Who’s Next for Berlin’s Financial Blitzkrieg?

By Finian Cunningham

July 16, 2015 "Information Clearing House" - " Sputnik" - Seventy-five years ago, when Europe succumbed to Nazi Germany it was the sound of trundling panzer tanks rolling into capitals that heralded defeat.

Now it is German “panzer banks” that appear conquering all in front of them. The financial terms dictated to Athens over the latest so-called bailout is nothing less than the subjugation of a sovereign country to the dictate of German banks. The troubling question for several European states is: who’s next?

Even the Western media could not disguise the shocking humiliation meted out to Greece by Germany’s Chancellor Angela Merkel and her intransigent Finance Minister Wolfgang Schaüble. The Washington Post described Greece’s acquiescence to “punishing ultimatum”, while Reuters said Athens had “surrendered”.

The Western media haven’t quite yet specified who the new financial dictators of Europe are. Reports refer blandly to “EU hardliners” and “tough EU leaders”, but reading between the lines it is clear that the paymaster calling the tune now for the rest of Europe is Berlin. And the tune is not melodious.

The Greek “anti-austerity” government of Alexis Tsipras has been shamed into turning the country over to Berlin’s finance capital. For a €86 billion “loan” extension, Greece is mandated to hand over €50 billion of Greek public assets that will in the future be privatised by “EU creditors”, who in reality are the German government and its banks.

On top of that, Athens will have to implement more withering austerity on its long-suffering people; and if Athens doesn’t meet the targets then Berlin will dispatch its shock-troops in pinstripe suits to ensure that it does. It’s a financial scorched-earth blitzkrieg that effectively makes Greece a “German annex”.

In 2010, Greece’s total debt was €110 billion, or about 130 per cent of its gross domestic product (GDP). In 2014, fuelled by reckless EU creditor largesse, the debt ballooned to €315 billion, or 170 per cent of GDP. With the latest bailout, the country’s debt will reach €400 billion – over 200 per cent of GDP. Most of the capital is from Germany, with the most powerful banks in Europe, and euphemistically referred to as “international creditor”.

The pattern is obvious.

Greece is lured into ever-deeper, un-payable debt under the absurd guise of “reducing arrears”. In this inevitable condition of debt-slavery, the country is bled dry and its assets can then be seized. Or as the Washington Post admitted: “A financial gun is held to the head of Greece”.

 

When Nazi Germany rolled over Europe seven decades ago, its lesser-known instrument of conquest then was to take over central banks and force them into debt by imposing “loans”. In 1942, the Nazi occupiers of Greece compelled the country to incur a debt which in today’s terms would be $12 billion.

Today, Germany does not need to physically invade countries in order to subjugate them. It can do that through modern capitalist banking systems, in the same way that Greece is now being looted lock, stock and barrel. Expensive armies, Luftwaffe and panzer artillery are dispensed with; gruesome death tolls, media outcry and legal repercussions are avoided. But the end result is the same: conquest of other countries’ resources for external aggrandisement. With typical German “efficiency” financial war has latterly replaced all-out military conquest in Europe.

But in the recent battle over Greece, it wasn’t entirely a cake-walk for Berlin. Behind the scenes of frantic negotiations in Brussels, Merkel and Schaüble were involved in serious clashes with French leader Francois Hollande and Italy’s premier Matteo Renzi. The French and Italians were pleading with Berlin to “have a heart” and to afford Greece a measure of debt cancellation.

In the end, Berlin and its hardline financial allies in the Netherlands, Finland, Latvia and Lithuania crushed the pleas for softer austerity terms. Greece is to be given no mercy. Merkel and Schaüble want all debt to be collected, with no-holds barred.

National debt figures across Europe show a clear North-South divide.

France, Italy, Spain and Portugal have government debts that – like Greece – exceed their national economic outputs. By contrast, Germany and its northern European neighbours have typically national debts of 50 per cent or less of their GDP. And, in all this, Berlin has emerged as the supreme paymaster, having availed of years of strong export-led growth and surpluses owing to the peculiarities of the euro monetary system.

What is rattling France and the other indebted countries of the eurozone is that Berlin will now turn its fiscal dictates on them.

France, with its relatively generous social welfare system and publicly owned state assets, presents rich pickings for Germany if it is forced into privatisation and austerity by the Berlin paymaster.

 

The added attraction is that Germany would then become the undisputed economic and political heavyweight in Europe, having sidelined Paris.

In this European showdown, Washington is also alarmed, but for very different reasons. It is afraid that if Berlin exerts too much financial discipline on EU members, the tensions and splits that have arisen over Greece will lead to wide-open cracks that may crash the 28-member bloc.

Washington, to be sure, is not primarily concerned about austerity and poverty across Europe. What concerns the Americans is that the EU will become fragmented from rivalries and mutual enmity – particularly between the principals Germany and France. In that case, the EU will no longer function as a cohesive bloc for Washington’s geopolitical project of confronting and isolating Russia. A divisive EU will also fatally damage the US-led NATO military alliance, which is crucial to Washington’s hegemony over Europe and indeed the Western hemisphere.

That is why Washington and its close ally in Britain are also calling on Berlin to moderate its financial dictate to Greece. If Berlin pursues its scorched-earth policy too zealously, Greece may implode totally, taking the rest of the EU and NATO with it.

Only days after Athens surrendered to Berlin’s ultimatum over financial looting, Washington reiterated its call for debt restructuring for Greece. Last week, US President Barack Obama urged Germany’s Merkel to write off part of the debt. She ignored Obama then.

Now the Washington-controlled IMF is repeating the admonition to Berlin. And French Finance Minister Michel Sapin was quick to endorse the latest IMF advice for debt write-off, no doubt out of a sense of self-preservation for his own country. It seems strange that the IMF, which has been dubbed a “debt-collecting agency”, should on the face of it show concern for Greece and its people. The real concern in Washington is that German financial dictate to other EU members is threatening to inflame divisions and social unrest both within and between countries.

Washington doesn’t have a problem with financial fascism. Its enslavement to Wall Street banks and corporations is testimony to that. The US apprehension is that Berlin’s financial blitzkrieg will not stop at Greece, but will proceed to other European capitals, with deleterious geopolitical consequences for Washington’s unspoken objective of undermining Russia. Dirty tricks from Washington are thus on the cards for Berlin.

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