{"id":15336,"date":"2015-12-16T08:16:37","date_gmt":"2015-12-16T13:16:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15336"},"modified":"2015-12-16T08:16:37","modified_gmt":"2015-12-16T13:16:37","slug":"the-great-greek-bank-robbery","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15336","title":{"rendered":"The Great Greek Bank Robbery"},"content":{"rendered":"
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The Great Greek Bank Robbery<\/a><\/h3>\n<\/header>\n
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ATHENS \u2013 Since 2008, bank bailouts have entailed a significant transfer of private losses to taxpayers in Europe and the United States. The latest Greek bank bailout constitutes a cautionary tale about how politics \u2013 in this case, Europe\u2019s \u2013 is geared toward maximizing public losses for questionable private benefits.<\/p>\n

In 2012, the insolvent Greek state borrowed \u20ac41 billion ($45 billion, or 22% of Greece\u2019s shrinking national income) from European taxpayers to recapitalize the country\u2019s insolvent commercial banks. For an economy in the clutches of unsustainable debt, and the associated debt-deflation spiral, the new loan and the stringent austerity on which it was conditioned were a ball and chain. At least, Greeks were promised, this bailout would secure the country\u2019s banks once and for all.<\/p>\n

In 2013, once that tranche of funds had been transferred by the European Financial Stability Facility (EFSF), the eurozone\u2019s bailout fund, to its Greek franchise, the Hellenic Financial Stability Facility, the HFSF pumped approximately \u20ac40 billion into the four \u201csystemic\u201d banks in exchange for non-voting shares.<\/p>\n<\/section>\n

A few months later, in the autumn of 2013, a second recapitalization was orchestrated, with a new share issue. To make the new shares attractive to private investors, Greece\u2019s \u201ctroika\u201d of official creditors (the International Monetary Fund, European Central Bank, and the European Commission) approved offering them at a remarkable 80% discount on the prices that the HFSF, on behalf of European taxpayers, had paid a few months earlier. Crucially, the HFSF was prevented from participating, imposing upon taxpayers a massive dilution of their equity stake.<\/p>\n

Sensing potential gains at taxpayers\u2019 expense,\u00a0foreign hedge funds rushed in<\/a>\u00a0to take advantage. As if to prove that it understood the impropriety involved, the Troika compelled Greece\u2019s government to immunize the HFSF board members from criminal prosecution for not participating in the new share offer and for the resulting disappearance of half of the taxpayers\u2019 \u20ac41 billion capital injection.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Great Greek Bank Robbery ATHENS \u2013 Since 2008, bank bailouts have entailed a significant transfer of private losses to taxpayers in Europe and the United States. The latest Greek bank bailout constitutes a cautionary tale about how politics \u2013 in this case, Europe\u2019s \u2013 is geared toward maximizing public losses for questionable private benefits. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[11066,10916,195,233,6937,282,11067,1167,3076,8402,4642,2921],"class_list":["post-15336","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-bailout","tag-bank-robbery","tag-debt","tag-ecb","tag-efsf","tag-european-central-bank","tag-european-financial-stability-facility","tag-greece","tag-insolvency","tag-project-syndicate","tag-taxpayers","tag-yanis-varoufakis"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15336"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15336\/revisions"}],"predecessor-version":[{"id":15337,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15336\/revisions\/15337"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}