The Greek Squeeze

Neither punishment or personality tells the story in Greece, but process reveals key details.

Modern reporting often leaves readers with angst and frustration! Details, analysis, and context are cast aside; headlines scream of defeat and victory; process is largely ignored. For Greece, the details of process are the story!

The austerity-balance sheet-conservative-German lead team is using Greece’s recession and internal collapse (much of it self-caused!) to leverage a classic squeeze play: Greece is forced to accept loans and internal economic measures on terms which continue its recession, with its only option going broke! In whose interests is such a diabolical idea? The hidden players, the private banks!

Greece, now broke (again, mainly from its own doing!), put bank loans to Greece at risk of mass default. So the agreement Greece originally signed subtly shifted the risks and repayment of those loans to the Greece populace. That shift specified balance sheet targets which deepened the humanitarian crisis.

But aren’t the government and the people the same? No, the government has its own resources and authority and normally acts as a social buffer. Through the original agreement, Greece’s government became a wedge and siphon. Its coffers and credit empty, the Greek government was forced to dig deeper into the population to extract the value of its safety nets–which were easy scapegoats because of past corruption. But that agreement put the EU in control of Greece’s internal affairs through its balance sheet targets.

Greece was squeezed–suspended between being broke and going broke. Meanwhile the bankers got their bailout by targeting the national balance sheet through the EU.

(This post won the editors gold badge http://www.nytimes.com/2015/02/27/opinion/paul-krugman-what-greece-won.html?comments#permid=14258518 in the New York Times.)

Originally published at blackhistory360.wordpress.com on February 27, 2015.