And so the Greek dra(ch)ma spreads…
“What really was rescued a year ago, in May 2010, were the French banks that held €31 billion of Greek bonds, German banks with €23 billion, and other foreign investors…”. In his latest essay , Replacing Economic Democracy with Financial Oligarchy, Michael Hudson says the EU has declared class war.
The trigger for this very forceful analysis was a June 2, 2011, land grabbing speech by ECB President Jean-Claude Trichet — Building Europe, building institutions– calling for change in EU treaties. Essentially the move aims to allow the European Central Bank to stage a financial coup d’état seizing key sovereign powers from member states when these embark on “unsound economic policies” – Trichet’s phrase for Euro-states that do not pay their debts.
It wasn’t stated that baldly, but in Prof. Hudson’s view, the intentions are clear. As the Euro-crisis deepens and worsens, the global bankers who provoked the whole catastrophe, are now insisting that they be rescued without loss, at a cost that even threatens the democratic foundations of Euro-states. Costa Gavras’ 1969 film “Z” with its darkly satirical view of Greek politics in the ’60s just took on renewed significance.
Lest anyone think laying the blame on the bankers above is too sweeping a statement, here is Hudson reporting the findings of US investigators into the causes of the 2008 subprime disaster: ” … the FBI (Federal Bureau of Investigation) and Fitch Ratings Agency have found financial fraud in 70 percent of subprime mortgage loans, involving a vast network of crooked mortgage brokers, real estate appraisers and lawyers. The leading culprits (Countrywide Financial, Washington Mutual and Citibank) set up the system, and ratings agencies helped Wall Street investment banks (Lehman Brothers, Bear Stearns, etc.) perpetrate a vastly controlled fraud by giving AAA top-grade ratings to junk mortgages that quickly plunged some $750 billion into negative equity in the financial meltdown of 2008 – 09. This led to a $13 trillion bailout of bad credit default swaps (CDS), derivatives trades and other casino-capitalist gambles – a power grab of debt-money by Wall Street lobbyists and insiders in Washington and New York...”
Read here for more of Hudson’s concerns about the abyss towards which we Euro-zoners are headed, and here for an earlier equally trenchant review of what he calls the Counter-Enlightenment …. then pop outside and start planting vegetables.
- Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri.
ECB turned blind eye to predatory lending, ex-EU-ambassador says.
- Will Germany and France stave off a Greek default? (telegraph.co.uk)