Three die in Athens and the banks are about to make an even bigger killing

Three dead in Greece today as a petrol bomb is thrown into a bank in the worst violence to hit the country since the riots of 2008. A member of the German FDP has just said that maybe the austerity measures that are being demanded by the European Union and International Monetary Fund in exchange for a 110 billion euro aid package are concentrating too much on one sector of of Greek society.  

Gregor Gysi from "Die Linke" brings it too our attention that the banks are just about to make a "killing" and the evidence, indeed, it might be that credit default swaps will protect those who caused the problem in the first place with  Peter Cohan, one of the people who is putting forward that contention, going on to tell us that: "A CDS is an insurance-like contract that obligates the CDS seller to pay the CDS buyer a set amount upon a bond issuer's default. A CDS buyer is often a holder of the debt that the CDS "references," but not necessarily. A CDS buyer also can simply be betting that a particular bond issuer, like Greece, will default. If the issuer does default, the CDS holder reaps its payment from the CDS seller, whether it holds the actual bonds or not." It does, indeed, all stink and Goldman Sachs, who hid Greek debt, doctored the books, sold them junk, now prepared to profit from a Greek default through its CDS buys?

Not only them though and  the 'Financial Times' inform us that "some of Europe’s biggest banks on Friday defended trading activity of credit default swaps on Greek sovereign debt in a meeting with European Union bureaucrats in Brussels." They are needed "to mitigate risk", they say. Only to mitigate risk and what about the risk that the normal working people of Greece are now exposed to? Moreover, with the International Monetary Fund being brought into the equation they are just the people to help the European Central Bank when it comes to enforcing those "structural adjustment programmes", that will ensure that the Greek people are firmly in the pockets of Anglo-Saxon and German bankers.

In the meantime, the gutter press in Germany in particular is doing its job. We have now moved on from the simple "lazy Greeks" get the "hard working Germans" money for nothing and "Die Bild Zeitung" advises the Greece to sell its islands. Well, there will be enough flush bankers around to buy them, that is for sure. However, joking aside, this really is as much about what kind of Europe, indeed, what kind of planet we want as it is about Greece and away from the jingoistic rubbish, we can be sure that in the European Union it won't only be the working people of Greece who suffer. Yes, as the Greek trade union leader, Spyros Papaspyros, said today, "there are other things the (government) can do, before taking money from a pensioner who earns 500 euros a month." There is and there are other things the European Union can do. Introducing fiscal federalism and establishing a real political and economic union for the people of Europe would be one thing. That would get rid of the robbing barons from the IMF, after which, we could quite simply tell  Goldman Sachs and the rest of the vultures to fuck off. The lines have been drawn!

The crisis in Greece

Yes, Goldman Sachs did execute a currency swap worth billions, without reporting it, and, yes, the books were doctored and the size of Greece's debt was hidden so that the criteria for joining the Euro could be fulfilled and, of course, this didn't only happen to Greece. It was, more or less, an open secret that many of the countries who joined the Euro did not meet the convergence critera. Therefore, when the economist Paul Craig Roberts says, “the question is whether Germany, the European Union’s dominant member, wants to hold the Union together enough to guarantee the troubled debts of its weaker members,” it is a question we can answer. The evidence would seem to suggest that neither a real effort nor the necessary political will was ever there to bring about a real political and fiscal union. Or how else might we explain the xenophobia that is being whipped up by the mainstream media and tiny minded politicians in Germany in particular?

Furthermore, it is not only the raw rhetoric of the nationalists and xenophobes that shows that the political will necessary for a real union is missing. There is also the knowledge that such a union is not possible without some sort of fiscal federalism and real inroads into the nation state. Unfortunately,  the so-called "rescue package" that has being botched together by the European Central Bank and the International Monetary Fund means that fiscal federalism is just not on the agenda. Therefore, not only are we are also being confronted with the myth of the "efficient and hard working Germans" bailing out the "inefficient and lazy Greeks" at a time when Greece being helped should be taken for granted much in the same way as it might be when the US government bails out California, but we also find ourselves with even less hope that the one concrete measure that is necessary  if a real political union is to take shape might be implemented. It is this that is the most poignant consequence of the present crisis; the European Union has not only shown itself as being incapable of conducting itself as a real political entity.

Of course, political considerations aside there are also very real social consequences and we can ultimately expect to see massive cuts in the public sector all over Europe. Moreover, while, almost paradoxically,  the "us and them" mentality, the xenophobia, which has been spouted out by newspapers like 'Die Bild Zeitung', will give some countries, such as  Germany, a certain period of grace  for the time being,  it would, nevertheless, be foolish to think that the massive wave of cuts in public spending that the IMF and the European Union will be imposing on Athens, will stop at Greece. This is another important consequence of the present crisis iand not only does Europe remain politically very much under Washington's heel but there is also no social alternative that might combat the dictates of a neoliberalism, which is simply bad news for the planet as a whole.

Towards a "United States of Europe"

The Indian economist Jayati Ghosh makes an interesting point when she says that Florida and California are in a worse financial position than Greece but that the U.S. government bails them out. Of course, not only is there fiscal federalism in the United States, something which the states of Europe just don't have, but there is also a political will that is sometimes difficult to find in Europe. Nevertheless, while it often appears that the mainstream media, including today's 'Guardian' , is quite happy to cultivate the political divisions within the E.U., we can be sure that although Greece and the other "PIIGS" (Portugal, Ireland, Italy, Greece and Spain) might not be allowed to gorge themselves on the European cake, they also won't be starved.

Firstly, however, we should put a 'Guardian' article that contends that Germany is playing a pivotal role in a bailout deal into perspective and on closer inspection we will discover that the "bailout deal" is in fact loans or loan guarantees to Greece. That is right, nobody is giving Greece anything. Moreover, while we will, no doubt, have the daily drivel, and it will be interesting to see how Germany's "Die Bild Zeitung", in particular, is going to report the so-called "bailout", playing to their respective galleries, the reality remains that this is a "compromise" solution for an E.U. which can have no interest in turning the Greeks over to the robber barons at the I.M.F.

Indeed, those "real" Europeans among us can feel happy today because what we are, in fact, witnessing is us saying goodbye to countries in the Euro zone pursuing that type of "independent" monetary policy that has seen them  disguise the true state of their economies with the "help" of those speculators at Goldman Sachs and elsewhere who then rub their hands in glee when those same economies flounder. Indeed, what are seeing is an irresistable shift in favor of those forces that want a real political union. Yes, while national sentiments are, once again, being whipped up, the E.U. has in fact taken a step closer to a "United States of Europe" and towards a fiscal federalism that will ensure real political and monetary union.