Greece’s crisis: Debt as white war.

The diving well at the Aquatics Center, drained of water.                    Photo: Oli Scarff/Getty Images

Last thursday I received a call from Santander, a Spanish-owned bank in Mexico offering me my fifth credit card. One of the advantages they offer me is to transfer my pre-existent debts from other banks to theirs, obtaining a lower interest rate. This sounds cool, but isn’t it a bit dumb to acquire more debt instead of cash? Actually it ain’t dumb. We were taught that precious metals and nonrenewable resources back up paper money and coins, but they don’t. Today’s money is nothing but public debt: an endless chain of who owes whom. Banks don’t give a fuck if you pay them or not. If they did, they wouldn’t be calling random people to offer them credits and loans they can’t afford. When you commit to pay a loan, the bank creates more money out of nothing. You owe them money you don’t have, but most importantly, money they don’t have. Because of that, it is not strange to see banks offering you bonuses in exchange of deposits, and actually, when you get a credit card, you are committing to periodically provide the bank with cash. They always lack of it, and because of that, they prefer us to spend money digitally (internet, debit cards, credit cards, checks) instead of physically. They also launder money because of that. A bank’s capital is backed up by debt. Once the debt has reached interest that are out of proportions they sell it to a third party. Banks ride, take advantage, and get rid of debts. It is a twisted scheme of pump and dump, which is legal because the people loosing money aren’t wall street investors. Collectors then buy your debt for a small amount of cash and harass you to win money.

The biggest problem is that we lack of a financial education. Specially, in arts and humanities, people show little or no interest in economics, finances, stocks, etc. This is our biggest weakness, and the greatest opportunity for banks and loaners to control us. When Santander’s representative called, he demanded me to give him two references (which would probably have been stalked with credit card offers). I told him I knew no one. They insisted a little bit, but eventually decided to grant me the credit card without references. No one would give a loan to a person who refuses to give references, except banks. If one does not know how to use a credit card it’s easy to drown on oneself’s interests, which is what they are looking for. Once these are higher than your available credit, banks generate even more money, and once you use all of your salary to pay the previous month debts, you will never grow again economically. It is destruction disguised as aid. It is white war.

Let’s go back to the problem which originated Occupy Wall Street. Debtors wanted to pay, but on lower and affordable monthly amounts. Banks refused, committed embargoes, and didn’t even sold the mortgaged houses they stole. They left them abandoned to fall apart. The behaviour of Europe with Greece follows the banks’ logic, mainly because it is regulated by them. Hence, it follows the logics of investments. When you loan, you invest: You spend a big amount of cash and in exchange you receive monthly payments, which in long terms result on a much larger amount of money. Today, Greece’s exit from the euro seems increasingly likely.  On June 30th Greece failed to make a €1.55 billion ($1.72 billion USD) payment to the International Monetary Fund (IMF), the biggest default in the fund’s history. The country has at least suffered a loss of 25% of its Gross Domestic Product (GDP) and a debilitating rise in immiseration and the unemployment rate—which now stands at over 50% among young people. Austerity always means less jobs, and because of that, Greeks reject the measures imposed on them.  Now, if Greece fails to make the payment of €3.5 billion due to the European Central Bank (ECB) on July 20th, it is likely to leave the euro, and possibly the EU. If they couldn’t pay €1.55 billions, how the hell are they gonna pay more than the double? In 2012, Greece’s debt was the 158.339 % of its GDP. This means greeks owe almost 60% more than what their country produces. Their debt follows the euro rules, so it is established according to the face value of the euro (if yesterday you took a loan of €5, today you owe €5) and not to its global value (the one when compared with other coins). If Greece is expelled from the euro zone and return to a local coin their debt will still be the face value of the euro. So as their economy continues to plumber, their debt will raise even more.

With public debt totalling €168 billion in 2004, it’s clear that the Olympics alone did not bring about an economic collapse. Yet the Athens Games epitomised the structural problems that had bedevilled the country for decades. It’s not just a question of how much money was spent on the Olympics, it’s also how it was spent and specially where it came from, which is the World Powers. After a period of austerity to tighten up its finances and qualify for euro entry in 2001, the Greek government loosened the purse strings. The Olympic games were just one of several areas where public spending was unchecked and funded by unsustainable borrowing. Again, why do banks loan money to people knowing they won’t be able to pay? Hosting the Olympic games cost almost €9 billion, making the 2004 Games the most expensive ever at that point. Within days of the closing ceremony, Greece warned the euro area that public debt and deficit figures would be worse than expected. The 2004 deficit came in at 6.1% of GDP, more than double the euro-zone limit, while debt reached 110.6% of GDP, the highest in the European Union.

Of all the hype surrounding the Olympics, some of the biggest tends to be economic. The event is often billed as a boon to business for its host city — a two-week burst of tourism and valuable TV time, as well as a spur for much needed infrastructure investment. The bid process leading to the election of a host city for the Olympic Games is split into three phases (each lasting approximately one year) and is governed by the Olympic Charter. During the Invitation Phase the National Olympic Comitees (NOC) are invited to declare their interest in bidding to the International Olympic Comitee (IOC). Then, during the applicant phase, the so-called Applicant Cities must answer a questionnaire prepared by the IOC. A group of experts then examines the answers, after which the IOC Executive Board chooses the official “candidates” from among the Applicant Cities. This is followed by the Candidature Phase, in which the Candidate Cities must submit a file in response to a second questionnaire from the IOC. This covers a wide range of topics, including the Olympic village, transport, security, accommodation, sports and venues, the environment and marketing. An Evaluation Commission then analyses the various candidature files and produces a report for the IOC members, allowing them to judge each city’s ability to host the Games. Then the IOC vote and elect the host city. So, if the IOC takes about three years to elect a city, why on earth did they elected Greece? Before the games, the country was facing already economic trouble, and building all the Olympic’s infrastructure creates jobs, which later disappear. The biggest problem is that the things you need for the olympics are almost never the things you need for daily life. Most stadiums which are built for the games are expected to fall into disuse after the tournament. In Greece, the aquatics center, the beach volleyball arena, and the softball arena fell apart. In addition, the massive Helliniko Olympic Complex, where many events were held, was abandoned. The only answer is control and power abuse.

If debt is war, desire is it’s fog, which uses peace and tranquility to spread panic and control. Ironically, only the third world and developing countries forgive debts. Europe doesn’t owe money to Latin America nor Africa. After the WWs, in 1953, Greece forgave Germany’s debt. Five years ago, Germany demanded Greece to sell them the Parthenon, the Acropolis, and the Aegean Islands, arguing that Greeks needed money to pay their loans and that cold cold Germany could benefit from Greece’s warm weather. This is a kind of wicked pawn strategy to drain Greece with no mercy: out of cash, and out of goods. It is in the end, centralisation. This strategy is quite common on sports events. For example, the Olympic Games in Mexico in 1968 and the FIFA World Cup of 1970 were use as a catalyst to end the Mexican Miracle. This ensured the Mexican dependance on the US to distill its own oil, offering an alternative market to the Arabian Peninsula and to the Persian Gulf (which had previously served as an alternative market to Mexican oil after Lazaro Cardenas’ oil expropriation). Brazil will follow the same path, which will weaken Mercosul and power up the Pacific Alliance. Foreign debts are the route used by the World Powers to drive capital out of developing and third world countries into their banking system. They control growth, hence they control production. Its a way to turn our countries into dwarves; they look as if they could grow, but they never will.

Because of this, voting no is quite an understandable decision for the Greek people. Can we really judge a country because it tries to achieve growth, specially when debt is the only way? Except OPEC, which has been tried to be dwarfed through War on Terror and currently with the Islamic State of Iraq and the Levant, every transnational alliance neutralizes a potentially emerging world power, even if it is part of them. The question is: where is debt’s war taking us?, considering it is not only a world conflict but a power conflict, because World Powers control its dissident population through debts too. Desire is the sickness, and debt is the symptom. When economy is used as a war strategy, the only way to counter back is through economic terrorism. Proudly, Greece contemplates only two options: having its debt forgiven or collapsing the Euro.

Alonso Cedillo