Broschur Pleite-Griechen Eng

7/31/2019 Broschur Pleite-Griechen Eng

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ROSA LUXEMBURG FOUNDATION

Sell your islands,

you bankruptGreeks

20 POPULARFALLACIES

CONCERNING

THE DEBT CRISIS

Headline in German newspaper,BILD, 27.10.2010


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photo:

MARIoSLoLoS/dpA


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What is the crisis? False descriptions of the situation 31. Greecehastoomuchdebts 3

2. ThefnancialmarketsarescaredthatGreecewillgobankrupt 4

How did the crisis come about?

Inaccurate research into the causes 5

3. TheGreeksarelazy 5

4. TheGreeksareconstantlyonholiday 65. WearepayingluxurypensionstotheGreeks9 6

6. TheGreekshavebeeneatheringtheirownnestwell 7

7. TheGreekshavebeenlivingabovetheirmeans 8

8. TheGreekstateisover-inated 9

9. Greeceisnotcompetitive 9

10. TheGreeksarecorrupt 10

The way forward? False solutions 12

11.TheGreeksshouldstartsavingbeorewehelpthemagain 12

12. SellyourislandsyoubankruptGreeks!29 13

13. Thecreditorsshouldootthebill! 14

14. GreeceshouldgetoutotheEurozone 15

15.Greecehastowinbackthetrustothefnancialmarkets 16

The role of the Germans: False friends 17

16. WewanttoberiendswiththeGreeks35 17

17. Youshouldhelpyourriendsbutnotbailthemout 17

18. NoGermantaxeurosorGreece!37 18

19. WearethepaymastersoEurope40 19

One last comment 2020.GreececheateditswayintotheEurozone

Wearenowpayingthepriceorourindulgence 42 20

TABLE OF CONTENTS


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Its that time again! Greece needs more loans and the governmentsin Europe are arguing about whether its really necessary and who

should oot the bill. There is widespread opinion in Germany that

Greece itsel is to blame or the problems it now fnds itsel in. It

frst o all cheated its way into the Eurozone, then the government

spent too much and the governed worked too little, many believe.

Latently nationalistic patters o interpretation o this kind have been

nourished by German politicians and the media, who have no endo proposals or how to solve the crisis. For example, the Greeks

should save more, work more and sell their public property and i

all o these measures do not help, then Greece will just have to leave

the Eurozone or declare itsel bankrupt. The stupid thing is, neither

are the causes o the crisis that have been named actually correct,

nor will the proposed ways out o the crisis achieve their goal.


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1. GREECE HAS TOO MUCH DEBTS

The acts:Becauseothefnancialcrisis,Greecesnationaldebtgrew

between2007andtheendo2010rom115%to143%oeconomic

perormance(GrossDomesticProduct,GDP).Thisso-calleddebtratio

willprobablyclimbabovethe150%markin2011.Bywayocompari-

son:Germanysdebtratioisabout85%.Context:ThehighdebtratioalonedoesnotexplainGreecesproblems.

Thereisnoadequatedebtratio,neitherintheorynorinpractice.1It-

alyhasadebtratioo120%,Japanhasevenreached200%oitsGDP.

Neitherotheseisseentobebroke,whileGreeceis.Why?Because

thefnancialmarketsarespeculatingonGreecebecomingbankrupt.

Thishasdriventheinterestrateornewdebtstosuchhighlevels,that

Athenscannotborrowanynewmoney2

.Bycomparison:Athensmustpay25%interestontwoyeargovernmentbonds,Italyonly3%and

Japanamere0.2%(asperendoMay2011).

Theproblemthereorelieswiththeinterestratethathasbeenorced

upwardsbyfnancemarketspeculations.TheMacroeconomicPolicy

Institute(IMK)hascalculatedthat,itheaveragerateointerestor

Greekstateloanswouldallto3%,thenthecountrysdebtratiowould

allto110%oGDPbytheyear2015.3

However,itheinterestratere-mainsashighasitis,Athenswillnotbeabletoborrowanymoneyon

themarkets.Whetherornotitisthenbrokedependsonthewilling-

nessotheotherEuro-statestohelpitoutbyprovidingloans.There-

ore,thequestionobankruptcyisaquestionopoliticaldecisions

bygovernments.

WHAT IS THE CRISIS?

FALSE DESCRIPTIONS OF THE SITUATION

1 BHF-Bank economic service, 4.6.2011 2 One simplified example to demonstrate how this works: Greece

borrows a loan of 1 million euros at a fixed rate of interest of 5 % p.a. (=50,000 euros). The bond is then traded

on the stock exchange and crashes. Its price falls from 1 million euros to 500,000 euros. The interest rate of

5 % (=50.000 euros) however remains unchanged. Ergo, the bond now has a yield for investment for the lender

of 10 % (50,000 euros from 500,000 euros). If Athens now wants to take out a new loan, the interest rate that

it has to pay is based on the yield for investment of the old loan. If it wants to borrow new money, this means

that Greece must offer the lenders an interest rate of 10 %. 3 IMK: Debt cuts bring more disadvantages than

advantages, May 2010.


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2. THE FINANCIAL MARKETS ARE SCARED

THAT GREECE WILL GO BANKRUPT

The acts:Greekloanscrashedonthefnancialmarkets.Inversely,theyieldortheseloans(seeootnote2)increased.

Context:Thefnancialmarketsarescaredonothing.Theyarenota

humanbeingwitheelingsandears.Andtheyarealsonotanobjec-

tiveentitythatanalysesthefnancialsituationoacountryinaactual

manner.Thefnancialmarketisnothingmorethantheentiretyothe

investorswhotrytoearnasmuchmoneyaspossiblewithfnancialin-

vestments.AnyonewhoisreallyscaredthatGreecewillgobankruptisnotinvestinginGreekgovernmentsecurities.Everyoneelsehopes

thatHellaswillbesavedandtheywillbeabletorakeinhugeinterest

profts.4

4 Berliner Zeitung newspaper 27.4.2010


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3. THE GREEKS ARE LAZY

The acts:TheGreeksworkagreatdeal.Theactualweeklyworking

hoursminuslunchbreaksbeorethecrisiswere44.3hoursaccord-

ingtoEurostat.InGermany,thisfgurewas41hoursandtheEUaver-

agewas41.7hours.5TheFrenchbankNatixisarrivedattotalaverage

workinghoursperannuminGermanyo1,390hours,whiletheGreeksworkanaverageo2,119hoursperannum. 6

Context:Germanyalsohashighdebtsbutwecanpaythemo,

becausewegetupprettyearlyandworkallday.7Apartromtheact

thattheGreeksworkalotandapartromtheactthatleisuretime

isnotnecessarilysomethingbadandworkisnotnecessarilysome-

thinggooditisundamentallywrongtoseekthecausesoacrisis

inacountrybycitingthelackohardworkamongitspopulation.TheGreeksdonothavetheoptionojustworkinglongerhourstoendthe

crisis.Theoppositeistruebecauseothecrisis,manyGreekshave

beenorcedtonotworkat all.Theofcial unemploymentratewas

16.5%inApril2011,andathirdoyoungpeoplewerewithoutapaid

jobattheendo2010.Thenumberocivilservantshasbeenreduced

by83,000inthelastmonths.Andsoitisclear,itisnotlazinessthat

createscrises,butcrisesdestroy jobs.Thismechanismworked theotherwayaroundinGermany:Theupswingreducedtheunemploy-

mentrateto6,0%inApril2011.

HOW DID THE CRISIS COME ABOUT?

INACCURATE RESEARCH INTO THE CAUSES

5 Handelsblatt newspaper, 2.5.2005 6 Natixis, Flash Economie, 30.5.2011 7 BILD newspaper 5.3.2010


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4. THE GREEKS ARE CONSTANTLY ON HOLIDAY

The facts:AccordingtotheEUagencyEuroound,Greekemployees

havearightto23daysholidayleaveonaverageperyear.TheGermansareintheluckypositionobeingabletoenjoy30daysholidayleavea

fgurethatisrightatthetopinEurope.AndtheGermansarestillright

upthereeveniyouincludethenumberopublicholidaystheyhave.8

Context:Wecannothaveonecurrency,whensomehaveagreatdeal

oholidayleaveandothersverylittle,saidGermanChancellorAngela

MerkelinthemiddleoMay2011.Thisisanotherversionothelazi-

nessaccusation.Itisanotherattempttoblamethecrisisontheindi-vidualsupposedlyalseconductotheGreeks.ConverselytheChan-

cellorpraisesherownpeople,statingthat,theactthatweareina

goodeconomicpositionisbecausewearesohard-working.

5. WE ARE PAYING LUXURY PENSIONS

TO THE GREEKS

9

The acts:AccordingtotheOECD,meninGermanyretireonaverage

at61.5yearsoage,whileinGreeceitis61.9.Andwecannotinany

sensetalkaboutluxurypensions:theaveragepensioninGreeceis

about55%otheEurozoneaverage,thatamountedto617eurosin

2007.Two-thirdsoGreekpensionershadtosurviveonlessthan600eurospermonth.

Context:Itisimportantthat,incountrieslikeGreece,SpainandPor-

tugal,people shouldnotbeable toretireearlier than inGermany,

ChancellorMerkelsaidinthemiddleoMay2011.AndyettheBILD

newspaper and the Chancellormustbeaware o the real situation

acingGreekpensioners.However,theyobviouslydonotcareabout

acts.Accordingtotheirwayothinking,everyyearoretirementandeveryeuroorpensionsisapureluxuryinacountrythatisinthemid-

dleoacrisis.

8 Spiegel-Online, 18.5.2011 9 BILD newspaper, 27.4.2010


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6. THE GREEKS HAVE BEEN FEATHERING

THEIR OWN NEST WELL

The acts:ThewagelevelinGreeceisonly73%otheEurozoneaver-age.AccordingtoinormationprovidedbytheGermanInstituteor

Labour,whichiscloselyassociatedwiththetradeunions,aquartero

allGreekemployeesearnlessthan750eurospermonth. 10Teachers,

orexample,ater15yearsinservice,earnabout40%lessthaninGer-

many11andthatwasbeorethecrisis.AccordingtoEurostat,beore

thecrisisafthoallGreekswerethreatenedbypovertyand25%o

Greekslivedinapartmentsthatweretoosmallorthenumberopeo-plelivinginthem(inGermany:7%).

Context:Here,whatweare lookingatisacrisisexplanation that

addstheaccusationogluttonytotheoneolaziness.Aswasthe

casewithallegationsolazinessandluxurypensions,anattempt

is beingmade to apply seemingly plausible common sense to the

economyasawhole.Theimplicationis,wejusthavetoworkhardand

savehardandeverythingwillbefne.Bothsmallandlargecrisescanbeexplainedinthisway.Weshouldhavejustaskedanyhousewie

whohastobudgetherhousehold,Merkeladvised.Shewouldhave

givenussomewordsowisdom:Onecannotliveaboveonesmeans

orever.Thatiswhatliesattheheartotheinternationalcrisis.12And

yetthedierencebetweenplatitudesandtherealityisclearenough.

Workinghardwillnotbringaboutaboom,rathertheconverseis

trueaboombringsaboutnewjobs.Frugalitycanleadtoruin(seeGreece)andnewdebts,bycomparison,canhelponetogetbyindi-

fculttimes(asinGermanyduringthemostrecentcrisis).

10 Frankfurter Rundschau newspaper, 25.7.2010 11 Ifo service 5/2007 12 Focus-online, 1.12.2008


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7. THE GREEKS HAVE BEEN LIVING

ABOVE THEIR MEANS

The acts:Foryears,thegovernmentinAthenshasbeenspendingmorethanithasbeenbringingin.Between2000and2007,itsbudget

defcitlaybetweenourandsevenpercentoGDP.

Context:Almosteverygovernmentlivesaboveitsmeans,thatis,

spendsmorethanitbringsin.Assuch,thebudgetdefcitotheGer-

man government between2000 and 2007was between1.6% and

4.0%oeconomicperormance.TheproblemwithGreecewasnotso

muchthenewdebt,buttheactthatthefnancialmarketsstartedtospeculateagainstAthensatsomepoint,pushingtheinterestratesor

newloanstoanunaordablelevelintheprocess(seeabove).Thiscan

alsohappentoacountrywithoutalargedefcit,whichisshowninthe

exampleoIreland,whichdidnothavedefcitsbutmostlysurplusesin

itsbudgetsothepastdecadeandyetitstillellvictimtothefnancial

marketsandhadtoberescuedbytheEUandtheIMFtothetuneo85

billioneuros.Germanyalsohashighdebts,butweareabletopaythemobe-

causewealwayssavepartoourincomeorarainyday,theBILD

newspaperwrote.13TheBILDismistakeniitwantstoapplythisargu-

menttothelevelothestate.TheGermangovernmenthasalsorun

upanetdebtsituationandhasnotsavedinthepast.Iwelookat

theeconomyasawhole,however,thereissometruthinit:TheGer-

mannationaldebtoaround2,000billioneurosisbalancedbytotalassetsoaround7,400billioneuros.14However,thesearenotour

assets,butaremainlyconcentratedinthehandsoaewrichpeople.

Thiswouldonlybeosomeusetothestate,iithadaccesstothese

undsthatis,iittaxedthem.However,thisisnotgoingtohappen,

aspropertytaxwasabolishedin1997.

13 BILD newspaper, 5.3.2010 14 DIW weekly report, 50/2010


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8. THE GREEK STATE IS OVER-INFLATED

The acts: Greekpublic spending in relation to the gross domestic

product,theso-calledpublicspending-to-GDPratio,was48%in2008,whilethisfgurewasonly44%inGermany.

Context:Beorethecrisis,thesituationwasverydierent.TheGreek

publicspending-to-GDPratiosankbetween2000and2006rom47%

to43%andremainedduringthisperiodbelowthelowGermanrate15.

Thisdidnotchangeuntiltheeconomyslumpedduringthefnancial

crisis.Andso,itwastherecessionthatwastoblameortheover-

inatednatureoGreekpublicspending,andnotHellenicextrava-gance.Andbesidesthis,Swedenhashadapublicspending-to-GDP

ratioobetween51%and55%ortenyearsnowandisnotbankrupt.

9. GREECE IS NOT COMPETITIVE

The acts:ActuallyGreecesexportsroseby200%between1990and

2008.Sothecountrywassuccessulontheworldmarket.Ontheoth-

erhand,Greecehadahightradedefcitoryears,reaching14%o

GDPin2009.ThismeansthatGreeceimportsmorethanitexports.

Themainreasongivenorthiswashighwageincreases,whichiswhy

theGreekwagelevelshouldallnow,inordertorenderthecountry

competitiveagain.Context:Beingcompetitiveisnotaeatureoanationaleconomyits

nothingthatitis.Thistermmerelydescribesaratio.Theunitlabour

costsinGreeceindeeddidincreasebetween2000and2010byalmost

40%16. Thiswasonly aproblem,however,because theunit labour

costsinothercountriesincreasedtoalesserextentandthebusiness-

esinthesecountriesthereorehadacostadvantageontheworldmar-

ket.TheEuropeanexpertatwagesavingswasGermany,wheretheunitlabourcostsonlyroseby5%thankstolowerincreasesachieved

incollectivebargaining.TheresultwashighexportsurplusesorGer-

manyandimportsurplusesorcountrieslikeGreece,Portugal,Ireland

15 Michael Schlecht: The Euro is burning. Position paper 21.5.2010 16 Commerzbank Research Note: Euro

periphery facing a wage revolution? 1.4.2011


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orSpain.TheGermansuccesswasthereoremerelytheinverseimage

otheailureintheEuroperiphery,becauseGermanywouldnothave

gainedsurpluses iithadnotbeenorthedefcitsinGreece,Spain

andPortugal.Andso,Germanysexportoensiveallowedittofllits

coersattheexpenseoitsneighbours.Germanyhashealthycom-panieswhoseproductsare indemandaroundtheglobe,theBILD

newspapertriumphed17.Themouthpieceothemanonthestreet

shouldnotorget,despiteitselation,thatGermanysexportsuccesses

werefnancedbythesacrifcesotheworkers.Aswagessankoronly

increased slightly, private consumptionwithin Germany has hardly

movedaninchinthelasttenyears 18.Andonemorething:TheWorld

EconomicForumdefnedcompetitivenessasacombinationoinsti-tutions,policiesandactorsthatdeterminetheproductivityleveloa

countryTheproductivitylevelalsodeterminesthereturnsoninvest-

ment19.That iswhatallstatesmeasurethemselvesby:Wherecan

thebestreturnsoninvestmentbegained?Thequestionis,however,

whetherthisisanappropriateunitomeasurementorenablingpeo-

pleworldwideagoodlie.

10. THE GREEKS ARE CORRUPT

The acts:Itistruethattaxraudandtaxavoidancearemorepreva-

lentinGreecethaninothercountriesandthatcorruptionisevery-

where20

.Theshadoweconomyisestimatedtobeabout25%otheeconomy(bycomparison:inGermanythisfgureisapprox.15%21)and

totaltaxraudamountsto20billioneurosperyear. 22

Context: Tax raud and corruption really are a great problem or

Greece.Threethingsmustbesaidinthisrespect:taxraudisakindo

redistributionowealthromthestatetotheprivatesector.Thereore,

themoneyisnotgoneassuch.Andso,thisargumentdoesnothelp

ustoexplaintheGreekcrisis.Secondly,theormerPrimeMinisterKostasKaramanliswasresponsibleortheGreekmess.Hewasaclose

allyoChancellorMerkelintheEU.WiththehelpothewillingGreek,

17 BILD newspaper, 5.3.2011 18 See in more detail in: Michael Schlecht: The Euro is burning. Position paper

21.5.2010 19 WEF Competitiveness Report 2010 20 Spiegel-online, 10.3.2010 21 IAW press release,

26.1.2010 22 The Standard, 11.2.2010


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Merkelmanagedonvariousoccasionstopenetrate the rontothe

southernnationsinimportantEUdecisions.Karamanliswasalways

theretomakedeals.Inreturn,theGreekdidnothavetoworryabout

any over-critical questions concerninghis sloppyfnancial policies.

This quote comes rom the ormer Editor-in-Chie o German eco-nomicmagazine, theHandelsblatt.23Thirdly,largeGermancompa-

niesalsoproftedromthebackhandercultureintheGreekeconomy.

Since2008,severallegaldisputeshavedocumentedthattheGerman

companiesSiemens,Ferrostaal-MANandDeutscheBahnAGbought

Greekpoliticiansingreatstyleandfnancedpoliticaldecisionsintheir

avour.Inthisway,theSiemensGroupaloneinvestedalmost15mil-

lioneurosperyearinGreeceoveraperiodotenyearsromthemiddleothe1990sinordertowinoverandinuencepoliticiansromthetwo

importantparties,NeaDimokratiaandPASOK.24Andourthly:Meas-

uredbythecorruption-indexoTransparencyInternationalGreeceis

indeedmuchmorecorruptthatGermany.Butatthesametime,there

ismuchlesscorruptioninGreecethanincountrieslikeIndonesiaor

China,whichareeconomicallyverysuccessul.

23 Michael Schlecht: The Euro is burning. Position paper 21.5.2010 24 Greece, the IMF and EU dictate and

German responsibility, position paper issued by the scientific advisory board of Attac Germany.


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11. THE GREEKS SHOULD START SAVING

BEFORE WE HELP THEM AGAIN

The acts:In2010,Greecesbudgetdefcitwasabout10.5%oeco-

nomic perormance.Athens promised tobring thisdefcit down to

7.5%in2011.Thiswillunlikelysucceed,andtheconsequenceisthat

theinterestrateorloansonthecapitalmarketwillnotsink,Greecewillremaincutoromthecapitalmarketandunabletoborrownew

undsasplannedin2012.Thatiswhynewstatesupportisbeingtaken

intoconsiderationtohelpAthensavoidbeingilliquid.

Context:ItisnotrighttodeducethatGreecedoesnotsave,justbe-

causeothehighdefcitin2011.Greeceisnotonlysaving,butisdoing

soatanextremelevel.Becauseotheausteritymeasures,theGreeks

havelostalmost20%otheirincomeonaveragesincethebeginningo201025.Nootherindustrialnationhasreduceditsstructuraldefcitby

somuchwithinoneyearinthelast25years,ratingagencyFitchhas

evenadmitted26.AndtheBerenbergBankseesAthensprogrammeo

austeritymeasuresasprobablythehardestfscaladjustmenteverto

havebeenmadebyaWesterncountry.27

Theactthatthedefcitwilllikelybehigherthanplannedin2011does

nothavetodowithextravaganceinAthens.Spendingisnottoohighincomeistoolow.This,inturn,hastodowiththeharshausterity

measures.Asthestateissaving,andreducingwagesandpensions,

economicperormanceissuering.Privateconsumption, or exam-

ple,was18%lowerinMarch2011thanoneyearbeoreand,inthe

sameperiod,65,000companieswentbankrupt.Areductioningross

nationalproductoalmost4%isexpectedortheyearasawhole.The

resultothisisthatlesstaxisbeingpaid.BetweenJanuaryandApril2011,revenueromtaxeswas7%belowthepreviousyearsfgureor

thesameperiod.Allinall,theGreektaxauthoritieshavetakenin1.2

billioneuroslessthanexpected.Andso,itisnotexcessivespending

THE WAY FORWARD? FALSE SOLUTIONS

25 FAZ newspaper, 25.5.2011 26 Financial Times Germany, 26.5.2011 27 Berenberg Bank, Macro Views,

20.5.2011


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thatistheprobleminAthens,buttheausteritymeasuresthemselves.

WedoubtthattheGreekeconomycanwithstandanaggressiveand

prolongedfscaladjustment.28

12. SELL YOUR ISLANDS

YOU BANKRUPT GREEKS!29

The acts:TheGreekstateownspropertywithanestimatedvalueo

270to300billioneuros.Thesearemainlyrealestateproperties,also

ontheislands.Context:ThegovernmentinAthensisnotjustsittingonitsortune.It

hasalreadystartedoabroadprogrammeoprivatisation,withtel-

ecommunicationscompanies,electricitysuppliers,portsandalarge

quantityorealestatepropertiesonoer.Bydoingthis,Athensaims

tobringin50billioneurosbytheyear2015.However,therearemany

snagsinthisprogramme.AsGreeceisbeingorcedtosell,itwillonly

receivebadpricesoritsproperty.Thebuyersinternationalcorpora-tionswilltrytoexploittheemergencysituationinGreece.Secondly,

ithestatesellsproftablecompanies,thentheincomeromthesewill

begone.Theresult:TheexperiencegainedbytheInternationalMon-

etaryFund (IMF) in countless stabilisation programmes has shown

that(privatisation)isanextremelyriskystrategyIttakesaverylong

timetomakesurethatsuchproceduresarecarriedoutinanorderly

ashion,andtimeissomethingthatGreecedoesnothaveatpresent.Privatisationsarethereorenotverywellsuitedasemergencymeas-

ures.30

28 Societ Generale, The Economic News, 5.4.2011 29 BILD newspaper, 27.10.2010 30 VP Bank, Investment

News, 1.6.2011


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13. THE CREDITORS SHOULD FOOT THE BILL!

The acts:TheGreekstatehasaround350billioneurosindebt.The

creditorsare:Greekbanks(23%),otherGreekcreditors(20%),gov-ernmentsintheEurozone(12%),theEuropeanCentralBank(18%),

theInternationalMonetaryFund(4%),otheroreigncreditors/banks

(23%).31Themoneylenderscouldwaivesomeotheloansissuedin

ordertosaveGreece.

Context:Thatsoundsair,becauseithishappenedthefnancialinves-

torswouldthenplayaroleinreducingGreecesdebt.Atthesametime,

itinvolvesseriousrisks.Firstoall,itwouldleadtosignifcantlossesorthebanks.Idebtswerecutby50percentinGreece,thiswould

meanaburdeno25billioneurosortheGermanbanksalone(IMK:

debtcutsbringmoredisadvantagesthanadvantages,May2010).Sec-

ondly,thiswouldbetheruinothemaincreditors,theGreekbanks.

Thirdly,itheEurozoneallowsacountrytogobankruptinitsmidst,

otherstateswouldalsolosetheircreditstanding.Theworryabout

Greececouldowovertootherperipherystatesandleadtoasell-outotheirbonds(DZBank,Interestmarkets,9.5.2011).Theproblem

couldthenspreadtostateslikeSpain,anditseconomyismorethan

twicethesizeotheeconomiesoGreece,PortugalandIrelandputto-

gether32.ThiswouldcertainlybetheendotheEurozone,whichisthe

backboneotheGermaneconomy.Aswecansee,aslongasEurope

isdependentonthegoodwillofnancialinvestors,itwillremaindif-

culttomaketheseinvestorspaytogetGreeceoutoitsdebtsituation.Onemorecomment:TheGreeknationaldebtisnotamajorproblem

ortheEurozone.Atatotalo350billioneuros,itisamere3.7%othe

EurozonesGDP.

31 VP Bank, Investment News, 1.6.2011 32 This would mean further risks for the banks. According to the

Bank for International Settlements, Greece, Portugal, Ireland and Spain owed the European banks 1,340 billion

euros at the end of 2010. A quarter of these were German banks (http://bis.org/publ/qtrpdf/r_qa1106.

pdf#page=100)


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14. GREECE SHOULD GET OUT OF THE EUROZONE

The acts:TheEurozonecouldattempttogetridotheGreekproblem

byexcluding/dischargingGreeceromtheEuroregionandsoprotecttheproblemromspreadingtoothercountries.Greece,ontheother

hand,couldre-introducetheDrachmaanddevalueitscurrency.This

wouldmakeGreekexportscheaperandthecountrycouldtrytoexport

itseloutothecrisis.

Context:Thiswouldhavetwoseriousdisadvantages.Firstly,iAth-

ensre-introducestheDrachma,thiswoulddevaluedrasticallyagainst

theEuro.However,thegovernment(aswellastheGreekbanks,com-paniesandprivatehouseholds)wouldcontinuetohavetheirdebtin

euros.Asaresult,thedebtswouldincreaserapidlyinvalueandthe

debtsituationwouldexplode.Thiswouldmeanthefnancialruino

Greeceandthebankingsystemwouldalmostcertainlycollapse.33

Inthiscase,Greecesoreigncreditorsaboveall,GermanandFrench

bankswouldhavetowriteothedebtstheyhaveissued.Second-

ly,excludingGreecewouldmeangivinguptheimplicitguaranteeocontinuanceotheEurozoneandwouldopenuptheoodgatesor

speculation against the Euro. Theplanocreating in the Euro

aworldcurrencythatcancompetewiththeUSDollarwouldthenhave

ailed.34

33 DZ Bank, Interest markets, 9.5.2011 34 Berliner Zeitung 27.4.2010. Concerning the advantages in the

status of a leading world currency, see AK 561, 20.5.2011. http://www.akweb.de/ak_s/ak561/23.htm


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15. GREECE HAS TO WIN BACK THE TRUST

OF THE FINANCIAL MARKETS

The acts:ToregainaccesstoloansandbecomeindependentoEUaid,Athensmustreceivemoneyromthefnancialmarketsataord-

ableinterestrates.Todoso,theinvestorsmustagainbelievethattheir

moneyissaeandproftableinGreece,thatis,thattheycanearngood

moneythere.

Context:Whathasbeenoutlinedaboveisprettymuchthecaseand

clearlydemonstratesthepowerbalancethreeyearsaterthefnancial

crisis.Today,allindustrialnationsareattemptingtoregainthetrustothefnancialmarketsbyimplementingausteritymeasures,wage

reductions,taxincreasesandanincreaseincompetitiveness.This

showsthatthepowerothemarketsisintact.While,atthebeginning

othefnancial crisis, itwassaidthat thefnancialmarketswould

havetoberestrainedorplacedinchains,nowthedemandsmade

bythefnancialinvestorswithrespecttotheproftabilityandstability

ostatesisonceagainthemeasuringstickwhichthecountriesthem-selvesgoby.Themarketsruleandpoliticsbendstomeettheirde-

mands.


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16. WE WANT TO BE FRIENDS WITH THE GREEKS35

Friendshipisaeelingbetweenpeople,notadefningactorinthere-

lationshipbetweenpoliticalapparatuses.Ocourse,oneotenspeaks

fgurativelyoberiendedstates.However,thisreerslesstobonds

oriendshipandhasmoretodowiththesharedinterestspursuedby

somestates.TheinterestthatGreeceandGermanyshareinthiscasecanbeoundprettyast:itisthejointcurrency,theEuro.However,

whileAthenshastopreventitseconomyromcollapsing,theGerman

governmentistryingtogetoutotheGreekproblemasinexpensively

aspossible.Whenitcomestomoney,riendshipgoesoutthewindow.

17. YOU SHOULD HELP YOUR FRIENDS BUT NOT BAIL THEM OUT

The acts:15May2011,Sundayevening,talkshowonGermantelevi-

sionwithAnneWill,thesubject:BillionsorthepoorEurowretches

isthegovernmentriskingourmoney?.Theprogrammestartsoby

questioningpeopleonthestreet.Theollowingquestionsareasked:Wouldyouhelpyourneighboursorriendsitheywereinafnancial

mess?Mostothosequestionedanswered:Yes.Theanswertothe

nextquestionWouldyoualsooerthemcollateraloraloan?how-

everismostlyNo.Thistakestheviewerstotheeveningsmainques-

tion:Shouldpoliticiansbeallowedtodosomethingwewouldnever

doinourprivate lie, thatis, provide large-scalecollateralor loans

takenoutbyothers?From2013,Germanywillprovidealmost168bil-lioneurosinguaranteesandalmost22billionincashinjectionsaspart

othelong-termEuropeanStabilityMechanism(ESM);thesumsareto

bepaidingraduallybetween2013and2017.

THE ROLE OF THE GERMANS: FALSE FRIENDS

35 BILD newspaper, 5.3.2010


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Context: We Germans should thereore not give guarantees or

theGreeks.Andyetweareconstantlygivingguarantees,without

anyoneaskingusiwewantto.Forexample,orthedomesticfnan-

cialinstitutions.Thiswasshownbythelastfnancialcrisis:whenthe

creditratingotheGermanbankswasindanger,thepublicauthori-ties jumped inwithaidandguarantees.While theGermanshare in

thefnancialaidtoGreecehasbeenapprox.22.4billioneurostodate,

theaidgiventotheGermanbankswassignifcantlyhigher.According

totheGermanBundesbank,thesupportgiventothefnancialsector

alonein2010increasedthenationaldebtby241billioneuros.36

18. NO GERMAN TAX EUROS FOR GREECE!37

The acts:ThefrstaidpackageorGreeceromtheyear2010con-

tainedaGermanshareoaround22billioneuros.

Context:Dobrindtisright.Itisnotthemuch-quotedtaxpayerwhois

helpingGreece.TheGermangovernmentdoesnottakethemoneyorAthensromthenationalbudgetorromtaxincome,butborrows

thismoneyatinterestrateso1%to3%andlendsiturthertocoun-

triesinastateocrisisincludingpenaltyinterest.Athensmustpay

4.2%or this aid,while Irelandpays5.8%andPortugalbetween

5.5%and6%.This isagoodbusiness proposition or theGerman

taxpayer.Thedierenceininterestmeansthatanestimated500mil-

lioneuroswillowintothecountry38

undertheproviso,however,thatthecrisisstatescanpaybacktheirdebts.Assuch,theBILDnews-

paperisrightwhenitheadlineswithYouGreeksaregettingnothing

romus!39.ItstheotherwayrounditisactuallyGreecewhowilloot

thebillintheend.

36 Bundesbank press release, 13.4.2011 37 Alexander Dobrindt, CSU, in BILD newspaper, 5.3.2010 38 Finan-

cial Times Germany, 20.5.2011 39 BILD newspaper, 5.3.2010


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19. WE ARE THE PAYMASTERS OF EUROPE40

The acts:Seeitems17and18

Context:AstheGermangovernmentgrantsGreeceaidintheormoloans,thismoneyhasnotbeengivenaway.Itwillcomeback

againplus interest.However, thedebt crisis acingsomeperiphery

stateshasmoreadvantagesorGermany,becauseGermangovern-

mentbondsareseenassaehavensamong investors. Theresult

isthatallinvestorsareeagertobuyupGermangovernmentbonds.

WhichiswhytheGermangovernmenthasnoproblemfndingfnan-

cialbackers,iitwantstoborrowmoney.TheresultothisisthattheinteresttheGermangovernmenthastopaytoitscreditorsisverylow.

Inearlierphaseswheretherewasaneconomicupswing,theGerman

governmenthadtopayitscreditorssignifcantlyhigherinterest.Now,

however,theEurocrisisismakingGermangovernmentbondsattrac-

tive,whichreducesthe rateointerestandsavestheGermanMin-

isteroFinancemoney.Theestimatedannualsavingsromthisare

3.5billioneuros.41

TheaidorstateslikeGreece,IrelandorPortugal,bytheway,isnotadonationandnotanactoriendship.Inreality,

themoneyisnotowinginordertohelptheGreeks,butinorderto

preventothercountriesromdamage.TheEuroGroupormulatedthis

explicitlyintheresolutionotheESM,theEurospermanentprotec-

tor,inMarch2011:ThememberstatesthathavetheEuroastheir

currencyshallestablishastabilitymechanism,whichwillbeactivated

whenthisisunavoidabletosecurethestabilityotheEurozoneasawhole.Thismeansthattheloansgivenasaidtocountriesinastateo

crisisarenottheretohelptheoverindebtedcountry,buttoprotectthe

restotheEurozoneromtheconsequencesothisoverindebtedness.

Itistheretoprotectthecreditorsromthedebtors.

40 BILD newspaper, 25.2.2011 41 Financial Times Germany, 20.5.2011


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ONE LAST COMMENT

20. GREECE CHEATED ITS WAY INTO

THE EUROZONE WE ARE NOW PAYING THE PRICE

FOR OUR INDULGENCE42

The acts:TheGreekdefcithasactuallybeencontinuouslyabovethe

EUupperlimitothreepercentogrossdomesticproductsince1997

evenduringtheyears1997to1999,whichweredecisiveorentrytotheEurozone.

Context:ThecheatingotheGreekswasalreadyknownaboutand

ofcialin2004.However,thecountrywasnotexcludedromthecur-

rencyunionnorwereanytreatyviolationproceedingsorsanctionsun-

dertaken,suchascutsinEUaid.Whynot?Thisissomethingwecan

onlypostulateon.GreecewasgovernedbyKostasKaramanlisrom

2004onwards,andheisacloseallyoGermanChancellorAngelaMerkel(seeitem10TheGreeksarecorrupt).Whatismore,itwas

thegoalothemainpowerswithintheEurozonesuchasGermanyand

France,inprinciple,toacceptasmanycountriesaspossible,inorder

tolendthecurrencyunionmoreeconomiccloutaterall,theEuroisa

competitiveprojectagainstthedollar,behindwhichtherearetheUSA

andaquarterotheworldeconomy. In addition,withGreecesen-

try,theEurozonespreadgeopoliticallytowardstheimportantMiddleEastregion.ThismaybewhytheIMFandtheEUexcludedGreeces

militarybudgettoagreatextentromtheausteritymeasuresin2010.

Despitetheactthatthis(asapercentageotheentirebudget)istwo-

and-a-haltimeshigherthantheGermanandtwiceashighastheEU

average.FrenchandGermanweaponsmanuacturersinparticularas

wellasthegovernmentsinParisandinBonn,orlaterBerlin,havebeen

supportingasystematicarmsbuild-upinTurkeyandGreecesincethe

1980s.43

42 Brse online, 7.1.2010 43 Greece, the IMF and EU dictate and German responsibility, position paper issued

by the scientific advisory board of Attac Germany


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Author

Stephan Kaufmann

IllustrAtIon of front pAge

Lutz Kbelbck

drawn up as a result of the project: Lets talk about alternatives ,

in cooperation with the press epartment of the Rosa-Luxemburg-Founation

ContACt

Rosa-Luxemburg-Stiftung

dr. Sabine Nuss, dr. Lutz Brangsch

Franz-Mehring-latz 1, 10243 Berlin

hone 030 44310-448, www.rosalux.e


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Broschur Pleite-Griechen Eng

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