Tag Archives: Austerity

The Greeks – they’re just like us!

First published  17th March 2015, The News Hub…. www.the-newshub.com

The relationship between the European Union, the Eurozone and Greece is no different to the relationships between many governments and their own citizens. The EU-Greece relationship is no more than a macro model of what is currently occurring, for instance, in the United Kingdom.


Let’s face it since the Greek crisis started a few years ago, in the main, the Greeks have been caricatured as lazy, workshy and the architects of their own misfortune. That naturally led to the assumption that they didn’t ‘deserve’ support from their richer European cousins unless they changed their ways.

Here in the United Kingdom, the scrounging working classes, just like the Greek nation, have really been clobbered over the last few years. They have been characterised as lazy, workshy and sitting back, as hard-working richer people fed them undeserved benefits. Government slogans such as “The workshy”, ” Abuse of the system” and “Benefits Culture” became common.


The government not only blamed them for a poorly designed welfare system by cutting benefits but humiliated the sick and disabled by forcing them to undergo questions and tests to ascertain whether they were deserving of government support.
Welfare benefits were even reduced if the State decided that they had more bedrooms than they really needed!
This was forced austerity without purpose.

The Greeks are taking the rap not just for their own economic shortcomings but for a very badly conceived and designed Eurozone. Their punishment too was humiliation through austerity.


Poor Brits had the state machinery and official interrogation to contend with whilst the Greeks were humiliated by the fiscal police known as ‘the troika’. Same principle, different scale.


The EU continues its slogan of “We want Greece to remain within the EU”, when all the evidence so far, is to the contrary.
The equivalent UK slogans are all about those ubiquitous ‘hard-working people’ and being ‘In it together’, which just like the EU – is supposed to be a club that everyone needs to belong to.

The oppressed eventually find a hate figure. The Greeks have found themselves the Nazis and poor Brits have found themselves ‘the toffs’ and the bankers. The Greeks want reparations for the damage done during WW2 and the Brits are enjoying bankers forgoing their comedy bonuses. The oppressors (real or imaginary) also need to be punished – an economic quid pro quo!


The Eurozone’s motives in not being too overt in helping the Greeks are very straightforward.


They say that they want to avoid a possible Greek exit from the Eurozone but in fact, it’s much more than that. There are other states within the European Union which are just below the radar and could potentially be in just as much trouble as the Greek economy. Spain and Portugal immediately spring to mind.


If Eurozone officials were not seen to dispense a certain amount of punishment to the Greeks before helping them, or if Greece decided to leave the Eurozone as a result of not being able to stand any more EU humiliation, others would doubtless follow . That means that Greece can only be helped by being thrown the occasional EU morsel, preceded by a public serving of abuse or austerity.

In the United Kingdom, the poor are being kept in line by also being thrown the occasional morsel such as an increase in minimum wage, a meaningless shift in tax bands or mini handouts which no doubt will be expressed by the Chancellor of the Exchequer in this week’s Budget.
It’s all about keeping the poor in check without giving others any ideas.

Economic Recovery: Fact or Faith?

Whenever man has struggled with solutions to big problems, he has turned to his God, who has consistently said that if man endures deprivations and suffering on this Earth, he will get his just reward in Heaven.

The weird thing is that here we are in the Year 5PL (Post Lehman) and our politicians are behaving just like those prophets of old. WITHOUT any proof and relying solely on faith, they say “Endure the austerity and soon you will be transported to the economic heaven.” Meanwhile they (the prophets) search for “signs”. For instance, a small statistical variation in economic data is seized upon as a “sign” that all will soon be well. (Chancellor Osborne did it again yesterday when he announced “encouraging signs that the economy is healing” HERE In fact, he repeats the holy phrase.)

Is that true? Have we been offered any proof? Do we have to accept the words of the prophets without question or are we being heretical and behaving like Doubting Thomases?

If the New Religion is true, then we have been witnessing the longest Resurrection ever!

There is much talk of “positive sentiment” and Central Bankers accept gifts and many sacrifices from the people and prophets….but, is there really room for faith in economic thinking?

Currently, it would appear that it is all we have.

(As you listen to the Chancellor, notice the total lack of numbers and dates in the affirmation of his faith)

Government Debt: “We’re all in this together.”

Never mind all that “Debt as a percentage of GDP” nonsense. Here’s a picture of government debt on a simple picture, courtesy of ukpublicspending.co.uk.

It is OUT OF CONTROL.

All steep graphs are scary, no matter which way they’re pointing. Make no mistake, the above graph is so scary and the Chancellor is running out of options so fast, that we are about to reach a very significant and critical moment in Britain’s social and economic history.

Because Chancellor Gideon has well-and-truly painted himself into a corner and is greedy for cash, he will soon become like a schoolkid with his nose pressed up against the sweet-shop window. But what will he be looking at? Surely, there’s nothing left to plunder.

Currently, our savings are languishing in banks, gradually losing their value. Investment rates are lower than inflation and currently it seems as if the differential will continue to increase. THAT will erode our savings at an accelerated rate.

Dormant bank savings accounts have already been looted in order to fund one of the Chancellor’s rapidly growing array of “schemes” to stimulate the economy. On this occasion, the booty (up to £400 MILLION) will be destined for the Big Society Bank (remember?) which has now been rebranded BIG SOCIETY CAPITAL (BSC). Forty percent of  BSC shares are owned by Barclays, HSBC, Lloyds Banking Group and RBS (They are preference shares which means that in the event of a collapse, the banks will have preference over other shareholders).

So what could the Chancellor and the banks be planning next? What happened in Cyprus ought to give us a clue.

As a country, we are not spending enough. One way to encourage us to spend would be to threaten our savings either by way of a levy (tax) or seizure.

You may be thinking “Yes, but surely, our savings are protected?” Yes, they are. The capital is protected  but our cash is not protected against taxes.

Within four to five years, the government will have to find about £70 BILLION per year JUST in order to fund the interest payments on the money it owes. So where will it find the money?

It is there somewhere. Here’s a clue:

The richest 1% of our population, many of whom famously squirrel away  their cash offshore, won’t be affected and neither will the large corporations  – they pay tax when they want to plus they are also lucky enough to be able to decide how much to pay.

That leaves the ordinary Saver and Depositor.

The only thing that the government needs to decide is how to present the raid on our money so as to disguise what essentially will be a tax. There are several ways in which the exercise can be delivered.

For instance, a Cyprus-like levy. Simple and straightforward.

There may be some sort of government share-offer, designed to relieve us of our cash or even a mandatory Government Bond which those with a certain level of savings will be bound to purchase.

I would suspect that even Pension Funds are no longer safe.

But the really scary thing is that because this will be a concerted and choreographed international assault by governments and banks, there will be nowhere to run.

We are well and truly “All in this together”………well….most of us.