Just as Greece complies at last, Europe pulls the plug

The Telegraph ^ | 2/16/2012 | Ambrose Evans-Pritchard

[bruinbirdman]

Officials from the EU and the International Monetary Fund made two grave errors when they swooped into Greece in mid-2010 and dictated the now hated "Memorandum".

"Strange, you'd think he didn't want to."

The regime of drastic cuts has tipped the economy into a violent downward spiral. They thought that private industry would muddle through as the state went through the austerity mincer. What the EU-IMF "Troika" did not fully understand is how many firms were really part of the state in disguise.

"The Greek government outsources everything," said one official with close knowledge of the events.

Faced with the guillotine, the state first slashed procurement contracts and then stopped paying its bills altogether. The government is now €7bn (£5.8bn) in arrears to private companies, including €3bn in unpaid VAT refunds for exporters. It is why business has borne the brunt of the fiscal squeeze, suffering 450,000 job losses, and why Greece's unemployment has soared to 21pc.

At the same time the banking system seized up. More than €60bn of deposits were withdrawn. By November, no Greek bank could issue a letter of credit accepted anywhere in the world, with calamitous implications for trade – and for exporters trying to meet Troika demands for export-led recovery. "Greece became a leper, and is now stuck in Catch-22," said one official.

Hellenic Petroleum was unable to import basic fuel. The reason why Greece's reliance on oil imports from Iran jumped from 15pc to 70pc in a two-week period in November was because Tehran agreed to take on the credit risk.

"They need to find some way to unblock this or the Greek economy is going to suffocate from lack of oxygen: we are reaching the limits," said Dimitris Daskalopoulos, head of the Hellenic Federation of Enterprises. The

[Milhous]

You first. What the hell does your allegation of banksters supposedly taking a 70% writedown have to do with my comment about banksters stiffing workers?

[okie01]

Did the international bankers take a 70% writedown on their Greek bondholdings, or did they not?

That doesn't make them "freeloaders", does it?

And the statement is true, whether they "stiffed workers" or not.

[Lurker]

I actually have that on vinyl. Haven’t listened to it in years.

[mylife]

I break the old stuff out on occasion.

[Lurker]

At this point anyone stupid enough to do business with the State of Illinois deserves whatever happens to them.

[Milhous]

Did the international bankers take a 70% writedown on their Greek bondholdings, or did they not?

Once again, so what? Banksters who make stupid loans need to go out of business instead of socializing losses by sticking it to workers.

[Milhous]

At this point anyone stupid enough to do business with the State of Illinois deserves whatever happens to them.

As the State of Illinois deserves whatever happens to it.

[Lurker]

Agreed.

[Milhous]

Alright then. BTW, in this context “State of Illinois” refers to the mob that appropriates goods at the point of a gun. “State of Illinois” does not mean the land nor the common folk living on that land. All common folk deserve honest government.

[Lurker]

Common folk deserve the government they vote for, nothing more.

[Milhous]

You still believe in the bankster’s obfuscation ploy known as “the vote?” LOL. Didn’t Bush starting the TARP bailout and “Bush with a tan” Obama finishing it teach you anything? ROTFL.