Yanis Varoufakis: Bailouts of Greece are Pretense for Massive Payout for German and French Banks
By Pam Barker | TLB staff writer
We need to be clear about one thing: bailouts to Greece, of which there have been three so far, have meant that European taxpayers had to find extraordinary sums of money to essentially pay out European banks who had made loans to Greece. There isn’t much that is Greek in that scenario, except that the IMF, which answers to the US Treasury Department, as well as the European Central Bank and the European Commission, took the opportunity to punish Greece with demands to so-called ‘restructure’ its economy, including cutting back on its pensions and job market, along neoliberal (i.e. policies which cut the public sector) lines.
The political motivation behind this, of a democratically elected left-wing Greek government trying to face down the harsh austerity economics of the Washingon-controlled troika and getting destroyed for it, is well supported.
And it is now official that less than 5% of the bailout loans made it to the Greek state budget where it could actually benefit dreadfully impoverished Greek citizens. This according to a study just released by the European School of Management and Technology in Berlin and published exclusively in Handelsblatt. The aid program was poorly designed, according to their findings, and was used primarily to benefit private creditors and banks, servicing existing debt and interest repayments. Although this has long been suspected, the study makes it official. This as Greece now appears to be in need of more ‘aid’.
And remarkably, despite these findings, the German government continues to defend its sacrificial bailout approach.
Below is a very brief interview clip from Democracy Now, in which former Greek FinMin, Yanis Varoufakis, explains in his typically engaging, frank way what these bailouts actually were. Click on the link here to see a transcript of this 5 minute interview.
Former Greek Finance Minister, Yanis Varoufakis
Varoufakis explains that of the first loan, 91% went to pay French and German banks, and of the 2nd and 3rd loans, the totality – 100% – went to them. Only 9% of the first loan went to the Greek state, therefore.
In 2010, he explains, Greece went bankrupt as a result of being in a common currency zone that couldn’t sustain the collapse of the entire banking sector. So private bank losses were put onto Greek shoulders, which, it was well known in advance, couldn’t sustain those losses. So other European taxpayers had to shoulder the burden. The first loan fixed the problem for the bankers but a second and third loan had to be made in order to hide the fact that the first loan couldn’t be sustained by the Greek state.
And these loans were extended on condition that the state undergo a stringent austerity program which shrunk people’s incomes to the point of impoverishment. This with the blessing of Washington and its globalist financial institutions. Enjoy this short clip as well as the Handelsblatt report.
About the author
Pam Barker is a TLB staff writer/analyst based in France. She has an extensive background in the educational systems of several countries at the college and university level as a teacher and administrator.