As most of y'all are aware, the Greek government found itself over a barrel. Under a crushing debt load and under pressure from the Eurozone (read: Germany) to balance its budget, Greece flirted with the idea of defaulting on its debt.
Now we can't have that, can we? Just think of all the banks and pension funds and investors who bought up Greek bonds looking to make a profit. We can't possibly allow them to assume the risk and take the loss. Sure, the bonds were issued by a sovereign nation - but they still carried an interest rate that would compensate a buyer for the risk he was assuming by purchasing the bond.
For those of y'all who slept through economics class (or stared at the brunette sitting in the next row over), interest is the return one receives for allowing someone else to use his money. Put another way, the interest rate is the price the borrower pays to use the investor's money. The further the spread between the interest rate and inflation, the greater the risk. The greater the risk, the greater the reward.
As part of the bailout plan, the Greek government has implemented austerity measures to reduce its operating deficit to within the range the Eurozone (read: Germany) finds acceptable. So, in order to keep the banks and investors afloat, the Greek people are being nickle and dimed to death.
Even worse, as part of the bailout package, the Greek government agreed to ignore provisions of the Greek Constitution. That's right. So that European bankers can keep their bonuses and BMWs, the Greek people are losing the right to govern themselves under their own Constitution.
Members of Parliament had just two days to read and approve a 400-page document. Much of the legal fine print was available only in English. More than 40 Parliament members from the two major parties backing the government rebelled and voted no. One was former Socialist Labor Minister Louka Katseli, who says Greece abdicated its right to immunity over its assets.
"If, in the years to come, there is a problem repaying loans, our partners have the right to seize assets, including gold of the Bank of Greece," she says. "That's why I have argued that our national sovereignty has been limited to a dangerous degree."
Katseli says the troika stipulates that national collective labor contracts, which are enshrined in the Greek constitution, are now void. Another unconstitutional clause, she says, requires that all revenues of the Greek state must be first used to pay its debt before paying public services, wages and pensions.
"So servicing the interests of our creditors goes above the national interest," Katseli says.
Since when is it acceptable in a democracy for foreign corporations and investors to dictate how another nation is to govern itself? One thing that the Greek crisis demonstrates clearly is the danger of ceding sovereignty over one's monetary system. In a past life, the Greek government could have devalued the currency by issuing more paper money in order to cover its debt. Or the government could have borrowed more from willing investors to pump into the economy. With the euro, those avenues are closed.
Worse still are the restrictions placed on the people's ability to direct their government, for, in exchange for membership in the union, Greece (and the other nations in the Eurozone) agreed to keep its budget deficits below a certain percentage of gross domestic product. By making that deal with the devil, the Greek government handed over part of its ability to manage the business cycle to outside corporate interests.
The agreement with the troika also establishes the creation of a permanent task force in Athens formed by experts from the European Union. The task force's headquarters is being set up in a modern office building, off-limits to the media.
Here, a French team will deal with reform of the central administration while a Swedish team focuses on health care. Dutch experts will create a land register, while Germans will reform local councils and the tax collection system.
Greece is slowly but surely being turned into a protectorate of Germany. And the people of Greece are paying the price while the bankers and corporate interests in Europe reap the windfall.
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