[Update 8-4: Well, perhaps the below post has become a irrelevant as Tsipras has agreed with Putin to build a new Greek pipeline from the turkish border into Greece (which putin hopes will supply as far as Italy). This sellout means Greece will be a slave nation like Ukraine for the forseeable future. Tsipras can be quoted as “Greece is a sovereign nation” but he obviously is to weak to notice he sold out. Its always easier to negotiate when you’re too lazy to do anything painfull. This move also means that Greece is less protected by the EU countries as long as this stupid antagonism (which started over gas) continues]
Greece is in trouble, it has build up a significant debt with the ECB, IMF and other creditors and it doesn’t generate the money to serve those debts. Yanis Varoufakis explains how the debt Greece has was only a tool for the German economy to allow its exports to grow, so more a gift to Germany than to Greece. He is right when het describes a system in which rich countries circulate money to foreign countries to drive their own economies. To him the predicament Greece is in is just a lack of honesty about this strategy on the part of banks, a strategy that never served Greece. That’s what he’s been trying to make Germany see in the last weeks, with little succes.
The fundamental flaw he points out in Greece is that it can not produce enough interesting products to generate export revenue sufficient to be independent of the (selfish) external cash injections. The idea of loans to Greece (as long as they where not of the Goldman Sachs loanshark type) was to give it the challenge to create enough exportable goods with 100% of the loan to generate income for say 5% of interest payments. That is the basic principle of investments. It didn’t work because in reality they where not investments, they where money to spend on European imports. They did nothing to reduce Greeces lack of export potential.
Yanis’s thinking on Greek debt.
The current fight Yanis has is to get rid of the ‘debt’ in a way that doesn’t drag the country down into chaos, as the banks maintain that the primary objective was never for Germany to help Germany. Why? Because a completely broke Greece still has a lot of value the banks like to monetize on. What Greece lacks is control over these malignant sharks. Also Europe can not afford to break the pretense of these self interested ‘investments’ because the system they are part of keeps the Eurozone together.
Money Greece borrows is spend on fossil fuels, which are burned without leaving anything to pay the interest on the loan
It is easy to see how Greece needs to produce Euros to pay the debts, while it also needs Euros to function. It now rings the doorbel of Russia (and other parts of the BRICS group) and asks for help there, which should not be a big political thing, but what can Greece offer Russia in return that would not ameliorate its problems with Europe? Russia and Europe are in the middle of a rearrangement to reduce the gas dependency of Europe. Greece imagines itself as a hub for Russian oil and gas, and if that happens it certainly can count on financial support from it.
The system Yanis has to demolish is the carboncredit system. He can with renewable energy
The sad thing about all this is that this would not reduce Greeces dependency on foreign cash, it would start to work for Russia in moving the dangerous and polluting hydrocarbons, to be burned into the atmosphere at immense cost down the line. It would perhaps develop gas/oil dependent industries usefull to Russia, but it would stay weak as it is now.
The alternative though is for Greece to literally fight a war of independence. It would have to reorganize itself in a shocking way, to make the greek citizen realize the energy and food potential the country clearly has. It would have to mobilize to create so much renewable energy capacity that it can take care of itself, produce goods and services for itself, without the need of exteral (carbon)credit. (We all know that money is primarily a means to allow the owner to purchase fossil fuels, or allow it to be purchased to support the production/logistics/sales chain).
A destructive too course for Greece also creates European tensions
Of course this state of independence shall -never- be, because Greece is weak and that is pretty usefull to all its neighbours, that is, independence won’t be allowed, it has to be fought. Yanis doesn’t seem to contemplate it now, but he (or his replacement) might have to if the country wants to escape more and more humiliation and depravity.
A Greek currency gives Greece control over the activities of its population
One important step to take for Greece is to get a handle on its own workforce and market. It has to reinstate an independent currency to achieve that, it can stay in the Euro, but part of mobilizing its workforce in more flexible ways is to reinstate a Drachme or perhaps a cryptocurrency. Bitcoin was suggested as an Apri Fools measure, but it is not far off. The problem with Bitcoin is that lots of foreigners own it, it has to be mined at great energy expense, and the blockchain servers are few and not in Greece. It would be much easier to simply start a Greekcoin, even using the same ledger system as bitcoin, just without the mining.
Pockets of autonomy would have to be developed, primarily in agriculture sector
Having an internal currency would allow Greece to peel away parts of its economy in which it doesn’t need the Euro. Parts that are more or less autonomous. Those Euro’s can be used to pay of debt and get rid of loans. This would start a ‘mining’ operation to find and develop autonomy in Greeces economy. A major tool in that efford would be the introduction of renewable energy and sustainable farming methods.
Hmm.. not so foolish after all?
The ‘greekcoin’ approach would also enable Greece to mobilize workers and direct activities in its economy outside the control of the Eurobankers. Even if it doesn’t solve the debt, it allows flexibility to implement changes that will reduce dependence on Europe.
We may have entered an era in which no region is ever allowed to develop (economic) independence, for simple security reasons. Most problems today emanate from independend regions and nations.
Introduction of the Drachme is often described as an exercise where the Drachme will be worthless or have some fixed value against the Euro. The key is that Greece doesn’t have to care what its internal currency is worth against any external ones. It can even prohibit the exchange and mandate (similarly to countries) that the Euro is used for some transactions and the Drachme for others. It just needs to use its currency to the best effect for Greece.
The altenative to loyalty to a Greek currency is mobilization and forced labour, or dependence
It seems Greece may not be there yet, it may not be ready yet to put it’s shoulders under such a currency, like it would put its shoulders under a rebuilding of the country after a world war. That is the effort needed from it to become independend, to escape the fossil fuel credit chains. Maybe it finds leaders that can inspire it to move that way, but more likely at this time, as it is not mobilizing and working frantically to reduce it’s dependence, it first has to sink deeper to see the key ingredient to free itself : Renewable energy.
P.S Perhaps Greece should follow through on building the first Rossi e-cat power plants as multiple studies report cold fusion is real.
Update : Asking for war reparations doesn’t solve the issue, although it does create an opportunity for Germany to build and install renewable energy capacity in Greece that can help the country sustain itself. The worst that can come of such a request is increased antagonism in Greek society against Europe and Germany, while the problem is only with the economic policy, not with its people. Those that want Greece to destroy itself will surely polarize whoever they can over this issue.