Bankruptocracy in the Greek Sector of Bailoutistan: The aftermath of the Reuters Report on Piraeus Bank

18/07/2012 by

You may have read the shocking story by Reuters on the ponzi scheme three (or more) Greek banks concocted in order to seem to raise more capital, without diluting the bankers’ stake in ‘their’ bankrupt banks. I have nothing to add to this excellent report by the folks at Reuters (except perhaps to suggest that insider trading rules may have been breached by Mr Sallas who traded in Piraeus Bank shares at a time when he was engineering a fresh issue of them). No, this post’s purpose is to inform those outside of Greece of the impact of this brilliant, and shocking, report on the Greek polity: on our government, our system of justice and, lastly, on our finest of journalists: Deafening silence!

In a country where, supposedly, a new conservative, pro-European, ‘sensible’ government was freshly elected on a mandate of bolstering the nation’s credibility (at least in the eyes of Europe), this blatant attempt to bend the rules of bank recapitalisation (by means of a ponzi scheme where one bankrupt bank provides loans to another so that the latter’s ‘owners’ can inject the loans as capital into ‘their’ bank) went spectacularly unnoticed. Workers’ pay is reduced to sub-Saharan levels, hospitals are starved of chemo-drugs, ‘respected’ journalists lambast unionists who are trying to defend the starvation wages of unskilled labour but, when such a scandal directed at misleading the EBA, the ECB, the troika itself, is revealed, SILENCE. And as if that were not enough, the troika itself, the ECB, the EBA, whose will and directions are being usurped, also remain SILENT.

All I can say, at this point, is that there is something terribly rotten in the southeastern flank of the Eurozone’s Bailoutistan. And, curiously, the troika seems to care not one bit.

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