The Watchdog

Keeping citizens in the loop



The likelihood of a default by Greece – a trigger for the insolvency of the ECB – has grown after IMF inspectors are reported to be preparing to say this week that  Greece has failed to meet all its fiscal targets and to withhold the IMF’s share of a fifth tranche of a €110bn EU and IMF bailout.

Without an injection of cash, the Greek government could run out of money as early as June.

A default and a reintroduction of the Drachma could see Greece returning to a rapid economic recovery similar to Iceland and so help avert social unrest but a default will lead to the insolvency of the ECB with a major impact on the euro.

Bild newspaper says that Greece is verging on a “revolution” as tens of thousands of people camp in Athens squares.

A fact finding mission by lawmakers of the German Bundestag has uncovered the scale of the impoverishment of the Greek people due to the EU and IMF penal bailout, according to a report by AFP.

“I’ve clearly realised how Greece is making it really tough for its citizens” by implementing austerity measures, said Steffen Bilger, a member of Chancellor Angela Merkel’s ruling Christian Democrats (CDU) who would not normally be suspected of mollycoddling what some here condemn as spendthrifts.

His CDU colleague Juergen Klimke said he found Athens “in an awful state,” adding that this was “far from being my best trip to Greece.”

For Kai Gehring, a member of the opposition Greens whose party advocates restructuring the Greek debt, “I think it would be impossible to force new reforms” on them.
“Greece has really asked a lot of its citizens,” the Green delegation representative said.

He also deplored that the German press “does not really speak of the efforts made by the Greeks and of the reform programme which crushes both public spending and investment”, said AFP.

German economist Hans Werner Sinn has said Greece faces civil war due to the policies of the EU and ECB.

„Economists agree that Greece will not emerge from its crisis without a debt restructuring. To become competitive again, the country would have to reduce prices and wages by 20 to 30 percent,” says Ifo President Sinn. This would correspond to the devaluation that occurred in Germany in the early 1930s as a result of the emergency decrees of then Chancellor Heinrich Brüning. “This sort of thing works in theory, but in practice it leads to the brink of civil war.”,1518,765601-2,00.html

Greek EU official  Maria Damanaki said on Friday a return to the Drachma was being considered, according to the media.

Greece can take heart from Iceland if it defaults. Iceland’s economy is growing as a result of the jettisoning a demand to pay huge amounts of interest to banks for an artificially inflated national debt, and many economists expect Greece to stage a fast recovery too in the event of a return to the Drachma. The UK was able to devalue its currency by 25% since 2008, allowing it to avoid much of the financial pain of Greece.

In a last ditch effort to stop a Greek default – which will shatter the ECB balance sheets and make it insolvent –, the  EU and  European Central Bank , ECB, appear to be trying to spring in for the IMF and find extra cash for Greek banks. But a new “bailout” package would require parliamentary approval, and German, Finnish and Dutch parliaments are increasingly recognising that Greece and its banks are insolvent and not illiquid and will never be able to repay its debt.

Otmar Issing  former European Central Bank Chief Economist said that Greece will „probably be unable to meet its obligations as the euro region’s most-indebted nation is insolvent.“

CDU/CSU lawmaker Michael Fuchs said Germany should not pay more money to Greece if the IMF withholds payments. FDP lawmaker Rainer Brüderle also expressed doubts over giving more money as baillouts to insolvent governments and banks.

An Irish Minister at the weekend also cast more doubt on the ECB, EU and IMF “bailout” strategy for the eurozone by saying Ireland will also need  a second “bailout” next year, opening the prospect of limitless demands for bailuts for insolvent governments and banks across the eurozone in the near future.

Many economists agree that the EU and IMF “bailout” has piled more debt onto the existing mountain of debt driving the economy into recession and sending the budget deficit out of control. Greece’s debt burden nw stands at around €330bn.

The ECB plan for a  privatisation programme in Greece will not solve the debt problem, said the FT.

“The core issues are how to fund Greece over the next two years and whether to restructure its debt. No amount of privatisations will make these burning questions go away.”

The fire sale of government holdings in utilities, banks, telecommunications companies and other businesses could be overseen by ECB and EU officials in a new level of economic pillaging of the kind last seen in Europe when Nazi German Gauleiters entered conquered countries and removed all the assets by force.

„ Newspaper reports that Athens will have to surrender authority on tax collection, sell-offs

The Financial Times reported on Monday that European leaders are negotiating a deal that would lead to unprecedented outside intervention in the Greek economy, including international involvement in tax collection and privatisation of state assets, in exchange for new bail-out loans for Athens.“


The plundering of Greece by the ECB, EU and private banks is also taking place against growing political turmoil as opposition parties refuse to support the “austerity” measures demanded by the ECB and EU.


May 31, 2011 - Posted by | Internationally significant information, Jane Burgermeister Report

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