In 2009 German officials, most notably the Merkel/Schäuble, convinced the new Greek government, led by Giorgos Papandreou, to OVERSTATE (not understate) the Greek deficit. This triggered the Greek (and ultimetely the euro-) crisis.
This is a scoop by John Ward, blogging at the Slog. As G-Pap took the reigns in Greece, he was presented with a nasty surprise.
Somewhat panicked by the degree of mendacity he’d discovered, Papandreou confided to key Cabinet cronies that the real fiscal situation involved not balanced books, but a 7.8% deficit…well beyond the limits allowed by Brussels – although Brussels had, from Day One, been something of a paper tiger when it came to enforcing the currency rules.
German banks were heavily exposed to the Athens deception. Thus, if the eurozone members didn’t put their hands in their pockets big time, Germany could be facing a severe financial crisis. Some time shortly before Christmas 2009 Papandreou started talks with Brussels, Paris and Berlin about the possible need for a bailout. And then it happened:
Somewhere in the midst of these talks, Berlin requested a smaller meeting with the Greeks. At this meeting, three sources (two Greek and one German) allege, the small German delegation made an astonishing observation: the situation would “have to look more desperate” in order to justify a bailout to the other eurozone members. That is to say, only widespread fear of the entire eurozone being damaged would get the member States to pile in with bailout monies.
According to Mr Ward, this mendacity was requested because of fears that the Franco-German banking system might collapse if Greece wasn’t saved. At the time little or nothing had been done to make the banking sector better able to withstand a derivatives wave.
This may very well be one of the considerations. But given the mad dash towards centralized EUnion government we’ve witnessed this last week and a half: Is it really inconceivable that the Merkel/Schäuble and hangers-on thought this the opportunity to manufacture the ‘beneficial crisis’ they needed to convince us sheeple it cannot be any other way?
Either way, the fact evidently remains that at some point Greece was asked to exaggerate the state dire state it was in, precipitating the woefully inadequate (and frankly economically illiterate) responses of our EUnion masters. In the mean time the crisis has engulfed Ireland, Portugal, Spain and Cyprus. Soon Italy will follow.
What may or may not have started life as a beneficial crisis, has now grown into a monster that is about to turn on those that thought they were its masters. And I really don’t see any reason why we should lend a helping hand to those that put us here in the first place.
Be that as it may, I urge you to head on over and read the entire, well-documented thing. It certainly puts a new and different light on the workings of ‘Europe’ and the euro-crisis. And it’s not all very good news, if you think about it.