Saturday, May 28, 2016

Greek Debt Negotiations – Troika And IMF Outmaneuver Syriza Again

Merkel, Lagarde, Juncker continue to pick the bone of Greece clean as traitor Tsipras reaps the rewards of collusion again while spouting bogus term "austerity" which is simply a code word for outright theft       

By Jack Rasmus

This past week the Greek Parliament voted by a narrow margin of 153 to 145 to impose even more austerity on its people — thus implementing the latest austerity demands by the Eurozone Troika required for the Troika’s release of loans earmarked for Greece last August 2015.

The continuing saga of Merkel and Tsipras
Earlier this year the Troika signaled to Greece, if it wanted to receive its next tranche of loans needed to make a scheduled payment of 3.5 billion euros to the ECB this July, Greece would have to toughen its austerity program still further. The Syriza government complied, and cut pensions and raised income taxes beyond what it had even originally agreed to last August.

Greek Government’s Latest Austerity Measures

In its May 22, 2016 decision last week, the Greek government then added still more austerity. 

That vote raised the sales (VAT) tax to 24 percent, imposed higher taxes on coffee, alcohol and gas, revised the privatization program to accelerate the sale of publicly owned transport, electricity, water and port systems, added finances to cover Greek banks’ growing backlog of non-performing business loans, and added contingency measures to cut government spending even further over the next three years should Greece miss the austerity targets imposed by the Troika last August 2015.

Prime Minister, Alexis Tsipras’ public response in the wake of still further austerity was “Greece is keeping its promises, now it’s their (Troika) turn to do the same”. But what promises? And to whom?

Tsipras get's an atta-boy from Papa Juncker

The past six years of Troika debt deals and austerity demands shows clearly that whenever the Troika has agreed to terms of lending to Greece in exchange for more austerity from it, the deal is never really closed. The Troika keeps demanding even more austerity, with nearly every quarterly review of Greece’s austerity compliance, before releasing just enough of the loans for Greece to repay the Troika for prior loans. The Troika dribbles out the loans and then squeezes Greece for still more austerity. That has been the Troika’s practice ever since the three major Troika Greek debt restructuring deals of May 2010, March 2012, and August 2015.

Greece’s Unsustainable Debt Load

By latest estimates total Greek debt is 384 billion euros, or US$440 billion. That’s approaching nearly twice the size of Greece’s annual GDP. A decade ago, in 2007-08 before the global crash, Greek debt was roughly half of what it is today, in terms of both total debt and as a percent of GDP. 

Greek debt was actually less than a number of Eurozone economies. 

So Greece’s debt has been primarily caused by the 2008-09 crash, Greece’s six year long economic depression followed, the extreme austerity measures imposed on it by the Troika during this period which has been the primary cause of its long depression, and the Troika’s piling of debt on Greece to repay previously owed debt.

Contrary to European media spin, it’s not been rising Greek wages or excessive government spending that has caused the US$440 billion in Greek debt. 

Since 2009 Greek annual wages have fallen from 23,580 to less than 18,000 euros. Government spending has fallen from 118 billion euros to 82 billion.

Bankers and Investors Get 95 percent of all Debt Payments

Who then has benefited from the escalation of Greek debt? To whom are the payments on the debt ultimately going? To Euro bankers and to the Troika, which then passes it on to the bankers and investors, the ultimate beneficiaries.

As a recent in depth study by the European School of Management and Technology, ‘Where Did the Greek Bailout Money Go?, revealed in impeccably researched detail, Greek debt payments ultimately go to Euro bankers. 

For example, of the 216 billion euros, or US$248 billion, in loans provided to Greece by the Troika in just the first two debt deals of May 2010 and March 2012, 64 percent (139 billion euros) was interest paid to banks on existing debt; 17 percent (37 billion euros) to Greek banks (to replace money being taken out by wealthy Greeks and businesses and sent to northern Europe banks), and 14 percent (29 billion euros) to pay off hedge funds and private bankers in the 2012 deal. Per the study, less than 5 percent of the 216 billion euros went to Greece to spend on its own economy. As the study’s authors concluded, “ the vast majority (more than 95 percent) went to existing creditors in the form of debt repayments and interest payments”. And that’s just the 2010 and 2012 Troika deals. Last August’s third deal is no doubt adding more to the totals.

The IMF: Pro-Greece or Pro-IMF?

Recognizing the impossibility of Greece ever being able to repay the debt, the IMF — a member of the Troika — has recently broken ranks with its Troika partners and has recommended the Troika provide debt relief to Greece. The Syriza government is no doubt betting on the IMF being able to convince the rest of the Troika to agree to debt relief. But in so doing, it is making the same error it made in last year’s 2015 debt negotiations: it is depending on the assistance of one wing of the Troika to convince the others to give Greece a break. Last year it was Syriza’s strategy to leverage certain liberal members of the EC and the Eurozone’s finance ministers group on its behalf. That failed. German ministers and bankers demanding more austerity prevailed last August 2015 over the “soft” or liberal elements in the EC and among the Eurozone’s finance ministers group. Syriza is now betting on the IMF, and proving its willingness to continue with austerity in the interim, to show it is “keeping its promises” to enforce austerity. But that similar strategy will fail as well.

Once more, Lagarde fucks the Greek people
The IMF’s proposal for debt relief for Greece, in its just released “Country Report 16/130,” proposes to extend the current Greek loans by 14-30 years more beyond current 2040 expiration dates; to introduce “grace periods” during which payments may be suspended; and reduce interest rates on the loans to a fixed 1.5 percent instead of variable rates much higher. However, data show that results in no debt relief in real terms at all.

Instead of forcing Greece to generate a budget surplus of 3.5 percent a year, out of which to repay the loans and achieved by means of severe austerity, the IMF also proposes to reduce the annual budget surplus to 1.5 percent. 

That would reduce Greece’s debt from 200 percent of GDP to “only” 127 percent… by 2040. Even that nominal debt reduction would fail, per the IMF, if Greece’s GDP grew at only 1 percent. It’s been declining at -5 percent and more for the past six years, so even 1 percent is highly unlikely. If Greece’s growth is 1 percent or less, then the IMF admits the other European states will have to add still more debt piled on Greece in order for it to repay the old debt. In short, the IMF version of ‘debt relief’ for Greece has little chance of economic relief for Greece. Nor does it mean any reasonable change in austerity for Greece. Things will get worse, just perhaps worse not as fast as in recent years.

What’s behind the IMF’s Shift?

The IMF is no friend of Greece. What are its possible motives for breaking ranks with the ultra-conservative elements in the Troika — led by Germany and its northern Europe banker allies in the Netherlands and elsewhere?

First, the IMF sees rising demands for its bailout funding on the horizon, not only in the Ukraine but in emerging market economies in the near future. Second, the IMF is feeling the heat from other IMF members in those economies demanding no more special debt considerations for Greece. Looming large on the horizon is also the possibility of the UK exiting the European Union, and elections in June as well in Spain. As secret discussions within the IMF in March exposed by “WikiLeaks” revealed, the IMF is concerned a re-emergence of Greek resistance to the Troika, concurrent with a possible Brexit vote and Spain elections, might converge into an economic ‘perfect storm’ this summer. The IMF wants the Troika to get in front of the curve with Greece before it escalates. Dampen the resistance before it begins by making concessions to Greece now, that won’t take effect for years to come, could be behind the IMF’s move.

CNN's frauds and hacks once again spew propaganda for Merkel and the IMF, screwing Greek pensioners and the poor for their corporate masters

Most likely, however, is that the IMF is maneuvering with the rest of the Troika to work a compromise whereby the Troika will buy the IMF out of the Greek debt negotiations. That would mean restructure the Greek debt, to pay off the IMF’s 14.6 billion euros share of the 384 billion euro Greek debt.

That has some appeal to the hardliners in the Troika. However, Germany is demanding that there be no debt relief for Greece before 2018. It is looking at German elections in 2017. So what is most likely is a compromise, resulting in a phasing out of IMF commitment and a phasing in of Greek debt relief that starts only in 2018 after German elections. It appears that’s exactly what the Troika may have decided in its May 24 most recent meeting in Brussels.

What all that means for Greece, however, is not only likely more of the same austerity, but perhaps even an intensification of austerity between now and 2018 —as the German-led conservatives within the Troika demand even more austerity now in exchange for the possibility of debt relief after 2018.

This news bureau contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc.  We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

Operation Condor 2.0: A Blow Against Venezuela

Obama and his mass-murdering CIA create chaos in Venezuela for dying big oil in effort to continue rape at the pumps   

By Nil Nikandrov

In his speeches Venezuelan President Nicolás Maduro constantly returns to the subject of the new Condor plan that the US is seeking to undertake in Latin America and the Caribbean. The codename "Condor" was first used to camouflage the widespread oppression orchestrated by military juntas in South America (mainly in Chile, Brazil, Argentina, Bolivia, Uruguay, and Paraguay) from 1970-1980.

Augusto Pinochet with Kissinger
Much is known today about the active support that America’s intelligence agencies and State Department lent to those repressive operations. The campaign was coordinated by the US secretary of state at that time, Henry Kissinger, and an International Criminal Tribunal still holds documents incriminating him. At least 70,000 people were killed during the Condor operations – politicians, trade union and other public figures, journalists, diplomats, academics.

Venezuela is the primary target of the new Condor plan. 

The Obama administration is doing all it can to plunge that country into chaos and violence, subjecting it to waves of criminal terror, starvation, and looting, trying to spark a direct military intervention. A few days ago, the State Department hosted a three-hour meeting attended by the Uruguayan OAS Secretary General, Luis Almagro, who is pro-American, and the commander of US Southern Command. Venezuelan President Nicolás Maduro described that meeting as "conspiratorial," emphasizing that he is fully aware of what they were discussing: "They are obsessed with Venezuela. And you know why? Because they have not been able to suppress the Bolivarian Revolution."

Maduro claims that Venezuela has been subjected to "media, political, and diplomatic aggression, as well as extremely serious threats over the past ten years." A strategy is implemented that would justify foreign intervention. The American threat to Venezuela’s independence and sovereignty is looking much more credible. 

President Obama’s executive order naming Venezuela as a country posing a threat to US national security has set off alarm bells for Bolivarian leaders. 

Russia’s Foreign Ministry responded to that order in a similar vein, "This effectively directly encourages violence and foreign interference in Venezuela’s domestic affairs." Former Colombian President Álvaro Uribe’s call for foreign troops to enter Venezuela is viewed by the Bolivarian leadership as the latest chapter in the information war "approved by Washington," in the run-up to war itself. US Southern Command is planning further developments on the Venezuelan front, based on this exact scenario.

Venezuela’s air-defense system has recorded an uptick in the Pentagon’s intelligence-gathering activities. At a press conference on May 17 President Maduro revealed that the country’s border had twice been violated by a Boeing 707E3 Sentry – which is used by the US Air Force to support continuous communications with armed units in conflict zones or to disable electronic equipment belonging to the government and army. A spokesman for the Pentagon issued a denial: "Our nearest aircraft to Venezuela was about 100 miles from their border," adding that "American pilots respect internationally recognized national boundaries."

No one in Venezuela believes the Pentagon’s brazen lies about "respecting boundaries," because no one has forgotten the attacks on Yugoslavia, Libya, and Iraq. The CIA’s special ops are also a strong memory, as is the 2004 attempt to deploy a detachment of "paramilitares" to Venezuela from Colombia in order to attack the presidential palace and assassinate President Hugo Chávez.

Venezuela’s response has been to beef up its defense capabilities. After the incident with the US spy plane, large-scale exercises, dubbed Independencia II, were launched in the country, involving not only the military, but also civil defense forces. Member of parliament Carmen Meléndez, who served as defense minister during the Chávez administration, has stated bluntly, "We must be prepared for any scenario." The exercises were staged in seven Integral Defense Regions, 24 Territorial Integral Defense Zones, and 99 Areas of Integral Defense. A total of 520,000 soldiers and members of the Bolivarian militia took part. Defense Minister Vladimir Padrino was categorical in his assessment of the result of the exercises: "There is no other choice but to transform Venezuela into an impregnable fortress of a country, and this can be achieved through a civil-military alliance."

In light of the difficult situation unfolding in the country – the worsening of the economic crisis and the rise in protests by a segment of the public that is being influenced by the opposition – President Maduro has signed a decree giving the government emergency powers. This document, valid for 60 days, expands the government’s authority to take further steps to ensure security. The military can also be brought in to shore up public order. Businesses, companies, firms, and NGOs with foreign ties will be subject to more stringent oversight and their accounts will be frozen – or perhaps even their property confiscated – if any disloyal activity is detected. Food and electricity will be provided to assist the most vulnerable classes of the population.

Venezuela’s foreign ministry is moving to limit America’s diplomatic staff to 17-18 people. This is very inconvenient for the US embassy, since their intelligence agencies need approximately 180-200 US diplomats in place in order to do their job. In retaliation the US embassy announced that it would no longer issue tourist or business visas: "It is impossible for us to maintain our previous high standard of service to the hundreds of thousands of Venezuelan citizens who visit the US Embassy in Caracas each year."

Victims of  Operation Condor

In preparation for the second edition of the repressive Condor Plan for Venezuela, US intelligence agencies have assigned an important role to the intractable domestic opposition – which Chavez always claimed, was in the service of the US government. For American intelligence agencies and the opposition groups that answer to them, the parliamentary elections in Venezuela on Dec. 6, 2015 opened up further opportunities to destabilize the country.

The opposition promised the public that after the elections the long queues and consumer shortages would disappear, and they were able to win their first majority in the National Assembly in 17 years. However, the country gained nothing by it, and the opposition now uses the floor of parliament to further fan the flames of civil unrest.

President Maduro declared his readiness to declare a state of emergency if the opposition’s subversive work continued. For example, the last march in Caracas by the opposition bloc Democratic Unity (MUD) ended in a free-for-all between the opposition and police. Law-enforcement officers, some of whom were female, suffered injuries when they were mercilessly beaten with metal bars. Some of their attackers were quickly pursued and detained. It turned out that the "protest" had been organized by Coromoto Rodríguez, the security chief for the head of parliament, Ramos Allup. In the 1970s Rodríguez was a member of the secret police (known as Disip), was involved in the torture of prisoners, and then served in President Carlos Andrés Pérez’s security detail while also working with the CIA. The arrests of the militants allowed SEBIN (the Bolivarian intelligence service) to shed some light on Rodríguez’s role in inciting riots in Caracas.

Now the Venezuelan opposition is preparing to hold a referendum to recall President Maduro. In early May, they instructed the National Electoral Council to verify about 1.85 million signatures (instead of 200,000 required by law) on a petition for a recall referendum. However, Vice President Aristóbulo Istúriz claimed that there were many irregularities in the collection of the signatures by the opposition and that the referendum will not be held until every one of those names has been verified.

MUD leaders are trying to exploit this situation to provoke "spontaneous protests" by closing roads, setting fires, and sabotaging power lines and water and food supplies. But there is a far more sweeping campaign of terror on the horizon that could supersede the radicals’ currently torpid crusade. With increasing frequency agents from SEBIN and the police are uncovering arsenals of US-made firearms, grenades, and explosives in Caracas and other cities.

The Americans have long been nursing a vindictive thirst to make an example of the Bolivarians. It started back when Hugo Chávez was still alive, once he began to pursue an independent policy after taking office in 1999. His initiatives to modernize Latin America to serve the interests of Latin Americans were supported by Cuba and embraced by a new generation of Latin American leaders. The US dictate in the Western Hemisphere has begun to weaken. Chávez and his supporters fought to establish unifying regional blocs, pushing for the creation of a South American defense alliance and the use of the SUCRE as a regional currency, as well as developing other projects without American input.

Obama working hand-in-hand with big oil to keep prices sky high

Now Chávez’s successor – President Maduro – is the object of bitter attacks. The pro-American media has blamed him for the failure of the "Bolivarian economic model," citing falsified statistics on Maduro’s "low approval ratings," and aggressively lobbying for the idea of ousting the president by force. The opposition leaders, many of whom have had a hand in previous ventures to destabilize the regime, are appealing directly to the country’s armed forces asking them to "intervene"... Henrique Capriles Radonski, who has close ties to the CIA, has been especially outspoken.

But the defense minister, General Padrino López, has laid out the army’s position: "The president is the highest authority in the state, and we pledge to him our loyalty and unconditional support." Attempts by the opposition to stir up a spirit of rebellion within the ranks of the military have thus far been unsuccessful. The patriotic ideals of Hugo Chávez are still alive in the army, and it is hoped that Operation Condor will misfire in Venezuela: the Venezuelan military will stay true to the Bolivarian constitution and president.

This news bureau contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc.  We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.



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