Friday, June 29, 2012


GREEK DEBT HISTORY: How Papandreou and Troika turned down a SECOND lifeboat

New Greek Finance Minister: he devised a way to get Papandreou off the hook, he steered Greece into the Euro in 2001. The plot thickens.

Yannis Stournaris
How a top German consultancy fed the Greeks a no avail.
Yannis Stournaras, the new Minister of Finance in Greece, has landed himself a pole-position job. Stournaras is something of a thoroughbred old-Establishment Greek politician: he emerged as a force in the old days of Kostas Simitis, the former Prime Minister of Greece, who - as one source put it earlier this week - "was the master builder of the greek tragedy right at the outset". It isn't meant as a compliment.
The facts bear this out: one way and another, Simitis schemed to disguise the chronic problems of the Greek economy and get Greece into the Eurozone. During the period of his governance, official data presented inflation as having decreased from 15% to 3%, public deficits diminished from 14% to 3%, with GDP allegedly increasing at an annual average of 4% - and actual labour incomes increasing at a rate of 3% per year. It was largely a tissue of lies that Eurostat had caught onto by 2006: whenever any Sprout or Europol tells you the Greek collapse came as a shock to Berlin-am-Brussels after Papandreou came to power, you know you are in the presence of a fool or a liar. The eurozoners knew from Day One that Greece was a potential liability....but it suited theur hubris-fuelled ambition to have them in.
Stournaras's nickname in Greece is 'Mr Euro'. Frequently described as 'the man who steered Greece into the eurozone', he was chief economic adviser and a very close aide to former Prime Minister Costas Simitis when Greece was negotiating euro entry up until 2001.
In October 2011, Yannis Stournaras proposed and formed a Greek sovereign debt reduction scheme called KAPPA (Initiative for Protection and Exploitation of Govermental Real Estate ).
The proposal envisaged the establishment of a public company to offer a diversified portfolio of real estate and movable assets, which will then be sold to a European body (European Investment Bank or EFSF), and be disbursed immediately as  €75 billion to massively reduce Greek public debt.
Codenamed "Archimedes", it was in reality the brainchild of multinational consultancy giant Roland Berger - by far the biggest management consultancy in Germany, it turns over a whopping  €0.8 billion per annum...and is based in Frankfurt. In September 2011, it had presented an ingenious plan in that City of Bankers to a Greek delegation led by Stournaras. In full, its recommendations suggested bundling Greek state assets worth  €125 bn into a holding company, and selling it to the EU. This company would issue bonds, and the Greek State would be allowed to use these.
Had it gone ahead, Roland Berger predicted it would reduce Greek debt from 145% to 88% of GDP.
Enthusiastic about the idea, Stournaras submitted RB's plan to the Papandreou goverment and the Troika together a month later. They r ejected it, and instead,  Papandreou, the IMF, and the ECB chose the far more risky (and, as it turned out, damaging) option of private bondholder haircuts and a second bailout.
It's hard not to make two simple empirical observations at this point: as  the Slogpost of three days ago demonstrated, Berlin conspired with Greece eighteen months before these events to exaggerate the Greek deficit (in order to ensure full eurozone contributions to the bailout). Now here the Troika was, looking a relative gift horse in the mouth....and turning it down.
One can only suspect that, had a smaller deficit in 2009 and a sale of assets to Brussels rather than a depressed open market in 2011 gone forward, Greece would've got back a great deal of its independent sovereignty and access to the markets than subsequently occurred. And the extrapolation from that in turn is that Merkel, Schäuble, Brussels and Lagarde have done everything in their power to reduce the chances of Greece retaining its independence.
So we can reasonably assume that this is more or less what the unlucky members answering directly to Obersturmbannführer Schäuble under the Faskal Union can expect.....more of the same.
And while we're down here, another little afterthought: Roland Berger is at present actively involved in a scheme to create a eurozone ratings agency....the €300 million start-up cost to be funded by a consortium of German banks in Frankfurt. Just fancy that.
If you read this and enjoyed it, you may have missed this piece from yesterday: WHY THE GLOBAL PLOTICAL CLASS FEARS WHERE LIBOR WILL LEAD
Although this exclusive story achieved reasonably high hits, it ought to have gone viral: we are looking here at a cordinated sovereign State/Central Bank plot during 2008 to manipulate LIBOR rates....yet again, to save the banks. If anyone wants to comment thread on this at high-circulation sites (especially in the States) I would deem that a great favour. The US public needs to be reminded just how totally it has been raped in myriad ways by these monsters.


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