95% of Greek Bailout Money Went to the Banks

File this under "news they ain't telling you."

As many are aware, for the past six years, bailout funds, courtesy of the IMF/EU/ECB have been flowing into Greece, in return for "structural reforms" that involve privatization of public resources, cutting of public expenditures, and so forth. But Greece still struggles. Why?

Perhaps this is why: a recent study (from early May of 2016) from the European School of Management and Technology (ESMT), a Berlin university, showed that fully 95% of the allocated "bailout" funds passed frictionlessly through the Greek state and went back to the banks (German banks particularly) to pay off their bad bets. The private losses of the various Euro banks were thus transformed into public debt, with the bill deliverable to the Greek people in the form of loans that they now have to pay off. Because they do not have their own currency, they cannot, like Iceland, inflate their way out of the crisis.

Here is Deutsche Welle, covering this story all the way back on May 4th:

Less than 10 billion euros ($11.5 billion) from Greece's first two international bailouts ended up in the hands of the Greek treasury, according to new study by the European School of Management and Technology (ESMT).

Contrary to popular belief, the lion's share of the rescue money sent to Greece was used for debt repayments, interest payments, bank recapitalization and debt restructuring, ESMT President Jörg Rocholl told DW in an interview on Wednesday.

http://www.dw.com/en/most-of-greek-bailout-money-went-to-banks-study/a-1...

It's a shocking number. 95% of bailout funds went to the banks? That's a screaming scandal, if ever I heard one, particularly when we are told that these monies are for a "Greek bailout" and not a "bank bailout."

Here is Scottish political economist Mark Blyth in a recent interview in Athens, making the point that the bank bailout could not be named as such by the neoliberal order (at 3:12 in the video):

Nobody wants to own up to a gigantic bailout of the European banking system that took six years. Austerity was a cover.

https://youtu.be/rGvZil0qWPg?t=3m12s

Also, beyond our greater understanding of the deceptions taking place in Greece, it is interesting to note that the American mainstream corporate media has not covered this shocking story, as far as I can tell, at all. The only links to the story are either Greek, German (Deutsche Welle, or the business newspaper Handelsblatt), or alternative/progressive news sources. Can anyone cite an MSM source that has relayed this damning information to the public? Or is it too raw of a reminder of the socialization of loss that occurred after the crash here?

Think the New York Times would cover this? Nope. The most recent Greek crisis story I could find was a relatively breezy account of bailout funds being secured by a privatization deal:

Greece on Tuesday signed a major privatization deal that will fulfill a key condition for the release of further bailout funding, but it will also displace thousands of refugees.

The deal, for a huge luxury real estate project on the site of the capital’s former international airport, was made in a memorandum of understanding between the state privatization agency, Taiped, and a consortium of Greek, Arab and Chinese companies. The land sits on a prime piece of coastline in Elliniko in southern Athens.

[...]

The deal was one of the few loose ends needed for creditors to sign off on 7.5 billion euros, about $8.5 billion, in bailout money after the approval of fresh austerity measures in recent weeks.

http://www.nytimes.com/2016/06/08/business/international/greece-secures-...

Of course, because the NYT does not seem to be cognizant of the bank bailout deception, it cannot raise the basic question: setting aside the propriety of this privatization itself, how much of the "bailout money" that it will secure will actually stay in Greece? It's kind of, you know, an important detail, if Greece is being forced to privatize public holdings and not getting anything in return other than more public debt.

Just remember this information the next time someone wants to talk about the "Greek" bailout.

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detroitmechworks's picture

Yes, it wasn't done by the "Correct" people. But the end result was a nice fuck you to the austerity enforcers. At least now if they want to put austerity in, they'll have to run it past the British FIRST.

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I do not pretend I know what I do not know.

Alligator Ed's picture

Practically electrocuted by this report. Who the fuck else benefits from austerity programs if not for the Banksters?

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appreciate seeing it.

Approx 20% of those UKers voting to moon the EU were skinheads of the xenophobic type - The majority saying ta-ta were citizens who were also fed up with the neoliberal scroogie but weren't overt about their bigotry, if indeed they harbored such views.(according to published reports)

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"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"

darkmatter's picture

...and that led me to wonder, "Why is this news to me?" Smile

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sojourns's picture

Goldman-Sachs for orchestrating it.

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"I can't understand why people are frightened of new ideas. I'm frightened of the old ones."
John Cage

Roy Blakeley's picture

First, the Euro was created as a mechanism for enforcing supply side economics. The Treaty of Maasticht, which led to the creation of the Euro, prevents running up national debt to stimulate the economy. Robert Mundell "the father of the Euro" is a notorious supply side economist

https://en.wikipedia.org/wiki/Supply-side_economics

and has admitted that the Euro was a mechanism for enforcing supply side economics. Second, Greece never qualified for admission to the Euro zone. Goldman-Sachs helped a former right wing Greek government to create financial instruments to hide Greece's debt (and then created an instrument to bet against the instrument they had created). The governments of Germany and other Northern European Industrial countries happily pretended not to notice that the Greeks were hiding debts because they wanted Greece and other Southern European countries in the Eurozone to weaken the Euro so that they would have a competitive advantage in exporting industrial goods. The Greeks were never bailed out. The money went to banks and hedge funds as mentioned in this post. The banks and hedge funds took the risk when they bought phony Greek debt instruments, but relied on the EU to bail them out.

Although the idea of a European Union was promising, it has been turned into a neoliberal mess. The problem with Brexit is that it will cause lots of problems in the short and medium term. Brexit is not a real solution, but there was no solution on the table or even in sight. The EU is run by an unelected commission and the "constitution" is a set of treaties that can not be amended. There is no mechanism for fixing this mess.

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what I have read.
I was in Greece during the vote, telling them to do this thing!

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"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

Now only if we can get it together somehow to wi our own fights.

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"Religion is what keeps the poor from murdering the rich."--Napoleon

Interesting fact is that Greece held too much debt to even be considered for acceptance into the EU in the first place. If it wasn't for Goldman Sachs coming up with a secret deal to hide Greece's debt things would have been very different. It seems anymore that if you follow the money, it will lead you to Hell's Kitchen, Goldman Sachs:

http://www.bloomberg.com/news/articles/2012-03-06/goldman-secret-greece-...

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snoopydawg's picture

Confessions of an economic hit man:

Fear and debt drive this system. We are hammered with messages that terrify us into believing that we must pay any price, assume any debt, to stop the enemies who, we are told, lurk at our doorsteps. The problem comes from somewhere else. Insurgents. Terrorists. "Them." And its solution requires spending massive amounts of money on goods and services produced by what I call the corporatocracy -- vast networks of corporations, banks, colluding governments, and the rich and powerful people tied to them. We go deeply into debt; our country and its financial henchmen at the World Bank and its sister institutions coerce other countries to go deeply into debt; debt enslaves us and it enslaves those countries.

These strategies have created a "death economy" -- one based on wars or the threat of war, debt, and the rape of the earth's resources. It is an unsustainable economy that depletes at ever-increasing rates the very resources upon which it depends and at the same time poisons the air we breathe, the water we drink, and the foods we eat. Although the death economy is built on a form of capitalism, it is important to note that the word capitalism refers to an economic and political system in which trade and industry are controlled by private owners rather than the state. It includes local farmers' markets as well as this very dangerous form of global corporate capitalism, controlled by the corporatocracy, which is predatory by nature, has created a death economy, and ultimately is self-destructive.

http://www.truth-out.org/news/item/35161-john-perkins-the-former-economi...

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

Voting is like driving with a toy steering wheel.

Amanda Matthews's picture

the Greek economic debacle in the first place and now the peasants get to pay them again in the form of loan repayments.

That's quite a nice racket the 1% have got going there, isn't it?

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I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are. - Bill Hicks

Politics is the entertainment branch of industry. - Frank Zappa

snoopydawg's picture

to get their money out of the banks? It was covered on websites like counterpunch, truthout and the intercept.people were unable to buy food, gas, pay their mortgages and other items. I saw pictures of elderly men crying in front of the bank because his wife was sick and he couldn't get money for her medications. There wer countless stories about the people not being able to get their money.
That was called a bail in. Any money that people have in a bank can be refused to be given to people.
And guess what went into the last omnibus bill if they crash the economy again? A bail in and they have also put a limit on how much money you can withdraw at one time. The fdic might give you a little recourse, but when you are talking about millions of people trying to get their money, it won't go very far.
Another thing they are doing is going to cashless societies. They want people to have to have their money in the banks so that when the next crash comes, you can't get your money.
They are already doing this in two countries in Europe. Australia and Sweden I think.
Plus the other reason for cashless society is so that people won't put their money in their mattresses. Many of the banks are charging people for putting their money in them. Look at how much you have to have on your balance before you are charged. Or you have to use direct deposit to avoid paying a fee.
gjonsit did a great essay on this maybe 6-8 months ago.
But do a search for bail ins and cashless societies and be prepared to be speechless.
As Durbin told us "the banks run this place" and he was speaking of congress.

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

Voting is like driving with a toy steering wheel.

Deja's picture

I opened my first account in years earlier this year. Used to just deal in cash. With my account, and every account they offered, I have to maintain a certain balance or I'm charged.

I was offered an account with a lower balance before fee, but I had to use my debit card a certain amount of times per month or I'd be charged a fee. Nice, huh?

Also, The American Legion wrote my son a check for $50. He doesn't have a checking account. I had him endorse it over to me. I went to deposit it and was told that they don't do that. WTF? She ended up doing it, "this one time."

I said, "He's charged a fee if he cashes it at the bank it's from because he doesn't have an account there, and he's charged a fee if he has an account here."

"Not if he keeps it above a certain amount; and he's going to eventually HAVE to have an account. Everyone does."

Years ago, I earned interest on my checking account balance, not just my savings account.

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detroitmechworks's picture

I've NEVER liked Direct Deposit, but the government made it mandatory for all DOD payments.

Except of course when they're doing back pay. Then you have to wait for them to cut you a paper check.

The games these jagoffs play...

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I do not pretend I know what I do not know.

was available. The Greek's voted against the deal that was offered, the PM betrayed them, and now Greece is being sold off piecemeal to the Banksters and their associates.
A lot of votes for Brexit probably originated in this mess. Now the MSM is starting the push to ignore this vote also. I sure hope the Brits hang tough.

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chuck utzman

TULSI 2020

I watched news casts from Australia on the internet that covered it daily. One of the things that was brought up was the scheduled Brexit vote that would happen this year. Many was worried then that UK would vote to leave the EU and that was last year. So I agree with the idea that what happened in Greece had an effect on this vote. Other countries may follow suit in the next few years.

We are so uninformed in this country that we think the rest of the world is too. The British voted for this with their eyes wide open. They know in the short term will be hard but in the long term like Iceland they will recover and be stronger. The only thing that EU countries that faced very harsh austerity could do was migrate to other EU counties to look for work. The UK had become one of the destinations for this migration. It just wasn't working and the UK's working class said enough.

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