The success and failure of the euro and the Greek drama – By George Konstantinidis

7 Jun

“The euro is much more than just a currency, it is a symbol of European integration in every sense of the word” Wim Duisenberg – former chief of the European Central Bank, 30th August 2001.

It is important that we all recognise the dual role of the euro: both its economical and political tasks in the European integration project.  We all recognise that the euro has caused the economic failure of the euro- zone, so why does nobody want to put an end to this failed project?  European integration seems to come at a huge cost to freedom, democracy, and the intrinsic values of societies and sovereign countries. These are the milestones of the euro, but a kind of integration is achieved by forcing Nations to forego their Sovereignty as a result of a debt that are unable to pay.  This result could not be achieved without the euro. Unlike any other normal currency that a sovereign country can adjust in order to remain competitive, the euro is rigid and provides zero flexibility.  Thus we have a flawed principle: two very different economies such as Greece and Germany sharing the same rigid currency, the one at the expense of the other.

Moreover, the real problem is not the economies of the European Nations, but the banking system. In order to support a failing banking system, central banks and governments have thrown trillions to private banks trying to avoid a toxic debt hair cut, but the banks always need more, much more. Somehow, the politicians are convincing their countries that a banking collapse is the end of the world and therefore they must support the banks at any cost. This cost is passed to the taxpayers. The soaring national debts are the product of this monstrous banking system that, especially in the euro-zone, is totally out of control as a result of the way it was designed. The banks are a united-linked system, over and above any legislation, with the ECB as its guardian. The euro is just the tool, the mechanism that enables the European state countries to bankrupt.

The euro has been the successful lethal weapon which is destroying sovereign countries via debt and bringing the political project of the European integration to a near conclusion, BUT……

Greece is the birth place of democracy and whenever democracy is under discussion, it is important that we refer to Greece.  Also, it is no coincidence that Greece is not only the weakest link, but the cradle of democracy. For many, “if you want to kill democracy, you must destroy its birth place”.

Greece has lost both its democracy (after having an appointed prime minister) and its sovereignty (after having signed the bailout deal, known as the Memorandum of Understanding) and by having the troika placed permanently in Greece. It is unprecedented in world history that a country has signed away its sovereignty for a loan, and this credit belongs to the two main political parties that have governed Greece over the last 40 years.

The astonishing thing that even a first year student can understand, is that after Greece has sold all its profitable state assets by adhering to the privatisation programme of the Memorandum, the GDP will reduce significantly, whilst the annual deficit will continue to grow year on year, causing the deficit/ GDP ratio to exceed any solvency levels. Youth unemployment is currently 50% and suicide in the country has exceeded 2500 in one year. How many more lives should be sacrificed to achieve the European project?

It is unsurprising that in the 6th May election the Greek people rejected the Memorandum. Even after they were given a haircut as the carrot, they have decided to reject the two main parties that have brought the country to its knees. The greatest share of votes, 19% was given to minor and new parties. The two main parties that have alternately governed the country for 40 years with clear majority of the votes could not even get a majority as a coalition this time, and this is after a bonus of 50 parliamentary seats that the new election system gives to the first pass the post party.  A further 35% of people did not vote at all, leaving a 48% of actual voters not represented – very sceptical and unconvinced that either political party has the solution.

So the first dilemma, Memorandum or anti-Memorandum with bankruptcy and no further loans did not scare the Greek people enough to fall in the trap, and the haircut was not a big enough carrot. It is now clear that Greece has not been rescued but sacrificed to rescue the European project.

Greeks are to vote again in less than two weeks’ time, on 17th June. The media war of propaganda has started again giving to Greeks another dilemma, Euro or Drachma? In reality, everyone knows that there is no mechanism to throw Greece out of euro; however, a country could leave of its own accord. The significance of a National Currency has been used as negative propaganda to scare the voters of a potential disaster if they choose to leave the euro. Surprising, the polls are concentrating on two parties, New Democracy, the Conservative party and SYRIZA, a left wing party that was the surprise winner of many votes in the last election. I am not convinced that if Greeks manage to appoint a government in any form on the 17th June, this will solve the problem. The further austerity measures are the continuation of more of the same wrong medicine which can guarantee that the people will be back in the streets, and I dare to say that a new election would be more likely within six months. The politicians cannot solve this problem that is now out of hand; neither should we expect them to. After all, they are the ones that they caused it in the first place.

Neither of the above dilemmas is right: Memorandum or not, euro or drachma, are not the real questions. The real question is in the heart of most Greeks. Will Greece rise from the ashes again? The whole world is focussed in this small country, the cradle of democracy, the birth place of European civilisation. This small economy that is only 2% of the European GDP has captured the global attention, not only because of the domino effect fear if Greece leaves the euro, as the euro-zone is better prepared for this now. Rather it is inspiration that they are looking for! Once again, the world is looking for a spark that will become a flame and a big fire! It is hope that they are after, hope that Democracy will never die.

Greece has inspired the world and has achieved the impossible in times of desperation. The Legend of Greece lives on and history shows that the Hellenes are very unique and unpredictable. Never try to classify them, and most of all, never try to write them off; they may surprise you at any time. My own thought is not if the Greeks will rise, because I am convinced that they will, but will they rise in time, to stop this European project?


33 Responses to “The success and failure of the euro and the Greek drama – By George Konstantinidis”

  1. Dionysios Spiliotopoulos June 7, 2012 at 8:14 pm #

    A very clear and clever approach not only to the Greek crisis but also to the effects of the Euro and to the financial “jokes”.
    Euro, obtained to be the joining link for a Union, was the reason of discordance instead.
    Like the English language which was separating English from Americans, according to the old good GBS.
    Germans have not understood that with their not logic financial policy (in long time terms), will kill the geese of the golden eggs. Who’s going to buy their products, if the Economic situation of the other countries, is on the level of surviving? None.
    Germans have usually won the battles but regularly have lost the wars.
    And the author has pointed out very well his aim.

    • author June 8, 2012 at 2:22 am #

      I think, when we talk about Germans, we need to differenciate between ordinary Germans who are also victims and dont understand what is happening, and the political elite that governs europe, especially the unelected ones. Germany has become very competitive by absorbing the East Germany, and still many Germans are paid very low wages. The governing elite is executing their plan with precision

      • Dionysios Spiliotopoulos June 8, 2012 at 10:48 am #

        By all means. I do not refer to the German thinking people who, according to my information, look with sympathy the whole situation. I refer the the political and financial elite, which not only tries to suppress Greece, but also pushes the low classes against Greeks convincing them that they have to work for the Greeks. Is Germany that MAKES MONEY on Greek disgraces, with the high interests. Forgetting also that still owes to Greece the War reparations, the obligatory war loan we have given them, and the antiquities, they have taken as “souvenir”. The amount is much higher than the Greek “debit”. Germany (speaking always about the “elite”) does not remember that her nowadays prosperity is to attribute to the fact, that they never respected their debt obligations

  2. James Mason June 7, 2012 at 11:25 pm #

    It is true, we are expecting that the Greeks should lead the way once again. Greece is a wonderful country and Greeks are very proud. We fought the Germans together. It is now clear that the euro is fraud. Nice report

    • author June 8, 2012 at 2:46 am #

      We are all Europeans, we love the Europeans but we also love their culture and national identity. A Federal Europe, apart from Democracy would kill the identity of the nations. The cultures are too different, no matter how optimistic we all are, is a receipy for disaster

    • author June 8, 2012 at 1:48 pm #

      Dear James, there is no need to fight anyone, all EU countries can live happy as a common market. Anything over and above this is doomed to fail. Every country is veru unique and people are too different. We love Europe, assuming and it should remain a collection of countries and cultures

  3. Maria June 7, 2012 at 11:29 pm #

    Do you think we will have Federal Europe soon? is really scary if the Germans are in charge

    • Dionysios Spiliotopoulos June 7, 2012 at 11:37 pm #

      Not at all. Seems to be that the Euro is facing a short life time.
      Voices bring, that German Banks, have already large amounts of “new Marks” in their strong boxes and Drachmas are already printed in China… Just voices…. (?)…

      • Myrto Zafeiropoulou June 9, 2012 at 10:40 am #

        Dionisi I totally agree with you. Euro will not last for much longer. Designed to fail?

    • author June 7, 2012 at 11:47 pm #

      It is now transparant that the common market was aiming for a Federal Europe, from the very beggining. The Eurobonds would result in a central financial control of all sovereign countries of the eurozone and the loss of control would be ireversable.

      • Maria June 8, 2012 at 2:16 am #

        so is it all about rescuing the banks? Didnt Iceland come out clean by letting the banks go bankrupt? Why should we, the taxpayers support the failing banks? The get huge bonuses every year. Something is not right. Do you think is all a plot? it is starting to make sense. Few years ago the loans were cheap and we all thought that euro was good. I feel stupid now. Is it the same problem in Spain, Italy and Ireland? There is not enough money to bail them out. Why dont they print more money? Sorry if I ask too many questions. What can we, the ordinary people do?

    • Roger Smith June 8, 2012 at 8:28 am #

      Maria, in a later post you ask what ordinary people can do.

      Find a political party in your country that is opposed to the EU: join it; campaign for it; vote for it, and encourage others to do the same. Democracy is not yet dead, but everyone must wake up (or be woken up) to their fate unless they act, and act now: enslavement in the EUSSR.

      • maria June 8, 2012 at 9:21 am #

        Dear Roger, I am afraid that in Eurozone there are no such parties. Do you think is because they will get funds if they go against EU? I dont see Italy, Spain or Ireland even discussing an EU exit. We need someone like Nigel Farage, he is my hero, I wish he was Greek. I watch him on you tube, he is the only real opposition in the Europarliament

  4. Roger Smith June 8, 2012 at 12:10 am #

    “It is unprecedented in world history that a country has signed away its sovereignty for a loan”.

    Unprecedented, maybe, but Greece is just the first in the queue.

    A heartfelt and inspiring contribution from someone who dearly loves their country, and would see the EU where it belongs: in the dustbin of history.

    • author June 8, 2012 at 1:30 am #

      as I said earlier, if you want to kill democracy, you destroy its birth place. Spain and Ireland are likely to be next, but the eurobonds would be the final nail on the coffin.

  5. Catherine Adractas June 8, 2012 at 4:05 am #

    Geoge Konstandinidis wrote an excellent article capturing the whole Greek situation and the fate of the Euro or the existance ofthe Eurozone and for how long?
    Unfortunately Greece had to paythe price and the politicians are the guilty ones here not the people who are suffering right now. Thanks George, good job.

    • author June 9, 2012 at 12:03 am #

      people are more aware now! The day is coming

  6. MINAS June 8, 2012 at 7:46 am #


  7. Stavros T. June 8, 2012 at 10:02 am #

    Dear Mr. Constantinidis, please receive my personal opinion on your article.
    I happen to disagree completely with your analysis which is flawed on many counts.
    Firstly, your statement that “the real problem is not the economies of the European Nations, but the banking system” betrays lack of understanding of Economics. The banking system is a secondary aspect of the functioning (or oiling) of any economy, which is based on productivity, work ethic, comparative advantage, etc etc. I would agree if you had insisted on the working (or bad working) of the international financial system, a large question to be addressed, but is not usually by the London financial world!!! And the question of the Euro has a lot of meat to give, but you do not seem to touch its essence at all.
    Secondly, your statement that Greece has sold its “profitable state assets by adhering to the privatisation programme of the Memorandum”, is simply not true, since it hasn’t started to do so at all. The privatization programme is well behind schedule, and the way the state-supported establishment reacts it will not advance much, unless the new govt, after the elections of 17 June, does something to that effect.
    Thirdly, I don’t see how you substantiate your claim that “It is now clear that Greece has not been rescued but sacrificed to rescue the European project”.. You add: The further austerity measures are the continuation of more of the same wrong medicine which can guarantee that the people will be back in the streets, and I dare to say that a new election would be more likely within six months¨¨. My answer to that is that it is partly correct since you do not mention the real structural reforms provided for in the Memorandum, namely, the drastic reduction of the public sector expenses, the opening up of competition, etc. I would have liked to hear more on those.
    Fourthly, on your question whether “Greece (will) rise from the ashes again?” and “Rather it is inspiration that they are looking for”, please stop these nationalistic statements (you have too many in the rest of your “analysis”) that convince very few, and definitely not the non Greek readers. They simply flatter some Greeks who fail to see the real options and the real position of Greece in the World.

    In order for Greece to rise “from its ashes” so to speak, we have to offer real solutions for undoing all the bad things that have taken place in the Greek society and economy the last 30 or so years.
    I am afraid in your analysis, with due respect, you simply offer none. And from a Greek living so many years outside Greece (I have also lived 20 years, with breaks, outside Greece) I would expect proposals that will not flatter misplaced nationalism but will point out to the deficiencies to be corrected, and not to perpetuate the clichés that it is Merkel and the Germans, and who else, to blame and that all is well!

    • author June 8, 2012 at 11:24 am #

      Dear Stavros,
      Thank you for the prompt response. Disagreeing is good and healthy. The answer to the points you raised is, why the taxpayers have to bail out the banks? Iceland recovered nicely by eliminating the banks. EU could lend money at 1%, should they wanted to help, however, there is serious profiteering involved. Banks are borrowing at 1%, and lent at 6-7%, so they are the only winners. I appreciate that Greece has a deficit, but austerity will not solve this. Have you seen how many shops are closing and what the youth unemloyment is? Furthermore, I didnt say that the privatisation started- will- (is that after Greece has sold all its profitable state assets by adhering to the privatisation programme of the Memorandum, the GDP will reduce significantly, whilst the annual deficit will continue to grow year on year, causing the deficit/ GDP ratio to exceed any solvency levels.) Thirdly, Greece has been sucrificed, is the first country that has lost its sovereigny, by signing the Memorndum. You have obviously not read it, and all your comments about Nationalism, are the example of the ones who lost their values and they believe they are Europeans. EU is not an equal partnership, and perhaps if you spent a day at the Europarliament, you will find out who makes the rules and who governs you. You can stay European , but I choose to stay Greek for ever. I have a full proposal for equal partnership and development with investment in Greece, I have sent it to all political leader, but they choose to bow to EU. My proposal will certainly get rejected, proving that our partners, do not want Greece to recover. If they did, they could have done it at the initial stage, when the Greek bonds were trading at less than 50%.

    • Myrto Zafeiropoulou June 9, 2012 at 10:50 am #

      Your suggestion is that Greece should burn so it can rise from its ashes. It is the people who suffer though. No one seems to think of them besides the author when they do financial talking. I think we have to stop thinking of people as numbers.

  8. Elly Ambrose June 8, 2012 at 10:51 am #

    A very well written report by George Konstantinidis reflecting the current situation of a fantastic and beautiful country. Having visited Greece on many occasions and having many friends there some of the reporting in the UK is a disgrace to Greece and to suggest lack of food to visitors to the country is simply untrue. Greece is in a difficult situation with the euro, but the economic climate worldwide is in turmoil not just in Greece. The biggest mistake Greece made was to join the single currency in the first place.

    • author June 8, 2012 at 1:53 pm #

      the cheap interest rates was the carot. Europeans and most especially Greeks borrowed beyond their means. This is offcource a mistake of the 40 years rulers. Other countries are in debt, manageable debt, but some countries have the ability to carry their own debt internally, like Japan. It is when people are forced to bail out banks for toxic debts that the rulers put the survival of the banking system over and above the people. At the end of the day, the derivative ballon will pop, and do not let anyone convince you, that is your fault. Keep going to Greece and tell people what great country and great people !

    • author June 9, 2012 at 12:04 am #

      at that time, they could borrow cheap. That was the carot. You must read the book, confessions of an economic hitman by John Perkins

  9. ALEX June 8, 2012 at 10:51 am #


    • author June 9, 2012 at 12:05 am #

      good point Alex, but please write in english, so everyone can understand

  10. Brian June 8, 2012 at 11:28 am #

    To The Greek People

    The Greek people gave theworld Education, Medicine, Literature, Arithmetic, History, and much Greek Languageis found in many languages of the world, also Greek Architecture has been copiedAround the world if the Greeks have a fault at all it is their idea of tomorrowwill do? Let me tell them that it definitely will not do, for once in theirhistory they need to adopt an Idea and saying of a famous English man and thatis Winston Churchill “Action this Day”? You have been fed the EuroDrug of cheap loans to the point that you no longer know the value of your owncurrency which would have allowed you to devalue and find a more manageablelevel of finance .

    If you want your freedom bringback the Drachma and once again manage your own Economy and Thus your Future. And Action This Day.

    Start the domino’sfalling say goodbye to European Enslavement and form the Death to the EU party.The world will then forever be in your debt.

    • author June 8, 2012 at 1:58 pm #

      Thank you Brian, you sound so patriotic about Greece, I hope you go there often; and it was Churchill that said ” the heroes fight like the Greeks” . You are not alone, many British and europeans respect the Greek values, and thats why they are after an inspiration from the Greeks, to finish this failing project of european integration. Please go to Greece this summer, we need your support

  11. Annette Morley June 8, 2012 at 11:08 pm #

    Enjoyed this article…Greece are going to be the scapegoats in all this…the PIS (PIGS with Greece removed) will be treated differently…better conditions will be drawn up for them. I have lived in Greece for the past 32 years & am extremely angry that this beautiful country is being destroyed by banks, corrupt politicians & irresponsible citizens. But know one thing: We (I consider myself Greek) will resurface…mark my words-Greeks don’t give up that easily.

    • author June 8, 2012 at 11:14 pm #

      Thats exactly right Annette, we dont give up. All it takes is us to unite, and then we are almighty. They have us divided with the assistance of the media

  12. Richard Blewett June 8, 2012 at 11:39 pm #

    The EU is a noble idea! – better together than a whole bunch of different states likely to go to war for some stupid reason. The Euro? – in it’s present form, NO, because it creates an imbalance between the rich and poor countries. I don’t have an answer because I’m not an economist. All I know is that something ain’t right and it needs to be fixed before the people rebel, and extremists gain ground. I too believe that Greece will show the way forward. Her people have suffered enough, both in real life and in toxic press. It is time for change, not chains!

    • author June 9, 2012 at 12:09 am #

      Richard, the biggest problem in having so many different countries and cultures as one powerful country, is how they are governed. The Europarliament of the elected representatives has no power, all power is within the european commission who are all unellected and expensive beaurocrats. Unfortunetelly, people believe is democracy but in reality is a dictatorship, and their laws superseed ours. I spent time there and I can tell you, is scary

      • george angelopoulos June 10, 2012 at 3:43 am #

        For what shined so bright , as the European Community, its a shame to crumble , the idea was one that noone ever asked those that , would be taking the burden on.

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