It is scandalous that the debts of private banks have been added to a national debt

All we hear is that Greece must pay ‘its €357bn of debts, but that debt is never broken down. 

How much of it relates to the cost of running the Greek state and the public sector, and how much relates to the cost of running the euro banking system? What private-sector industry other than the banks could have its ‘debts’ added to a national debt?

The Greek state has cut back its costs so much that it is on the line to have a primary surplus, which means the cost of running Greece matches the amount of tax revenue it generates. Is the amount of dollars running in and out of the banks in California or North Dakota part of those states’ debt? No. Is the amount of money running in and out of banks in the different regions of the UK, or Japan, classed as a debt the taxpayers of those regions must pay? No. So why should the Greek taxpayers be burdened with the transaction costs of the private-sector banks.

In what world does it make sense that Greece is forced to borrow even more money from the ECB, just so it can then return that same money to the ECB? Why is the ECB so scared of letting the public know who designed its policy of forced austerity (someone, somewhere sat around a meeting table and came up with this policy).

This mess is a reflection of the quality of leadership the people of Europe have now. These leaders have never worked in the real world, but spend their career in a political bubble gaining high office.

It would never have happened if the Commission was led by someone like Jacques Delors, or if France and Germany had the calibre of leaders they had in the 1980s, people who saw the bigger picture and stepped above petty national politics. Instead, Europe is led by donkeys like Jean Claude Juncker, Angela Merkel and Francois Hollande, followed by lapdogs like Enda Kenny.

Everyone knows the policy of austerity is hypocritical and dishonest, but, even worse, that it makes no sense economically or politically. So, the leaders of the EU who created this mess are incapable of fixing it, because to fix it means they would have to admit they have been wrong for the last eight years. And as we in Ireland certainly know to our cost, a politician would rather go to hell in a handcart and bring us all with him then admit he was wrong. The issue now is just how much damage are the EU’s leaders prepared to do to the European project, before they face reality and take the action that should have been taken in 2008, and separate the debt that countries incurred to run the state from the debt they were forced to take on to prop up their banks.

The state-related debt can be repaid and the bank-related debt must be moved off Eurozone member states’ balance sheets into a Eurobond system.

Desmond FitzGerald

Canary Wharf



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