Greece's 'Odious' Debt: The Looting of the Hellenic Republic by the Euro, the Political Elite and the Investment Community (Anthem Finance)
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Jason Manolopoulos combines his experience of the global financial system, European politics and Greek society to demonstrate how one of the EU’s smaller countries played a catalytic role in a crisis that threatens the future of the euro, and possibly even of the European Union itself.
He explores the historical legacy and psychological biases that have shaped an on-going drama. While leaders of the European Union criticise ‘the markets’ for destabilizing the single currency, Manolopoulos interrogates the shared beliefs of the EU and the investment banking community – and how they colluded for a decade in the illusion that lending huge sums to peripheral eurozone countries was safe.
Policy and investment errors bear marked similarities with earlier financial crises – in particular the Exchange Rate Mechanism system and the Argentine debt crisis. This inability to learn history’s recent lessons begs fundamental questions of policy making, which this book discusses.
Greek society also comes under scrutiny, as shocking details of a kleptocratic political class and a wasteful public sector are revealed. Manolopoulos traces these developments back to dictatorship and civil war, but argues that there is no excuse for their continuation in a modern democracy.
New narratives are being told, such as 'we will return to growth swiftly', or 'your sacrifices will not be in vain'. In the final analysis, behavioural economics is neither a trendy concept nor a fad, it is all there is, because behaviour also determines economic outcomes. Understanding this requires a conceptual leap for our political and institutional leaders, and they do not have much time in which to make it. Chapter 1 FROM BUENOS AIRES TO ATHENS Keeping books on social aid is
stalemate. For reasons that are not well understood, Stalin did not send aid to the Communists in Greece, though the fighters did receive some support from Tito in Yugoslavia. Many left-wing fighters were barefoot and their ammunition was rationed. Despite this, the implicit Soviet threat was sufficient to prompt the US government to regard preventing Communist rule in Greece as of strategic importance - not least because of its proximity to the trade routes of the Strait of Constantinople and
agenda was a revamp of 20 of the Greek air force's Mirage jets, built by French company Dassault. Rafale International, the joint venture that comprises Dassault, Thales and Snecma, announced in March 2008 the opening of an Athens office, and its intention to see the Rafale Omnirole established as the 'natural continuity of the French supply source to answer the needs of Hellenic Air Force'. This followed the delivery in November 2007 of 15 Mirage 2000-5 aircraft to Greece.18 In the same month
believed that convergence was occurring. Figure 7.6 German Balance of Trade (€mn> seasonally adjusted) Source: German Bundesbank. Repeatedly, we have heard politicians express the hope - in defiance of all research and experience - that merging dissimilar economies together within a single currency area, or fixed exchange rate, encourages convergence. It doesn't - it merely heightens the differences and closes off the escape route, via reducedflexibility.This is one of the commonest and most
subprime crisis emerged from large-scale lending to low income borrowers, and was famously aggravated by securitisation. But while continental European politicians fumed at such Anglo-Saxon excesses affecting the world economy, a similar phenomenon was occurring in Europe. Governments of varying creditworthiness were bundled together and stamped with an investment grade. With the CDOs, the instruments had been rated according to the soundest of the mortgages involved, despite including debts of