Skip to main content

The ECB: Not just another vulture fund

To protect themselves, the creditors went so far as to include a clause guaranteeing that Greece will have to honor its obligations even if the agreements are proven to be illegal!

by Olivier Bonfond , Renaud Vivien

Under the Securities Market Program (SMP) which lasted between May 2010 and September 2012, the ECB purchased Greek bonds for less than their face value on the secondary debt market, i.e. the “second-hand” market where debt securities are sold and bought based on supply and demand. Much like the vulture funds, the ECB paid € 40 billion to buy Greek bonds from several private banks and is now demanding that Greece fully repay their face value, that is, € 55 billion plus the interest.

Another inherent feature of the vulture funds’ strategy is that they systematically refuse to partake in debt restructuring schemes. This is also true of the ECB, which ruled out any participation in the 2012 Greek debt restructuring. It even exerted pressure to prevent a debt reduction in 2010 although the debt was already unsustainable.

As stated by Panagiotis Roumeliotis, a former representative of Greece to the IMF, during a hearing before the Greek Parliament, the Frenchman Jean-Claude Trichet, then President of the ECB, “was among the ones who led the case against a debt restructuring by threatening to starve Greece of cash. In reality, Mr. Trichet was bluffing in an attempt to save the French and German banks”.

The goal was to give them the time to be repaid thanks to the loan extended by the Troika and to get rid of their Greek bonds on the secondary market through the SMP. It is worth recalling that in 2010 the bulk of Greece’s debt was in the hands of only 7 banks (3 French and 4 German banks); that was before the intervention of the Troika, now renamed “the Institutions” – namely the IMF, the ECB, the European Commission and the European Stability Mechanism.

The report of the audit commission established that over 80 per cent of the € 240 billion in loans granted by the Troika in 2010 and 2012 went directly back to repay around twenty private banks. A significant share of the money never even reached Greek soil and simply passed through an ad hoc account opened at the ECB. By allowing these banks to remain immune from the bursting of the private-credit bubble they themselves had created, this bailout of private creditors by public institutions generated an illegitimate debt for the population.

A third similarity with the vulture funds: the ECB took advantage of the weak position of the debtor State to “negotiate” agreements that were clearly unbalanced. The so-called Institutions imposed upon Greece Memoranda which violate the rights of the Greek people and exacerbate the debt burden. Even worse, they did it knowingly. In an internal confidential document, the IMF wrote in March 2010 that the Memorandum it was about to sign would have dire social consequences and lead to a further increase in the Greek debt.

Moreover, the agreements signed since 2010 include abusive clauses revealing that Greece was forced to relinquish significant parts of its sovereignty. British law, which is very protective of creditors (and is given priority by the vulture funds), is now applicable in case of dispute. Under these agreements, the State also commits itself to fully forgo its immunity. In other words, Greece renounced any means of defense against its creditors, who – just like the vulture funds – can seize any assets belonging to the State as a form of repayment. To protect themselves, the creditors went so far as to include a clause guaranteeing that Greece will have to honor its obligations even if the agreements are proven to be illegal!

Illegality is indeed an issue. The austerity measures embedded in the Memoranda directly violate several provisions of Greek, European and international law. These violations engage the responsibility of the Institutions, including the ECB, whose acts violate the rules of the European Union and its own statutes.

For instance, the SMP is conditioned on the implementation of austerity measures, which is clearly a breach of its statutes and the principle of “independence” of the ECB, enshrined in article 130 of the Treaty on the Functioning of the European Union (TFEU). In engaging in such political blackmail, the bank blatantly oversteps its mandate, unlike the vulture funds, which are solely driven by profit.

Recently the ECB also abused its power by stifling the Greek banks in order to force the Syriza government to yield. Yet, as a central bank, it is supposed to be the lender of last resort and take steps to avoid any instability or bank run. Thus in that capacity it should have provided the Greek financial institutions with the necessary funds. All these actions and pressures by the ECB are irregularities that nullify Greece’s commitments towards the institution.

Source:


Read also:


Comments

  1. A contract to do something illegal cannot be brought before a court of law.

    Additionally, loans created among corrupt governments and oligarchs with power over the corrupt government are also unenforceable.

    ReplyDelete

Post a Comment

Popular posts from this blog

It's definite: Elizabeth Warren is the female Obama, can't be trusted

globinfo freexchange

One year from the 2020 US presidential election, things start to become clearer day by day. In the US political scene, we can now recognize the authentic progressives from the fakes, and certainly, from the establishment neoliberal centrists. 
In the presidential-candidates level we can now identify only Bernie Sanders and Tulsi Gabbard as the ones who are willing to fight the establishment and try to implement progressive, anti-imperialist policies. After her latest position, concerning the military coup in Bolivia against the democratically elected Evo Morales, Elizabeth Warren could be considered a pseudo-progressive, equal to a female Barack Obama. Therefore, progressives definitely can't trust her.
Warren tweeted:
The Bolivian people deserve free and fair elections, as soon as possible. Bolivia's interim leadership must limit itself to preparing for an early, legitimate election. Bolivia's security forces must protect demonstrators, not commit …

It's now or never: the first step for a Sanders/Corbyn synchronization in power must be done on 12 December in UK

This is a once-in-a-lifetime opportunity for the global working class
by system failure
Two years ago, we wondered whether a US government under Bernie Sanders, together with a UK government under Jeremy Corbyn, could mark a decisive victory against neoliberalism. Whether it could mark the beginning of the end of the Reagan/Thatcher awful legacy.

It seems that the time has come for the first step towards this prospect.

The oncoming UK general election on Thursday 12 December 2019, will be the most critical for decades, especially for the global working class. The outcome will determine to a significant degree, whether the capitalist West will change course away from the destructive neoliberalism, towards a form of Democratic Socialism. A new model that will resurrect the social state, while at the same time, will seriously deal with the great environmental challenges, defying big interests and rejecting the for-profit-wars model.



As we already pointed out, the whole Brexit issue is pri…

Latest WikiLeaks revelation and its treatment by the mainstream press explicitly demonstrate why the imperialists are determined to eliminate Julian Assange

globinfo freexchange
On November, 23, WikiLeaks published an e-mail, sent by a member of an OPCW fact-finding mission to Syria to his superiors, in which he expresses his gravest concern over intentional bias introduced to a redacted version of the report he co-authored.
The Organisation for the Prohibition of Chemical Weapons sent a team of experts to investigate allegations that a chemical attack took place in the Syrian city of Douma on the 7th of April 2018. The author of the e-mail was a member of that team and claims the redacted preliminary version of the report, misrepresents the facts he and his colleagues discovered on the ground. The e-mail is dated 22nd of June. It is addressed to Robert Fairweather, Chief of Cabinet, and forwarded to his deputy Aamir Shouket and members of the fact-finding mission to Douma.  


In short, the OPCW whistleblower actually claims that the report has been somehow altered. And it was done in a way to fit the scenario, according to which, the Assa…

Mainstream media pro-Johnson propaganda gets into full swing

by Craig Murray
We are now under election broadcasting rules.

Ian Austin left the Labour Party nine months ago. He was then appointed by the Tories as Prime Ministerial Trade Envoy to Israel. As of yesterday, he is neither a MP nor a candidate for election. He is a minor politician who achieved only the most junior ministerial rank, PUSS, and for only seven months. He is best known for heckling Jeremy Corbyn while Jeremy Corbyn was delivering the official Labour response to the Chilcot Report on the illegal invasion of Iraq, shouting “Sit down and shut up” and “You stupid disgrace” at Corbyn for criticising the war.
We are now under election broadcasting rules. How and why was Ian Austin invited onto the BBC Radio 4 Today programme today? He left the Labour Party six months ago, and has been a huge critic of Corbyn. It is hardly a surprise that the Tory’s Trade Envoy to Israel advises people to vote Tory. So who initiated Ian Austin’s appearance on the BBC Today programme, and why? It…

LIVE: Bolivians resist military coup in La Paz

Fears for an assassination attempt against Evo Morales

BREAKING
Independent journalist, Ben Norton, tweeted that he has been informed about a possible assassination attempt against the Bolivian president Evo Morales. According to Norton:
          Sources are telling me they are afraid that Bolivia's elected President Evo Morales might be killed tonight in the right-wing coup.

Sources are telling me they are afraid that Bolivia's elected President Evo Morales might be killed tonight in the right-wing coup.

This is a full-fronted imperialist attack on democracy. It is a blatant attempt to recolonize Latin America and overthrow all efforts at progress. — Ben Norton (@BenjaminNorton) November 10, 2019
Updates

EU giving cover to the military coup that just took place in Bolivia. Neither the EU nor the US support democracy. The people of Bolivia already expressed their “democratic will” by re-electing Evo Morales. A right wing US-backed coup stole that from them, this is disgusting https://t.co/qamCSvYmz9— Rania Khalek (@RaniaKhalek)…

Οργανισμός Αμερικανικών Κρατών: Στην υπηρεσία της Ουάσινγκτον

του Ανδρέα Κοσιάρη
Ο Οργανισμός Αμερικανικών Κρατών, που εξέδωσε την έκθεση για την εκλογική αναμέτρηση στη Βολιβία, η οποία «δικαιολόγησε» το πραξικόπημα εναντίον του Έβο Μοράλες, είναι στη θεωρία ένας ουδέτερος οργανισμός κρατών. Στην πραγματικότητα όμως έχει μακρά ιστορία υποστήριξης των επεμβάσεων των ΗΠΑ στη Λατινική Αμερική, και σήμερα χρηματοδοτείται κατά πλειοψηφία από τα ταμεία του αμερικανικού κράτους. 
Παρά την ίδρυσή του το 1948 με σκοπό την «προώθηση της ειρήνης και τη διευθέτηση διαφωνιών μεταξύ των κρατών-μελών», ήταν μάλλον από την αρχή όργανο της αντικομμουνιστικής εξωτερικής πολιτικής των ΗΠΑ.

Ο ΟΑΚ υπήρξε σιωπηλός ή και στήριξε όλες ανεξαιρέτως τις αμερικανικές επεμβάσεις στη Λατινική Αμερική, είτε αυτές λάμβαναν τη μορφή εισβολής, όπως στην Κούβα το 1961, είτε τη μορφή στήριξης σε πραξικοπήματα και δικτατορικά καθεστώτα, όπως στη Χιλή το 1973 (και στην Αργεντινή, τη Βολιβία, τη Γουατεμάλα, τη Νικαράγουα, την Αϊτή, τον Παναμά, τη Βραζιλία, την Παραγουάη και τον Ισημ…

Nos oponemos al golpe

Declaración de Noam Chomsky y Vijay Prashad
En Bolivia se está gestando un golpe de Estado contra el gobierno electo liderado por Evo Morales. Sectores de la policía han dicho abiertamente que están dispuestos a permitir que grupos de milicias fascistas ataquen el palacio presidencial en La Paz. La situación es muy grave.

Evo Morales ha invitado a los cuatro principales partidos a sentarse y conversar sobre el camino a seguir para la democracia boliviana. Ha pedido el establecimiento de un diálogo para evitar el regreso de los días de las dictaduras militares y los gobiernos oligárquicos. Morales ha hecho un llamado a las Naciones Unidas, a la Organización de los Estados Americanos (OEA), al Vaticano y a otros más para que contribuyan a encontrar el camino para alejarse del golpe.

El golpe es promovido por la oligarquía boliviana que está enojada por la cuarta elección que sus partidos pierden frente el Movimiento al Socialismo. La oligarquía cuenta con el total apoyo del gobierno de los…

Here's why Bernie could end up being better than even FDR

globinfo freexchange

In his speeches, Bernie Sanders frequently refers to the 32nd president of the United States, Franklin D. Roosevelt (FDR), and his New Deal program that helped millions of Americans after the 1929 Wall Street crash. Sanders and other progressives are proposing a similar program adjusted to the modern environmental challenges. The Green New Deal has now become a popular vision, especially among young Americans. Around it, the progressives are aiming to build a whole new model beyond destructive neoliberalism and even obsolete capitalism.

Many would argue that this is quite an extremely optimistic view. That Sanders is just an old-school moderate Social-Democrat who will only manage to revive some typical social policies of the past, and that's it. He will never manage to seriously challenge the current power structure, which, indeed, has grown enormously, controlling nearly every aspect of the political and economic life.

Yet Sanders already managed to achieve …

Bolivian UN ambassador: “racist elite” engineered coup to restore neoliberalism in Bolivia

Democracy Now!
Thousands marched across Bolivia Monday to demand the resignation of Jeanine Áñez, the right-wing senator who declared herself president of Bolivia last week after longtime socialist President Evo Morales resigned under pressure from the military. 
The coup d’état has thrown Bolivia into crisis, with violence across the country leaving at least 23 dead. On Friday, the military gunned down nine pro-Morales protesters outside Cochabamba, where indigenous people took to the streets again on Monday. Thousands more marched to the presidential palace in La Paz. 
The wave of protests are condemning the spike in anti-indigenous violence under interim President Áñez and demanding the return of Evo Morales. Áñez has a history of using racist, anti-indigenous language, and last week she issued a decree protecting the military from prosecution for violent acts and said that Morales would face prosecution if he returned to Bolivia. 
Morales is Bolivia’s first indigenous president, a…