Debt Fraud: Greece Actually Owes Nothing!

February 19, 2015

The Greek debt, as such, is mostly not Greek debt. The debt which Germany and other nations are demanding that they pay for, is money that the Greeks never got! So the Greeks don't owe that money. This was a swindle, because the Greeks didn't incur that debt.Lyndon LaRouche, Feb. 17, 2015

What Americans need to know about Greece and "its debt," is that the new Greek government is asking the European Union to shut down a huge Wall Street-London bank swindle and make economic growth possible again in Europe.

If that doesn't happen, the worsening bankruptcy of the whole trans-Atlantic banking system will continue to generate desperate confrontations with major powers Russia and China, with the threat of world war.

The rest of Europe, so far, is refusing to shut that Wall Street swindle down, and today Obama's Treasury Secretary Jack Lew backed up that refusal, including by a threatening phone call to the Greek finance minister.

What Obama, Merkel, et al. are demanding Greece do, instead of shutting down this Europe-wide swindle by the banks, is run a budget surplus of 4.5% of its annual economy, exclusively to pay the "Greek debt." In U.S. terms? That would mean the United States running a government tax surplus of $750 billion a year, in order to pay down debt. You won't hear Obama or Lew volunteering to try it; it is impossible.

The "Greek debt" swindle is the same one as the TARP bailout here, and the Federal Reserve's printing of $4 trillion in new money to cover Wall Street's debts; and its perpetrators are the same huge banks.

In the United States, the big banks took millions of subprime, unrepayable mortgages sold by their captive mortgage companies, and made them into toxic securities which blew up the financial system and the whole economy in 2008; the government bailed them out, while our living standards plunged.

In Europe, the banks bought the mortgage securities from the U.S. banks. At the same time they made millions of unrepayable subprime loans of their own — not only to homeowners, but also to governments without the means to repay them, like those of Greece, Ireland, Portugal, Hungary, and others. Big Wall Street banks were involved, particularly Goldman Sachs, which created "magic" derivatives: Take a bank loan to Greece, make it look like a mere "currency swap" rather than a debt — but turn it into a much bigger debt ten years later.

All this European subprime debt blew up on the big banks in 2009, a year after the U.S. subprime debt blew up on them. Then the European governments all superindebted themselves, to create a $1 trillion "European TARP" called by the initials EFSF. They bailed the megabanks out, with the IMF pitching in, using "only" about $600 billion to pay the unpayable "subprime government debt" part of it. $275 billion paid "Greek debt."

This immense bank bailout got passed through the Greek, Irish, etc. governments, which passed it immediately on to the banks which had been their "subprime lenders."

We have to spill this thing as a leading issue in the U.S. You can sink Wall Street on this one. If you sink the Greek swindle, you're going to start a chain-reaction explosion of the international trans-Atlantic system, like the Wall Street system and similar things, the British andothers. They are the ones who owe the debt, not the Greeks.
— Lyndon LaRouche • Feb. 17, 2015

The Greek debt swindle was classic. In 2009 Greece's debt was $300 billion. It then "got" two huge bailouts in 2010 and 2012, of about $140 billion each. Less than 10% of that $275 billion stayed in Greece and was spent by the Greek government; more than 90% went directly and immediately to Deutsche Bank, HSBC, JPMorgan Chase, and their fellow sharks, with small amounts crumbling to the hedge funds swimming alongside. Former Greek Labor and Social Security Minister Louka Katseli has given documentation that the Greek government actually got to spend or invest just 3% of that $275 billion. The only banks which had to write off their "Greek debt" were Greek banks; all of Wall Street and the London-centered banks got their toxic debt "assets" guaranteed 100% by this European bailout swindle. This made the Greek banks so bankrupt that the Greek government then had to borrow more to bail them out with $50 billion — so Greece's debt was increased when supposedly being reduced! A total swindle!

Then, between 2010 and today, Greece, Ireland, Portugal, etc. were ordered to pay the bill for this huge new Europe-wide bank bailout debt. They imposed a slashing domestic austerity until their people emigrated, death rates rose and birth rates fell, and clouds of wood smoke rose over modern cities whose inhabitants could no longer afford modern heat. After five years of this punishment, Greece's $300 billion debt has become $350 billion or so — after $250 billion passed through to the banks!

And the other European countries are also on the hook for this phony debt, all of it. They guaranteed it; Greece and Ireland and the other austerity-crushed countries can't pay it, so the rest of Europe must either agree to reorganize that debt and write it down, or their taxpayers will pay for the swindle.

This is why the new Greek government now demands that Europe shut down this global bank swindle: Write off the unpayable debt; invest in reviving economic productivity by building new economic infrastructure.

In addition, the megabanks have to be put through a Glass-Steagall reorganization and broken up.

To which Lyndon LaRouche has added:

"This thing has to be put loud and clear on every doorstep in the United States. If you want to avoid World War III, that's what you'll do."

Meanwhile, in Ukraine, after the forces of the fascist Kiev regime fled under fire today from encircled Debaltsevo, an actual ceasefire is now in effect, however fragile, and heavy weapons are being withdrawn from the front lines by both sides, as agreed by the leaders of the French, German, Ukrainian, and Russian governments at Minsk last week. To make it an enduring ceasefire, all we need do now, is immediately remove Nazi Victoria Nuland from the State Department.

SEE "Glass Steagall"



U.S. Treasury Secretary Lew Threatens Greece: Capitulate or Else

In a display of thuggery, U.S. Treasury Secretary Jack Lew called Greek Finance Minister Janis Varoufakis today to demand that the Greek government capitulate to the Eurozone's demands, or suffer "immediate hardship."

In barely-disguised diplomatic language, Lew told Varoufakis to find a "constructive path forward in partnership with Europe and the International Monetary Fund, to build on the foundation that exists to advance growth and reform," a Treasury spokesman reported today. Act now, he said: "time is of the essence," as a "deadlock" is not good for Europe.

Greece was to have submitted its proposal requesting an extension of its loan agreement—not bailout program—to the Eurozone ministers today, but this has been postponed until tomorrow, Feb. 19. The Guardian quoted government spokesman Gabriel Sakellaridis warning that Athens will not cave in to demands that it extend the bailout agreement:

"We believe the terms of the bailout cannot continue by any means."

Germany insists otherwise.

The European Commission's Vice President, Valdis Dombrovskis, demanded today that Athens stick to the terms of the original bailout agreement, warning Athens not to make "unilateral" moves to reverse its austerity program while negotiations are ongoing.

Meanwhile, in remarks to the Parapolitica radio program, Greek Minister of State Alekos Flamborasis reported that Greece may ask for an emergency EU summit, adding that if this didn't occur by the end of the week, Greece would request it, "as the issue is political." He underscored:

"Athens is not requesting an extension of the Memorandum as the vote of the Greek people has abolished the Memorandum. Our country is calling for an extension of the loan agreement... so that we can resolve a few things that are outstanding."

Cyprus To Give Greece Unconditional Support

The President of Cyprus, Nicos Anastasiades, said his country will give Greece its full support in all European Union talks. Commenting on the talks between Greece and the EU, Anastasiades said, "I am not saying that I am optimistic; however, I am saying that our wish is for everyone to realize that development and the creation of new jobs is the answer to austerity or to strict austerity, a position that the President of the Commission, Jean-Claude Juncker, has included in his pre-election program. He told CNA:

"Cyprus's firm stance is the support of Greece, and this is the position I maintained in the European Council, and this is confirmed by the Greek side. Therefore this is going to be our policy in all the critical meetings that will follow, either Eurogroup meetings or the European Council meetings."

Commenting on a possible Greek exit from the euro, he said:

"Of course a possible Grexit would not only affect Greece but the whole of Europe. Therefore, there will be some consequences, but only a few that will not dramatically influence the situation in Cyprus."

Coming Battle for Glass-Steagall in the European Parliament

Two Italian Members of the European Parliament, Marco Zanni and Marco Valli, have filed a list of 101 amendments to the fake EU banking separation bill, which comes up for a vote in the EP Committee on March 23-24. If approved, the amendments would turn the EU regulation into a real Glass-Steagall-like banking reform.

Many amendments just suppress articles of the bill that are useless in a banking separation regime, whereas others change the text drafted by the EU Commission or add new paragraphs to give the bill teeth. Amendment 1, for instance, rejects the proposition that a credit institution must simply "reduce excessive risk exposure," and specifies that this must be achieved "by eliminating the implicit government guarantee enjoyed by trading activities performed by credit institutions." Amendment 2 adds to Art. 1, which calls for "facilitating ordered resolution of crises and recovery," the passage "without repercussions on taxpayers and without implementing a bail-out."

Amendments 4 and 14 change the text proposed by the Commission for "separating certain trading activities," to "separating trading activities from credit activities." Amendment 8 introduces the ban of all trading activities, and Amendment 9 specifies that "credit institutions" cannot perform such activities. Amendment 15 mandates "basic credit institutions" to perform "exclusively" commercial banking. Amendment 16 introduces a whole new paragraph saying that "All activities not indicated in Para. 1 (Art. 8) must be considered as trading activities. Such trading activities are forbidden for basic credit entities" except for a few cases.