By Christos Terzides, HuffingtonPost
“Germany supports Greece” could’ve been a headline that reflected a good ending to the Greek drama. But this is far from the truth.
On August 19, the German Bundestag, on the urgings of Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble, approved Greece’s third, 86-billion-euro bailout package. The deal, which was also approved by other Eurozone parliaments, is in addition to the earlier two bailouts totaling €350 billion.
For anyone who has only followed the Greek story by scanning headlines, it might seem that European solidarity holds fast. Europe’s robust economies again decided to spend a flood of money to save an unproductive country of tax-evaders run by corrupt politicians from bankruptcy, Eurozone exit, and total chaos.
An important factor in this decision was the about-face by the Left government headed by Alexis Tsipras after months of negotiations and the July 5 referendum that decreed against a compromise with the creditors in a new bailout agreement. (That the government agreed to an even more painful deal for the Greek people is another story.)
The truth of the matter is that the Greek people will never see the bailout funds being used for growth or to reboot the Greek economy, as the European leadership claims. The €86 billion will be paid out in tranches. The first tranche of some €26 billion will be paid out shortly and has already been earmarked; €10 billion will be used to maintain bank liquidity, although no one has said or will guarantee that this cash injection into banks will lead to the lifting of the asphyxiating capital controls still in place. Obviously this will not happen and the same situation will persist. Greek banks are performing dismally on the stock market. By way of comparison, in 2007, National Bank of Greece shares traded at €9.40; now, in 2015, they trade at €0.55. Greek banks are being sold for a pittance. Of course, all the banks have considerable real estate assets for anyone interested but that, too, is another story…
The remaining €26 billion will go to repaying previous loans. So basically an insolvent client is being extended new loans to pay off earlier ones. This is reasonable for those who wish to maintain a false image of idyllic Eurozone growth.
To ensure Greece’s lenders are repaid for this loan, the bailout agreement includes more harsh terms for a Greek society taking its dying gasps: tax increases across the board, privatizations through a process of dubious transparency, and public spending cuts.
Unemployment is galloping, the price of gas is roughly three times what Americans pay, families are being pulled apart, people are committing suicide, the Greek state is unable to check the unprecedented wave of migration from Arab countries, and all this simply so Germany and the banks can collect on what’s owed.
Once again in history, Greece is not getting the help that the country needs instead to what people believe. Like the famous after WWII Marshal plan that in the Greek case the biggest percentage was spend on supporting a certain site on the Greek Civil war or again on corrupting politicians.
Why does Germany extend loans? What does it fear if Greece collapses? How much has Germany invested in the ‘house of Europe’ and what does it stand to lose if it starts to fall apart?
There are many questions. Unfortunately, the headline doesn’t reflect the truth for anyone who has followed the Greek issue closely. For some European leaders perhaps a corpse in the basement is preferable to a problem child roaming the streets hungry.
