The Greek Surrender –
Finance As A New Means Of War
An interview between Michael Hudson & Sharmini Peries
MICHAEL HUDSON: It’s good to be back.
PERIES: Michael the International Monetary Fund is pushing for comprehensive measures to tackle Greece’s debt burden. They want the lenders to get creative in terms of debt cancellation and the measure that they’\’re proposing seems to be fairly progressive compared to what the lenders are talking about. Tell us more about the IMF’s proposal and how the lenders are reacting to it.
HUDSON: The IMF says it will not reduce Greece’s debt by a single penny. It will keep the debt in place. The problem is the way that the European central banks keep their balance sheets, if it breaks down Greece’s debt owed to the IMF, then the countries Germany, France and other countries whose banks are bailed out will have to take a loss and they refuse to lose a single penny. So the IMF has not made a creative proposal. It has repeated what it said a year ago without changing a single word. It says okay, we’re going to keep every penny of debt in place but we’re going to give you a fudging number. We’’e only going to charge you 1.5% interest and you won’t have to pay the debt for 25 years. So you don’t get a debt markdown, but you won’t have to pay interests for 25 years and we’ll charge you only a little bit of interest.
There’s only one kicker. You’re going to have to cancel your pensions, write them down, impose austerity, privatize your government, and you’re going to have to shrink your economy so that it will shrink by about 1, 2, 3% a year so that the 1.5% interest that we’re charging as little as it is, is going to absorb all the income growth you have. Every penny of growth of have from the next 25 years ,you’ll have to end up paying the German banks. READ MORE…