Greece and the Euro: Fifty Ways to Leave Your Lover
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Researcher Simon Thorpe wrote to the ECB and asked whether they would object if a publicly-owned credit institution were to borrow from the ECB and use the funds “to supply the money to a government such as the Greek government in order for that government to pay off its debts to financial markets.” The ECB replied:
According to the Treaty—as you have just quoted—such publicly owned credit institutions “shall be given the same treatment by national central banks and the ECB as private credit institutions.” It is up to the banks to decide how to use the money they have borrowed from the central bank system.
5. The Dowry: Impose a Financial Transaction Tax
Thorpe notes that the ECB has issued and lent nearly one trillion euros to the banks at 1% since December 2011—three times the total Greek debt of 355 billion euros. If Greek public banks borrowed from the ECB at 1% and bought Greece’s sovereign debt, the debt could be paid off in 10 years just from the returns on a very modest Financial Transaction Tax (FTT) of 0.3%.
Imposing a tiny FTT on all financial trades would not only be a lucrative source of revenue but would prevent the attacks of speculators, both on the newly-issued drachma and on the sovereign debt of Greece and other Eurozone countries. The FTT has already been implemented in many countries. In 2011, there were 40 countries that had FTT in operation, raising $38 billion (€29bn).
Where There Is a Will, There Is a Way
The problem is finding the will, particularly among the Eurocrat leaders holding the reins of power, who may not be looking for an amicable workout. The marital problems of Greece and the Eurozone stem from an arbitrary set of rules that were entered into and can be changed by agreement. But as Mike Whitney maintained in a June 3 article titled “Europe Moves Closer to Banktatorship”:
These people are not interested in fixing the EZ economy. They are engaged in a stealth campaign to . . . solidify the power of big finance over the individual states . . . .
To avoid that dire scenario, the popular majority needs to grab the reins of power. It is fitting that Greece, the birthplace of European culture and democracy, is the focus of the struggle against bondage to an elite banker class. Greece can dance again if she can set herself free.