Friday, October 21, 2011

The Lies We Were Told About Greece

As the europoliticians meet this weekend to argue over who will pay for the recapitalization of the French banks ("Europe" say the French, "France" say Germany and Holland) there are a few reports regarding the situation in Greece circulating on the internet.  For instance, this one posted in Alphaville, discusses not only the current situation but the fact that even after 50% haircut the Greek debt to GDP ratio would be 120% in 2015.  If it goes down from there it is presumably because the projection expects some kind of Greek miracle after that.  After all, predicting the Greek economy in 2015 is already a foolish exercise. 

It is interesting to remember that, not too long ago, we were told that "Greek was not Argentina" (true, Argentina's debt to gdp ratio was only 55% in 2001) just like we were then told that Portugal is not Greece and Spain is not Portugal.  Someone forgot to point out that neither Greece nor France are Germany, but we digress.

What is obvious at this point is that
  1. the Greek people are not better off than 12 months ago and there is no plan to fix their problems.
  2. The discussion over who pays to recapitalize the French banks who lent all that money to Greece clearly illustrates that the whole show (the bailouts, the EFSF, the ECB changing rules, a summit every 6 weeks, etc) is for the benefit of the politically astute French and maybe German banks (and bankers) and not for the benefit of the citizens of Greece, Portugal or any of the affected countries.  
  3. None of the predictions made by the IMF, the European governments and/or the ECB regarding Greece have come true.  In fact, every time they take a look, they find a worse than expected situation.  Yet, somehow, they keep making bold predictions with reckless abandon which are duly parroted by the friendly press.
  4. The last bailout plan agreed in July (less than 3 months ago) was a cruel joke.  Beginning with the 50billion (euros) in privatization revenues.
  5. The European stress tests (there were 2 already) were a total waste of time.  Dexia, which was recently taken into receivership by France and Belgium, passed with flying colors.
We could go on but we think the point is made.  The question is, why does anyone believe that this people know what they are doing and/or feel compelled to tell the truth?

No comments:

Post a Comment