Why Greece?

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I want an answer to this questions:  why is Greece bearing the brunt of financial attacks in the past few months?

Why are the people of Greece having ‘austerity’ measures shoved down their throats more than any other country in the world?

We hear endlessly from the mainstream media about how Greece is in financial crisis because it’s not answering to the calls for tighter austerity measures or how the economy is going to collapse as a result of their debt burdens.

But I really want to know:  why Greece?

But Why Greece?

Greece is nowhere near the top when it comes to some of the typical economic comparisons:

Debt: CNBC ran a series looking at the total debt of the 20 largest debtor nations, at least when comparing external debt to GDP.  Greece was number 15 out of 20, owing $182 (182%) for every dollar in GDP.  This was more than the US (120%) and Australia (139%), but substantially better than countries like Germany (185%), France (250%), Belgium (336%) and, of course, Ireland (a whopping 1,382%).

To save you the boredom of going through each slide, the list of countries with respective debt per capita is as follows:

External Debt (as % of GDP) Gross External Debt (Billions) 2009 GDP (Est, Billions)
1 Ireland 1382.0% $ 2,380 $ 172
2 England 413.3% $ 8,981 $ 2,173
3 Switzerland 401.9% $ 1,304 $ 325
4 Netherlands 376.3% $ 2,550 $ 677
5 Belgium 335.9% $ 1,324 $ 394
6 Denmark 310.4% $ 626 $ 202
7 Sweden 282.2% $ 1,001 $ 355
8 Finland 271.5% $ 505 $ 186
9 Austria 261.0% $ 867 $ 332
10 Norway 251.0% $ 641 $ 255
11 Hong Kong 250.0% $ 816 $ 326
12 France 250.0% $ 5,370 $ 2,150
13 Portugal 223.6% $ 552 $ 247
14 Germany 185.1% $ 5,440 $ 2,940
15 Greece 182.2% $ 580 $ 318
16 Spain 179.4% $ 2,460 $ 1,370
17 Italy 146.6% $ 2,602 $ 1,770
18 Australia 138.9% $ 1,230 $ 882
19 Hungary 120.1% $ 225 $ 188
20 US 101.1% $ 14,825 $ 14,660
AVERAGE 303% $ 2,714 $ 1,496
SUM $ 54,278 $ 29,922

Debt per Capita: when looking at total debt per capita (using the same numbers in the CNBC report), Greece ranked as the 6th best country when it came to the total amount owing per person in this country:

Debt Per Capita Rank Index to Average
Hungary $ 22,739 1 20%
Italy $ 44,760 2 39%
US $ 48,258 3 42%
Germany $ 51,572 4 44%
Portugal $ 51,572 5 44%
Greece $ 53,984 6 47%
Australia $ 57,641 7 50%
Spain $ 60,614 8 52%
France $ 83,781 9 72%
Finland $ 96,197 10 83%
Austria $ 105,616 11 91%
Sweden $ 110,479 12 95%
Denmark $ 113,826 13 98%
Hong Kong $ 115,612 14 100%
Belgium $ 127,197 15 110%
Norway $ 137,476 16 119%
England $ 146,953 17 127%
Netherlands $ 152,380 18 131%
Switzerland $ 171,528 19 148%
Ireland $ 566,756 20 489%
AVERAGE $ 115,947 100%

Again, Ireland looks just disgusting with $566, 756 per capita owing (probably less if Bono would pay his taxes) and Greeks owe about $0.30 per every dollar that the British owe to global lenders.

There are a number of other ways to twist these basic numbers, but they keep telling me the same story:  Greece should not be facing the problems it’s facing and I smell a witch hunt.

Despite these very clear facts, many economists and other soap-boxers pretend to refer to a non-existent myth that there’s a difference in ‘ability to repay’, like the Swiss and Germans shit gold ducats while the Greece are completely incapable of taking care of the fiscal responsibilities.

This is, of course, a myth, and if I were Greek, I’d be pretty damn insulted with the regular insinuations that the British or Australians or others around the world are more capable of taking care of their own books than the creators of democracy.

So Why Greece?

We’ve seen that the facts tell a different story:  Greece is in substantially better economic condition than most EU countries, at least when you look at GDP per capita and total external debt to GDP.

It seems the ‘Greece bashing’ needs an explanation.

I have one:  Greeks elected socialists and the world bankers don’t like that.

Here’s a reprint of the table from above with political ‘leaning’ of each government.  Notice how Greece is one of the few that lean towards believing socialism is a viable political alternative to market politics.

Debt Per Capita Rank Index to Average Current Government
Hungary $ 22,739 1 20% Market / Capitalist
Italy $ 44,760 2 39% Market / Capitalist
US $ 48,258 3 42% Market / Capitalist
Germany $ 51,572 4 44% Market / Capitalist
Portugal $ 51,572 5 44% Socialist / Soc Dem
Greece $ 53,984 6 47% Socialist / Soc Dem
Australia $ 57,641 7 50% Market / Capitalist
Spain $ 60,614 8 52% Socialist / Soc Dem
France $ 83,781 9 72% Market / Capitalist
Finland $ 96,197 10 83% Market / Capitalist
Austria $ 105,616 11 91% Socialist / Soc Dem
Sweden $ 110,479 12 95% Market / Capitalist
Denmark $ 113,826 13 98% Socialist / Soc Dem
Hong Kong $ 115,612 14 100% Market / Capitalist
Belgium $ 127,197 15 110% Market / Capitalist
Norway $ 137,476 16 119% Socialist / Soc Dem
England $ 146,953 17 127% Market / Capitalist
Netherlands $ 152,380 18 131% Market / Capitalist
Switzerland $ 171,528 19 148% Market / Capitalist
Ireland $ 566,756 20 489% Market / Capitalist
AVERAGE $ 115,947 100%

NOTE:  I admit that I took a bit of a leap with some characterizations of each country, but finding this information was actually quite a challenge.  If corrections are needed, please post them in the comments and I’ll adjust the table.

Greece, Portugal and Spain all stand out as current social democratic or socialist countries.

In other words, there’s a very good possibility that because of the political bias of each of these countries, the banks have been shut out of the halls of parliament in Greece.  Admittedly, Norway and Denmark (and other countries that swing back and forth with conservative and SocDem governments) throw a kink into my description, but their external debt is admittedly much lower than other countries.

Anyways, the overt attack on Greece and the people of Greece is exactly how the bankers get their revenge.

What’s that?  They’re taking a write-down on their existing debt to the Greek government?  Well, if Greeks have their say, there won’t be anything to pay back.  They’ll declare bankruptcy and forfeit on EVERYTHING they owe, leaving the money junkies with nothing but a bunch of empty sacks.

As a result of this situation, the money junkies of Europe and elsewhere have risked the life of one of their debt addicts and they need to revive it before the addict dies.

Or … before something worse happens …

Enter the ‘Iceland Solution’

In 2008, Iceland faced a similar ruinous economic future. They were being threatened by external forces that were going to rip their economy apart, piece by piece.  The IMF forced the existing government to impose a whopping minimum 18% interest on any debts outstanding.

Early in 2009, the people of Iceland said no.  They handled things a different way.

A new left-wing government was formed early February, 2009 in response to the crisis and citizens demanding better.

The new government devalued the Icelandic Krona even further than it already had been, crushing the value of any outstanding debt.  By April 2009, the government had launched an investigation into some of the banks and other institutions that tried to ruin the economyOther business leaders have come under investigation for manipulating the economic situation to their benefit.

Greece – and any other country on the planet – can follow the same path.  Despite what the Euro-Zone junkies are trying to scare us with.  In fact, CNBC has already stated that Greece is the most powerful country in the world right now because the lenders are desperate to remedy the situation and avoid economic revolution.

A referendum is exactly what the Greeks should be entitled to instead of more austerity measures.  If they don’t get it, it will turn the country into chaos.  German and French hypocrites will have to step aside.

This is a path to our future that the bank-owned countries are desperately trying to avoid, as it would set and reinforce a dangerous alternative to dropping your pants and continuing on with issuing debt and driving your country to economic ruin over and over again.

It would force the Greeks to take ownership of their problems and possibly never borrow again.

And this has bankers terrified.

External Debt (as % of GDP) Gross External Debt (Billions) 2009 GDP (Est, Billions)
1 Ireland 1382.0% $ 2,380 $ 172
3 Switzerland 401.9% $ 1,304 $ 325
4 Netherlands 376.3% $ 2,550 $ 677
2 England 413.3% $ 8,981 $ 2,173
10 Norway 251.0% $ 641 $ 255
5 Belgium 335.9% $ 1,324 $ 394
11 Hong Kong 250.0% $ 816 $ 326
6 Denmark 310.4% $ 626 $ 202
7 Sweden 282.2% $ 1,001 $ 355
9 Austria 261.0% $ 867 $ 332
8 Finland 271.5% $ 505 $ 186
12 France 250.0% $ 5,370 $ 2,150
16 Spain 179.4% $ 2,460 $ 1,370
18 Australia 138.9% $ 1,230 $ 882
15 Greece 182.2% $ 580 $ 318
13 Portugal 223.6% $ 552 $ 247
14 Germany 185.1% $ 5,440 $ 2,940
20 US 101.1% $ 14,825 $ 14,660
17 Italy 146.6% $ 2,602 $ 1,770
19 Hungary 120.1% $ 225 $ 188
AVERAGE 303% $ 2,714 $ 1,496
SUM $ 54,278 $ 29,922

3 comments on “Why Greece?

  1. The Greek government does not have the money to pay its obligations. It is just that simple.

    There is not enough cash to pay for both the running of the government and the payments of its debts, and almost no one believes that they will get their money back if they lend Greece money to meet those obligations, despite the sky-high interest rates Greece is offering. Nor can Greece monetize its debt (that is, print money) since they use the Euro.

    It’s not some grand capitalist conspiracy, but rather arithmetic.

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  3. Is it that simple? At what point should lenders have said no? If they didn’t, should we feel any sympathy for them if Greece bails on their debt?

    Why are we not being relentless with Ireland, as Ireland has $14 owing for every $1 that they generate in GDP, compared to Greece, which is less than $2 owing for every dollar in GDP? Ireland, by most counts, is substantially worse off than Greece and the EU does nothing mainly because the Irish government has spent the last two decades dropping corporate taxes.

    And have you seen the details of the Greek bailout package? Admittedly, I don’t know what the previous situation was, but most of the changes harshly and negatively impact those in lower income brackets. Where’s the tax on the rich? Or a 1% financial transactions tax? Greece is a basic case of why it’s time to stop the freeloading and ensure that everyone pays a fair amount.

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