The solution to the debt crisis: 1 GRD = 1000 EUR

The"Greek crisis" has many hidden aspects which skilfully those, few, political officials who know have kept in shadow, blocking the Parliament and the Greek people to know. Some of these relate to the bargaining power of Greece to the Troika and private lenders.

In the first part of the ongoing series of articles revealing the biggest secret of the Greek crisis mentioned in the law concerning the Greek bonds, an issue which I highlighted in the article "The secret bargaining chip of Greece's debt" from July 2010 ( found in the book "Case Greek Crisis, Strange Coincidences" versions of Lebanon), presenting a series on the subject of reports of leading universities and law firms.The revelations in the article caused a sensation, but it was not until fifteen months later that the issue had large dimensions, where in a series of articles and publications in XrimaNews.gr presented evidence suggesting that the Greek government had agreed to convert the law that regulates the Greek bonds from Greek to English, in return for securing PSI + includes mowing part of the Greek debt by 50%.


In my call for help to inform the House about what would such a concession to lenders for Greece, responded, first, the independent member of Parliament,  Mr. Panagiotis Kouroumplis (former MP of PASOK who was thrown out of PASOK by Mr. Papandreou when he refused to vote the midterm plan), who tabled in Parliament on 07 November the first question to the Minister of Finance Mr Evangelos Venizelos (not yet received a reply). This was followed by two other related topical questions, one of them to the Prime Minister, Mr Lucas Papademos, by the chairman of the Synaspismos Party, Mr. Tsipras and then the  Deputy Finance Minister Mr. I. Mourmourasissue mentioned it in his speech in the House. 


In this article, a new dimension to the issue will emerge, which has to do with the possibility of Greece, if abandoned by their partners and return to the drachma, to pay at least the 206 billion sovereign debt in the hands of individuals with 206 million drachmas or even 330 billion of bonds governed by Greek law with 330 ex DR.Let's see how it can be legally done through international reports and a special advocate from the UK, partner of an international company in Switzerland and lawyer in New York and Paris, who has prepared studies for the euro area and the law of theMember States bonds for more than ten years and has recently been extensively involved with the case of Greece.When Greece issued a bond in euros governed by Greek law, the bond is issued in the legal currency of Greece at that time. That is, if the legal currency is the euro, on the Greek law this will be the currency of the bond (and bond will be payable in Athens).If, however, Greece for some reason withdrew from the euro area and began issuing the drachma, it would have to determine through Parliament, by law, the rate of new drachma to the euro immediately after the Greek courts for the currency which would be the bonds payable. Under Greek law would be a new penny and not the euro, since the new drachma would be the legal currency of the country. 


The rate to be set by the Greek parliament would apply both to repay the bonds governed by Greek law, which is currently EUR 330 billion, and any other economic activity that would include the use of the drachma within and outside Greece.Thus, Greece has the inalienable right under law to adopt, if desired, a compulsory for all citizens, lenders, Troika, etc. rate, for example, 1 GRD = 1000 EURO making that appreciation rather than depreciation currency. In this case Greece could pay the entire debt that is governed by Greek law to new drachmas, that is to pay 330 million drachmas on to repay a debt of 330 billion. So, there would be only 35 billion in bonds governed by English law, which would constitute a debt of less than 15% of Greek GDP. Exactly what France did without legal trouble in 1960 with the creation of the new franc at a rate of 1 new franc = 100 old francs. So did Germany and Austria after the Second World War. The goal is to reduce a debt that has become odius to allow life to continue to be protected and not to be threaten or finish.


"Νew coins have been circulated with no major legal challenges in history," says lawyer expert on the Financial Times, adding that if the bondholders of Greek bonds governed by Greek law (90% of the debt, ie 330 billion , falls into this category despite the Memorandum which has not passed from the House - In the most cautious estimates, and if you do not include bonds Troika and the ECB, at least 206 billion euros of bonds are governed by Greek law) try to deposit lawsuit against Greece alleging that the rate is unjust, the Greek courts will have no choice but to apply the law of Greece and to reject the request of bondholders vindicating the country.


But even if bondholders attempt to file a lawsuit against Greece in international courts "over the issue of jurisdiction (which probably will not overcome) will face well-documented case on the bonds of Serbia and Brazil after the Second World War II, "says the Financial Times the specialist lawyer.Since Greece pay lenders and dismissal of the shackles of debt, could allow the drachma to float against other currencies which would result in an understatement, with the aim of increasing competitiveness.One should not make the mistake of believing that these are a rough approximation of a very important issue. There are studies of leading universities and law firms that confirm the validity as mentioned here and which are available to MP or journalist whoever wants to help highlight the issue. However, one should not make the mistake to assume that all this is easy to implement and will have very serious consequences for Greece.


So what, primarily, we must understand is that Greece is in the hands of a number of advantages and options due to the fact that the law of 90% of government bonds is Greek and as this does not confer a legal advantage and as long as Greece does not accept the conversion to the English law, nor the troika nor the lenders can essentially blackmail, because it is Greece that is 100% legal and covered the rest are completely uncovered.The legal dimension of the Greek crisis shows that Greek officials concealed the truth from the Parliament and the Greek people and never brought up the legal advantages of Greece and the fact that in reality no one can blackmail for anything, except to attempt to work with Greece. And as I said in previous articles, what is true for Greece applies in a great extent to Ireland, Spain, Portugal, Italy etc, creating a scene of terror both for European banks which have lent about 9 trillion in Eurozone countries and for U.S. banks that have insured this debt.


So, if the Greek government granted the law of Greek bonds to bankers to obtain the agreement of the PSI + or otherwise allow the conversion law bonds from Greek to English, it will have deprived Greece, the largest bargaining "weapon" and the only legal advantage which could save it if seen its partners to leave.(With information from the Financial Times - The expert in question is a lawyer: By Gilles Thieffry, Solicitor (England and Wales), Member of the New York bar, Avocat au Barreau de Paris, and Partner at GTLaw, Geneva)


Panos PanayiotouHead of stock market technical analyst

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Bundle of money from the EU to Turkey to send us illegal immigrants!

01 December 2011 00:01At a time when Turkey conducts waves of illegal immigrants to Greece, around 8000 per month, the EU in Ankara donated nearly half a billion € for the "management" and "treatment" of illegal immigration.This amount concerns only the period 2011-2013 and at least 2010 the EU provided assistance to Turkey for the construction of two centers removal-obviously on the side of Greece, illegal immigrants (17.4 million €) and six reception centers for asylum seekers (56.2 million €). They have also granted substantial funds (32 million) to support the management capacity of the border from Turkey. In other words, Turkey with armed forces that reach the 700,000 men, not including this paramilitary units-has the ability to manage its borders especially on the side of Greece.
These figures came after a published question MEP LD Papanikolaou to Commissioner for Enlargement and Neighbourhood Policy, Mrs S. Füle.The MEP SW stated: "The EU the 4 years from 2010 to 2013 will have contributed a total of more than half a billion to Turkey's efforts to tackle illegal immigration ""For now the details of FRONTEX on illegal flows to Greece from Turkey and 320 daily illegal crossings convince for the opposite. Neither time nor money is there. Turkey should assume direct responsibility in controlling illegal immigration and agree with the EU on a comprehensive program returns ".Except that it never assumed its responsibilities and never going to, not because they avoid them, but because the promotion of illegal immigrants in Greece is a draft national strategy. Any other treatment of the matter is simply unrealistic. And the helpless Greek state has simply succumbed to the fate of this subject, taking the credit of the known left-wing formations. As to fence PRO.PO minister who stresses for months it's going to happen, we just remind him that it will not happen.Department news defencenet.grhttp://www.defencenet.gr/defence/index.php?option= Com_content & task = view & id = 28083

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Albrecht Ritschl: "If Germany paid war compensations, would go bankrupt immediately”

19/10/2011 - 09:00
Interview with Isaac Karipidis

Arriving on the fourth floor in one of the buildings of the London School of Economics ...
It is not difficult to find the office of the German professor of economic history, Albrecht Ritschl. Above the door is stuck a card depicting a Piggy-Piggy to swim in the sea, holding in the mouth the Greek flag. Entering the office, the first thing you face is a photocopy of a 200 drachma bill of Rigas Feraios.
Professor Ritsl became known, as he admits, not very popular in his country, because he, through his articles in the British press and through the interviews in German magazines, has essentially argued that the attitude of Germany towards the financial problem in Greece is unacceptable, a position which he expressed even in the magazine Spiegel, which is not ... famous for philhellenic approaches. Indeed, in an interview in the magazine this summer said that if Greece, along with other countries' claims the compensations (note: the Second World War) and Germany is forced to pay, then they’d even get our ... shirts ".According to the professor, the German postwar "miracle" is due to a large extent on the fact that Greece has never claimed reparations from Germany, as others did. "That Germany should not forget," as he said in "Hot".
Professor Ritsl was born in Munich in 1959. He has taught at many different universities in Europe. From Barcelona and Zurich to Berlin. In recent years Professor of Economic History at one of the most popular universities in the financial world, the London School of Economics.

Sir, do you really have anything to do with Greece?
No, no.
How do you explain such a strong Greek presence in your office?
(Laughter.) I have some basic knowledge of Economic History of the 20th century thanks to my profession. Eventually, in an interview they asked me how bad things were in early 1900 - a time which is anyway not far from ours. I asked, then, give a comparison of the problem of Greece with the conditions then prevailing, and thus began my contact with your country.

Your relationship, then, with Greece was inaugurated when the problems started in our country?
(Laughter.) Yes, so it is. It is a coincidence. Unless, of course, the deep relationship that we all have with Greece, which is over 2,000 years. European culture, European course would be completely different without the positive contribution of the Greek spirit. But that's another story ...
Speaking strictly for my relationship with your country, I would say it started because of financial problems and mainly because of how the rest of Europe dealt with them and especially Germany.

Really, how did Germany dealt with them? How do you see the attitude of Germany towards Greece?
I must say that now, these recent weeks, the attitude of Germany has changed. It is not so intransigent and so cumbersome as  It was before.
Today there are two major trends within the country, which collide, even among themselves. One argues that there should be no default in the eurozone. Debts must be paid to the last cent not to expose Europe to international markets. The other "school", the other trend, if you will, which recently gained ground, says it should be restructured debt. According to proponents of this view, there is nowhere in the EU a rule, which impose the full financial support of a country on the verge of bankruptcy. And historically, indeed, this is the way in which the debt of a country goes.

You, as professor of economics, which solution do you favor?
Sir  Karipidis, I must say-and I know that this will not appeal to your readers, it is almost impossible for Greece to pay its debt. The debt of Greece in relation to production is much greater. So the restructuring is almost imperative. I am able also to tell you that within the German government, no longer speak for a large proportion of the debt restructuring of Greece. It is no secret anymore. Moreover, politically speaking, I would say that Greece has never been ready to enter the euro. Before you enter the Eurozone in a system such as the eurozone, you have to develop a strong, modern tax environment. I think the Greek government was not ready to face the difficulties of such a mechanism. This, indeed, we are seeing and experiencing now. Nevertheless, I must say that there is no reason to look back but to see how we deal with the situation together. All countries to cooperate for the common good of the eurozone. To see how we get out from this path, without creating more damage to the global economy.

Often, however, Germany, at least in our eyes, does not seem so minded as you say ...
There you are wrong, sir Karipidis ... The German government several times in the recent past have not acted with the required efficiency. Also, if you look a little old in the history of Germany, we see that this too has its own huge mistakes - not only politically but also economically.

What do you mean?
After the Second World War, Germany left behind a Europe essentially damaged. Furthermore, because of frivolous options, the same over the past century,  has gone bankrupt three times. If it were not for the U.S., which helped financially after the war, and countries such as Greece, which never claimed war damages, now my country would not have the economic power it has. I've said it before and am not afraid to repeat to you, Karipidis: Germany is the biggest sinner in the 20th century and perhaps of modern economic history. My compatriots seem to have selective memory on this issue. If you interpret it psychologically, it's because we always tend to remember only the good side of ourselves. (Laughter.) Nevertheless, it is right to remind my countrymen of historical events, which anyway remain vivid in the minds of people living in other European countries.
You know, for these positions I'm not very popular in my country ... Of course, I must say, as an economist and researcher, and that your country has a large responsibility for the current situation. As people, you spend much more than you produce and your life is not justified by your income.

Really, could the Greece today to claim reparations from Germany?
Allow me to tell you that this is a purely legal question, to which I will not take place. I know that it has launched a debate among legal circles in Europe -even informally-but I can not have a scientific perspective. I am not a lawyer. This, however, you will say with certainty is that the real issue is not whether Germany owes war reparations to Greece, but that we should all deal with this difficult situation. The point is that Germany must understand that it has its own share of responsibility and must leave the arrogant rhetoric. It should go into more effective and efficient approach to the problem. Germany must not forget that two generations ago was able to stand on its feet thanks to the generous attitude of Western powers, including Greece. It should be stopped, then, to see the solution only with numbers and see it with a more effective and wider political view.

I will not disagree with you on the necessity of immediate treatment of the problem should’ t we, however, look at the agreements signed in the past and have not been met? I refer to the Agreement on German debt was signed in London in 1953.According to this, if a reunification of the two Germanies took place, Germany would have to pay war reparations. Germany was unified in 1990, but compensation is not given ...
It is not such a simple issue ... The agreement says that Germany will pay its debts when it will be reunited and the new state created will be the "legal" successor of the German Empire. Like, say, before the war. It is still not clear whether Germany that emerged after 1990 is the "legal" successor of the German Empire. If it is proven, then the debts of the German Empire are passed in the state of Germany and countries like Greece can claim compensation from either the German courts or even by European courts. The issue is still open. Of course, Germany's view is that the united Germany is not the "legal" successor of the German Empire, and therefore not liable for any damages. I must say, however, that if Germany eventually asked to pay all such damages, not only to Greece but also in the world, then it will go bankrupt immediately. Because the amount that will be charged, will be much higher than the amount that Germany can afford.

Before closing, I would like to ask you what do you think should be done to Greece to come out from this difficult situation.
Look, things are very serious. To be perfectly honest, what is done should be done with great care not to have bad consequences. You should at all costs to avoid riots and strike a final and lasting solution in the least possible impact on the Greeks. The one issue this debt. Personally, I think much of it should be deleted. I am not able to tell you how much, but surely the number is large. The other major issue is that Greece from now on should begin to live with its own resources and not by loans and grants from other countries or the EU. One thing is certain: The years during which Greece was living with borrowed money are gone. From now on, your country faces a painful period to adjust to new, arguably more realistic, and unfortunately, my assessment is that this period will last many years ...

Although you do not sound particularly optimistic, I can only thank you, sir Ritsl for the discussion we had!
Thank you, sir Karipidis, and do not forget that Germany after the war was much worse than what is Greece today!
 
Published in the journal Epikaira: 14/10/2011

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