Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

News & Supplemental  

“We have a new kind of occupation in Europe by the Germans”: Did Germany Inflate Greece’s Deficit?


Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. (The flash dri­ve includes the anti-fas­cist books avail­able on this site.)

COMMENT: Fur­ther high­light­ing the delib­er­a­tion under­ly­ing the Ger­man eco­nom­ic and polit­i­cal sub­ju­ga­tion of Europe, a Greek gov­ern­men­tal sta­tis­ti­cian has charged that that coun­try’s 2009 bud­get deficit was delib­er­ate­ly inflat­ed to jus­ti­fy harsh aus­ter­i­ty mea­sures.

Zoe Geor­gan­ta has charged that the inclu­sion of util­i­ties under the cat­e­go­ry of gov­ern­men­tal debt went con­trary to Euro­pean reg­u­la­tions. 

She has charged that: “We have a new kind of occu­pa­tion in Europe by the Ger­mans.”

Ms. Geor­gan­ta’s voice may be added to the grow­ing cho­rus  of recog­ni­tion that the cir­cum­stances befalling Europe were NOT HAPPENSTANCE.

Fac­ing legal pro­ceed­ings, the head of Greece’s sta­tis­ti­cal analy­sis bureau is charg­ing that his elec­tron­ic com­mu­ni­ca­tions are being hacked and mon­i­tored.

Who might be doing that?


“Greece Revamps Sta­tis­tics Ser­vice Board after Row” by George Geor­giopou­los; Reuters; 9/16/2011.

EXCERPT: Greece said on Fri­day it would replace the board of its inde­pen­dent sta­tis­tics ser­vice (ELSTAT) after two mem­bers resigned and anoth­er was quot­ed as alleg­ing that 2009 deficit data had been arti­fi­cial­ly inflat­ed.

It said ELSTAT chief Andreas Geor­giou would keep his post.

The upward revi­sion of Greece’s bud­get deficit in 2009 to 15.4 per­cent of gross domes­tic prod­uct exposed the scale of the coun­try’s fis­cal derail­ment and sped up the debt cri­sis which is still rock­ing the euro zone.

“The 2009 deficit was arti­fi­cial­ly inflat­ed to show that the coun­try had the biggest fis­cal short­fall in all of Europe, even high­er than Ire­land’s which was 14 per­cent,” ELSTAT board mem­ber Zoe Geor­gan­ta was quot­ed as say­ing by the Eleft­herotyp­ia news­pa­per. Geor­gan­ta said the inclu­sion of a num­ber of util­i­ties under the gen­er­al gov­ern­ment inflat­ed the deficit. She said this had not been han­dled accord­ing to Euro­stat guide­lines and that the chair­man reject­ed the board­’s objec­tions.

“We have a new kind of occu­pa­tion in Europe by the Ger­mans,” Geor­gan­ta told Real FM radio, adding that Ger­man offi­cials at Euro­stat put pres­sure on the gov­ern­ment to inflate the 2009 deficit to jus­ti­fy harsh aus­ter­i­ty mea­sures. . . .

COMMENT: The Euro­pean Eco­nom­ic Com­mu­ni­ty was for­mal­ly artic­u­lat­ed by Reich offi­cials dur­ing the war, with the clear design to extend and ampli­fy the arrange­ment after the war. Below, we quote Gus­tave Koenigs, Sec­re­tary of State at a 1942 con­fer­ence about the Euro­pean Eco­nom­ic Com­mu­ni­ty.

Europais­che Wirtschafts Gemein­schaft (Euro­pean Eco­nom­ic Community–translation).

EXCERPT: . . . At the moment the so-called “Euro­pean Eco­nom­ic Com­mu­ni­ty” is not yet fact; there is no pact, no organ­i­sa­tion, no coun­cil and no Gen­er­al Sec­re­tary. How­ev­er, it is not just a part of our imag­i­na­tion or some dream by a politi­cian — it is very real.

The idea lives in the con­scious­ness of Europe‟s peo­ple who have been brought togeth­er as a result of the Eng­lish sea block­ade and the unnat­ur­al alliance of Eng­land and Sovi­et Rus­sia. Present­ly we have a Euro­pean mil­i­tary com­mu­ni­ty, made up of troops and vol­un­teers from Italy, Fin­land, Hun­gary, Roma­nia, Spain, Slo­va­kia, Croa­t­ia, Hol­land, Nor­way and Ger­many, which is fight­ing against Bol­she­vism. Its roots are in the eco­nom­ic co-oper­a­tion of the Euro­pean nations and it will devel­op after the war into a per­ma­nent Euro­pean eco­nom­ic com­mu­ni­ty. . . .

COMMENT: The Euro­pean Mon­e­tary Union is the real­iza­tion of the the­o­ries of Pan-Ger­man the­o­reti­cian Friedrich List. Writ­ing in 1943, Paul Win­kler fore­saw that the Ger­man pow­er elite would real­ize their goals through the cre­ation of a Ger­man-dom­i­nat­ed cen­tral Euro­pean eco­nom­ic union (bear­ing a strik­ing resem­blance to today’s Euro­pean Mon­e­tary Union.) One of the prin­ci­pal influ­ences on List’s think­ing was the “con­ti­nen­tal” con­cept of Napoleon, who attempt­ed to eco­nom­i­cal­ly unite Europe under French influ­ence.

The Thou­sand-Year Con­spir­a­cy: Secret Ger­many Behind the Mask; by Paul Win­kler; Charles Scribner’s Sons [HC]; 1943; pp. 15–16.

EXCERPT: . . . . The Ger­mans have a clear plan of what they intend to do in case of vic­tory. I believe that I know the essen­tial details of that plan. I have heard it from a suf­fi­cient num­ber of impor­tant Ger­mans to cred­it its authen­tic­ity . . . Germany’s plan is to make a cus­toms union of Europe, with com­plete finan­cial and eco­nomic con­trol cen­tered in Berlin. This will cre­ate at once the largest free trade area and the largest planned econ­omy in the world. In West­ern Europe alone . . . there will be an eco­nomic uni­ty of 400 mil­lion per­sons . . . To these will be added the resources of the British, French, Dutch and Bel­gian empires. These will be pooled in the name of Europa Ger­man­i­ca . . .

COMMENT: The Lis­t­ian mod­el was put into effect by the Third Reich, as can be gleaned by read­ing Dorothy Thompson’s analy­sis of Germany’s plans for world dom­i­nance by a cen­tral­ized Euro­pean eco­nomic union. Ms. Thomp­son was writ­ing in The New York Her­ald Tri­bune on May 31, 1940!

Ger­many Plots with the Krem­lin; T. H. Tetens;  Schu­man [HC]; 1953; p. 92.

EXCERPT: The Ger­mans count upon polit­i­cal pow­er fol­low­ing eco­nomic pow­er, and not vice ver­sa. Ter­ri­to­r­ial changes do not con­cern them, because there will be no ‘France’ or ‘Eng­land,’ except as lan­guage groups. Lit­tle imme­di­ate con­cern is felt regard­ing polit­i­cal orga­ni­za­tions . . . . No nation will have the con­trol of its own finan­cial or eco­nomic sys­tem or of its cus­toms. [Ital­ics are mine–D.E.]

The Naz­i­fi­ca­tion of all coun­tries will be accom­plished by eco­nomic pres­sure. In all coun­tries, con­tacts have been estab­lished long ago with sym­pa­thetic busi­ness­men and indus­tri­al­ists . . . . As far as the Unit­ed States is con­cerned, the plan­ners of the World Ger­man­ica laugh off the idea of any armed inva­sion. They say that it will be com­pletely unnec­es­sary to take mil­i­tary action against the Unit­ed States to force it to play ball with this sys­tem. . . . Here, as in every oth­er coun­try, they have estab­lished rela­tions with numer­ous indus­tries and com­mer­cial orga­ni­za­tions, to whom they will offer advan­tages in co-oper­a­tion with Ger­many. . . .

“Insight: Num­bers Game Turns Nasty for Greek Stats Chief” by Dina Kyr­i­aki­dou [Reuters]; Yahoo News; 3/14/2013.

EXCERPT: Econ­o­mist Andreas Geor­giou knew his job would not be easy. It was when he dis­cov­ered his emails were being hacked and leaked that the real chal­lenge of tam­ing his country’s approach to offi­cial sta­tis­tics hit home.

Hired in 2010 to reform the dis­cred­ited Greek Sta­tis­tics Author­ity ELSTAT, Geor­giou dis­cov­ered the e‑mail breach weeks into the job.

“The police told me that the hack­er had been enter­ing mul­ti­ple times a day into my account from day one of my work at ELSTAT and had accessed and down­loaded thou­sands of my e‑mails,” Geor­giou told Reuters. “All trust was bro­ken.”

Greece’s debt cri­sis engulfed the euro zone after the coun­try revealed in 2009 its deficit had been mas­sively under-report­ed. Now the Amer­i­can-edu­cat­ed Greek brought in to stop such prac­tices is also trapped in the storm.

Last Novem­ber, he was called before par­lia­ment to answer accu­sa­tions by for­mer Sta­tis­tics Author­ity board mem­bers that he had inflat­ed Greece’s 2009 bud­get deficit as part of a Ger­man-led con­spir­acy to plunge the coun­try into deep­er aus­ter­i­ty.

Last month, finan­cial crimes pros­e­cu­tors charged him with fal­si­fy­ing offi­cial data. The ratio­nale behind such charges has not yet been released, but he may be con­victed of breach of faith — a crime that usu­ally applies to those who embez­zle or mis­use pub­lic funds. If he is, he could face at least five years in jail.

Geor­giou, 52, says he did noth­ing wrong and mere­ly applied EU sta­tis­ti­cal stan­dards, such as ensur­ing data-col­lec­tors are free of polit­i­cal influ­ence. “That this is hap­pen­ing in the mid­dle of the euro zone is a strange and sur­real expe­ri­ence,” he said. “I am being pros­e­cuted for fol­low­ing the law.”

His sup­port­ers, includ­ing EU part­ners who are bankrolling Athens with hun­dreds of bil­lions of euros, say the affair reflects con­tin­u­ing polit­i­cal reluc­tance in Greece to con­front many of the country’s struc­tural flaws.

Euro­stat, the EU’s offi­cial sta­tis­tics author­ity, has rushed to Georgiou’s defense, issu­ing pub­lic state­ments in his sup­port.

A spokesman for the Ger­man finance min­istry said he knew of the inves­ti­ga­tion, but had heard noth­ing about Germany’s alleged part.


6 comments for ““We have a new kind of occupation in Europe by the Germans”: Did Germany Inflate Greece’s Deficit?”

  1. On Page 16 of the Thou­sand Year Con­spir­a­cy Paul Win­kler Writes about Pruss­ian Econ­o­mist Fred­erich Von List “Accord­ing to List a nation must con­quer all coun­tries lying in its sphere of eco­nom­ic action — by degrees, but steadi­ly”

    Then, on p. 225 Win­kler states All of this entered into the prepa­ra­tion for what Hitler calls the “New Eco­nom­ic Order.” This “New Order” is in its entire­ty the old Pruss­ian scheme of List, which nine­ty years before Hitler’s reign pro­vid­ed the blue­print for the cre­ation of Euro­pean eco­nom­ic uni­ty under dom­i­na­tion of a Pruss­ian Ger­many. It also pro­vid­ed for sub­se­quent expan­sion of this Prus­so-Teu­ton­ic Europe through inva­sion of the mar­kets of oth­er con­ti­nents, and estab­lish­ment of “pro­tec­torates” through­out the world. This scheme has always been close to the hearts of the Prus­so-Teu­ton­ic pow­ers of Ger­many... TERRITORIAL CONQUEST HAS A MEANING SUBORDINATE TO ECONOMIC CONQUEST, ACCORDING TO LISTS’S FORMULA. (cap­i­tal­iza­tion added for empha­sis)

    Posted by Von List | March 19, 2013, 7:31 pm
  2. It looks like the pros­e­cu­tion of Geor­giou is going for­ward but we’re going to have to wait to hear the pros­e­cu­tor’s spe­cif­ic charges. This is going to be a sto­ry to watch:

    Insight: Num­bers game turns nasty for Greek stats chief
    Reuters – Thu, Mar 14, 2013

    By Dina Kyr­i­aki­dou

    ATHENS (Reuters) — Econ­o­mist Andreas Geor­giou knew his job would not be easy. It was when he dis­cov­ered his emails were being hacked and leaked that the real chal­lenge of tam­ing his coun­try’s approach to offi­cial sta­tis­tics hit home.

    Hired in 2010 to reform the dis­cred­it­ed Greek Sta­tis­tics Author­i­ty ELSTAT, Geor­giou dis­cov­ered the e‑mail breach weeks into the job.

    “The police told me that the hack­er had been enter­ing mul­ti­ple times a day into my account from day one of my work at ELSTAT and had accessed and down­loaded thou­sands of my e‑mails,” Geor­giou told Reuters. “All trust was bro­ken.”

    Greece’s debt cri­sis engulfed the euro zone after the coun­try revealed in 2009 its deficit had been mas­sive­ly under-report­ed. Now the Amer­i­can-edu­cat­ed Greek brought in to stop such prac­tices is also trapped in the storm.

    Last Novem­ber, he was called before par­lia­ment to answer accu­sa­tions by for­mer Sta­tis­tics Author­i­ty board mem­bers that he had inflat­ed Greece’s 2009 bud­get deficit as part of a Ger­man-led con­spir­a­cy to plunge the coun­try into deep­er aus­ter­i­ty.

    Last month, finan­cial crimes pros­e­cu­tors charged him with fal­si­fy­ing offi­cial data. The ratio­nale behind such charges has not yet been released, but he may be con­vict­ed of breach of faith — a crime that usu­al­ly applies to those who embez­zle or mis­use pub­lic funds. If he is, he could face at least five years in jail.

    Geor­giou, 52, says he did noth­ing wrong and mere­ly applied EU sta­tis­ti­cal stan­dards, such as ensur­ing data-col­lec­tors are free of polit­i­cal influ­ence. “That this is hap­pen­ing in the mid­dle of the euro zone is a strange and sur­re­al expe­ri­ence,” he said. “I am being pros­e­cut­ed for fol­low­ing the law.”

    His sup­port­ers, includ­ing EU part­ners who are bankrolling Athens with hun­dreds of bil­lions of euros, say the affair reflects con­tin­u­ing polit­i­cal reluc­tance in Greece to con­front many of the coun­try’s struc­tur­al flaws.

    Euro­stat, the EU’s offi­cial sta­tis­tics author­i­ty, has rushed to Geor­giou’s defense, issu­ing pub­lic state­ments in his sup­port. A spokesman for the Ger­man finance min­istry said he knew of the inves­ti­ga­tion, but had heard noth­ing about Ger­many’s alleged part.

    “I don’t even know the accu­sa­tions. Non­sense,” he said.

    The cur­rent Greek gov­ern­ment has also backed Geor­giou, although it is clear­ly hes­i­tant to inter­fere in the judi­cial process.

    “The out­side world does­n’t under­stand and, to be hon­est, we have a huge dif­fi­cul­ty explain­ing to our part­ners what is hap­pen­ing here,” said a senior Greek finance min­istry offi­cial on con­di­tion of anonymi­ty.

    “What we stress is that we stand behind the cur­rent num­bers under­pin­ning the eco­nom­ic pro­gram. They have been ver­i­fied by Euro­stat and we have full con­fi­dence in Mr. Geor­giou.”


    Gov­ern­ment offi­cials say part of the prob­lem with Greece’s sta­tis­ti­cal ser­vice was that, until recent­ly, it was con­trolled by the finance min­istry and at the mer­cy of min­is­ters. In the past, some may have want­ed to keep GDP low to col­lect more EU sub­si­dies, while oth­ers want­ed to boost GDP to keep the deficit ratio with­in EU rules, said offi­cials.

    Euro­stat reg­u­lar­ly used to give Greece’s num­bers “reser­va­tions”, mean­ing it doubt­ed their valid­i­ty.

    In 2004, then-finance min­is­ter George Alo­gosk­oufis told Brus­sels that Greece had under-report­ed its bud­get deficit for years, includ­ing for 2001, the year it joined the euro zone.


    That cred­i­bil­i­ty suf­fered fur­ther with a new finance min­is­ter. Social­ist George Papa­con­stan­ti­nou announced in late 2009 that the bud­get deficit would come to 12.7 per­cent of GDP instead of a pre­vi­ous­ly esti­mat­ed 6 per­cent. He blamed his Con­ser­v­a­tive pre­de­ces­sork.

    Eurogroup head and Lux­em­bourg Prime Min­is­ter Jean-Claude Junck­er told reporters in Brus­sels at the time: “The game is over — we need seri­ous sta­tis­tics.”

    The revi­sion was fol­lowed by anoth­er new deficit esti­mate of 13.6 per­cent in April 2010.

    It was at that point, as part of an inter­na­tion­al bailout that res­cued Greece from bank­rupt­cy, that Papa­con­stan­ti­nou cre­at­ed a new, inde­pen­dent sta­tis­tics author­i­ty and brought in Geor­giou.

    The new sta­tis­tics boss, plucked from his career in Wash­ing­ton, came with a rep­u­ta­tion for a mild man­ner, a fond­ness for pas­tel ties, and a black belt in Jujit­su.

    In Octo­ber 2010, he re-exam­ined the 2009 bud­get deficit fig­ure with Euro­stat and revised it again, this time to 15.4 per­cent.

    Alo­gosk­oufis declined to com­ment on how the sta­tis­tics ser­vice had oper­at­ed when he was min­is­ter. Papa­con­stan­ti­nou says it was dur­ing his tenure that the agency start­ed func­tion­ing with­out polit­i­cal inter­fer­ence. As for the charges against Geor­giou, he said, the final arbiter of the verac­i­ty of any EU mem­ber’s data is Euro­stat, whose rules nation­al sta­tis­ti­cal agen­cies are required to apply. “I there­fore fail to see how and why this is an issue for the Greek courts.”

    Notice how Eurostast offi­cials rou­tine­ly assumed Greece was under report­ing its debt for years and Greece’s finance min­is­ter even admit­ted this back in 2004. It was­n’t until after the 2008 finan­cial cri­sis — when things like a “Troi­ka” tak­ing over coun­try more of an option — that George Papa­con­stan­ti­nou’s late 2009 announce­ment of Greece’s deficit revi­sion became an exis­ten­tial cri­sis that required a com­plete loss of sov­er­eign­ty a mas­sive aus­ter­i­ty regimes.

    So Euro­stat knew Greece was under report­ing since at least 2004, but it was only after the debt was allowed to grow for anoth­er five years that the EU/ECB/IMF did any­thing. And the thing they did was to take the Greek’s sov­er­eign­ty, give them a Troi­ka...and also take their pub­lic util­i­ties and nat­ur­al resources:

    Greek bailout pro­gram review hits snag

    Post­ed: Mar 12, 2013 10:03 PM IST Updat­ed: Mar 13, 2013 2:22 AM IST
    Asso­ci­at­ed Press

    ATHENS, Greece (AP) — Inspec­tors from Greece’s res­cue lenders delayed a meet­ing with the prime min­is­ter which had been sched­uled for Tues­day after talks stalled over tax col­lec­tion dif­fi­cul­ties and promised reduc­tions in pub­lic sec­tor staff.


    Debt inspec­tors are also press­ing Greece to speed up its pri­va­ti­za­tion pro­gram.

    Prime Min­is­ter Sama­ras met Tues­day with Alex­ei Miller, chief exec­u­tive of Rus­si­a’s state-run nat­ur­al gas giant Gazprom, one of the com­pa­nies short list­ed in the planned pri­va­ti­za­tion of Greece’s Pub­lic Gas Cor­po­ra­tion, or DEPA.

    Oth­er con­tenders include Azer­bai­jan’s state ener­gy com­pa­ny Socar and Rus­si­a’s pri­vate Sin­tex.

    Mean­while, around 3,000 pro­test­ers marched in cen­tral Athens against plans to devel­op a gold mine on the Halkidi­ki penin­su­la, a pop­u­lar hol­i­day des­ti­na­tion in north­ern Greece. The pro­test­ers chant­ed “we want forests, not a gold­en tomb,” and marched to par­lia­ment in the peace­ful demon­stra­tion.

    Eldo­ra­do Gold Corp., based in Van­cou­ver, Cana­da, has been grant­ed the rights to the gold mine and plans to begin dig­ging soon.

    The coun­try’s main oppo­si­tion par­ty, the left-wing Syriza, has sided with the pro­test­ers.

    “We do not oppose growth, but we are opposed to these pirate invest­ments that seek to loot the envi­ron­ment of nat­ur­al resources,” Syriza leader Alex­is Tsipras said.

    “The politi­cians who bank­rupt­ed this coun­try ... are work­ing with those who want to plun­der its great min­er­al wealth and leave an envi­ron­men­tal waste­land behind.”

    Posted by Pterrafractyl | March 20, 2013, 12:13 pm
  3. With the euro­zone in full on Cyprus-freak­out mode fol­low­ing the Cypri­ot rejec­tion of the pro­posed depos­i­tor tax on Cypri­ot banks, it’s worth keep­ing in mind that — like Greece — the nature, struc­ture, and large rel­a­tive size of Cyprus’s bank­ing sec­tor was no secret to ECB/EU offi­cials when Cyprus was peti­tion­ing to join the euro­zone. It’s more of an aus­ter­i­ty-era con­cern:

    Does size mat­ter? Cypri­ot bank sec­tor prob­lem went over­looked

    By Jan Strupczews­ki

    BRUSSELS | Thu Mar 21, 2013 1:59pm EDT

    (Reuters) — There was no offi­cial red flag that Cyprus’s over­sized bank­ing sec­tor posed a big risk to its econ­o­my until last year, when the Euro­pean Union set up tools to mon­i­tor such imbal­ances, a Reuters review of EU reports dat­ing back to 2003 showed.

    The total con­sol­i­dat­ed assets of the Cypri­ot bank­ing sec­tor, dom­i­nat­ed by three large banks, are 7.5 times the size of the island’s econ­o­my, which pro­duces almost 18 bil­lion euros ($23.27 bil­lion) a year.

    Because Cypri­ot banks suf­fered heavy loss­es in the Greek sov­er­eign debt restruc­tur­ing last year, Nicosia now needs an inter­na­tion­al bailout. Most of the emer­gency loans from the euro zone, once agreed, will go to recap­i­tal­ize the banks.

    One of the con­di­tions for the bailout, how­ev­er, if that Cyprus will more than halve the size of its bank­ing sec­tor by 2018 to match the EU aver­age of around 3.5 times GDP.

    “The bank­ing sec­tor is com­plete­ly over-sized. That’s why the pre­con­di­tions to solv­ing this prob­lem are very dif­fi­cult,” Ger­man Finance Min­is­ter Wolf­gang Schaeu­ble said last week.

    “Solu­tions have to be found to that. The Cypri­ot bank­ing sec­tor, like in oth­er coun­tries, with its spe­cial rules that led to it becom­ing over-sized, has con­tributed sig­nif­i­cant­ly to the cause of the prob­lem,” he said.

    This is a rel­a­tive­ly recent con­clu­sion.

    When Cyprus was exam­ined as to whether it met the cri­te­ria to join the Euro­pean Union in 2003, a Euro­pean Com­mis­sion report on its readi­ness men­tioned no prob­lems with the bank­ing sec­tor — it was not a cri­te­ri­on for mem­ber­ship.

    Nei­ther did the Euro­pean Cen­tral Bank men­tion that any­thing was wrong with Cypri­ot banks or their busi­ness mod­el — based on fund­ing from deposits, almost half of which are from non-res­i­dents — when it eval­u­at­ed whether Cyprus was fit to join the euro zone in a 2007 report.

    “They had 10 years to make this point and while it was made infor­mal­ly here or there, nobody ever said or did any­thing about it,” one euro zone offi­cial said.


    Nei­ther is the size of the Cypri­ot bank­ing sec­tor unique.

    In a report pub­lished almost a year ago, the first pub­lic men­tion of the threat that Cypri­ot banks might pose to the finan­cial sta­bil­i­ty of the island, the Euro­pean Com­mis­sion said Cyprus ranked only fourth in the euro area.

    Lux­em­bourg has a bank­ing sec­tor 24 times the size of its econ­o­my, Ire­land eight times and tiny Mal­ta 7.8 times big­ger than its GDP.

    A senior EU offi­cial said that the Euro­pean Com­mis­sion told the Cypri­ot gov­ern­ment in a tele­phone call already in Novem­ber 2011 that it should reduce the size of the bank­ing sec­tor, but that advice was ignored.

    “If the ques­tion is, were econ­o­mists and pol­i­cy­mak­ers able to see the cri­sis com­ing and if they did some­thing about it, I think it is fair to say — not much,” the EU offi­cial said.

    “But once the cri­sis has struck, espe­cial­ly after the Ice­land and Irish cas­es, it has become clear the over­sized bank­ing sec­tors are a seri­ous prob­lem for a coun­try and the euro zone as a whole.”

    The first offi­cial indi­ca­tion that the size and busi­ness mod­el of the Cypri­ot bank­ing sec­tor might become a prob­lem was in a Com­mis­sion report from May 2012, pre­pared under the new­ly agreed pro­ce­dure to detect macro­eco­nom­ic imbal­ances.


    The Euro­pean Union on Thurs­day gave Cyprus until Mon­day to raise the bil­lions of euros it needs to clinch an inter­na­tion­al bailout or face the col­lapse of its finan­cial sys­tem and prob­a­ble exit from the euro zone.

    It’s also worth point­ing out that one of the rea­sons Cyprus’s rel­a­tive­ly large bank­ing sec­tor is such a recent con­cern is due, in part, to that recent demand last year by the usuaul sus­pects that pri­vate hold­ers of Greek debt take a large “hair­cut” on their Greek debt hold­ings. Pri­vate hold­ers like Cyprus’s large banks.

    The upcom­ing sequel to this hor­ror flick should be inter­est­ing.

    Posted by Pterrafractyl | March 21, 2013, 3:33 pm
  4. Democ­ra­cy and sol­i­dar­i­ty in the euro­zone can be testy:

    Cyprus Strug­gles lto Meet Bailout Demand as Dead­line Looms
    By Tom Stoukas & Ben Sills — Mar 22, 2013 10:16 PM GMT+0530

    Euro­pean and Cypri­ot offi­cials were locked in talks to find a for­mu­la to avert the Mediter­ranean island’s finan­cial col­lapse, strug­gling to forge con­sen­sus on a bailout pack­age before the Euro­pean Cen­tral Bank cuts fund­ing.

    Cyprus’s options nar­rowed today after Rus­sia spurned a bid for a loan and coali­tion law­mak­ers in Ger­many dis­missed the Cypri­ot government’s lat­est res­cue pro­pos­als. That left the troi­ka of inter­na­tion­al cred­i­tors to ham­mer out fresh terms with Pres­i­dent Nicos Anastasiades’s coali­tion focus­ing on the fate of Cyprus’s ail­ing banks.

    “We believe that in the next few hours we could be able, with a lot of dif­fi­cul­ties, to reach a frame­work that will be with­in the poli­cies of the EU, Euro­pean Cen­tral Bank and IMF,” Averof Neo­fy­tou, deputy pres­i­dent of Cyprus’s rul­ing Disy par­ty, told reporters in Nicosia, refer­ring to the troi­ka of cred­i­tors. “We are try­ing hard. I believe we may have a result today.”

    Euro­pean patience with Cyprus is run­ning out after Cypri­ot law­mak­ers reject­ed a plan to tax bank deposits agreed on last week­end by the 17 euro-area finance min­is­ters. The same finance chiefs are now con­sid­er­ing a plan to shut­ter the two biggest banks in Cyprus and freeze the assets of unin­sured depos­i­tors, four Euro­pean offi­cials said yes­ter­day. The ECB has said it will cut off emer­gency fund­ing to Cypri­ot banks at the end of Mon­day, March 25 unless there is a deal.


    Cyprus Pop­u­lar

    Cyprus Pop­u­lar, found­ed in 1901 as a small sav­ings bank, oper­ates in Cyprus, Greece, the U.K., Ukraine, Rus­sia, Roma­nia, Ser­bia, Mal­ta and Chi­na through 439 branch­es, ser­vic­ing 1.35 mil­lion cus­tomers, accord­ing to infor­ma­tion on its web­site.

    The bank, which employs about 8,500 peo­ple, post­ed a net loss of 1.56 bil­lion euros for the first nine months of 2012, after a net loss of 3.65 bil­lion euros in 2011 fol­low­ing write­downs on Greek gov­ern­ment bond hold­ings, good­will relat­ed to its Greek busi­ness and mak­ing pro­vi­sions for loan loss­es.

    Cyprus’s total bank assets swelled to 126.4 bil­lion euros at the end of Jan­u­ary, sev­en times the size of the 18 bil­lion euro econ­o­my, from 78 bil­lion euros in 2007, data from the Euro­pean Cen­tral Bank and the EU’s sta­tis­tics office show. Russ­ian com­pa­nies and indi­vid­u­als have an esti­mat­ed $31 bil­lion of wealth in Cyprus, accord­ing to Moody’s.


    Cypri­ot Finance Min­is­ter Michael Sar­ris, who met the same day in Moscow with Russ­ian First Deputy Min­is­ter Igor Shu­val­ov and Finance Min­is­ter Anton Silu­anov, said today that Rus­sia would offer no addi­tion­al sup­port beyond restruc­tur­ing a 2.5 bil­lion-euro loan grant­ed in 2011.

    Merkel told a closed-door meet­ing of leg­is­la­tors in Berlin today that Cyprus’s deci­sion to test Europe is unac­cept­able, and that it must now act quick­ly, a par­ty offi­cial said.

    Cyprus is liv­ing “in an illu­sion,” Michael Meis­ter, deputy par­lia­men­tary leader of Merkel’s CDU, told BBC Radio 4’s “Today” pro­gram. “They have to restruc­ture the whole econ­o­my, restruc­ture the bank­ing sec­tor and until now I don’t see the Cyprus peo­ple and politi­cians agree­ing on this”.

    It’s fas­ci­nat­ing how we con­stant­ly hear about the need to “restruc­ture” economies through­out the euro­zone with­out any sort of vision for what the new­ly restruc­tured economies will look like after the “restructuring”(austerity) phase. If folks like Merkel actu­al­ly shared such a vision it might be use­ful for shoring up “con­fi­dence” in the “expan­sion­ary aus­ter­i­ty” man­dates advo­cat­ed by folks like Merkel. That’s, of course, assum­ing the visions for those restruc­tured economies are con­fi­dence-induc­ing.

    Posted by Pterrafractyl | March 22, 2013, 11:12 am
  5. Here’s an inves­ti­ga­tion to watch:

    Rhein­metall, Atlas Probed for Brib­ing Greek Offi­cials
    By Karin Matussek — Aug 26, 2013 6:02 AM CT

    Rhein­metall AG (RHM) and Atlas Elek­tron­ik GmbH, a unit joint­ly owned by ThyssenK­rupp AG (TKA) and Euro­pean Aero­nau­tic Defence and Space Co., were raid­ed as part of a Ger­man probe into alle­ga­tions of bribery by employ­ees.

    The sus­pects are being inves­ti­gat­ed over pay­ments to Greek offi­cials from 1998 to 2011 to win con­tracts for sub­ma­rine equip­ment, Frank Pas­sade, a spokesman for the pros­e­cu­tors’ office in Bre­men, Ger­many, said in an inter­view today. Atlas, a naval elec­tron­ics man­u­fac­tur­er, alleged­ly paid 8.5 mil­lion euros ($11.4 mil­lion) in bribes and Dus­sel­dorf-based Rhein­metall, an armored vehi­cle mak­er, paid 9.1 mil­lion euros, Pas­sade said.

    “Atlas informed us in 2010 about the mat­ter, but at the time the facts indi­cat­ed that we didn’t have juris­dic­tion since every­thing hap­pened abroad,” Pas­sade said. “Tax inves­ti­ga­tors inspect­ing Rheinmetall’s books last year brought new aspects to light prompt­ing us to open a probe.”

    Ger­many has seen a wave of bribery inves­ti­ga­tions since Siemens AG was raid­ed in 2006. Fer­rostaal GmbH was fined 140 mil­lion euros ($187 mil­lion) as part of a set­tle­ment in 2011 over bribes to offi­cials in Greece and Por­tu­gal to win sub­ma­rine orders.

    The alle­ga­tions in the Bre­men probe over­lap with events that were part of the Fer­rostaal case, Pas­sade said. The search­es of Rhein­metall and Atlas took place last week, he said. He declined to iden­ti­fy any sus­pects.

    The com­pa­nies con­firmed the raids. Oliv­er Hoff­mann, a spokesman for Rhein­metall, said the alle­ga­tions are base­less. Atlas, based in Bre­men, is coop­er­at­ing with the probe, said Stef­fen Leuthold, a spokesman for the com­pa­ny.

    One rea­son this inves­ti­ga­tion is poten­tial­ly so reveal­ing: The obfus­ca­tion of Greek debt that cre­at­ed Greece’s finan­cial trou­bles in the first place was par­tial­ly con­duct­ed in order to pay for these subs:

    The Wall Street Jour­nal
    The Sub­ma­rine Deals That Helped Sink Greece

    By Christo­pher Rhoads
    Updat­ed July 10, 2010 12:01 a.m. ET

    ATHENS—As Greece slash­es spend­ing to avoid default, it has­n’t moved to skimp on one area: defense.

    The deeply indebt­ed Mediter­ranean nation, whose finan­cial cri­sis roiled the glob­al finan­cial sys­tem this year, is spend­ing more than a bil­lion euros on two sub­marines from Ger­many.

    It’s also look­ing to spend big on six frigates and 15 search-and-res­cue heli­copters from France. In recent years, Greece has bought more than two dozen F16 fight­er jets from the U.S. at a cost of more than €1.5 bil­lion.

    Much of the equip­ment comes from Ger­many, the coun­try that has had to shoul­der most of the bur­den of bail­ing out Greece and has been loud­est in con­demn­ing Athens for liv­ing beyond its means. Ger­man Chan­cel­lor Angela Merkel has admon­ished the Greek gov­ern­ment “to do its home­work” on debt reduc­tion.

    The mil­i­tary deals illus­trate how Ger­many and oth­er cred­i­tors have in some ways ben­e­fit­ed from Greece’s profli­ga­cy, and how that is com­ing back to haunt them.

    Greece, with a pop­u­la­tion of just 11 mil­lion, is the 6largest importer of con­ven­tion­al weapons in Europe—and ranks fifth in the world behind Chi­na, India, the Unit­ed Arab Emi­rates and South Korea. Its mil­i­tary spend­ing is the high­est in the Euro­pean Union as a per­cent­age of gross domes­tic prod­uct. That spend­ing was one of the fac­tors behind Greece’s stratos­pher­ic nation­al debt.

    The Ger­man sub­ma­rine deal in par­tic­u­lar, announced in March as the coun­try lurched toward bank­rupt­cy, has cast a spot­light on the Greek mil­i­tary bud­get and on the for­eign ven­dors sup­ply­ing the hard­ware. The deal includes a total of six subs in a com­pli­cat­ed trans­ac­tion that began a decade ago with Ger­man firms.

    The arms sales are draw­ing heat from Turkey, Greece’s neigh­bor and arch-rival. “Even those coun­tries try­ing to help Greece at this time of dif­fi­cul­ty are offer­ing to sell them new mil­i­tary equip­ment,” said Ege­men Bagis, Turkey’s top Euro­pean Union nego­tia­tor, short­ly after the sub deal was announced. “Greece does­n’t need new tanks or mis­siles or sub­marines or fight­er planes, nei­ther does Turkey.”

    Greece’s deputy prime min­is­ter, Theodore Pan­ga­los, said dur­ing an Athens vis­it in May by Turk­ish Prime Min­is­ter Recep Tayyip Erdo­gan that he felt “forced to buy weapons we do not need,” and that the deals made him feel “nation­al shame.”

    Oth­er Euro­pean offi­cials have charged France and Ger­many with mak­ing their mil­i­tary deal­ings with Greece a con­di­tion of their par­tic­i­pa­tion in the coun­try’s huge finan­cial res­cue. French and Ger­man offi­cials deny the accu­sa­tions.

    A spokesman for Ger­man Chan­cel­lor Merkel says the sub­ma­rine trans­ac­tion was the cul­mi­na­tion of an old con­tract signed long before Greece’s debt cri­sis. In May, France’s defense min­istry said Greek author­i­ties have con­firmed their will­ing­ness to pur­sue talks on sev­er­al arm-pro­cure­ment deals.

    In May, Greece’s eco­nom­ic crimes unit began inves­ti­gat­ing all weapons deals of the past decade—totaling about €16 billion—to deter­mine if Greece over­paid or bought unnec­es­sary hard­ware.

    Ger­man pros­e­cu­tors are inves­ti­gat­ing whether mil­lions of euros in bribes were paid to Greek offi­cials in con­nec­tion with the sub deal. In May, the chief exec­u­tive of one of the Ger­man com­pa­nies help­ing to build the sub­marines, called Fer­rostaal AG, resigned amid the probe.

    For some promi­nent Greeks, the lat­est sub­ma­rine deal was the last straw. In late April, Ste­lios Fenekos, a 52-year-old vice admi­ral of the 22,000-person strong Greek Navy, resigned his posi­tion, bring­ing a three-decade Navy career to an end. He says he did so to protest the Greek defense min­is­ter’s deci­sion to pur­chase the subs, as well as oth­er deci­sions tak­en in recent months that Mr. Fenekos con­sid­ers “polit­i­cal­ly moti­vat­ed.

    “How can you say to peo­ple we are buy­ing more subs at the same time we want you to cut your salaries and pen­sions?” says Adm. Fenekos, in his first inter­view with a reporter. He was refer­ring to the gov­ern­men­t’s 5% cut in most pen­sions and even deep­er slash­es to pub­lic-sec­tor wages enact­ed in response to the cri­sis. The Greek Navy, he says, can­not afford to main­tain the addi­tion­al sub­marines. It cur­rent­ly has eight subs.

    A spokesman for the Greek Min­istry of Defense said Mr. Fenekos’ res­ig­na­tion was accept­ed. In step­ping down, “Mr. Fenekos did not refer to the sub­ma­rine deal,” he said.


    It was in that envi­ron­ment that Greece in 1998 went shop­ping for sub­marines. It decid­ed on three Ger­man-built class-214 sub­marines, a state-of-the-art diesel-elec­tric pow­ered ves­sel, with the option of buy­ing a fourth—for a total of €1.8 bil­lion. The first was to be built at the Kiel head­quar­ters of Howaldtswerke-Deutsche Werft GmbH, with the oth­ers built at the affil­i­at­ed Hel­lenic Ship­yards SA, in Skara­man­gas, Greece.

    The arrange­ment, called the Archimedes Pro­gram, would pre­serve thou­sands of jobs at the Greek ship­yard.

    Greek offi­cials in 2002 expand­ed it to include the mod­ern­iza­tion of three old­er class-209 submarines—work to be done at the Skara­man­gas ship­yard using mate­ri­als and help from the Ger­mans. The increase would cost anoth­er €985 mil­lion.

    The Ger­man side con­sist­ed of a com­pa­ny owned by Ger­man truck­mak­er MAN SE, called Fer­rostaal, and Howaldtswerke-Deutsche Werft, now owned by ThyssenK­rupp Marine Sys­tems AG. (MAN has since reduced its stake in Fer­rostaal to 30%.)

    The total cost of the new and ren­o­vat­ed subs: €2.84 bil­lion.

    As the mil­i­tary expen­di­tures rose, Greece’s two main polit­i­cal par­ties used them as a polit­i­cal foot­ball, each try­ing to make the bud­get deficit fig­ures look worse when the oth­er was in charge.

    When the Social­ist gov­ern­ment first bought the sub­marines, it post-dat­ed the account­ing for them to the day when the ves­sels were to be deliv­ered, rather than when they were pur­chased.

    The gov­ern­ment at the time was strug­gling to meet bud­get cri­te­ria for entry into the euro zone, which it joined a year behind oth­er mem­bers in 2001. Push­ing back the expens­es sad­dled the bill with the Social­ists’ suc­ces­sors, the con­ser­v­a­tive New Democ­ra­cy par­ty, which came to pow­er in March 2004.

    The New Democ­ra­cy gov­ern­ment that year then used a sim­i­lar tac­tic, by retroac­tive­ly account­ing for the expen­di­tures on the date of pur­chase. That inflat­ed the bud­get deficits of the pre­vi­ous government—while mak­ing it eas­i­er for the New Democ­ra­cy gov­ern­ment to meet its own deficit goals.

    Both account­ing meth­ods at the time were allowed by the Euro­pean Union. The result­ing mas­sive deficit revi­sions made in 2004 for the pre­vi­ous years—4.6% of gross domes­tic prod­uct ver­sus 1.7% for 2003—triggered an inves­ti­ga­tion in 2004 by Euro­stat, the Euro­pean Union’s sta­tis­tics agency, to under­stand what caused the revi­sions. The find­ings did not result in any sanc­tions.

    Mil­i­tary spend­ing account­ed for near­ly a quar­ter of the dif­fer­ence in the 2003 fig­ures, and even more in revi­sions made on the deficits for pre­ced­ing years.

    After the Social­ist par­ty, PASOK, returned to pow­er in Octo­ber 2009, it made a sim­i­lar maneu­ver: It announced the fed­er­al deficit was much worse than the out­go­ing gov­ern­ment had let on, main­ly due to pub­lic hos­pi­tal debts, set­ting in motion the finan­cial cri­sis.

    Mean­while, not one of the subs had been deliv­ered. When Greek offi­cials trav­eled to Kiel to test the first sub, called the Papaniko­lis, they said that they found that in cer­tain sea con­di­tions the sub­ma­rine list­ed to the right. “The Navy said we can­not accept this sub,” said Mr. Fenekos, the admi­ral who recent­ly resigned. “But the politi­cians did not want to stop it because they need­ed the pro­duc­tion for the work­ers in the ship­yard here.”

    ThyssenK­rupp Marine Sys­tems said the crit­i­cism was base­less and was made to delay pay­ment.

    By last fall, Greece had paid €2.032 bil­lion, about 70% of the total owed. With the deal at an impasse, the Ger­man com­pa­nies can­celled the con­tract.

    Final­ly, in March, the two sides announced they had begun nego­ti­at­ing a new deal. Instead of hav­ing three old­er subs mod­ern­ized, just one would be mod­ern­ized, and Greece would buy two addi­tion­al new ones, bring­ing the total to six new submarines—costing a total of €1.3 bil­lion.

    Abu Dhabi MAR LLC, a ship­build­ing com­pa­ny in Abu Dhabi, would buy 75.1% of the Greek ship­yard, with the expand­ed sub­ma­rine deal a con­di­tion of the sale. The Greek gov­ern­ment final­ly accept­ed the sub, with the under­stand­ing it would imme­di­ate­ly resell it. No deal has been final­ized.

    Greece’s defense min­is­ter, Evan­ge­los Venize­los, speak­ing to the Greek par­lia­ment in March, explained that the deal was an attempt to end the mess, to “sev­er the Gor­dian knot” that the new gov­ern­ment had inher­it­ed.

    With 1,200 ship­yard jobs at stake, Ger­many demand­ing con­ces­sions on the com­plex deal, and Greece hav­ing already paid two bil­lion euros with­out receiv­ing a sin­gle sub, the new arrange­ment was nec­es­sary, he said.

    But in Feb­ru­ary, just as a solu­tion appeared to be at hand, Ger­man pros­e­cu­tors in Munich began turn­ing up evi­dence of unsa­vory deal­ings, accord­ing to records of their inves­ti­ga­tion.

    Fer­rostaal exec­u­tives autho­rized pay­ments worth mil­lions of euros to politi­cians to win the ini­tial deal in 2000, through a Greek com­pa­ny called Marine Indus­tri­al Enter­pris­es, accord­ing to the Munich pros­e­cu­tor’s records.

    To do this, Fer­rostaal used sham con­sult­ing con­tracts, accord­ing to the records. That com­pa­ny then dis­trib­uted pay­ments to “offi­cials and deci­sion-mak­ers” in Greece, accord­ing to the records. The inves­ti­ga­tion is ongo­ing. No charges have been filed.

    Adamos Seraphides, chair­man of MIE Group Lim­it­ed, a suc­ces­sor com­pa­ny to a divi­sion of Marine Indus­tri­al Enter­pris­es, said he does­n’t believe that the com­pa­ny’s pri­or lead­er­ship was involved in bribery.

    In March, police searched Fer­rostaal offices, in Essen, seek­ing evi­dence of bribe pay­ments. In May, sev­er­al exec­u­tives stepped down.

    “Fer­rostaal will con­tin­ue to pur­sue the inten­sive dia­logue with the state pros­e­cu­tor’s office in Munich and has pledged full and com­pre­hen­sive sup­port and coop­er­a­tion,” says a Fer­rostaal spokesman.

    A ThyssenK­rupp spokesper­son says the com­pa­ny got into the busi­ness only in 2005, when it bought Howaldtswerke-Deutsche Werft.

    Despite the tor­tu­ous, decade-long jour­ney of the sub­ma­rine deal—and Greece’s pre­car­i­ous finan­cial standing—Germany stands ready for more busi­ness.

    Gui­do West­er­welle, the Ger­man for­eign min­is­ter, in Feb­ru­ary told a Greek news­pa­per that Ger­many does­n’t want to force Greece to buy any­thing.

    But “when­ev­er it comes to the point when it’s ready to buy fight­er planes,” a Euro­pean fight­er-plane con­sor­tium, which Ger­many rep­re­sents in Greece, “wants to be con­sid­ered in the deci­sion.”


    Unfor­tu­nate­ly, the lack of inter­est in cut­ting back Greece’s exces­sive­ly high lev­els of mil­i­tary was­n’t lim­it­ed to the pre-cri­sis peri­od and, for the Greek gov­ernent, such cuts may not have been option­al:

    Greece’s aus­ter­i­ty does­n’t extend to its arms bud­get
    Greece con­tin­ues to spend the most on arms in the EU as a per­cent­age of GDP, while its peo­ple suf­fer eco­nom­ic hard­ship

    Paul Hay­don
    theguardian.com, Wednes­day 21 March 2012 10.56 EDT

    In the wake of the pri­vate sec­tor debt swap agreed last week, Euro­pean lead­ers have con­tin­ued to call for major struc­tur­al reforms to Greece’s econ­o­my and soci­ety. The cur­rent EU-IMF bailout remains con­di­tion­al on fur­ther aus­ter­i­ty mea­sures, includ­ing reduc­ing pen­sions, the min­i­mum-wage and civ­il ser­vice jobs. How­ev­er, one area of the Greek bud­get does­n’t seem to have received much scruti­ny: its huge mil­i­tary spend­ing.

    The fact that Greece, a rel­a­tive­ly small and demo­c­ra­t­ic coun­try with not much in the way of glob­al ambi­tions, should spend as much on its mil­i­tary as it does is per­plex­ing. In 2006, as the finan­cial cri­sis was loom­ing, Greece was the third biggest arms importer after Chi­na and India. And over the past 10 years its mil­i­tary bud­get has stood at an aver­age of 4% of GDP, more than £900 per per­son. If Greece is in need of struc­tur­al reform, then its over­sized mil­i­tary would seem the most log­i­cal place to start. In fact, if it had only spent the EU aver­age of 1.7% over the last 20 years, it would have saved a total of 52% of its GDP – mean­ing instead of being com­plete­ly bank­rupt it would be among the more typ­i­cal coun­tries strug­gling with the reces­sion.


    One major fac­tor is that France and Ger­many’s arms indus­tries have great­ly prof­it­ed from this prof­li­gate mil­i­tary spend­ing, lead­ing their gov­ern­ments to put pres­sure on Greece not to can­cel lucra­tive arms deals. In the five years up to 2010, Greece pur­chased more of Ger­many’s arms exports than any oth­er coun­try, buy­ing 15% of its weapons. Over the same peri­od, Greece was the third-largest cus­tomer for France’s mil­i­tary exports and its top buy­er in Europe. Sig­nif­i­cant­ly, when the first bail-out pack­age was being nego­ti­at­ed in 2010, Greece spent 7.1bn euros (£5.9bn) on its mil­i­tary, up from 6.24bn euros in 2007. A total of £1bn was spent on French and Ger­man weapons, plung­ing the coun­try even fur­ther into debt in the same year that social spend­ing was cut by 1.8bn euros. It has claimed by some that this was no coin­ci­dence, and that the EU bail-out was explic­it­ly tied to bur­geon­ing arms deals. In par­tic­u­lar, there is alleged to have been con­cert­ed pres­sure from France to buy sev­er­al stealth frigates. Mean­while Ger­many sold 223 how­itzers and com­plet­ed a con­tro­ver­sial deal on faulty sub­marines, lead­ing to an inves­ti­ga­tion into accu­sa­tions of bribes being giv­en to Greek offi­cials.

    Admit­ted­ly Greek mil­i­tary spend­ing has been sig­nif­i­cant­ly reduced over the last year or two, although not near­ly as much as gov­ern­ment expen­di­ture on health­care or social wel­fare. Nonethe­less, Greece con­tin­ues to spend the most in the EU as a per­cent­age of GDP and remains one of the biggest weapons importers in the world. Recent months have also seen con­tin­ued pres­sure from Merkel and Sarkozy on Greece to hon­our its arms deals amid ongo­ing nego­ti­a­tions over the cur­rent bailout deal.


    For­tu­nate­ly, it sounds like Greece’s gov­ern­ment won’t have to wor­ry about any large mil­i­tary pur­chas­es in the future. The troi­ka wants mil­i­tary cuts now. And what the troi­ka wants, the troi­ka usu­al­ly gets. Leave it to the troi­ka to make even defense cuts seem a lit­tle creepy:

    Greek Reporter
    Troi­ka Wants Greek Defense Indus­try Sliced
    By Andy Dabilis on Novem­ber 16, 2013 in Econ­o­my, Mil­i­tary, News, Pol­i­tics

    Talks between Greece and envoys from its inter­na­tion­al lenders imme­di­ate­ly led to more demands for reforms and pres­sure on the gov­ern­ment to shed itself of one of its defense indus­tries and improve the woe­ful rate of tax col­lec­tion with a bud­get hole of as much as 2.9 bil­lion euros ($3.9 bil­lion) loom­ing for 2014.

    Rep­re­sen­ta­tives of the Troi­ka of the Euro­pean Union-Inter­na­tion­al Mon­e­tary Fund-Euro­pean Cen­tral Bank (EU-IMF-ECB) met with Finance Min­is­ter Yan­nis Stournaras on Nov. 5 and are due to have a pow­wow with Admin­is­tra­tive Reform Min­is­ter Kyr­i­akos Mit­so­takis on Nov. 8. He is charged with over­see­ing the so-called mobil­i­ty scheme to trans­fer, sus­pend or fire 40,000 work­ers over the next two years which is also far behind sched­ule.

    The gov­ern­ment is eager for the Troi­ka to give approval to a pend­ing loan install­ment of one bil­lion euros ($1.37 bil­lion) and agree on reforms before the Nov. 21 dead­line for sub­mit­ting its bud­get to Par­lia­ment and two com­ing ses­sions of the Eurogroup, which also deals with the loan pack­ages.

    Deputy Min­is­ter of Finances Chris­tos Staik­ouras released data show­ing that rev­enues in Octo­ber were 24 per­cent above the month­ly goal set by the Troi­ka but that coin­cid­ed with anoth­er report show­ing the gov­ern­ment leaves 50 per­cent of tax­es uncol­lect­ed dur­ing a crush­ing eco­nom­ic cri­sis.

    In a bid to boost busi­ness, the Troi­ka wants a 3.9 per­cent cut in the lev­el of social secu­ri­ty con­tri­bu­tions employ­ers are oblig­ed to pay but at the same time wants the clos­ing or stream­lin­ing of the loss-mak­ing state firms Hel­lenic Defense Sys­tems (EAS) as well as ELVO and the min­ing oper­a­tion Lar­co.

    Greece report­ed­ly rebuffed the demand to make changes at EAS with the lenders insist­ing the bloat­ed staff be cut from 900 to 341 because the com­pa­ny has lit­tle stand­ing in the mar­ket. Stournaras ignored it, say­ing the state defense firms should be “export-ori­ent­ed” although they aren’t.


    Posted by Pterrafractyl | December 3, 2013, 3:09 pm
  6. New pro­pos­al for aus­ter­i­ty-strapped Greece: Slav­ery

    Von Mis­es Insti­tute any­body?

    From Zero­hedge:


    Europe’s Mod­est Pro­pos­al To End Unem­ploy­ment: Slav­ery
    Sub­mit­ted by Tyler Dur­den on 01/24/2014 18:10 ‑0500


    Hav­ing spent weeks talk­ing amongst them­selves about the chron­ic and dan­ger­ous rise of youth unem­ploy­ment in Europe (as we warned here), the Cen­ter of plan­ning and Eco­nom­ic Research in Greece has pro­posed a con­tro­ver­sial mea­sure. As GreekRe­porter reports, the mea­sure includes unpaid work for the young and unem­ployed up to 24 years old, so that com­pa­nies would have a strong motive to hire young employ­ees. “Unpaid” work sounds a lot like slav­ery to us... but it gets bet­ter; the report also sug­gest­ed “export­ing young unem­ployed per­sons.”

    Cen­tre of plan­ning and Eco­nom­ic Research in Greece has pro­posed a con­tro­ver­sial mea­sure in order to deal with the prob­lem of increas­ing unem­ploy­ment in the coun­try.

    The mea­sure includes unpaid work for the young and unem­ployed up to 24 years old, so that com­pa­nies would have a strong motive to hire young employ­ees. Prac­ti­cal­ly, what is pro­posed is the abo­li­tion of the basic salary for a year. At the same time the “export” of young unem­ployed per­sons was also pro­posed to oth­er coun­tries abroad, as Greek busi­ness­es do not appear able to hire new per­son­nel.

    Whether it’s Europe in the 1930’s or the US dur­ing the same peri­od (con­flicts between strik­ers, the Nation­al Guard and armed mili­tias), unem­ploy­ment can cre­ate a pow­er­ful cock­tail of unrest.
    But turn­ing your nation’s young into slaves does not seem like a good solu­tion to us...


    More at link


    Relat­ed: Wal­ter Block (Von Mis­es Insti­tute) on “Vol­un­tary Slave Con­tract”


    Posted by Swamp | January 25, 2014, 11:12 am

Post a comment