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The Humiliation of Greece

It’s not often we get to witness the moment when a leader sells his nation for money. Such a moment occurred in Athens last week.

At the behest and on the authority of Prime Minister Samaras and President Papoulias, an amendment to Greek law was drawn up last week. There was no debate in parliament, the vote is still to be purchased. But unless this amendment is challenged or changed, the change it will bring in will alter the future of Greece and its people every bit as much as the day Greece joined the Euro, perhaps even as much as the day Democracy was re-instated after the long rule of the Generals. Only this change will be a giant step away from Democracy and towards subservience to an unelected elite.

You can read the law in its original here. Here is a translation of the key part.

«The Beneficiary Member State, the Bank of Greece and the Hellenic Financial Stability Fund each hereby irrevocably and unconditionally waives all immunity to which it is or may become entitled, in respect of itself or its assets, from legal proceedings in relation to this Amendment Agreement, including, without limitation, immunity from suit, judgment or other order, from attachment, arrest or injunction prior to judgment, and from execution and enforcement against its assets to the extent not prohibited by mandatory law».

The law says, should any future Greek government try to default in any way on its debts – by setting up a debt commission or by any other means, even one accepted by international law and precedent, then Greece chooses to relinquish all claims on the assets of the Greek people and the nation and equally relinquishes all legal protections from its creditors/bond holders. In other words, if a future Greek government tries to default, Mr Samaras and Mr Papoulias have guaranteed that the Greek people will forfeit and lose any and all rights to their nation’s assets including its national companies and natural resources and the law will not protect them. All those assets will be open to seizure by Greece’s bond holders. The vulture funds, vulturecrats and all the bond holders have been handed a loaded gun and a license to loot.

No nation has ever done this. The question is why are Greek politicians trying to do it and why now?

For the last two years two questions have echoed round and round Europe and occupied the elite who rule/own it – how to stop Greece defaulting and how to recapitalize its banks – so that neither can pull down the things Europe really cares about – Germany’s and Frances’s banks?

I believe passing the above law is an important part of the answer to both those questions. In fact, if passed in to law, it will, I think all but complete a Troika formulated policy begun with the much talked about but little understood, partial Greek default and bond swap, that was the first station of Greece’s cross. What is that policy?

Stop Greece from Defaulting.

There has been and continues to be much talk about ‘helping Greece not to default’. In actual fact there is very little real ‘help’ at least not for the Greek people. The intent of Troika’s policy for Greece has been far more directly to simply ‘stop’ Greece defaulting no matter what harm it does to Greece or its people. The policy has actually been to crucify Greece if necessary, and to deny her, no matter what, the release of default.

I believe this new proposed law is intended to put beyond all reach the release of default.

But first lets clear this law is not a one off. It is a continuation of a policy that the bond swap began. The bond swap dealt with only one part of Greek debt closing off only one potentially open door to default. The present proposed law closes off all the other exits in one stroke.

So let’s start by clearing away some of the misdirection that the mainstream media has so helpfully piled in our way concerning the debt swap that Greece undertook in March 2012 and about which so much has been written. First the debt being swapped was purely Sovereign debt that was held privately. I. E. by banks. So it did not cover sovereign debt held by other nations or central banks, nor any private debt, such as that issued by Greece’s banks. Only sovereign debt held by banks and other financial institutions.

Needless to say the debt/bond holders of those institutions have used every column inch they could buy or influence to tell the approved story of how they, the ‘wealth-producers’ of the world, as they like to style themselves, have been robbed by a nation of feckless, work-shy,’socialistic’, tax-avoiding, recidivist crooks. What actually happened is nearly the opposite.

Certainly, Greece did default/restructure this debt. So on the face of it it cannot be denied that the bond holders took a loss.  But as I have pointed out before, private companies default all the time. Default is not a crime against business, it is part of it. Neither restructuring debt nor defaulting it is  a crime.  Let’s look at the case of Chrysler – again. The management simply did the mathematics and knew that unless they could reduce their burden of debts they would not be able to get out from underneath them in order to make a profit going forward. Given that situation the management (Who by the way were the culpable ones for piling up that much debt) simply said – if we do not reduce this debt then the business is dead. Better to default some of our debt and allow a business that can make money to emerge.

That is all default is. A sensible way out of a disastrous situation.

Now when Chrysler defaulted they forced a settlement on their creditors of 29 cents on the dollar. According to the BIS (Bank for International Settlements)

In February 2012, the Greek government launched an offer to exchange €206 billion of bonds held by private sector investors for new bonds with a face value of about €100 billion.

So Greece offered very nearly 50 cents ‘on the dollar’. To me that’s a bail out in all but name because it is above what the bond holders would have got had they been selling in the open market. The Greek government made no attempt to get the best deal for their people, but instead offered the open hand of generosity for their banker friends while beating down on ordinary Greeks with a closed fist.

But the settlement with the bond holders was never simply about money ‘now’, it was perhaps even more about altering the future. This was a ‘restructuring’ with one purpose – to make future default or restructuring impossible. The bond holders got paid 15% of the face value of their bonds in cash up front. The important point, however, is that the rest of their 50 cents on the dollar came in the form of new bonds issued to replace the old. The important point, perhaps the main point of the exercise was that the old bonds, which were ‘Greek Law’ bonds were replaced by ‘English Law’ bonds. The difference between Greek law and English law bonds is important and valuable to those holding them.

In Greek law bonds there can be are what are called Collective Action Clauses which allow the government to impose on the bond holders an agreement which is binding on them all so long as a majority votes in favour. Thus in a restructuring the government can dictate terms and as long as a majority of the bond holders agree, however reluctantly, the rest have no choice but to acquiesce. This is what Chrysler did. This is exactly what the Greek government did to debt it had issued under Greek Law. In English law these clauses do not appear. Which means that individual bond holders, of debt issued under English law, can hold out against imposed restructurings and refuse to settle. The effect is to make it very difficult for a government to force a settlement on bond holders. Hold-outs can always block it and force a higher price.

What the Greek government did, with the blessing of the Troika, was use the collective settlement not only to offer the holders more than they would have got in the market – which mean as far as the markets were concerned that the banks were better off after the default than before – but to replace all the Greek law bonds which allow restructuring with new English law bonds that make it impossible. The deal made this restructuring the last Greece would be able to do.

So while the mainstream press obediently peddled the ‘poor bondholders being forced to accept default’ story – the real story was that thanks to English law bonds for the old Greek law ones, no future Greek government that was not convinced of the merits of destroying Greece for the sake of Europe’s big banks, or wanted to re-negotiate – like a possible left wing, Syriza government –  no such government, no matter what it promised those who voted for it, could ever again impose a collective default settlement upon the new debts.

The bond settlement was not just about giving to the bond holders it was about taking away from the citizens of Greece. Taking away from them their ability to chose certain futures.

Foreclosing the future 

Now let’s look forward to what might happen if the present coalition were to lose the next election and Syriza were to gain power. The Syriza leader, Mr Alexis Tsipras, has already called for a debt commission, and in any election that call or something similar, will be a central promise of Syriza to the Greek electorate.

But now consider what the chances would be of making good on any such promise. If Syriza were to take exception to the generous deal given to the bond holders and if they tried to change that deal in any way, it would be a technical default and the English law clauses would prevent any new deal being forced on the bond holders. The clause would stop any attempt by Syriza to reduce Greek debt by that route. That avenue was closed when the present government signed its generous restructuring deal.

So much of the ‘poor bond holders’ story. But the bond story only dealt with one part of Greece’s debt. It left untouched the part of Greece’s Soveriegn debt held by governments, central banks like the ECB and Fed, and by other international funders such as the IMF or the various European bail-out funds like the EFSF etc., and did nothing to ‘save’ Greece’s banks from the mountain of bad private debts they still held or which they had pledged as collateral to the ECB. These debts are what new law is for.

The New Law.

On the surface the new law pertains only to the debts of the Greek state and its institutions. And on their debts the proposed new law is rather clear. It says, should any new future Greek government, no matter the mandate given to them in an election, try to default on any of Greece’s remaining sovereign debt, now held mainly held by other governments, central banks and international financial bodies, then the Greek state and the government of the day would have no protection in law against suits brought against them nor even against injunctions served to restrain their assets prior to an actual judgement. This means a Greek government would not even be able to fight such a case because while they were trying to fight, all their sovereign assets would already be frozen.

IF a Greek government tried to default not only would it not be able to force a settlement on its English law bond holders, but nations and central banks to whom it owed money would simply be able to claim and then seize Greek national assets. They could start with those already held by them, such as Greece’s gold held abroad, but also claim ownership of any other asset such as Greece’s infrastructure of roads, rail, power, water, oil and lands.

In one fell swoop the new law would radically alter the situation of those institutions, such as the ECB, who are sitting on billions of Greek government bonds pledged as collateral by Greek banks. Up till now a default would have left the ECB, like everyone else, holding worthless paper and heading for the nearest court to file suit in the hope of eventually getting a judgement in their favour. Whose court and what judgement  no one has been clear about. In short the EBC and everyone else were holding debt that was not secured against any specific claim against Greece’s assets. They were, in effect, unsecured bond holders. The ECB would not like to see it that way but I think that is how it is.

The new law changes this. And I think the European poweres are well aware of this and it is why they insisted on this law being written. For let us be clear this law was created by the Troika for the precise purpose I have outlined. The law, or the idea of it, was there in the 400 pages of the memorandum that was drawn up to govern the Greek bail out back in February. The eventual adoption of the law, is there in the fine print as one of the preconditions for the bail out to be fully released. And now the Greek quislings have done their master’s bidding.

Because if the law is adopted, then suddenly, in a default, every one of the Troika institutions could point to Greek law and say, by your own sovereign law the Greek bonds/debt we are holding are secured against your national assets. Any default and the ECB could claim whatever it wanted to cover the value of the bonds it held. My guess is the ECB might fancy Greece’s financial sector, thus making the running of Greece’s economy from Frankfurt much easier than it is now.

Of course a Greek government would not have to roll over and agree. A Greek government could still alter the law and say we are still ‘the will of the people’ and we will not surrender any assets no matter what your claim. But in return Greece’s gold would be seized as would any other Greek sovereign assets held abroad. Greece would also find suits imposed on any banks that tried to do business with them. The suits would all be based on the new, proposed law.

Taken together the earlier bond settlement, replacing Greek law bonds with English law bonds, plus the as yet to be voted upon new law would make it almost impossible for an any future Greek government, to ever again default or restructure sovereign debt. Together they are, I think, how the Troika plans to stop, prevent, and outlaw Greek people determining their own future..

This is how the Troika intends to crucify Greece.


But as if this wasn’t enough I want to suggest one more deeply unpleasant thought that came to me when I was thinking about the purpose of this new law. This is speculation because it is based upon an interpretation of the law and I am not a lawyer. But I want to put it to you because if I am in any way correct it makes the actions of the leaders like Mr Samaras an even more horrid betrayal.

Private debts in Private Greek Banks.

What I have not yet looked at is the immense pile of bad private debts held by the insolvent Greek banks.  This would seem to be outside the scope of the proposed law. And this is a problem, because if those banks collapsed, the ripples of the event could spread and to where no one is quite sure: Commerzbank, Deutsche Bank, Unicredit, The Bundesbank itself, Credit Agricole, Soc. Gen. No one quite knows. No one wants to find out. And what of the elite of Greece? The elite families of Greece, and there are only a few, who own its banks and its oil companies, and whose sons have provided Greece with her Generals as well as her Prime Ministers  would face ruin if the private debts in their banks were to implode.

Of course this should be a private affair and nothing to do with the government and its debts. But, since 2007 we all know that such private debts have been made government business. That is the new world we have been brought to. Greece’s banks will require further assistance. Everyone is clear about that . So what if a future government decided, while it might not be able to restructure its sovereign debt, it could at least refuse to take on any more debt for the sake of ‘saving’ the private banks? A more left wing government could still allow banks to default. It could clear their debts, force their bond holders, whoever they were, to suffer the losses, and then nationalize whatever assets were left, and at least Greece would have a clean banking sector. Good for Greece. Not so good for the families whose wealth and power would have just burned down.

But now think what this new law would have to say about that. On the surface nothing you might think. So might Syriza. Private banks defaulting on private debts . Nothing the government could be sued for, even under the new law,

Sadly I think the new law is there to make sure the government could be sued even for allowing private banks to default on their private debts. How?

Think of how a bank, a systemically important bank, one large enough to cause a domino effect, has to be wound up. You cannot simply let it fall apart. That would be what is known as a disorderly insolvency. What has to happen, is an orderly insolvency that ensures the bank still fulfills its socially necessary functions as a bank for ordinary people and other businesses.

In an orderly insolvency, like Chrysler’s. or Northern rock’s,  auditors must be appointed whose job it is to sort out the parts that are still viable from those that are not. The viable ones are put in one business and allowed to emerge from bankruptcy while the dead parts are put in another financial entity which is overseen by trustees while its affairs are wound down.  For most companies this happens as an entirely private matter. A company like Chrysler simply stops making cars for a while until the legal and financial sums are done. But for banks it is different. People have to have access to their money. And for big banks their operations need to continue for the sake of lots of other businesses which rely on them. So in the case of banks the government usually steps in. In the case of Northern Rock or Bradford and Bingley in the UK or the Caja in Spain or hundreds of banks in America, the government takes over the failed bank. It becomes the temporary owner and the bank’s debts appear on the government accounts. AND THERE is the key.

For as soon as a bank failed and the Greek government stepped in, as it would have to, to make sure the default was done in the orderly fashion that would protect ordinary people and the wider economy, then the bank and its debts would become sovereign. And as soon as that happened I think any sharp lawyer, expert in corporate and international law, would be able to argue that the default was ’caused by’ or at least ‘overseen and controlled by’ the government and, as such, was a sovereign default.

If the government chose not to ‘save’ the bank and its debts but instead allowed the bank to default, then the new law would empower the banks former owners and its creditors to seize sovereign assets.

It might seem incredible, and it surely is, but if I have read the law properly I think there is a very good chance it would also be the case. Just think of the way the law allows Vulture funds to sue nations even for losses on loans the Vulture fund never had any interest in until it bought them up specifically so it could sue. Tell me my scenario is impossible.

If think there is a horrible chance that the proposed law would mean that any future Greek government would have no choice but to keep bailing out the private banks. It would makes the Greek private banks and those whose wealth and power is tied to them, invulnerable. They could not be allowed to default. the proposed new law, combined with the ‘English law’ bonds would prevents any future government from being able to do anything at all to change the debt burden of the Greek people.

This law, if passed, and I think it will, would make the wealth of the 1%, untouchable even in default. The law would says either they are bailed out or they have the right to take whatever assets they wish in lieu.  The new law, could, if I am correct, be used to recapitalize a defaulting bank by simply plundering the assets of the nation.

If this speculation, and this is all it is, is correct in any way, then one of the elite, Mr Samaras, framed this law knowing it would protect his fortune and power and that of his family and his friends and their families. A law by the elite for the elite. And one that would spell the end of any meaningful democracy in Greece.

It also means this. If the Greek people vote for Syriza and the promise of reducing their burden of debt and austerity, this law and the Bond changes will ensure those promises are all broken. If that happens the voters would turn against those who promised and failed. The Left will be seen as worse liars and rogues even than those they replaced. Many Greeks might then swing violently from left to right, in to the arms of far right nationalists.

And that would be the perfect excuse for suspending democracy and bringing in a ‘technocratic’ government, a dictatorship by another name, perhaps of outsiders, backed by the military if necessary. A bankers paradise. A paradise of the elites. Vote left, swing right. The future of Europe.

This law is the end game. It must be stopped. And it can be. The Greek parliament can, and in my opinion must, vote it down decisively. If not then any incoming government seeking to turn away from enforced austerity, examine the nations debts, to reject that which was found to be odious and to restructure the rest, would find the steel jaws of a carefully constructed trap snapping closed upon them. At which point the only option would be something very close to revolution.

But it would be that or and end to democracy and economic crucifixion.


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35 Responses to The Humiliation of Greece

  1. yakima canutt December 20, 2012 at 10:39 pm #

    There is something very wrong when governments have to go to the poachers to write gamekeeper laws, and not notice they have been twisted 180 degrees.
    How did it come to this.
    Why has there been no career structure to bring through dyed-in-the-wool regulators, an entire class of righteous honorable folks with intelligence and commitment who could keep the rodents under control.

  2. Paul Prichard (Paper Bear) December 21, 2012 at 4:10 am #

    The title should have been ‘The Abolition of Greece’. The sovereign Greek people are being dispossessed of their nation and are being desovereignised and future Greeks yet to be born will be born into a dispossessed condition.
    If this ‘law’ gets ‘passed’ and because the exact same thing will happen to Spain, Portugal, Italy, Ireland and the rest of Europe then you might just see even more European people standing up and saying ‘no’.

    • Dillon December 21, 2012 at 8:34 pm #

      I think the time of people standing up to the elites is slowly coming. Already there have been large protests in spain and greece with smaller scale one happening in the UK and USA. People are becoming more and more aware of just how much society is stacked against them in favour of the rich.

  3. Paul Prichard (Paper Bear) December 21, 2012 at 4:13 am #

    Will the Greek people be allowed to keep the clothes they stand in or will that also be forfeited ?

  4. Robert 1 December 21, 2012 at 5:03 am #

    The shock doctrine once again (Greece). God help the people of Greece and world if the parliament approves this new law.

    Don’t be smug America it is happening in your own country too. America was set up for a shock doctrine scenario by the industries, banks and politicians. And now they are paying the price. Declining incomes, destruction of unions and workers rights, unaffordable health care, insurance, housing and enormous, likely, permanent loss of jobs.

    Happy New Year everyone.

  5. Paul Prichard (Paper Bear) December 21, 2012 at 9:56 am #

    When the public road outside the home of every Greek becomes the property of someone else will the Greek people be charged a small fortune to use it ?

  6. Golem XIV December 21, 2012 at 10:17 am #

    Thanks for your comments.

    Just wanted to add – a reader over on the Guardian (someone linked to the article – thank you) commenting on this article said this is ‘old’ news because the law was mentioned in the memorandum back in March. I know this. I mention it in the article and link to a NY Times article from that time.

    The reason for writing this now is because now, what was in the memorandum has been drafted and will soon be voted upon. For that reason NOW is the time to remind Greek readers to put whatever pressure they can on their MPs and do whatever else they can to stop this law being adopted.

  7. sumo December 21, 2012 at 11:31 am #

    Thanks for keeping your eye on this and sounding the alarm.

    When Max Keiser was in Greece, warning the people that elite vultures were circling, waiting for their chance to gut the Greek economy and its plunder its assets, I thought Keiser had a valiant heart but was exaggerating.

    Jesus F’ing Christ. Keiser was prescient and completely accurate.

  8. Jim December 21, 2012 at 1:59 pm #

    I think you are wrong. You have to remember that the law is just a piece of paper, the ultimate test of a good law is ‘how can it be enforced?’ The elite can pass all the laws they want, but eventually ordinary people are going to say that they don’t give a toss about those laws and they will execute that elite.

  9. ballymichael December 21, 2012 at 2:04 pm #

    There’s been some discussion of this piece over on the guardian liveblog. My take on it (but note that I’m relying on google translate to actually read the greek legislation – not safe) is that this is the official record of the greek enabling legislation for the EFSF Treaty.

    It would have been pleasant, GolemXIV, if you had actually given more context? Here’s Clause 15.3 of the EFSF Treaty.

    “Each of the Parties hereby irrevocably and unconditionally waives all
    immunity to which it is or may become entitled, in respect of itself or its
    assets or revenues, from legal proceedings in relation to this Agreement,
    including, without limitation, immunity from suit, judgment or other order,
    from attachment, arrest, detention or injunction prior to judgment, and from
    any form of execution and enforcement against it, its assets or revenues after
    judgment to the extent not prohibited by mandatory law.”

    Does it look familiar? It should. It’s exactly the same as that oh-so-sinister paragraph quoted above, but expressed as part of the treaty. In the legislation that enables it, naturally the greek drafters refer to the specific greek institutions involved.

    Just as the drafters in every other state party to the EFSF would have done the same.

    Why is it in there? To protect the EFSF from the action of a government taking its loans, and then refusing to repay. It’s a waiver of sovereignty, specific to the multinational lender. It reads as sinister, but if you look at it from the point of view of the EFSF, it’s simply covering their position. The ESM has exactly the same, the IMF has exactly the same. It’s just something a multinational lender needs, if they’re lending to sovereign states.

    I admit, I don’t understand why this law shows up now. The EFSF runs out next year. But it appears to have been published as part of an official record of legislation perhaps it appeared with a time lag?

    • Golem XIV December 21, 2012 at 3:40 pm #

      Hello ballymichael,

      I’m not quite sure what to make of your comment. Your tone strikes me as needlessly snide. “Does it look familiar? It should.” What is the point of that?

      If you disagree with me why not just say so politely? You say, “It would have been pleasant, GolemXIV, if you had actually given more context?”

      You come across as a slightly pompus head-master lecturing some errant child. Is that how you like to come across?

      I found that comment particularly disappointing. Are you the sort of person who upon receiving a gift, looks at it and says – “Is that it? You should have given more something better!” Because that is what you managed to say to me.

      You could have written something more along the lines of..”I think I may be able to offer a little more context which might alter how the whole thing looks.”

      As to the substance of what you write –

      You tell me, in your inimitable style that the paragraph looks a lot like the one that was agreed for the setting up of the EFSF. Yes indeed. I did write in the article that the quoted para was from the document agreed with the Troika for the bail out. So I am mystified why you are telling me something as if I had missed it when it is right there in the article? I even linked to the NY Times article which does mention it by name.

      Perhaps my error was that I did not mention by name the ESFS at that particular point. I had mentioned it by earlier and had thought that was enough. Obvioulsy it was not. My mistake.

      What your comment boils down to, it seems to me, is what you say at the end , that such clauses are there to protect the lenders and are therefore a good and necessary point. In other words you just disagree with me. Which you could have just come out and said clearly to start with.

      You think it is necessary for such a clause to be there, I do not. That was my point. When America borrows from China or the UK borrows from Germany – by selling them bonds – there are no such clauses. Every nation retains the right to default. We do, the Germans do everyone does.

      I did not agree with the clause being part of the negotiation with Greece over the ESFS or ESM. I still do not.

      I particularly do not agree when the lenders are also politically dictating terms of another country’s sovereign business of how it rus its own affairs. That must be the right of the people. When you borrow from a bank it does not come with clauses saying you must give up smoking, drinking and any sports that might cause you injury.

      If you think the IMF or the EFSF should have those rights then we simply disagree. Which is fine. I may well be quite wrong in my opinions.

      But I would ask you to try polite and generous of spirit instead of snide and condescending as a new style.

      • ballymichael December 21, 2012 at 5:45 pm #

        If it came across as snide and sneering, this was not my intention. This column does come across as very alarmist and judgemental.

        It’s not just that I disagree. Your analysis looks completely wrong to me, I’m afraid. Let me say, though, that what follows is not a legal opinion, I’m not a lawyer. And I’m not trying to be impolite. You have a good blog here.

        This clause has nothing to do with Greece being “humiliated”. How could it be, when every party to the EFSF and ESM has ratified laws with an almost identical clause?

        Nor does the Clause have anything to do with Greece not being able to default. It’s sovereign rights in that regard look to me to be mostly unaffected.

        All this clause does is waive Greece’s “Sovereign Immunity” with regard to the EFSF. Without a clause like that, the EFSF would have great difficulty bringing legal action against Greece, were there to be a legal dispute. Because international bodies and sovereign states are not on a level playing field. The sovereign state has Sovereign Immunity.

        Which is why Greece, or Argentina, or anywhere else can default. And in the case of a “normal” bond-holder, who doesn’t have a bond with such a waiver, a court familiar with international law will always side with the sovereign state.

        We saw that, quite by chance, just this last week. Here’s the press release from the International Tribunal for the Law of the Sea, ordering Ghana to release the impounded argentinian navy ship, which had been impounded after a court case by a vulture fund.


        And they didn’t get into any “ins-and-outs” of the Bonds. Argentine is Sovereign. The Vulture Fund isn’t. End of story, from the point of view of international law.

        The other Sovereign Governments, who are putting up money/guarantees/loans to Greece or other countries, don’t want to be in that position, via the EFSF or ESM, acting for them. Therefore, international lenders of last resort have a waiver in their statutes, that the member-states ratify.

        You’re effectively accusing Samaras of High Treason, in this column. And I’m sorry, it’s completely and utterly groundless. It’s a standard clause. And it isn’t in the Memorandum, it’s in a Treaty, that all state parties signed as legal equals.

        • Golem XIV December 21, 2012 at 7:36 pm #

          You are quite right the article does come across as alarmist (in the sense of pointing out things which strike me as giving cause for feeling alarmed) and judgemental.

          I think we live in times when there are quite a few things that are alarming. And I think we need to judge for ourselves not placidly accept the spoon fed judgements of those who proclaim they know better.

          On to specifics – You say nothing in the document seems to you to effect Greece’s sovereignty. I sincerely hope you are right and I am wrong. But I am not the only one who thinks this does greatly effect Greece’s sovereignty.

          Here is what Ms. Louka Katselia who is a former Greek labour Minister in the Papandreou government and an economist has to say about the EFSF agreement we are discussing,

          “This is the first time ever that a European and probably an O.E.C.D. state abdicates its rights of immunity over all its assets to its lenders,”

          Ms Katselia was also special economic advisor to Papandreou, is on the scientific advisory board of the German Insitute for Economic Research in Berlin and is the director of the development centre of the OECD.

          So she agrees with me. Or rather I agree with her. So my alarm is not confined to just me.

          Your point about all nations signing the same clause. True. But the consequences of signing are and always would be quite different for Germany or France to sign than for Greece to sign.

          Both the usurer and his client sign the same contract. The effect on them is quite different.

          Lastly your point about sovereign immunity. I am not sure the point you are making. You say yourself that signing the document restricts Greece’s ability to default against a loan from the EFSF.

          Then Greece is, as I and Ms Katsella argue, giving away her sovereignty to her main creditor. So I don’t understand how you can claim I am quite wrong and Greece’s sovereignty is unaffected?

          You agree it has been given away as regards the EFSF. And as you say the EFSF goes defunct shortly. I strongly suspect this clause is now going to be boilerplate for all debtor nations.

          In which case we are entering a new era where sovereignty will be eroded for debtor nations.

          I personally think that is something well worth feeling alarmed about.

          ALL that aside. Thank you for your reply. Sorry if I cam across as testy. Like you I do not mean to be. But I am alarmed. That does not make me ‘alarmist’. It makes me alarmed. ALarmist has the connotation of unconsidered. I try very hard to consider these things first and THEN get alarmed. Not the other way around.

          I hope to see you around here more, helping to ask awkward questions and putting over conflicting and valuable alternative views.

  10. Jason December 21, 2012 at 2:05 pm #

    Just added you to a comment on the Telegraph debt crisis thread if that is okay, this to me seems to be part of the larger plan to abolish EU states and absorb them into a greater collective. First it will be Europe and then what next amalgamation with the equivalent American (North and South) and SE Asian ‘co-prosperity’ spheres? This will be the international bankers wildest dreams comes true.

    The problem is the people of Europe are so disparate and want to live such totally different lives the only way this can be done is under some form of totalitarian dictatorship.

  11. steviefinn December 21, 2012 at 3:33 pm #

    Chanced on this earlier, a lecture given by Professor Gilbert Achtor at SOAS on the 12th of last month. He sifts through the causes of the so called Arab Spring, describing the different ingredients, it seems to me that these are already in place & simmering away in Europe, & in particular within Greece.

    He describes how the high percentage of graduates suffering within high youth employment, & the difficulty to afford to feed oneself properly & other often cited factors alongside the neo -liberal effect on these countries. Notably due to the stripping away of public investment & the lie that it would/will be replaced by a private version.

    It seems that the Neo-liberals are digging a large hole that eventually either they or we will end up in. Hopefully it will be them, either way the above law probably will not matter in the end. Just another link to our chains that will be added to or forever broken.


  12. Hucklebuck December 21, 2012 at 10:27 pm #

    This represents nothing short of the dissolution of the state. I never thought I see the day when an advanced, Western democracy would vote itself into serfdom. My mistake.

    • Golem XIV December 21, 2012 at 11:28 pm #

      I think many of us made the same mistake.

  13. Phil (Mcr) December 22, 2012 at 12:29 am #

    Irony of ironies on the last day of the world! Globalisation and its Mayan discontents


    “Indeed, the long-term repercussions of both economic globalisation and the Mayan uprising itself, were clearly foreseen by the Zapatistas, who predicted, not an end of the world, but the collapse of the western capitalist economy. Furthermore, Zapatista predictions had a certain sense of “prophecy” – with all the connotations that word has: in the sense of teaching and the sense of foretelling or anticipating. When the EZLN had stated in the first Lacandona declaration that the era of party politics was over, it was not only prophesying alternative ways of making politics – invoking direct democracy (based, incidentally, on ancient Mayan traditions, and different from representative democracy), but it was, in fact, anticipating the collapse of some political institutions of western modernity.”

  14. Kimo December 22, 2012 at 5:23 am #

    I get the feeling the Greek politicals will sign anything that keeps the money coming. And the population will go along. Where will it stop? When foreign boots hit Greek soil. They will meet subversive resistance from a practiced population, familiar with evasion recently, and outright sabotage as demonstrated in WWII. Bottom line; Greece will always be a money loser loser for outsiders, because insiders will always be willing to take their money, and give little in return.

    • Zenon August 27, 2013 at 9:40 pm #

      they keep blaming the simple people for the action of 100.000 corrupt politicians and their families plus their relatives and friends that drove us to this position we had heavy industry and weapons production capabilities they are literally flooding our cities with illigal immigrants and diseases they raise the taxes and hunt the Greek people and leave the elites and illegal run free they even banned they gun licenses and confiscated any weapons or gun shops. A university student i knew shot an illegal for breaking and entering his house and threated to kill his mother and already stabbed his older brother

      • JayD August 27, 2013 at 10:13 pm #

        The corrupt politicians and banksters must be thrilled that you direct so much of your anger at ‘illegals’….you fool !! Wise up to rule 1… Divide and rule.

  15. Pat Flannery December 22, 2012 at 12:40 pm #

    Passing laws that diminish a country’s sovereignty is impossible in a republic. Greece is a republic.

    The U.K. is not a republic. British Sovereignty vests in its Sovereign, currently Queen Elizabeth II. Historically the British Parliament arrogated the powers of the British Sovereign. Since 1688 the Supremacy of Parliament is the fundamental law in Britain.

    That is not the case in the Republic of Ireland for example. It is difficult for British people and even many Irish to make that distinction. Many think that the Irish Dail is supreme in Ireland just as the British Parliament is supreme in Britain.

    Greece is a republic. Its parliament is therefore not supreme. Any law it passes that exceeds its powers is unenforceable, either internally or externally.

    That’s why people have fought and died for republics – and will again. I am proud to be a citizen of two republics, the United States of America and the Republic of Ireland.

    • Joe R December 22, 2012 at 8:08 pm #


      Ireland by its own official title, is not the Republic of Ireland. It is Eire or Ireland. Look at your passport.

      And Ireland has, via its government and Dail engaged in repeated acts of giving away its own sovereignty ( de facto if not de jure ). This has been very real and no strong challenges via the law have emerged to any of this yet. Those who weild the law are appointees of the government and don´t rock the boat. An example of a de facto betrayal follows from over a year ago…


  16. Phil (Mcr) December 22, 2012 at 12:48 pm #

    Is this alarmist?


    ‘The air force document explains that the air force will be overseeing the deployment of its own military surveillance drones within the borders of the US; that it may keep video and other data it collects with these drones for 90 days without a warrant – and will then, retroactively, determine if the material can be retained – which does away for good with the fourth amendment in these cases. While the drones are not supposed to specifically “conduct non-consensual surveillance on on specifically identified US persons”, according to the document, the wording allows for domestic military surveillance of non-“specifically identified” people (that is, a group of activists or protesters) and it comes with the important caveat, also seemingly wholly unconstitutional, that it may not target individuals “unless expressly approved by the secretary of Defense”.’

  17. Phil (Mcr) December 22, 2012 at 1:05 pm #

    Or this?


    “A nontransparent program called “Paid Detail Unit” has been set up so that private corporations are actually employing NYPD officers, who are in uniform and armed. The difference is that when these “public servants” are on the payroll of the banks, they are no longer serving you and the impartial rule of law in your city – despite what their uniform and badge imply.”

  18. Joe Taylor December 22, 2012 at 3:06 pm #

    I don’t know if those articles are ‘alarmist’ Phil but they frighten the pants off me.

    I’m thinking about what David said about dreams in his last blog and everywhere you turn our dreams are becoming a nightmare

    ‘Democracy’ is all we mere mortals have to oppose domination. It has to be fought for or it will be taken away.

    • Mike Hall December 22, 2012 at 5:35 pm #

      “It has to be fought for BECAUSE IT HAS BEEN taken away”

      Fixed 😉

  19. Joe Taylor December 22, 2012 at 9:28 pm #

    > “It has to be fought for BECAUSE IT HAS BEEN taken away”

    Mike, my guess is that the greater majority of the world’s population would agree with you – I know I do.

    There’s so much discontent out there that reaction due to it has become a deluge.

    There must be a zillion online & offline articles, blogs posts, YouTube videos, books, academic papers, you name it, about what’s wrong and how this situation we find ourselves in came about.

    David’s book, all the brilliant papers he’s put online for our benefit and all the talks he’s given around the country (off his own bat) are a good example of what intelligent, decent, committed people like him are doing to enlighten those, like myself, with less between their ears – and it’s working

    But despite all that, given that the greater percentage of humanity are being exploited by a tiny minority, realistically, what should we DO?

    It’s one thing to say ‘fight’, but we can’t realistically fight bombs, gunships, tanks, machine-guns, rocket propelled grenades, tear gas and billyclubs, or seek redress through a judicial process that’s stacked against us, with logical discussions, reasonable demands and orchestrated demonstrations.

    Hasn’t the time come for the more intelligent amongst us to stop analysing and explaining how we got to where we are now and to start telling the rest of us what we should actually do about it?

    If you have any ideas, please consider putting them up in this discusion http://bit.ly/UhrtbZ

    • Mike Hall December 23, 2012 at 1:19 am #

      Joe, I wish I knew.

      That is to say beyond knowing that the solution cannot involve violence, and we must continue to share our knowledge & indignation at the nonsense the established order of elites would have us swallow.

      I’ve mentioned research psychologist Daniel Kahneman’s book ‘Thinking, Fast and Slow’ here a couple of times. The concept he’s offering us is blindingly simple & backed by his life’s empirical work & that of others.

      We have two modes of ‘thinking’.

      The one we cannot switch off is rapid, based on a kind experiential heuristics, extrapolating as best we can from whatever stuck in our memories that +seems+ to fit the situation. We couldn’t function without it – no good spending 1/2 hour looking for new evidence of what a Hairy Mammoth is when it’s charging down on us & we’ve only got as far as the sharp stick in defensive tactics.

      Slow mode takes some deliberate invoking to pause, take stock, look for new evidence & integrate it with previous knowledge. This is why we’ve developed such incredible use of language, tools & technology.

      But fast forward to the breadth & complexity of modern society & I think most people just give up trying to understand what’s really going on. Just about everything about our lives conspires to have us accept whatever information is readily to hand, if we ever make into ‘system two’ (slow) mode beyond a cursory nod of acquaintance.

      It becomes obvious just how powerful mainstream media is when the things we most need to understand actually play out quite remotely from our immediate environment in space & time.

      However, I do think that self awareness of the ‘nature of the beast’ (us!) is very powerful in mastering its shortcomings.

      But it all takes time, contemplation, a real desire to learn & what I might best describe as a peaceful heart & faith in the astonishing ability of humans to create & experience the sublime.

      Best I’ve got, & it’s taken a lot of years in semi-wilderness & a very unconventional life.

      Tho’ no matter how deeply I’ve peered into the abyss, something has always, quite unexpectedly, drawn my attention back to the true evolutionary potential of ourselves & our world.

      Curiously, it seems to me that whether anyone consciously has such faith doesn’t matter. Acting like you do works just as well 😉

      Don’t know if any of the above makes sense? I’ll post it anyway…

  20. Joe Taylor December 23, 2012 at 12:16 pm #

    Thanks Mike, I’ll get the book.

  21. Scot Hines January 17, 2013 at 9:46 am #

    German Chancellor Angela Merkel ’s government said June 24 banks and insurers will recognize their “very high interest” in sharing the burden of a Greek financial package and an agreement will be reached in the next nine days.

  22. Just me May 27, 2013 at 7:18 pm #

    “New drug called Sisa is killing austerity-hit Greek youths”



  1. Humiliation of Greece - the new model for Europe | 2 Nights 3 Days - December 22, 2012

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