime maybe) in case of Greek revolution very easily. Nearly every Turk (excepted the Communist ones) would be glad to do that as they perceive Greece and Cyprus as first category national foes and have claims against them.

          However much more difficult to manage for the Capitalist Empire would be a case of revolution in Italy.

  5. monte_cristo

    The question, the issue is as always is Greek inequality.
    Are we stepping on the poor or are we stepping on the ‘ones that ride inequality’?
    Which one is it?
    Do the Greeks that have profitted from “false accounting/tax evasion etc” have to pay down the advantage they’ve been riding for so long, or do they transfer the cost to the poor?
    Bank runs? Do we think the poor are currently shifting their accounts? Or is it the rich and the middle class?
    What are the Greek ‘socialists’ doing. If you read the press they are in between the middle class and the poor.
    Whether you are out on the streets as an ‘anarchist’ really depends on your economic location.
    They Greeks appear to me to have as a whole done awesomely well from riding the ‘let’s bury the current account surpluses’ of the eurozone centre. Now we need a ‘adjustment’. It’s payback time. And they’re bitching. I don’t know whether the problem is the Greek societal problems or the Eurozone societal problems.
    I guess as always the problem is inequality.

    Where do the rich figure in all this? OWS Europe.

  6. Fiver

    Thank you Yves Smith, and THANK YOU MR HUDSON for making it explicit that the ultimate gun-to-head is that of the US to Germany, that it is the US at the top of this obscene food chain, and which will be gorging on European assets and eating their business (and growth) for the next decade – that Europe will to a large degree be funding the US recovery going forward.

    The way this has been portrayed in US/UK media has been just unbelievable – headlines and Heads screaming “When will Greece stop holding the world hostage??!!” or portraying Germany as if they were looking for another War and all manner of such crap.

    Let’s not forget who sowed derivatives mines throughout the Western financial system, who deliberately detonated them, and who not only DID NOTHING WHATEVER to fix things, not only blocked every immediate European effort seeking much tougher international financial regulation, but then proceeded to print money directly into the hands of those who turned around and dismembered Europe’s weaker members while loading up to the gills with European bank and sovereign CDS. This is the biggest imperial sacking ever.

    1. psychohistorian

      Lets not forget who hires, fires and gives direction to the folks you are railing at.

      Laugh the global inherited rich out of control of our society and into rooms at the Hague.

      1. Fiver

        Whether it’s new wealth, old wealth, smart wealth or stupid wealth, it has been centred in the US for nearly a century, is in firm control of the US and its globalized Empire today, is made up largely of a fusion of mega-wealthy and institutionally exceptionally powerful Americans, and is even now very broadly supported inside the US by a people it has long since propagandized, and more recently terrorized, into a near-infantile state of incapacity – much the same as “developed” peoples elsewhere.

        The world is shrinking as we speak. The financial crisis is but one among many economic, social, geopolitical and, above all, ecological crises we now confront having “grown” 6 billion people from oil over the last century, with more billions coming, all of whom want to live the good life though it’s clearly impossible. Neither the world, nor the US itself can possibly get out of this intact unless the people of the US make a decisive break with the existing elite, its vicious predatory structures and its unsustainable, ever-increasing, consumption-driven mode of existence.

        It has pretty much broken my heart after decades of involvement to see that the response to this enormous calamity borne of mind-beggaring corruption and abuse of power was not, at long last, the appearance of millions in the streets demanding justice. I wish OWS well, but I fear my honest estimation is that what’s going to actually happen is a few bones tossed while every real effort is expended towards blowing another bubble of false, final, and perhaps fatal, “prosperity”.

        1. Nathanael

          Have no fear. While people would indeed mostly be satisfied by having a few bones tossed to them…. *the 0.1% are kleptocrats* and are therefore constitutionally unwilling to toss even a bone. So no bones will be tossed, and people will get more and more ready to really change things.

  7. YY

    Am I not paying attention or does the coercive effort sound like “If you don’t stop threatening suicide, I’ll have to kill you”, “If you don’t eat this shit sandwich, we’ll have to take it off the table”, or “If you leave we’ll have to expel you”. This is surreal.

  8. mani

    Kind of confusing, the link he’s drawing between CDS writers and money market funds. Is he saying that CDS-writing banks or their hedge fund counterparties will fail, and then money market funds will break the buck because their bank debt will default?

  9. PQS

    Ugh. This whole thing is a powder keg. How much more will the Greeks take? Not much, I’d wager. I await the fires in the streets and at the national treasures.

    Taibbi’s analysis works very well here: European and American banks and their 1% handmaidens are looking for their Stupidity Insurance (from making bad bets on Greek bonds), and Credit Amnesty. Again. Oh, and of course, more FREE MONEY from the taxpayers. I chuckled last week when I heard the news that “the Markets” surged on the announcement of the paper-thin “deal” to “settle the Greek thing once and for all.” “Of course they’re surging, I thought, they can’t wait for more free money from the taxpayer! It’ll be like an early Christmas for them!”

    It just boggles the mind.

  10. Demented Chimp

    Mind boggling insanity. Dont underestimate humanities capacity to self deceive, this could go on and on. The inquisition rumbled on for 700 years.

    1. psychohistorian

      And with the re-affirmation yesterday by the US House of Representatives that the US motto change in 1956 to In God We Trust was a good thing it shows how far down the rabbit hole the secular republic, that was the dream of the original motto E pluribus unum, has gone.

      1. F. Beard

        The problem is that the “god we trust” in is Mammon! The Hebrew and Christian God forbids usury from fellow countrymen and commands periodic debt forgiveness. He certainly condemns theft of purchasing power and oppression of the poor.

        If Progressives were smart they would study the Bible and use it against so-called “Religious Right”.

  11. CaitlinO

    Maybe we shuld start a pool on which hedge fund manager will be the one to number the blocks of the Parthenon, take it apart and rebuild it in the back yard of his Greenwich estate.

  12. richard wilson

    These bankers and their shills are such liars. They claim that if Greece left the Eurozone, then Greece would have to leave the EU.

    Let’s tighten up our semantics.

    It is physically impossible for Greece to leave the “Eurozone,” since the “Eurozone” means Europe, which has 50 nations.

    The “European Union” consists of 27 nations within the “Eurozone”

    The “European Monetary Union” consists of 17 nations within the EU.

    The corporate media says “Sixty-six percent of Greeks want to stay in the Eurozone.”

    Yes of course. Greeks like the Schengen Treaty, which lets all citizens in 25 of the 27 EU nations (excluding Bulgaria and Romania) travel throughout those 25 nations without having to show a passport (although they usually must show a Schengen visa).

    But that is not the same as, “Sixty-six percent of Greeks want to keep the euro currency.”

    How easy it is for bankers and their shills to twist semantics, and to scare the Greek masses by falsely claiming, “Dump the euro, and you will be kicked out of Europe!”

    Nonsense. Where does it say you must use the euro currency to be in the EU? Ten countries in the EU do not use the euro, including England. Why can’t Greece be number eleven?

    Regardless of the currency used, no nation can be kicked out of the EU except by a majority vote of the 27 EU member states.

    Besides, Switzerland and Norway are not part of the EU or EMU, and they do okay.

  13. LAS

    Michael Hudson did not mention Corzine’s collapsed hedge fund, but Hudson’s analysis seems to run parallel to the Corzine story.

    I am just beginning to understand how the US influences people in other countries. We are sustaining an imperialist system that is quite brutal, but it is all one-step removed from our direct view so that we tolerate it.

    If only Obama and Geithner would put in the same effort to generate jobs for Americans as they will to save hedge funds. But they don’t.

    You know, Obama could have used his intervention in Europe as a bargaining tool to get concessions from Wall Street, but apparently has not. Sometimes I wonder why he gives away his own power time and again.

    1. Maju

      “Sometimes I wonder why he gives away his own power time and again”.

      Because Obama is and has always been (together with the Twin Capitalist Party farce) someone chosen and financed by the oligarchy to be a manager or even a mere pretense of a manager (honestly he seems more like a butler than a president). So is Clinton, so are all the Republican party candidates… at the moment the only electoral half-alternative in the USA (able to gather 20% of the vote in some states and able to have some rather radical or truly independent candidates and members) is the Green Party.

      Anyhow, even if someone like Obama would decide to act as a truly independent statesman, they’d just shoot him as they did with Kennedy and Lincoln: nothing moves, certainly not the president (reduced to the role of secretary-buffoon), without the agreement of the oligarchs’ mafia.

      In the end he does not have any real power: he’s not giving away much, just performing his role as pretense of power that is actually somewhere else.

      1. Nathanael

        Imperialism, like any other political-economic scheme, dies when unemployment and hunger hit 25%. (Roughly.) Watch for it.

  14. Schofield

    If you’re one of the 99% then one of the things the bankers and their politician accomplices don’t want you to know is that you could stop the bankers manufacturing money from thin air and could adopt Modern Monetary Theory and set up a trust to manufacture the money. A trust that is carefully set up to keep the politicians on a tight leash and actually represents the interests of the real economy as well as the financial sector, consumers and pensioners. After all money is merely embedded commands and the 99% need to take charge of their economy to direct it for 100% human flourishing not just 1% flourishing.

  15. andrew hartman

    i am trying go understand the frustrations of the greek people. NONE of
    the borrowed money benefitted them? it was all stolen by the elite and
    shipped out of the country?

    NONE of the public sector benefits are excessive?

    just asking as we reassemble the guillotine.

    1. Maju

      The borrowed money was used for fraud but also to pay for the taxes never collected to the Greek oligarchy. In any case Greece does not have a welfare state worth that name, Greek salaries are and have been about the lowest of EU-15 (prior to Eastern European expansion) and, even if the state was a bit oversized, it was not that much (other than maybe the military, which is never the objective of the cuts anywhere).

      It does not matter in any case: in democracy a people does not enslave itself and their children just to pay some impossible credits to some distant bankers who are anyhow making huge profits and who everybody knows as the only beneficiaries of all this mess. You need a colonial dictatorship to do that and that is not really an option objectively speaking.

      Nations, like individuals, have the right to bankruptcy: it’s sacred and natural. Of course banksters always try to suppress that right and enslave or even kill, as in the Merchant of Venice, the victims of their blood-sucking scams, so others don’t even think that they can get away without paying.

      But they have it badly these days: Greece will default, a military regime is out of the question and after Greece will come Italy and probably others (Ireland, Denmark, Belgium, Portugal, etc.)

      We have to assume that banks are going to fall and be nationalized (in order to guarantee basic deposits and little more). It’s much better that way than people suffering enslavement.

  16. Lafayette


    Nichols Sarkozy has just announced at his closing Press Conference that France would “continue to fight for the Financial Transactions Tax exacted to repair the damage that Financial Institutions have provoked”.

    He also stated that he welcomed Mr. Obama’s “support” on this matter – but he specifically stated that Obama meant the contribution of Financial Institutions to correct the problem, but any specific measure to do so.

    In fact, therefore, Obama has simply reiterated what Our Boy Tim said during his visit two weeks ago to Brussels that, for the US, the tax was a no-go.

    The US refuses therefore to implement the tax – and thus one is led to suspect that the reason is that such a tax would stifle campaign donations during the run-up to next year’s elections.

    1. Lafayette

      Typo: but he specifically stated that Obama meant the contribution of Financial Institutions to correct the problem, but any specific measure to do so.

      Should read: but he specifically stated that Obama meant the contribution of Financial Institutions to correct the problem, but NOT any specific measure to do so.

  17. Schofield

    Mr Hugh you are jumping the gun! We currently have a situation where Individualism is out of kilter with Cooperatism. So right now OWS is busily engaged in winning the moral and intellectual arguments concerning this imbalance. Once these have been won the people will better listen to answers.

  18. Nick

    Why are the PIIGS instituting austerity measures if the ratings agencies keep downgrading their bonds because those same austerity measures inhibit growth? That means the debt of those countries will just keep growing ad infinitum. The whole thing seems like a negative feedback loop to me.

    The only winners are the bond-holders, who know that the ECB will bail out these countries. Thus, a downgrade in bond ratings=higher returns for bondholders, on what appears to be a riskless investment. Tell me I’m wrong, please.

    1. Maju

      Because the IMF and EU do not give them any other option: the EU’s official mantra now is “cuts”, “austerity”…

      I was very surprised when it began, because the natural reaction to a crisis is more (and not less) expenditure by the state, in order to compensate somewhat for the failures of the markets. However in Europe that is NOT a worry for the elites: their only worry is nominally to “save” a euro that shows no signs of being threatened (it’s extremely overvalued and not falling at all).

      So we must ask ourselves: which is the real reason? And IMO the real reason is that all this is nothing but a planned and concerted destruction of any sort of public assistance, the planned ThirdWorldization of Europe or at least large parts of it. By the end of this inverted five year plan, the slums of Europe should have increased by X%, the ability of workers to be healed at no or little cost should have plummeted to Y% and the levels of effective literacy should have shown the first indications of decrease in a century.

      Personally I prefer Stalin’s five years’ plans, even if I don’t agree with much of them either. This is not less planned but it is much more evil and being more evil than Stalin is a lot of evil!

      1. Nathanael

        This does seem like the plan. I can’t believe it’s really their intention, because it’s stupid and self-destructive.

        This path always leads to the elites being slaughtered by angry mobs, or by warlords looking to lead the angry mobs. Only if you’re an effective warlord can you actually do well with this kind of plan, and the elites who are pulling this nonsense are *not* competent to be warlords. (No, not even the elites in the military-industrial complex; you have to have a very particular set of skills and attitude to be a warlord, and it’s not a combination which will get you ahead in a bureaucracy.)

  19. Lafayette

    Nick: Why are the PIIGS instituting austerity measures if the ratings agencies keep downgrading their bonds because those same austerity measures inhibit growth? That means the debt of those countries will just keep growing ad infinitum. The whole thing seems like a negative feedback loop to me.

    You have to understand where the debt money was spent. Typically, in the Mediterranean countries, it went in “make work” financed by the Treasury to keep unemployment low.

    For instance, Greece has a very large standing Army when there is not much of a threat to the country. And, they got carried away by public construction programs.

    At any rate, most have more Civil Service than they need, because nepotism has been rife.

    So, there is a lot that can be cut to make more room for paying a debt that is now drastically reduced. With, even, perhaps (with GREAT conditionality), some stimulus spending that can take place.

    None of the above intends to justify austerity – not in the least. In the present condition, yes, these countries need absolutely some stimulus spending.

    But in a country like Greece that spending cannot do much in alleviating unemployment – which is why a great many young Greeks are leaving (for the UK and for the US).

    The Greeks have a steep climb out of the Debt Hole that they have dug for themselves. It is a great shame, they are a very nice people. (Go see for yourself, they can use your dollars! You’ll get your money’s worth – in terms of culture, history and some of the most beautifully blue water on earth. If you like sailing, it’s a paradise on earth.)

  20. Vinz Klortho

    Soddy wrote that financial debts grew exponentially at compound interest but the real economy was based on exhaustible stocks of fossil fuels. Energy obtained from the fossil fuels could not be used again. This criticism of economic growth is echoed by his intellectual heirs in the now emergent field of ecological economics[3].

    Sounds like he was on to something important!


    1. Lidia

      “Wealth, Virtual Wealth and Debt”, is a masterpiece. Written by a scientist, it is within the grasp of any attentive layperson. All he writes is, as we would’ve said at my geeky tech school back in the day, “intuitively obvious”.

      Other works are not that easy to find: I don’t know what’s in it, but “Money versus Man” will run you from $60-$750 in a used copy. I am enchanted by the title but unsure if I want to commit the funds.

      It has been clear to me for a while that, indeed, that our struggle is that of MONEY VERSUS MAN, and that man is losing against the Golem he created. So refreshing to find a voice, even a posthumous one, which “gets it”.

  21. Eric

    Greece and Iceland got to much the same fiscal position through significantly different routes. Iceland backed very risky Icelandic banks which became insolvent. Greece pretty much consumed the unrepayable borrowed amounts domestically. Austerity is a relative condition and a very significant portion of the Greek austerity measures involve scaling back from expenditure levels that could only have been reached by borrowing unrepayable amounts. Had 15 years ago (and any time between then and now) PASOK or ND campaigned to avoid future austerity by not selling so much debt, they would have guaranteed the other party’s success. Greeks need to forge a future that works for them, but a comparison with Iceland is not very accurate.

    1. sleeper

      What bothers me is the seemingly common tread that implies that the debtors – Greece, Iceland, Ireland, and US mortgagees went blindly down a path of free and easy money.
      That these guys are just deadbeats with no shred of honor.

      There is another possibility – the lenders deliberately made money free and easy because more money could be made with loans that defaulted than loans that were repaid. This is the Magnatar contract scheme – legal but deceptive and destructive.

      1. Maju

        That’s exactly what Hudson says it’s happening.

        No idea why you may think that “honor” has anything to do here: “honor” is not a concern for usurers, only interested in money (“greed is good” proclaimed Reagan) nor is a great concern for people who have to choose between life and death (or similar) for their children.

    2. Calgacus

      Iceland & Greece are in different situations, Iceland’s being much better. Iceland did NOT back the Icelandic banks whose liabilities the UK & the Netherlands are trying to put on the state of Iceland. That is why the matter is heading to the courts. The biggest problem of Greece is that it signed on the Euro suicide pact, a monetary system designed not to work, designed to create crises & austerity. Iceland did not & has its own currency. Perhaps you meant Ireland, which like Greece did drink the Euro Kool-aid, and did guarantee its crooked banks. If one has ones own currency, there is no reason for the kind of austerity being forced on Greece or serious unemployment. Ever.

      1. Lafayette

        Cal: The biggest problem of Greece is that it signed on the Euro suicide pact, a monetary system designed not to work, designed to create crises & austerity.


        You’ve missed entirely the purpose of the Euro. The fact that it was central to integrating an economy across 400 million people that will one day be greater than that of the US in terms of market place and total GDP.

        Mistakes were made in its implementation, but the above reflection cited is blatantly wrong. The euro functioned marvelously well for quite a while since its inception until some Financial Nerds in the US triggered, by means of Toxic Waste, the Credit Mechanism Seizure of 2008 and the Great Recession of 2009.

        European countries, which have always had unemployment rates at least 2/3% higher than the US, went into a tailspin.

        As a consequence, many of them were borrowing far too heavily to sustain high levels of unemployment – but that is a fundamental precept of a Social Democracy. So, it is understandable that Americans cannot comprehend that priority, given the Winner-Takes-All socioeconomic system they have.

        (Where humans are taken for roadkill on the Highway of Life, because “that’s the way the cookie crumbles”. Cookie, me arse, the economy is about lives and their well-being. The “pursuit of happiness” long since having been revealed as a pipe-dream.)

        And the right safeguards were now in place. Audited oversight of national budgets is now a regulatory rule of the Commission in Brussels and, along with the ECB, total borrowing limits will be monitored and signaled when trespassed.

        If that is any more or less than what happens in the US, pray tell us how. Uncle Sam is in the very much the same predicament because of the lack of oversight by Federal regulatory bodies – that should never have allowed the Toxic Waste to be generated. (That and the fact that a politically blasé public allowed the Troglodyte Right to control Congress.)

        What has saved Uncle Sam’s sorry ass is the fact that dollar is a reserve currency. For how much longer, many are asking. Check back in for the answer when gas at the pump is $10 a gallon …

        1. Maju

          I must disagree. While I do not think that the euro was any “suicide pact” in principle, it was all the time too Germano-centric for any good.

          Since the beginning there were hidden inflation issues in peripheral states but the key of its failure has been that, specially since 2003 (4 years after implementation), the euro began climbing positions against other currencies (US dollar specially) making Southern European economies less and less competitive in the international markets.

          This is not so much a suicide pact but a suicidal attitude of subservience of souther states and peoples to the hidden German colonialist agenda, that now is becoming quite obvious. This agenda of course would not work without the connivance of France and the lack of critical thought re. EU in southern Europe (which has been always the most Europeist region at its own peril).

  22. Lafayette

    And, now, to make matters worse, the Greek Right wants to upset the apple-cart to somehow take advantage of the situation by refusing to join a Coalition Government.

    These are the same politicians, btw, that arranged the loans “off the books” with Goldman Sachs …

    Many people had doubts about letting Greece in to the Eurozone. Given the political immaturity, I now see why.

    And this episode will make it increasingly more difficult for other countries to enter. I have the suspicion that it will put new entries back at least five years.

    The EU is not a cash-cow as many of the Eastern Block countries may have thought … and the sentiment is growing that maybe the Eurozone is large enough at present.

    We shall see, but I sense that the Great Dream of a “United States of Europe” is on hold.

    1. Foppe

      The interesting point becomes obvious once you focus not on the political “immaturity” (other people would simply call this corruption, btw, not sure why you don’t) of the Greek elites, but on the question why they were let in regardless, and who let them in.
      Secondly, “The EU is not a cash-cow as many of the Eastern block countries may have thought” seems a very odd thing to say, given that it certainly is one to the western industrialists.. May I remind you that the primary aim was economic integration, and that one of the major consequences of such integration is increasing access to potential consumers, who can then buy your goods? To the German (and Dutch) industries, the Eurozone was mercantilist heaven.

      As for “the dream is on hold”: you must be new here..

  23. Nathanael

    “The wild card is whether the level of civil disobedience rises to the point where the government has to change course.”

    Barring the importation of foreign troops to Greece, the government will be forced to change course.

    Actually, I think revolution is more likely than any other outcome in Greece — the writ of the formal government appears to be running less far every week. Someone just has to organize a counter-government, and it’s all over.

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