The Troika’s Policy in Greece: Rob the Greek people and give the money to private banks, the ECB, the IMF and the dominant States of the Eurozone
On
20 August 2018, the Greek government of Alexis Tsipras, the IMF and
the European leaders celebrated the end of the Third Memorandum.
On
this occasion, the major media and those in power spread the
following message: Greece has regained its freedom, its economy is
improving, unemployment is on the decline, Europe has lent Greece 300
billion and the Greeks will have to start repaying that debt in 2022
or in 2032.
The
main claims are completely unfounded as Greece remains under the
control of its creditors. In compliance with the accords that the
Alexis Tsipras government signed, the country must imperatively
achieve a primary budgetary surplus of 3.5% which will force it to
continue brutal policies of reduction of public spending in the
social sector and in investment. Contrary to the dominant message
that Greece will not begin to repay its debt until some time in the
future, it should be clearly understood that Greece has been repaying
considerable amounts constantly all along to the ECB, the IMF and to
private creditors, and this prevents it from responding to the needs
of its population.
by
Eric Toussaint
Part
6 - Let us now go back to the development of the Greek crisis
Between
September 2009 and March 2010, foreign banks’ loans to Greek banks
decreased by over 50%.
The
Greek banks only survived thanks to liquidities made available by the
Bank of Greece under ECB rules that provide for massive cash-flow to
all the Eurozone banks. (The same practice is followed by the Fed,
the Bank of England and the Swiss central bank).
In the
following graph the green line shows how the tendencies of the Greek
banks to use the Eurosystem funding massively increased after
September 2008.
Blue
line: Loans from the Greek banks to the government.
Green
line: Loans from the Central Bank to Greek Banks
Source:
Bank of Greece.
From
October 2009 to early May 2010, there were a number of meetings
between the European institutions, the IMF, bankers and the new
government of the socialist PM George Papandreou, who had won the
elections on 4 October 2009 with 43% of the votes, which is a very
high rate. They were to finetune a new bail-out programme for the
Greek banks and their creditors. Greece did not have enough financial
resources to help them out.
What
should have been done is the opposite of what Papandreou did, siding
as he did with private banks that were responsible for the crisis:
namely refuse point-blank to give new public money to the banks and
avoid increasing the public debt for this nefarious objective. If
Papandreou had adopted an attitude that suited the interests of a
majority of Greece’s people, we would have avoided the social and
political drama that ensued.
A first
pack of austerity measures was implemented by the Greek government in
complete contradiction with its electoral promises. Simultaneously
the Troika was being created and the first Memorandum of Agreement,
made public in May 2010, was drafted in secret (see comments on the
secret IMF documents:
http://www.cadtm.org/Secret-IMF-Documents-on-Greece).
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