THE CRISIS? MERKEL'S FAULT OF COURSE!

Effligies of Angela Merkel and Nikos Anastadiasis on display at a carnival in Limasssol, Cyprus

The following article comes from the website EUROPRESS. On this site you can read the article in its original Spanish text as well as many other languages.

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The aid plan launched by the Eurogroup in return for a tax levied on Cyprian bank deposits has provoked violent reactions. Germany is often accused of wanting to punish a struggling country. However, it’s not the Chancellor who is to blame for the mistakes of the island, writes an economist.

By John Müller

In this latest crisis hitting the euro, it’s not the Cypriots who are at fault; it’s Angela Merkel and her government – don’t waste time looking for other explanations. It’s not the fault of a bloated banking sector that holds €128bn in assets in a country with a GDP of €17bn – it’s Merkel who did it.

Don’t blame those banks that, as the German secret service warned in November, opened their vaults to €21bn from Russian Oligarchs without looking too closely and accepted – no questions asked – a few other thick wads from Arab millionaires (from fortunes that are hard to justify). The banks practice International Personal Banking and "tax optimisation"; Merkel, in contrast, labours under a Protestant sense of morality.

It’s not even the fault of the money managers who put 50 per cent of their money – that’s right, 50 per cent – into Greek bonds, purely out of patriotism (Cyprus is half Greek), even though they knew that they risked losing it all. No, that’s Merkel’s fault.

Christofias's crisis

It’s certainly not the fault of Sigmar Gabriel, the agreeable German Social Democrat leader, who cut off all lines of retreat for the Chancellor: "I cannot imagine the German taxpayer bailing out Cypriot banks whose business model is based on allowing tax evasion." The entire blame, of course, falls on Merkel.

Nor is it the fault of the pathetic ex-President of Cyprus, the communist Dimitris Christofias, an autocrat formed in the Soviet Komsomol (perhaps the reason why there are so many Russian bank accounts in Cyprus), who was not in the habit of consulting his ministers, the parliament or the central bank.

The Guardian, a newspaper that cannot be suspected of ill will, accused him in December of leading the country into "a sorry state." Christofias was the one who decided in 2011 to keep in Limassol harbour the ship carrying explosives to Hezbollah, which then blew up and took out the only power plant in the country. He also supported the president of one of the two big banks, the Marfin Laiki, when it decided to shift its headquarters to Greece despite opposition from the central bank of Cyprus. His last act of foolishness was refusing to allow negotiations on the merger of the Marfin Egnatia Bank of Greece with the Laiki Bank of Cyprus when the famous offshoring to Greece was decided on, a move that cost Cyprus €4bn in assumed liabilities. With that, this economic genius sank his country. But no – it’s all Merkel’s fault.

Weak leader

Nor does it appear that his brand-new successor, Nicos Anastasiadis, a weak leader playing the game of ‘blame Europe for what I have to do,’ should shoulder any responsibility at all. Anastasiadis props himself up on half-truths to plunder the deposits of the Cypriots instead of starting with sending a bill to the shareholders and creditors of the banks. But of course, that would end the cushy financial system that they have built up and that they expect to continue to live off. Schäuble reminded him yesterday that the idea of robbing depositors didn’t come from Germany. But no. It’s all Merkel’s fault.

And it’s Merkel fault, too, for allowing Anastadiadis to toy with the prestige of the Eurozone, as Papandreou did before him. And because four years ago she didn’t stand firm and veto Cyprus’s entry into the eurozone. Because she let herself be fooled by the certification of the OECD that Cyprus had met 40 EU directives against money-laundering. And, in passing, it’s also the fault of Christine Lagarde, of the IMF, which supported it. Do you recall who it was who handed the Greek minister the list of tax evaders, the one that got lost? As if Lagarde knew nothing about the state of the Cypriot banking sector! But no. It’s all Merkel’s fault. And it had better be her fault, because any other theory will leave us standing naked before our own cluelessness.

Translated from the Spanish by Anton Baer

GOLDMAN SACHS AND THE GREEK CRISIS

Goldman Sachs, acryl on paper.

I had greater expectations of the Dutch TV documentary about Goldman Sachs and the downfall of Greece (Monday, February 13th), but the programme only relied on indirect evidence and contributions. Still very interesting but less so than when we had heard and seen persons directly involved such as Greek ministers and CEO’s of Goldman Sachs. Perhaps the time was not right yet! 

The TV documentary confirmed the image I already had of Goldman Sachs and the Greek affair. It is a very complex case that is difficult to summarize in all its aspects. For that reason I will merely give some impressions here. According to a financial economist and writer, Goldman Sachs is not looking for world power. In stead he compared the bank with a squid whose tentacles are around the globe and slowly sucks the world. Not directly a reassuring picture.

To indicate how strongly committed Goldman Sachs is to get the smartest people Microsoft boss Bill Gates was quoted. He was supposed to have said that his biggest competitor was Goldman Sachs, because it succeeds to attract the brightest people available on the labour-market. These so-called nerds, according to a former employee of Goldman Sachs, are only busy creating canny financial products without ever asking whether this will be social responsible products. The financial derivatives developed by them were compared with a pie from which the top and the bottom looks familiar, but inside there are products of which nobody knows in what way they were created and how they ultimately taste.

Of course, the wickedness of the bonus culture in banks was also raised. This makes that the corporate culture has detached itself from reality so that the question whether it is still humanly justified what you sell, is no longer a matter of debate. In The Netherlands, this corrupt corporate culture at banks became infamous for the selling of insurances that according to the Dutch Financial Markets Authority were too complex for the average citizen to comprehend. Additionally, these products were too expensive for their value and eventually they proved to be too costly to get rid of it. Finally, under pressure of potential lawsuits, some banks in The Netherlands offered settlements to tens of thousands of buyers of these insurances. 

If you want to believe in conspiracy theories you can accuse Goldman Sachs of such a global conspiracy with the aim to get all financial matters into one hand, which is their hand of course. For example, the new Italian Prime Minister Mario Monti and Mario Draghi, the new President of the European Central Bank, were former advisers from Goldman Sachs and could therefore be part of a global Goldman Sachs network. But it is not that simple. Italy is a democracy and the European Central Bank is controlled by the Central Banks of the countries in the Eurozone and the people in charge there have other loyalties than Goldman Sachs. 

The current Greek Finance Minister Evangelos Venizelos of the Social Democratic party PASOK. He gained national fame by his performance as a defender of Andreas Papandreou in a corruption trial. In 2004 he was Minister of Culture and Sport responsible for coordinating among other infrastructure and links with the Olympic Committee of the 2004 Olympic Games in Athens. He followed Giorgos Papaconstantinou on 17 June 2011 as Minister of Economic Affairs in the recasting of the Cabinet of Papandreou in connection with the great economic problems of Greece.

Finally the Greeks themselves or rather their political elite who has for years made a financial mess. For example, both left and right parties give public money and jobs to their voters. It is a political elite that, encouraged by the membership of the Eurozone, was able to continue play fair-weather with borrowed money without explaining to their people and their voters that someday the borrowed money should have to be paid back. They were addicted to credits and when a rearrangement of the Greek debt was needed, they asked Goldman Sachs for help. 

Goldman Sachs is anything but a Santa Claus, however, as everyone knows by common sense. But the problem with addicts is that they only see their own reality and unfortunately at that time EuroStat did not do anything to open their eyes. Thanks to Goldman Sachs the debt mountain could continue to grow more. At the same time Goldman Sachs was the only one that benefited, because it had hedged itself against the risks they understood but the Greek politicians did not. Now the price for their artificial prosperity has to be paid and the Greeks awaken rudely from the dream that their political leaders with other people's money had juggled out of their sleeves.