EU and Goldman Sachs Threaten Greece with bankruptcy if they don't vote the right way
Sorry to rise above the trivia but some of you might be aware there are very important developments going on in Greece this week.
The current right of centre government may fall next week and have to call an early general election if it loses a parliamentary vote on electing a new President - it needs the votes of independents and others to do so. If such a general election took place it is likely that the anti austerity left of centre Syriza party would win - who are committed to taking the country of the Euro and introducing socialist policies.
These events have led to significant stock market instability this week.
Now the EU (Juncker) and Goldman Sachs (who was apparently implicit in causing Greece's problems in the first place) are warning the Greeks that 'if they vote the wrong way' they face bank runs, bank holidays, food shortages, economic collapse and worse.
Maybe its about time the Greek people - who invented democracy - reminded them who runs their country! Cos the EU message seems to be - carry on voting for the established parties rather than parties (like Syriza) who might actually change things and make life better for its people!
Who runs Greece - bankers/the EU or the people?
http://www.reuters.com/article/2014/12/12/us-greece-eurozone-juncker-idUSKBN0JQ16E20141212?feedType=RSS&feedName=worldNews
http://www.zerohedge.com/news/2014-12-12/goldman-warns-greeks-cyprus-style-prolonged-bank-holiday-if-they-vote-wrong
The current right of centre government may fall next week and have to call an early general election if it loses a parliamentary vote on electing a new President - it needs the votes of independents and others to do so. If such a general election took place it is likely that the anti austerity left of centre Syriza party would win - who are committed to taking the country of the Euro and introducing socialist policies.
These events have led to significant stock market instability this week.
Now the EU (Juncker) and Goldman Sachs (who was apparently implicit in causing Greece's problems in the first place) are warning the Greeks that 'if they vote the wrong way' they face bank runs, bank holidays, food shortages, economic collapse and worse.
Maybe its about time the Greek people - who invented democracy - reminded them who runs their country! Cos the EU message seems to be - carry on voting for the established parties rather than parties (like Syriza) who might actually change things and make life better for its people!
Who runs Greece - bankers/the EU or the people?
http://www.reuters.com/article/2014/12/12/us-greece-eurozone-juncker-idUSKBN0JQ16E20141212?feedType=RSS&feedName=worldNews
http://www.zerohedge.com/news/2014-12-12/goldman-warns-greeks-cyprus-style-prolonged-bank-holiday-if-they-vote-wrong
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Comments
The EU and Goldman Sachs do not control the behaviour of investors, but they are eminently capable of predicting it - and this is all this is, a prediction. Not a "threat" or an attempt to "bully" Greece into voting a particular way.
Is it wrong? If so, feel free to provide an alternative analysis of what will happen to Greece's economy following a Syriza victory. I'm also sure Syriza is capable of making its own position plain if it doesn't think that investors will flee the country in the wake of a General Election victory. And I'm sure that the Greek public is capable of making its own mind up as to whether the risk of bank runs and the like is worth it.
I see it the same as the UK PM warning Scotland what would potentially happen if they elected a socialist government.
Lets just say if the financial markets wish to destroy Greece - they probably will be able to. The question is why have banks like GS been given so much power than they can threaten to destroy a country if the people vote the wrong way.
Goldman Sachs and co are of course very powerful - with their tentacles in many corners of government and their lobbyists everywhere. They managed to secure tens of billions in bailouts for their company post the crash - which saved them from going under. Where did our central bank Chairman learn his trade for example?
I merely suggest its a sad day for democracy. We have a similar party now topping the polls in Spain - and the established order is being threatened.
Maybe sometimes a little more short term poverty is better than effective slavery - a message the Greeks might have learned from the events of the last century. Cos if the Greek people want to elect a left wing anti austerity, Eurosceptic, anti Euro party - they should be able to without threat or bullying!
And who says it couldn't happen here - if Labour say cant or wont don't deliver the cuts the markets want.
The financial markets are not a monolithic entity. Their behaviour is the summation of a host of individual actions by private and corporate investors, and those who act on their behalf and on their instructions.
As such, that term - "threaten" - remains an inaccurate one. It is a prediction, not a threat.
Not really relevant to the topic at hand. The US bailed them out because the US believed it was in its own interests to do so.
Well, I'm afraid this is what happens when your national government is up to its eyeballs in debt.
Never mind that, it did happen here once already. It's a key reason why we have a coalition Government, because Gus O'Donnell put it to both the Tories and Lib Dems in no uncertain terms that the markets would collapse and the economy would sink if the two parties didn't come to a deal. If it weren't for that, we'd have probably ended up with a second General Election in 2015.
Look, it's quite simple: if you want to be free to do what you want, don't end up owing people a metric f***-ton of money.
If it was about market forces and paying your debts and taking the hit if you make bad decisions - most European banks and US banks including GS would have gone under in 2008. Its a pity the kids, sick and elderly of Greece have had to pay for it - while Goldman Sachs distributes billions in bonuses.
Only if you think that the consequences of that 'hit' begin and end with the institution in debt. As the whole "too big to fail" narrative goes, however, that is not true in the case of large financial institutions: if they go down, they take the host country's economy with them.
So it is still about the consequences of indebtedness.
Greece did not bail out Goldman Sachs. Where Goldman Sachs is perhaps culpable is in respect of its involvement with helping the Greek authorities conceal the true state of Greece's economy from the European Union institutions, thus prematurely - and economically fatally - binding it to the euro long before Greece was in a sensible position to take such a monumental step.
No - Goldman got billions via the bailout of AIG and via other sources.
http://www.theguardian.com/business/2011/jan/27/goldman-sachs-received-aig-bailout-cash
And who says GS isn't complicit in causing the Greek mess - it conspired with the government to hide its debts so it could borrow even more.
http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman-sachs-helped-greece-to-mask-its-true-debt-a-676634.html
IIRC it was the US that bailed out AIG, so the Greek taxpayer still didn't pick up the tab for that.
On the latter part, it takes two to tango. Goldman Sachs would not have done what it did unasked, or apropos of nothing; it was Greece's democratically elected Government, at the end of the day, who made the final call to deceive the rest of the eurozone and the World about the state of its economy. It might have had a harder time doing so without Goldman Sachs' help, and I don't care to claim that GS aren't a bunch of unprincipled scoundrels; but the ultimate responsibility for that decision lies with the Greek Government of the day. The Greek people are paying the price for the actions of a previous Greek Government - that is what it amounts to. No use blaming the errand-boy.
So a bank conspires to commit what is effectively fraud?
Not so much as too big to fail - more too big to jail.:D
It's also down to the EU for being stupid enough to believe the Greek numbers when they joined. So desperate where they for their European Dream tm to spread across the continent that they fudged Greek entry. Well it's deservedly come back to bite them in the back side. Greece will probably exit the Euro and it will start a chain reaction where other countries will leave.
If a financial institution does so with the blessing - even on the instructions - of a sovereign national Government, under what jurisdiction could it be prosecuted?
So if that country fails to abide by it's obligations to the lender organisations, those organisations have the right not to lend to them.
This is no different from what happened to Britain in the 1970's when in return for a loan from the IMF the then Labour government had to carry out spending cuts.
And we come back to the issue - is Greece really a sovereign independent nation any more.
Still enjoying our discussion amongst the mostly tittle tattle on here (e.g. does anyone like Diane Abbot) - shame no one else is interested in debating it!
What a surprise the E.U acting like a big bad bully.
Is Greece not allowed to make decisions what's best for itself.
It's plain that this comment was an afterthought, and that not much thought was put into it. Using terms like "stupid" and "desperate" doesn't credit your argument. It is in the EU's interests for the euro to be a success. It is not in the EU's interests to admit states whose economic situation might threaten to destabilise it. No-one's "dreams" are well-served by deliberately admitting flawed economies into the system. That's why the rules were there. If the figures were signed off by a respected financial institution, what good reason would the EU-level agencies involved have had to doubt or second-guess them?
It rather looks as if you couldn't help yourself, you had to conjure up a way to blame the EU for this, so you opened your mouth without engaging your brain first and just let all the bullshit splurge out of it. Article #1 of the UKIP Creed: "Wherever there's a problem, the EU must be to blame for it, somehow."
This is speculation that looks very suspiciously like wishful thinking. Meanwhile, let's get back to reality shall we?
I am out at the moment so will write a detailed response later but using the BS word doesn't help your case does it?
In response to "stupid" and "desperate", it passes muster just fine.
I think we've exhausted the possibilities of this discussion anyway. You're clearly a delusional fantasist, and I see no profit in talking to you any more.
The reality is most of Europe is in a right mess - even Germany is tanking now and France is experiencing deflation. And Russia - lets not even go there. Maybe the Greeks reasserting themselves may be the kerplunk stick that brings the whole thing crashing down.
http://www.theguardian.com/business/2014/dec/14/eurozone-crisis-history-repeating-itself-again
The euro was always a political project, an attempt to defy economics.
The ERM had already demonstrated that no other European state could live with a fixed exchange rate with Germany; many of us predicted what would happen to those countries that were crazy enough to join the euro.
Greece (and Italy and Spain and Portugal) now have an overvalued currency; France is beginning to suffer also. The result is depression, mass unemployment, lower tax revenues and higher welfare spending. Spain entered the euro having met all the "criteria" and government finances were managed responsibly, but the result was still an uncontrollable boom followed by a bust.
Oh dear.
The politics of this are simple. Voters no longer see Europe as the solution to Britain’s economic problems. They are glad Britain didn’t join the euro. Many are unconvinced that Britain should be in the EU at all. The longer the euro crisis goes on, the bigger Nigel Farage’s grin will get.
Plus they all use methods that are largely the same so even when not acting like sheep they react in very similar ways to changes in the market, so again it's hard to tell.
And that's before we get to the (effective) power of the ratings agencies, which seems to have come about as a result of companies firing their own experts and outsourcing the work to what turns out to be a very limited range of contractors, half of whom seem to have merged with one another...
If you want to bankrupt a country, declare them as an F and tell the other agencies they have to make the same declaration or you will publish those polaroids. Then sit back and wait for the ministerial lunch invitations to roll in.
Great post. 100 percent correct.
you can only kick the can down the road so far
just like Japan the whole debt pile will have to be written off
as ive said before there are 3 options
1 print
2 default
3 war
No country in the EU or Eurozone can call themselves sovereign.
then watch one of the main reasons to get out of the eu so we can get back our sovereign again and get and get back own independence and make decisions that are good for the people of the uk.