The debate in the Greek Parliament over the introduction of an austerity plan conveniently obscures the international character of the problem which it attempts to deal with. The problem for Greece as with Spain, Ireland, Portugal and other countries, is the amount of toxic debt (a result of bad speculative loans) which was created over the past decade by the international banking system. This colossal toxic debt is still being passed around the global financial system in packages known as bonds and in particular, ‘credit default swaps’ (CDS’s). Those financial institutions, whose personnel created this catastrophe are fearfully ‘passing the parcel’ whilst hoping to be baled out again and again by the ordinary citizens of each country in which this speculative banking system operates.
What the politicians in Greece, under the guise of an ‘austerity programme’ are debating, is how to ‘fleece’ the Greek people so that that the toxic debt held by their banks is passed over to their citizens and is replaced in the bank vaults by something more positive – like gold. The golden fleece which the modern Jason’s of the international banking fraternity seek is their own further enrichment by the impoverishment of the ordinary citizen, who in their eyes is also – a creature bound to labour. These modern ‘merchant adventurers’ seek to make the existing Greek wage slaves also into present and future ‘debt slaves‘. Their agents in this transfer of toxic debt from the banks to ordinary people are the political classes of the various countries.
In Greece politicians are contemplating an austerity programme so they will be allowed get a further loan – just to cover the interest payments on their existing loans! They claim they are trying to cure the Greek debt problem by taking on further loans and getting the Greek citizens into further debt. To the question; ’do we side with the few thousand international bankers who created this mess, or with the millions of our own people?’ Their answer is clear. ‘With the bankers‘. In passing an austerity programme, the Greek politicians, as with the politicians in all countries solving the problem in this way, will be acting as representatives of the banking system and not of their own citizens. International Toxic Debt, means the current system is bankrupt, but the logic normally applied to bankruptcy – default, is to be ignored in the interests of the few who control the system which caused it.
The debt burden for Greece is estimated to be in the region of 1.3 billion euros, and a system of credit default swaps and associated financial instruments, such as the 60 billion euro European Financial Stability Mechanism (EFSM), is currently in place to cover this. Bonds guaranteeing payment in default by Greece are held mainly by France and Germany and the default risk in these countries is mainly covered by the Insurance industry in the US. If Greece defaults and decides not to pay the German and French bond-holders, will then have to pay up. They in turn will claim the money back from the American insurance industry, which is already in a perilous state and close to bankruptcy itself. The fear, among those who subscribe to the present system, is that if Greece defaults, then so too will other countries, such as Spain and Ireland and the whole international house of cards will collapse yet again. And despite these measures, collapse again it will. The question is not if, but – when!