Which country is a bigger drain on the European economy: Germany or Greece? Their differences in size notwithstanding, both economies are being “bailed out” with almost equal amounts of cash.
Bloomberg, not exactly a Bolshevik press agency, recently highlighted why we should have zero sympathy for the bankers of Frankfurt and Berlin. Its editors cited estimates that Germany took more than €284 billion from other countries in the single currency bloc between 2009 and the end of last year. Greece has so far received €340 billion in loans as a response to the financial crisis; just 15 billion euros of that sum came directly from Germany.
There is, of course, a fundamental difference in the way these transfers are taking place. With the exception of an occasional “haircut”, German banks have not been penalised for predatory lending; on the contrary, they are having their loans repaid at interest. Greece, on the other hand, is being required to destroy its society in order to fulfil the conditions set by the European Commission, the European Central Bank and the International Monetary Fund.
As if to emphasise that the intervention in Greece is of an imperial nature, a German civil servant has been given responsibility for administering it.
Horst Reichenbach, head of the EU’s “task force” for Greece, was in the news recently because a car used by his wife, the veteran MEP Dagmar Roth Behrendt, was set on fire outside their home in Potsdam. I condemn that act of violence without hesitation and am relieved that nobody was hurt as a result.
That attack should not be allowed distract attention from the harm that Reichenbach is inflicting on the people of Greece. Patients with rare diseases are being charged the full price for medical treatment that was previously subsidised by the state. The reason? A 10% cutback in health expenditure that Reichenbach and his puppeteers have demanded. This measure will cause far more human pain than the burning of an empty BMW.
Reichenbach’s nationality isn’t the only thing that undermines his neutrality. His curriculum vitae does, too.
For some 30 years, he was an official in the European Commission, where he climbed the hierarchical ladder until he became its director-general for enterprise and industry. In that position, he presided over a department that is secretive in many ways. Yet one thing the internal fiefdom does not conceal is that it puts the interests of big business ahead of all other considerations.
Even more problematic is that Reichenbach went on to be a vice-president of the European Bank for Reconstruction and Development.
In the interests of transparency, the EBRD should publish details of all interactions that Reichenbach had with German banks and the Berlin government during his six years with the London-based institution. The EBRD’s website gives a list of 57 financial institutions - or branches of financial institutions – in Germany that are described as “confirming banks” for its “trade facilitation programme”. Did Reichenbach help these banks in any way? If so, there could be a conflict of interests with his current job, where the agenda he follows panders to German banks.
The EBRD rarely comes under scrutiny from journalists. Most of us probably have a fuzzy idea that it has helped transition occur in central and Eastern Europe following the collapse of communism. What we don’t know is that it has sinister ideological objectives.
The organisation Bankwatch has tracked how the EBRD is infatuated with the concept of public-private partnerships hatched by the Conservative government in Britain during the 1990s. The purpose of these schemes is to give firms motivated by profit a bigger role in providing services that were previously under public management.
In tune with tyrants
Defenders of the “partnerships” tend to argue that they bring greater efficiency. Experience indicates that their real purposes is to allow rapacious capitalists get control of taxpayers’ money. That has been the case with many of the “partnerships” financed by the EBRD. A sewage treatment plant for the Croatian capital Zagreb, earmarked a €55 million loan from the EBRD in 2001, has been plagued by delays. While the Croatian people have lost out, the private contractors (partly owned by the German energy company RWE) involved have still been paid – much more than was originally budgeted. (The price tag for the project rose from €176 million to almost €327 million between 2001 and 2007). Recently, the EBRD has been eager to expand into the Middle East and North Africa. An assessment on Egypt carried out by the bank identifies “private sector-led, inclusive growth” as the central priority for any activities it may finance. This indicates that the EBRD is more in tune with the reviled dictator Hosni Mubarak than with the valiant demonstrators who caused his downfall last year. Mubarak also pursued the same goals to placate his chums in the West. A “structural adjustment programme” that the IMF required Egypt to implement in 1991 led to a doubling of the proportion of the population who struggled to survive on less than $2 a day.
Greece is now undergoing “structural adjustment”. Christine Lagarde, the IMF’s current chief, says she is more concerned with poor children in Africa than in Greece. Her attitude is despicable. It is the economic prescriptions that she signs that aggravate poverty throughout the world. It is thanks to her and Horst Reichenbach that experiments proven to devastate are now being repeated.
●First published by New Europe, 3-9 June 2012.