In the 21st Century, we seem to have done away with the bloodshed and war involves inviting a country to join you in a single currency, lending them billions that they can never afford to repay, forcing their economy into the ground to pay the debt, removing their democratic government and then taking them over in exchange for lending them even more money.
Reuters reports that Germany (hmm, I remember that name from a history book that I read once) plans to insist that Greece give up financial and budgetary control and give them to the EU.
This follows on from the last plan, where Greece would default (but not call it default) on it's debts, but only for the private sector, not the German controlled ECB.
Greece has already been bailed out once. They have failed to meet the commitments that they made in the first bailout where they promised to cut their government deficit year on year. The austerity program forced on Greece actually made the deficit worse, not better.
Greece was then forced to give up democracy (even though they invested it!) and the legitimate government was replaced by a technocratic alternative.
Next they demanded that the private sector 'voluntarily' give up all claims to most of the money that was lent to Greece as a condition for a second bailout will not work. Not surprisingly, asking somebody to give up tens of billions of Euros 'voluntarily' did not work.
Now the EU wants to give up on the pretence of letting Greek citizens run their own country. They want to take over the single most important function of government - the ability to decide how to tax and spend the money from the Greek people.
Not only that, but they want to insist that repaying the EU loans takes precedence over all other spending - that means paying back money to the EU is more important than paying the Greek people wages and benefits from that taxes collected from the Greek people.
Germany basically wants to turn Greece into Scotland - no responsibility for taxation, only spending what money is given to them by their masters.
Meanwhile the SNP is desperately trying to turn Scotland into Greece. Doing so would force Scotland into the Euro and probably hand over control to Germany in about ten years time.
Any regular reader of 'Random Mousings' shouldn't be too surprised - I predicted this in September. I did give them an alternative suggestion to avoid it but I don't get many hits from Greece (maybe they can't afford the internet any more).
Here is the leaked text of the formal declaration of takeover, together with a plain English translation (hat tip zerohedge.com).
Assurance of Compliance in the 2nd GRC programme
I. Background
According to information from the Troika, Greece has most likely missed key programme objectives again in 2011. In particular, the budget deficit has not decreased compared to the previous year. Therefore Greece will have to significantly improve programme compliance in the future to honour its commitments to lenders. Otherwise the Eurozone will not be able to approve guarantees for GRC II.
The last set of demands that we made of you made things worse, not better. We blame you, not us.
Even though we made your economy worse by forcing austerity on you, we won't give you any more money unless you give in to our demands.
II. Proposal for the improvement of compliance
To improve compliance in the 2nd programme, the new MoU will have to contain two innovative institutional elements on which Greece will have to commit itself. They will become further prior actions for the second programme. Only if and when they are implemented, the new programme can commence:
Here are our demands. If you don't agree to them then you don't get a penny more from us, and we both know that you don't have much choice in the matter.
1. Absolute priority to debt service.
Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure. This will reassure public and private creditors that the Hellenic Republic will honour its commitments after PSI and will positively influence market access.
You must become our debt-slaves. Your money is now our money. Paying our money back comes first, before paying your own wages, pensions, benefits, public services (like hospitals).
Your parliament must sign this agreement in blood. This is because we don't trust you.
We will let you keep your democratic name, but you know and we know that you are our bitch.
De facto elimination of the possibility of a default would make the threat of a non-disbursement of a GRC II tranche much more credible. If a future tranche is not disbursed, Greece can not threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement.
We don't trust you to repay your debt (which we got you hooked on by giving you interest rates that were too low).
You have been threatening not to pay our banks if we don't lend you more money and we don't like that. In future don't do it again - if you can't afford to repay them then stop being greedy and spending money on food etc.
2. Transfer of national budgetary sovereignty
Budget consolidation has to be put under a strict steering and control system. Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time. A budget commissioner has to be appointed by the Eurogroup with the task of ensuring budgetary control. He must have the power a) to implement a centralized reporting and surveillance system covering all major blocks of expenditure in the Greek budget, b) to veto decisions not in line with the budgetary targets set by the Troika and c) will be tasked to ensure compliance with the above mentioned rule to prioritize debt service.
We don't trust you to stop spending money on wages, pensions, benefits and public services (like hospitals) so that you can afford to pay us.
We demand that you get a grip. In fact, because we don't trust you to do that, we will get a grip for you. We demand that you put one of our 'heavies' in charge of how you spend money. We will say that this is a temporary measure, but we both know that you will never recover.
Our guy in Greece will report back to us on how well you are doing at paying us back. He will tell us if you do anything stupid, like trying to buy food when you could be paying us back. He will stop you spending our money (from your tax payers) on anything we don't like. He will make sure we get our money back even if you don't like it.
The new surveillance and institutional approach should be formulated in the MoU as follows: “In the case of non-compliance, confirmed by the ECB, IMF and EU COM, a new budget commissioner appointed by the Eurogroup would help implementing reforms. The commissioner will have broad surveillance competences over public expenditure and a veto right against budget decisions not in line with the set budgetary targets and the rule giving priority to debt service.” Greece has to ensure that the new surveillance mechanism is fully enshrined in national law, preferably through constitutional amendment
Here is what we want you to say in your surrender document.
You must write the surrender into your constitution so that those pesky judges and any future politicians can't renounce your surrender or get in the way of us extorting our money from you and your people.
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