Anxious Greeks Emptying Their Bank Accounts

Source: Spiegel Online

Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending -- and are inadvertently making the recession even worse. 

Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament.

With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn't managing to recover from a recession that has gone on for three years now: "Our banking system lacks the scope to finance growth." 

He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion -- by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October -- the biggest monthly outflow of funds since the start of the debt crisis in late 2009.

The raid on bank accounts stems from deep uncertainty in Greek households which culminated in early November during the political turmoil that followed the announcement by then-Prime Minister Georgios Papandreou of a referendum on the second Greek bailout package. 

Papandreou withdrew the plan and stepped down following an outcry among other European leaders against the referendum, and a new government was formed on Nov. 11 under former central banker Loukas Papademos. That appears to have slowed the drop in bank savings, at least for the time being.

Italy and Greece: Rule by the Bankers

Source: Global Research.ca
Michael Roberts

"Technocratic governments" ruling on behalf of financial markets

Both Greece and Italy will be ruled by so-called ‘technocratic’ governments. Even though both Greek prime minister George Papandreou and Italian prime minister Silvio Berlusconi were elected comfortably in parliamentary polls and were never defeated in any vote of confidence in parliament, they have been ousted – to be replaced by unelected ex-central bankers and former executives of hedge funds and investment banks. From now on, financial markets will rule directly over the lives of the Italian and Greek people.

Democracy should be put above markets, said Papandreou. Berlusconi said that the appointment of a government of technocrats would be “an undemocratic coup” that ignored the 2008 election result. But it is still happening. In Greece, Lucas Papademos will become prime minister. He was head of the Greek central bank when Greece joined the euro and boasts of his leading role in achieving that. Now he takes over in order to keep Greece in the euro, a decision that now President Nicolas Sarkozi says was “a mistake.” Papademos was in charge when Greek officials lied about their fiscal position to the EU authorities and he presided over the failure of the Greek government to collect taxes from rich Greeks (like himself). But he is now the financial markets’ own man. Greece is to be run by the very man most responsible for getting them into this mess. It's like Alan Greenspan taking over as President of the United States after Wall Street demanded President Obama step down for failing to cut entitlement spending enough to balance the budget!

The G20 and Globalization

Source: Corbett Report and Global Research.ca


TRANSCRIPT & SOURCES: 

Last week’s G20 Summit in Cannes, France is already being written off as a bust by the international financiers who were hoping to bolster the fledgling European Financial Stability Fund with international support and to implement a new global financial services tax which they claim will be the long-term solution to the ongoing global economic meltdown.

Germany and France Begin Talks to Break Up Eurozone

Source: The Guardian
Larry Elliott, Heather Stewart and John Hooper

Fears that Europe's sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue.

Despite Silvio Berlusconi's announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in the eurozone's third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

Greek Prime Minister Forced Out in Euro Crisis Deal

Source: Global Research.ca
Patrick Martin

Greek Prime Minister George Papandreou agreed to resign Sunday and be replaced by a coalition government of national unity that will have a mandate from the bankers and European heads of state to impose even more drastic austerity measures on the working people of Greece.

Papandreou held what a spokesman said was his last cabinet meeting as leader of the social democratic PASOK party before entering a protracted meeting with President Karolos Papoulias and Antonis Samaras, leader of the opposition right-wing New Democracy party.

The talks faced a double deadline Monday—the opening of the financial markets in Europe, hit by huge sell-offs last week over the Greek crisis, and a meeting of European Union finance ministers in Brussels. The Greek delegate to that meeting, Finance Minister Evangelos Venizelos, was expected to confirm the formation of a new government committed to carrying out the terms of the EU agreement reached October 26 on a restructuring of Greece’s debt.

Press reports from Athens indicated that beyond the ouster of Papandreou, demanded by Samaras as the price of his party’s support, there was no agreement on the composition of the new government or who would lead it. Talks will continue Monday, again chaired by the elderly Papoulias.