GREED, BANKS AT CORE OF GREEK CRISIS

GREEKS AND GERMANS BOTH AT FAULT IN FINANCIAL CRISIS

There are a few misperceptions about the Greek situation commonly accepted here in the USA as fact. The Greeks are not lazy. The idea that they sit around all day in cafes, talking politics and sipping black syrupy coffee is off the mark. From my nine seasons working there and years of observations, I know the vast majority of them rise very early, work hard all day, and return home late in the evening. They do take a mid day siesta...but if you count up all the hours they work...you would find it is as much or more than American standards---about 40 hours a week. While it is the Germans who work less than 30 hours per week! The Greeks are a tough, hard working, frugal people who have carved out a living for eons from a harsh climate and an unyielding rocky land.

The other misperception is that they are profligate spenders. No one I knew in Greece over my many years there or any of my Greek friends here in Vermont, fit that description. Then you may ask how did they borrow all that money and get into such a pickle?

They had help from the northern european, and German bankers and investors!

The circumstances for the Greek crisis are reminiscent of what happened here in the USA during the run up to the Great Recession of 2007-8..when banks made huge profits on loans. Lenders in those days would give massive loans to anyone coming in off the street. If the prospective client was breathing and had a pulse they sat him or her down to sign a few papers, and in minutes the borrower or mortgagor left the bank stuffing greenbacks in their pockets. The banks profited massively by making these loans, so they aggressively marketed them. But even those Crassus-like sums were not enough for them, so they devised ways to generate even more profits...by selling bundled mortgages (derivatives) to eager investors, knowing full well that poor-risk borrowers were included in all these derivatives. The "hidden bad paper" was the trip-wire that brought the entire financial system down. Thus it was the banks, eager to make big profits on lending, who were the main cause of America's path into debt. By being too greedy, making poor decisions, agreeing to high risk loans and making too many loans our here in the USA initiated the dreadful and painful Great Recession. The economic downturn in USA financial sector caused a global contraction. Those events were mirrored elsewhere and in Greece they caused a collapse of the tourist industry upon which that nation was highly dependent and that event (and others) precipitated the Greek financial collapse and European recession.

Events in the U.S. A and in Greece prior to the financial collapse were very similar. In Europe it was the big German, Danish and Dutch banks which aggressively marketed and encouraged Greek borrowing, because it was highly profitable. The lure of big profits caused too many lenders to become careless about to whom they made loans. The Greeks could not have gotten into this mess all by themselves. As in the USA, the banks, in this case the German and northern European banks, were to blame too. ( I should note here that as the specter of recession raised its ugly head here at home, both Mr. Bush and Mr.Obama were mightily frightened. Not for the pain and suffering of our citizenry, but for the paralyzing fear that the financial structure upon which their financial supporters and their careers were based might fail. Thus without much thought they just "bailed the big banks out". This "bail out" is not the "bail out" the Greeks got...those exchanges of Euros were loans. The USA "bail out" was a freebie---a give away of trillions of dollars directly to the culprits who were the cause of the problem---- the careless, greedy lending institutions. Those "give away" "bail out" funds all taxpayers are still paying back.)

So the Greeks are not lazy, they are not improvident, any more so than Americans who got themselves (and the rest of the world) into a similar debt problem. So it is my thesis here that that both the German banks AND the Greek borrowers are at fault in this crisis. So why are we smearing and maligning only the poor Hellenes? It is not only fair that those institutions which were so greedy or careless as to make loans available to unsuitable borrowers should also suffer for THEIR misdeeds. The solution to the Greek crisis should take that into consideration...pain for both borrower and lender.

And to the Germans and their Angela Merkel...you should have a little more compassion. Don't let that old enmity between north and south..Protestant and Catholic, conservative and liberal, highly structured northern and more fluid southern societies undermine and weaken one of the great, wise and humane projects of the late 20th century! A United Europe.