Δευτέρα, 26 Αυγούστου 2013

Airdrops for saving euro: ECB's airborne regiments

Normally banks, especially central ones like EU's ECB, work in the context of financial institutions, stock markets and wire transfers. But in the era of ultra-hard, ultra-centralized euro, EU countries in the austerity-stricken south are beginning to see a military-like airborne division of ECB, destined to conduct emergency airdrops of fresh euro bills, in order to save the most destructive currency in the world (several countries have almost-declared bankruptcy within a decade after its introduction as their national currency).

Faisal Islam is a well-known journalist that writes in Dailymail (UK). In his recent column he provides excerpts from his book "The Default Line: The Inside Story Of People, Banks And Entire Nations On The Edge", where he describes how ECB organized and executed a military-style emergency airdrop of several billions of fresh euro bills into the Greek banking sector on June 2011, as well as into Cyprus a few months ago.

In both cases, the transfer was of course a top-secret operation, at least in its details. No one wants to be faced with armed terrorists or top thief crews when a cargo plane is carrying a 2 bn euro load. Some of this transfers has even seen the news spotlight: at least in one case in Greece, where a VIP-like convoy was shown on prime-time news on TV, escorting a few unmarked trucks just out of El. Venizelos international airport and straight to the headquarters of the Bank of Greece that June of 2011. Same thing happened with Cyprus, where a cargo plane was shown landing there straight from ECB and heavily-escorted trucks carrying fresh euro bills to the banks, only hours before their opening in a fearful bank-run morning. This was of course totally pre-planned, a standard deterrence measure showing high level of security, as well as an "everything under control" sign to all the viewers.

In both cases, these images where much more that transfer of money. It was a sign of force. In both cases, the delivery came just after the cornered governments of the countries (a second one for Greece in 2011, a stunning first for Cyprus in 2013) where essentially blackmailed into accepting harsh conditions for new memorandums and new austerity measures for their people, on demand by Eurogroup, ECB and the troika.

Faisal Islam provides a very interesting perspective of what happened during these two "air raids" by ECB's airborne regiment (so to speak) and how this seems to be a new defacto operational plan for every new deal: let the talks drag for long, place an imminent deadline at the very last moment, force a government to sign, and only then send a cargo plane full of cash to that country as a sign of conquering.

Here are a few of the most interesting parts of Islam's article. There are also some references (at the bottom) to Greek articles that mention these new disclosures. Of course, no major media station in Greece has mentioned any of these. They are too busy pushing forward with the "success story" of a "recovering economy", when the national debt has now stricken 180% of GDP, unemployment rate officially at 28% (unofficially over 37%) and the government is ready to lift all protection from confiscation of houses for over 500.000 "red zone" mortgage loans.

The mission was neither to save lives nor even to preserve a fragile democratic freedom like the famous airlifts in post-war Berlin, but to protect and prolong the economic experiment of a multi-national currency. Billions in freshly minted euro notes made a clandestine journey to struggling Greece – a drama worthy of a John Le Carré novel but authored in Frankfurt am Main, known as Mainhattan, world headquarters of the euro. ... 

Consisting of the European Union, the European Central Bank and the International Monetary Fund, the Troika made it clear that it would withhold the final instalment of a €110 billion bailout, agreed in May 2010. This last €12 billion payment of foreign funds was needed desperately – to pay pensions, public servants and interest on Greece’s huge debts. It was funding that Greece could raise neither in taxes from its own people, nor from the financial markets. ...

A decade after it gave up the drachma, the world’s oldest existing currency, Greece faced the crushing reality that it did not have the sovereign authority to meet the demand for paper currency from its own citizens. It could mint euro coins and there were also plates for the €10 note. But coins and small denomination paper were not going to satisfy the demand. Only the German Bundesbank, the National Bank of Austria and the Luxembourgers have ever had the plates for the highly prized €500 note, the highest-value paper currency in the world. (This form of manufacturing would appear to have been confined to German-speaking countries.) Intentionally or not, the ability of Greece to meet a huge surge in demand for banknotes had been effectively proscribed. By June 2012, Greek demand for paper currency had nearly trebled and amid last summer’s electoral tumult, the secret missions started in 2011 were once again required. The response was extraordinary. While issuing public threats to Greeks, in private the Troika authorised military and commercial cargo planes to feed them euros – billions-worth on every flight. They were intended not only to preserve Greece’s fracturing social stability, but also to preserve the single currency itself. ...

The value of notes in circulation in Greece doubled from €19 billion in 2009 to €40 billion in September 2011. By the summer of 2012 the total had reached €48 billion, of which at least €10 billion – possibly much more – had been delivered through secret airlifts. Typically, developed economies have cash in circulation worth between four and seven per cent of gross domestic product. In 2009 in Greece, the figure was 8.2 per cent. By 2012 it had trebled to 24.8 per cent. On these numbers, in mid-2012, Greece had a greater value of euro notes in circulation than the Netherlands, even though the Dutch economy is four times that of Greece. ... 

Four very large green juggernauts laden with euros had arrived from the European Central Bank, just hours before Cyprus’s banks were due to reopen. An historic just-in-time delivery. That afternoon a Maersk Star Air cargo plane had parked up at the end of the runway at Larnaca airport. Flight logs record that the plane, registration OY-SRH, had flown from Cologne to Munich in the early hours, and then, via Athens, to Larnaca. It was carrying €5 billion euros in notes – not a bailout, but an epic logistical effort to sate the Cypriot desire for paper money. The cash had been transferred from the Bundesbank logistical reserve at the request of the ECB. But only after the Cypriot government had done its ‘homework’, complying with Troika demands for economic and financial reform. ... 

But even these extraordinary lapses pale into insignificance against the two mega lies – untruths in the very structure of the euro – which persist even now, despite the seemingly calmer weather in the currency bloc. A blueprint for revival is being drawn up in the German headquarters of the European Central Bank. The ECB is in absolutely no doubt that the euro will survive. But the people of the crisis countries – Spain, Portugal, Greece, Cyprus, Italy and Ireland – are yet to be enlightened by their politicians about the price to be paid: in short, the survival of the euro means much lower wages for them. 

Read more: http://www.dailymail.co.uk/news/article-2401410/When-Greece-banks-melted-EU-talked-threatened-cut-loose--10billion.html

Related articles (in Greek):

1 σχόλιο:

Jaga είπε...

A very special article back from May 2012 by CNN Money, just before the elections in Greece. In a few words, it is stating that bringing the banks at the brink of chaos and the society into a blackmail may not be such a bad idea, if austerity and new loans are to be passed just after the elections.

Mentioned in the article (in Greek) by info-war.gr (see ref.1 above):

"Maybe Greece needs a run on the banks" (21/5/2012):

>> http://finance.fortune.cnn.com/2012/05/21/greece-bank-run/

"Do the Greeks need bitter medicine? Pushing the economically ailing country's banks to the brink might be just what it takes to get austerity measures in place."