The prospect of a Greek Euro exit has further intensified the shocking level of capital flight out of Greek banks as citizens and businesses attempt to withdraw everything they can in Euros before their savings get turned into Drachmas. Estimates put the scale of withdrawals at €75 billion over the last two years peaking at €3 billion Euros in a single week in the aftermath of the election. The idea of a Greek Eurozone exit has been floated for several years, but even when I first published a blog addressing the subject back in September 2011, the view that a Greek Eurozone exit would be desirable or even possible was still being criticised as unrealistic, speculative, stupid, dangerous and absurd. By May 2012 even heads of state and central banker bosses were openly discussing the prospect of a Greek withdrawal.
|David Cameron, ever the political opportunist|
It is the harsh economically destructive "structural adjustments" that the IMF and ECB have set as conditions on the Greek bailout deals that have intensified the Greek economic crisis and caused the huge political backlash that is panicking the global financial markets, making Cameron's comments that the Eurozone should "make up or break up" particularly hard faced, since it is the UK backed IMF and their insistence upon harsh austerity measures that intensified the crisis to this level in the first place.
The head of the Bank of England Mervyn King also joined in with the Euro doom-mongering by claiming that the Eurozone is "tearing itself apart with no obvious solution". An economic analyst called Doug McWilliams made widely publicised claims that a disorderly Greek exit from the Euro could result in a 5% drop in Eurozone output, equivalent to a $1trillion loss. Coincidentally another chief central banker Mario Draghi of the ECB has spent even more than $1 trillion in ultra-low interest "giveaway loans" to the debt riddled European banks in the last six months alone.
Given the fact that the ECB's €1,000,000,000,000 in secretive LTRO loans and €100,000,000,000s more in Greek bailouts have had no discernible effect in preventing this economic chaos, surely the European Central Bank (and the Bank of England for that matter) will have to stop squandering such vast sums on propping up the dysfunctional neoliberalised financial sector and willfully inflicting economically destructive self-defeating austerity in order to pay for it.
|After handing out €1tn in ultra-low interest loans to the|
the debt riddled European financial sector in the last
6 months alone, Mario Draghi can expect them to come
squealing again in the wake of this latest "crisis".
Had the ECB intervened with direct loans to help Greek businesses to expand and modernise and to the Greek government to improve national infrastructure (instead of intervening with bailouts and punishing austerity measures), I'm absolutely certain that the situation in Greece would not have got so badly out of hand.
Even though the pan-European anti-austerity backlash has begun, I fear we're going to be stuck with this kind of privatise the profits, nationalise the losses, bailouts for the super-rich and austerity for the masses economic rubbish for a good while longer, especially in Britain where all three of the establishment parties are wedded to the ideas of "austerity" or "austerity-lite".