Greece and the euro: Fifty ways to leave your lover

Published on Intrepid Report, by Ellen Brown, June 11, 2012.

The Euro appears to be a marriage of incompatible partners. A June 1 article in the UK Telegraph, titled Why Europe’s Love Affair with the European Project Is Ending, reported that two-thirds of 9,000 respondents thought that having the euro as their single currency was a mistake.  

For Greece, it was a tragic mismatch from the beginning; and like many a breakup, it is really about money. Greece is a vivacious young woman chained to a tyrannical old man. She yearns to be free to dance on her own; but breaking up is hard to do. Defaulting on her debts will force her out of the Eurozone and back to issuing drachmas, and she could get brutally beaten by speculators on foreign exchange markets for her insolence.

Fortunately, there are alternatives to an ugly divorce. The treaties binding the 17-member nations are just a set of rules, entered into by mutual agreement; and rules can be bent or broken, especially in crises. The ECB (European Central Bank) broke a litany of rules to save the banks, and so did the Federal Reserve to save Wall Street in 2008. Rules that can be bent for banks can be bent for people and nations—not just Greece, but all the other Eurozone countries threatening to file for divorce.

Paul Simon says there are 50 ways, but here are five creative alternatives.

1. The open marriage: Return to the drachma without abandoning the euro: … //

… 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. (full text).

(Ellen Brown is an attorney and president of the Public Banking Institute. In “Web of Debt”, her latest of 11 books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are Web of Debt and Ellen Hodgson Brown).

Links:

Solving The Debt Crisis, 13.51 min, uploaded by SimonJonathanThorpe;

The Euro Zone of Denial Hits the Wall, 75.07 min, uploaded by KnowledgeAtWharton on Oct. 28, 2011;

Planning for the Future: A Sneak Peek at Tomorrow’s Europe, on Spiegel Online International, by Konstantin von Hammerstein, Christoph Pauly and Christoph Schult, June 11, 2012, (see also the Photo-Gallery);

Eight elementary errors of economics
, on RWER Blog, by Geoff Davies, June 7, 2012.

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