The people, or hoi polloi to use the ancient Greek term, are anxious to find out just how much of their future has been mortgaged to Wall Street. Apparently Goldman Sachs earned $300 million in fees on the first currency swap, done in 2001, and was back recently proposing that Greece sell off its revenues from its health care system. No one knows what else has been sold off and for how long, but what started out as a government financing problem has turned into a government bankruptcy problem. The government may not have the cash flow to pay off its debt, and may not have any more national assets to hock in order to borrow more, even from the EU.
Mr. Papaconstantinou spoke today against the strikes that are now being held across the country by civil servants. He said the nation's "public sector is out of control" and he compared fixing the deficit to changing "the course of the Titanic." That's just what investors want to hear – they're along for a ride on the Titanic. As for the hoi polloi, the average Greek citizen probably agrees that something was out of control, but it may not have been the unions. It appears to have been the Greek government, conniving with Wall Street banksters, that led to things getting out of control.
Another way to look at this is to ask yourself who knows how much has really been borrowed by various governments around the world? You would think this would be vital information available to citizens from their government economic bureaus, but clearly the Greek citizens didn't know what was going on, and the EU statistics office in Brussels didn't know either. But Goldman Sachs did. What sort of international financial system is it that allows a private sector firm to have such information when it is not even available to the citizens who are responsible for repaying the debt?
The answer to that is a corrupt, broken, secretive, and exploitative international financial system – one that grants enormous power and wealth to a handful of private sector firms. This is the reality the citizens of Greece – not just the unions – are now facing. It is a reality that justifiably will create disgust and anger among the people of Greece, who may well reject the shock therapy being offered by the EU finance officials, thereby calling their bluff. If so, it will be the second rebuff of the international financial elites, following the rejection of austerity measures by Iceland to repay its debt.
EU officials are still talking and acting as if they have matters under control, and their pronouncements carry the weight of law. They may be about to find out otherwise, and if so, the global financial system and global markets are in for an economic version of shock and awe.