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 11 - Why do we say that the ECB gave enormous gifts to around fifteen major French, German, Dutch, Belgian, Italian and Austrian banks?
Between 10 May 2010 and early July 2010, a period of eight weeks, the ECB purchased approximately two thirds of the Greek public securities held by around fifteen large European private banks. To my knowledge, until now, no one had ever pointed to that fact.
The problem is not so much the mass of securities purchased, though it was indeed enormous – €41 billion –, but the fact that that amount corresponds to the majority of the holdings of these big private Eurozone banks. The ECB purchased the securities at approximately 75% of their face value, and thus paid out €35 billion.
Had the ECB not massively purchased Greek securities, the price would have fallen even lower. That would have forced the private banks of the dominant powers of the Eurozone to again turn to their governments, which would have contributed to further undermining the capitalist system in a context where conditions were ripe for the emergence of a major movement like the Indignadxs. And that movement was certain to have spread to the dominant Eurozone countries had the bankers again asked the governments for more money.
Anyway – and this is not in contradiction with what has just been said – the big private banks who sold Greek securities to the ECB below the purchase price posted a loss which they wrote off against taxes due.
The banks of the Centre got the international press and their governments to mount a campaign to place responsibility for their own problems on the Greeks and more generally the PIIGS countries (a contemptuous acronym used by some of the press to designate the periphery countries: Portugal, Ireland, Italy, Greece and Spain) in order to hide the fact that those problems were in fact the result of the banks’ own cavalier policy of seeking maximum profit, mainly on the market for “structured financial products” in the USA and elsewhere.
Source, links, references: