The ever evolving Greek Melodrama continues in the pages of The Financial Times. Mr. Münchau’s essay is framed in a dire warning: ‘A failure to tell the truth imperils Greece and Europe’ and its sub-headline ‘If the IMF pulls out, Europe will be free to mismanage the crisis on its own’ Financial Times headline writers sharpen or reduce to the lowest terms, to appeal to the prejudices of its readers! If one thing is glaringly obvious, it is that from the beginning of this Crisis, from the propaganda offensive of The Virtuous Northern Tier vs The Profligate Southern Tier that was proffered by the apologists of four time defaulter Germany, the preferred method was to engage in moral shaming of the Greeks as the ethical other, as outsiders from their Northern betters.
Yet it was Goldman Sachs that colluded with former Greek governments to hide the true level of Greek indebtedness:
Now, though, it looks like the Greek figure jugglers have been even more brazen than was previously thought. “Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future,” one insider recalled, adding that Mediterranean countries had snapped up such products.
Greece’s debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period — to be exchanged back into the original currencies at a later date.
And not to forget the Germans and the fact that they defaulted 4 times in the 20th Century. Ms. Tett provides the reader with the pertinent data.
And then then there is this Financial Times news story :
Headline: Tsipras warns IMF and Germany over bailout talks
Sub-headline: Greek prime minister says negotiators ‘playing with fire’ for domestic gain
Greece’s prime minister Alexis Tsipras has warned the IMF and Germany to “stop playing with fire” at the expense of the Greek people, saying he is confident a bailout deal is within reach. Markets were hit this week by concerns that a deal might not be reached before July, when Greece is due to make a €7bn debt repayment. European negotiators are trying to seal a new agreement so Greece can release another tranche of funds from its most recent €86bn bailout to make the payment. Representatives of Greece’s lenders are set to return to Athens this week to check whether Greece has complied with a second batch of reforms agreed under the current bailout.
How long does it take for the political agents of the E.U. to realize that ‘Reform’ and its instrument ‘Austerity’ are demonstrable, empirical failures? Even the IMF has reluctantly realized a portion of this reality:
Headline: Neoliberalism: Oversold?
Sub-headline: Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion
Or have I phrased it as a question when it should be a statement about the self-serving myopia that pervades the European Union, under the leadership of its capos Merkel and the ECB. The EU was and remains a cartel with the trapping of a democracy, as Yanis Varoufakis pointed out long ago. In sum, it could be observed that Monnet’s vision was not democratic but corporatist, without engaging in hyperbole.