John Ward – Greek Debt Reputation : Is Varoufakis About To Make A Distinction Between Borrowing Obligations And Odious Debt? – 10 April 2015


Some of you may remember a Slogpost here three years ago in which strong (but also very odd) allegations were made about how Berlin actually encouraged the Papandreou regime in 2009 to exaggerate the size of Greece’s debt hole. To quote the piece:

‘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.’

Although several German (and French) motives were involved at the time, in the light of Syriza’s recent election to power in Greece, the rationale behind this strange request is becoming a little more clear.

What’s highly significant here is that the new Government immediately launched an enquiry into post-crisis debt management, and how the country’s subservience to the Troika emerged. I understand there is a great deal to observe, especially in relation to Evangelos Venizelos and his ruthless attempt to airbrush the event from Elstat history.

Elstat (the Greek statistical authority)’s board member Zoi Georganta caused a sensation by alleging in 2011 that the declared deficit for 2009 had been been massaged upwards in November 2010 by her boss Andreas Georgiou. In June 22011, six Elstat board members had been dismissed after clashing with Elstat chairman Georgiou on the subject of Greek debt exaggeration.

The matter was never satisfactorily explained, but the reason for the fraud (it now emerges) may well have been a deliberate attempt by Wolfgang Schauble to load unrepayable debt onto Athens and make it The Bad Guy example to reassure the Bond markets that there would be no pussyfooting around when it came to potential eurozone defaults.

In fact, during the time since, two separate lifelines out of the current debt structure have been strongly put forward at EC level…and turned down flat by Berlin. The Euronauts don’t want a solution to the Greek dent problem: they want a dead goatskin to drape over the fundamentally flawed euro.

Now comes news that the Greek parliamentary committee is focusing largely on the legal topic of ‘odious debt’.

“The committee will examine how Greece entered into the bailout agreements with its international lenders, as well as any other matter related to the memoranda’ implementation,” Syriza Parliamentary Secretary Christos Mantas explained, “We are fulfilling our commitment and the social demand to explore the causes and responsibilities of an unprecedented crisis that devastated the vast majority of society”.

This offers Tsipras and Varoufakis the chance to repudiate debt which is not an obligation in international law. The latter has said Greece will fulfil all its “obligations”….but not including funny-money and invented debt scammed by Berlin.

Greece begins its traditional all-banks-closed Easter break later today. The rumour still persists that, after closure of the markets worldwide this afternoon, there could well be an announcement about this very important matter. / link to original article

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