Greek Elites And Debt Crisis

Greece has been hit hard by the late-2000s recession which is central to the related Western sovereign debt crisis and capitalism. The Greek government debt crisis, subsequent economic crisis and resultant, sometimes violent protests have roiled domestic politics and have regularly threatened both European and world financial markets and political stability since the crisis began in 2010. Elites are capitalist or non capitalist and come in all flavors (royal, democratic, socialist, communist, etc.). Here, I talk about the unbreakable grip Greek elites have had on their country. Ever since becoming an independent nation, Greek elites closely tied to the West have governed Greece and profited from and ruined it.

The symptoms of the Greek debt crisis must be viewed in terms of the West's debt crisis which has reached the more productive and wealthier states in Europe (Portugal, Spain, Italy, Ireland, France) and beyond. Greece has a population of 10 million and has a $500 billion debt ($50,000/capita) and survives only with loans it must repay. Compare: America (300 million population) has a $15 trillion debt ($50,000/capita) and survives only because, due to necessity and inertia of habit, other states and global merchants still have faith in its printed dollars.

In the West, the standoff is between creditors (states and lenders) who have made bad loans and debtors (states and borrowers) who refuse to pay. The dominant and healthier European powers, while themselves also burdened with high social costs, are now pumping money into their failing southern European client debtors not to save them from default but to save their own banking and political systems from collapsing. However, pumping money into bankrupt client states has its limits because the idea of democracy interferes with each state's ability to conform and readjust to the new world order. As net creditor states cannot convince their productive citizens to continue paying bailouts to their less productive client debtors, the latter cannot convince their unproductive citizens to live within their means. The creation of wealth, power and profits, jobs and social benefits is a matter of demand/supply for production occasioned by global economics and not a matter of demand/supply for grants and loans occasioned by domestic policy and democratic votes. Each state now faces the leveling effects of global economics which creates turmoil between its 1% dominant elite class allied with its self interest, money and power, and its 99% working class allied with its own self interest, jobs, income and social benefits.

The disarray, bankruptcy and impending downsizing or bankruptcy of European states is intractable and inevitable. The turmoil between states and between classes is due to globalization which shifted production from Europe and America to low cost Asia.[1] The prior West production economies have now become service and consumption economies and the the newly emerging Asian and Latin American economies have taken their place as production economies. Europe and America are now increasingly debtors leaving them borrowing in excess to support their profligate spending on social and military issues, running continuous deficits, and spending huge sums generally by printing money.[2] Ironically, their creditors are Asians. And, as the Asian power rises in the 21^st century, the Western power will surely decline. The Asian creditor's faith in the West's printed money has a limit. Already, Asian voices call for dumping the dollar standard.

China is slowly liberalizing its capital account by internationalizing its currency . . . the US dollar system is broken. And China is not stupid. It knows that as the global debt crisis burns its way from the periphery of the global system to the core, its dollar holdings are at risk. It can't hedge that risk now, but it can prepare the currency battle space for a new global monetary system.[3]

Generally, the amount of printed dollars in circulation is inversely proportional to the foreign debt. If foreign creditors start pulling their dollars, the state must print more to cover its payments thereby bringing on inflation. Traditionally, inflation was used to reduce domestic debt. International creditors, however, require a higher fiscal discipline that preserves the value of their investments. The U.S. interest is to reduce debt without losing the dollar standard and its ability to borrow.

The West's pretension of still being wealthy and powerfull, as it was in the last century after WWII, in doing so is surely a form of hubris. The ancient Greeks had a goddess who punished such behaviors; her name was Nemesis.

Observations show that all types of governments are controlled by elites who organize their states for extracting power and wealth, some more efficient than others. It is no question that capitalist elites have most efficiently organized their states, by lifting mankind materially, putting more people to work and sharing just enough wealth with them to keep their systems going. But putting people to work and sharing wealth does not mean that elites and people are free. Elites are free by the sword and their rules and people are free through struggles. The coexistence between elites and people is always a give and take fight, between rulers, employers and people, workers, and is subject to change. Communist takeovers change regime elites and fascist takeovers preserve regime elites.

With their large semi-rich "middle class" bourgeoisie in relative comfort and their democratically elected parties increasingly unable to pay for their armaments buildups, foreign wars and domestic consumption of imported goods, services and mounting debt, democratic governments controlled by elites (fascism light) are left with no win options (1) increase the debt (2) increase tax of taxpayers (3) confiscate the wealth of taxpayers (4) cut social programs (5) cut military spending. Short of fascist heavy (Nazi) takeover conditions, democratic governments will continue with their lesser options (1),(2),(4) and make token reductions in (3),(5). When these options are exhausted, fascist heavy takeover becomes possible. Short of communist takeover conditions, democratic governments, unless forced, in no case will give up options (3),(5) upon which they survive. When these options are exhausted, communist takeover becomes possible. The business alliance with democratic government relies on options (1),(2),(4) (fascism light) and the political parties have these options for making change within the limits of preserving elite wealth and power. The direction of fascist light politics is finding ways of consensus among all business and people players how to manipulate options (1),(2),(4) as long as possible absent a production economy.

Like a nuclear cell, a state cannot exist without a nucleus organized by elites who write its constitution, laws and rules written by and for its dominant interests. Historically and at present, one can observe different types of states which have forms depending on different circumstances, the environment, availability of physical and human resources, technology and the efficiency with which these resources have been organized by elites. That a state can be organized by and for the people is a myth and has never been observed. All states have been organized by and for elites. Change in government means change in elites, good or bad depending on their organizing efficiency. As to people, they have no choice but to adapt to the laws and rules set down by elites and struggle in the state they live in, and doing what offers them the best chance for individual and collective survival.

The economy of Greece mainly revolves around the mostly government service sector (85.0%) and industry (12.0%), while agriculture makes up 3.0% of the national economic output. Important Greek industries include tourism (with 14.9 million international tourists in 2009) and merchant shipping (at 16.2% of the world's total capacity, the Greek merchant marine is the largest in the world), while the country is also a considerable agricultural producer (including fisheries). As the largest economy in the Balkans, Greek elites are also important regional investors.

The evolution of the Greek economy during the 19th century (a period that transformed a large part of the world due to the Industrial revolution) has been little researched. Recent research from 2006 examines the gradual development of industry and further development of shipping in a predominantly agricultural economy, calculating an average rate of per capita GDP growth between 1833 and 1911 that was only slightly lower than that of the other Western European nations. Nonetheless, Greece faced economic hardships and defaulted on its loans in 1826, 1843, 1860 and 1893. Other studies support the above view on the general trends in the economy, providing comparative measures of standard of living. The per capita income (in purchasing power terms) of Greece was 65% that of France in 1850, 56% in 1890, 62% in 1938,75% in 1980, 90% in 2007, 96.4% in 2008, 97.9% in 2009 and larger than countries such as South Korea, Italy, and Israel.

The country's post-World War II development has largely been connected with the so-called Greek economic miracle. During that period, Greece saw growth rates second only to those of Japan, while ranking first in Europe in terms of GDP growth. It is indicative that between 1960 and 1973 the Greek economy grew by an average of 7.7%, in contrast to 4.7% for the EU15 and 4.9 for the OECD. Also during that period, exports grew by an average annual rate of 12.6%.

In a number of ways Greece still remains a pre-industrial economy, dominated by the state, by cartels and by a handful of wealthy families. Few multinational companies have found it possible to do business there. Like the rest of the financial and political elite in southern Europe, Greek elites believed the euro would be a catalyst for modernization. Replacing printed drachmas with a new currency would, elites argued, be a transformative act which, in a single step, would turn Greece into a vibrant, free-market economy. But in that respect, as in so many others, the euro was simply not up to the job. Money, especially from loans and grants, does not modernize an economy. It does not do what elites should be doing, that is modernizing. And the European idea of having a single currency for producers and consumers, absent due diligence, neglects human nature. These simple truths are now catching up with all of them.

Greece has defaulted on its external sovereign debt obligations at least five previous times in the modern era (1826, 1843, 1860, 1894 and 1932).[4] Greece's first bankruptcy was in 1826. The Greek War of Independence began in 1821 and targeted the end of Ottoman authority, which had ruled most of that region for 400 years. In 1824, a loan of 472,000 pounds was secured on the London Stock Exchange to continue this fight. This offering was oversubscribed and buyers were required to put down only 10% of the purchase price with a promise to pay the balance over time. An additional loan of 1.1 million pounds was floated in 1825. The unfortunate fact about these two loans was that speculators and middlemen in London (Greek and English elites) skimmed off much of the proceeds before Greece received any funds. Another issue was that the Greek War of Independence soon descended into civil war between rival factions, making it difficult to even figure out who should receive these funds. No interest payments were ever made to the bondholders on these two loans, and the value of the paper eventually plummeted to a fraction of the par value. It wasn't until 1878 that the Greek government settled on the loans, brokered by elites and paid by the Greek people, which by then with accrued interest had increased to over 10 million pounds.

The second Greek bankruptcy was in 1843. In 1832, another loan totaling 60 million drachmas was given to Greece, which was officially an independent sovereign nation. The loan was arranged by the French, Russian and British governments, and was ostensibly given to help Greece build its economy and manage the initial stages of governance. With the troika of powers exercising a real protectorate, with this loan came a king, Otto, a prince of Bavaria imposed by the troika. The priority of the income of the Greek state would be to pay the creditors. Representatives of the troika in Athens would control the compliance with the rule. Athens tried to pay, stopped in 1836, restarted in 1840, and stopped again in 1843. It was the first default since independence. From a first installment of 40 million francs loan, only 24.3 million arrived to Athens. The rest went into the pockets of Greek and European elites. The funds received in Athens were mostly squandered on the maintenance of a military and the upkeep of Otto. Greece managed to stay current on this loan until 1843, at which time the government stopped payments. After this default, Greece was shut out of international capital markets for decades.

The third bankruptcy came in 1860. During that year there was a constitutionalist revolution. The British began to warn Athens in 1845 and 1846 that they wanted the old loan payments. In 1854, the French and the British blockaded the port of Piraeus, near Athens. It was the first Franco-British occupation until 1857. Later, the troika of powers imposed an annual payment of 900,000 francs for the third loan. But in 1860, Athens was unable to comply. It was the second bankruptcy after independence. Greece had to accept a mortgage on a third of the proceeds of the customs of the port of the island of Syros, 100 kilometres from Athens. In 1862 another revolution occurred and the king from Bavaria was replaced by a Dutch prince, George I, by imposition of the troika, and signed a treaty in 1864.

The fourth bankruptcy was in 1893. After the Greek government settled outstanding defaults in 1878, brokered by Greek elites and paid by the Greek people, the global capital markets opened once again to Greece and, as you might expect, lenders were only too eager to provide funds. It was good business for Greek and European elites. Loans for wars make elites rich. In 1892, a French delegate at the invitation of the government of Athens, studied the Greek accounts and concluded that bankruptcy was inevitable; the report was never released. In December 1893, the Greek government decided to suspend payments to the redemption fund and reduce by 70% interest on foreign debt, from January 1894. The countries of creditors protested. The negotiation would last until 1898. In 1898, foreign pressure led Greece to accept the creation of the International Committee for Greek Debt Management. This committee monitored the country's economic policy as well as the tax collection and management systems of Greece. In between there was the Greco-Turkish war, which ends with the Greeks having to pay a four million Turkish pounds compensation to the neighbors. A group of European powers that mediate the conflict, some linked to the creditors of the Greek debt, take the occasion and imposed, along with a new loan of six million pounds, an international commission to control the debt service. After resisting for years, in 1898, the Greek Parliament approved the control. The Commission recommended the postponement of major public investments and advised the Ministry of War to limit spending to the “strict minimum.” Greece’s external public debt was then 552 million francs in consolidated debt and 31.4 million francs in floating debt. The debt service was observed until 1932, even during World War I, a new Greco-Turkish war and two wars in the Balkans, all paid for by the Greek people.

The fifth bankruptcy was in 1932. The Great Depression pushed Greece, again into bankruptcy. In the early 1930s, many countries defaulted on sovereign debt obligations as the world economy contracted and entered what became known as the Great Depression. Greece imposed a moratorium on paying on its outstanding foreign debt in 1932. This default lasted until 1964, the longest of any of the country's five defaults. One interesting historical anecdote is that Eleftherios Venizelos was the Greek Prime Minster that defaulted on Greece's sovereign debt in 1932. An analysis of the Greek accounts by a Finance Committee of the League of Nations in March 1932 verified that the foreign reserves of the Bank of Greece were on their way to exhaustion. Faced with this looming, Greece abandoned the gold standard in April and the Greek currency, the drachma immediately depreciated by 50%. The Greek government asked the League of Nations for a loan, but there was no understanding. Athens decided to suspend all interest payments. Unilateral default. Negotiations dragged on over eight years, with several setbacks, until January 1940 when an agreement was achieved. Athens complied until April 1941, when the German invasion and occupation of the country occurs. That would last until October 1944. The Nazis on the run left the country virtually destroyed. The drachma then suffered five brutal devaluations between 1945 and 1949. A civil war began in 1946 and lasted until 1949. In that war America offered military help and paid the Greek elite government to defeat its communist adversaries.

In the late 2010's, many countries faced defaults on sovereign debt obligations as the world economy contracted and entered downturn second only to the Great Depression. In order to avert a default, in May 2010 the other Eurozone countries, and the IMF, agreed to a rescue package which involved giving Greece an immediate €45 billion in bail-out loans, with more funds to follow, totaling €110 billion. In order to secure the funding, Greece was required to adopt harsh austerity measures to bring its deficit under control. Their implementation will be monitored and evaluated by a new troika, the European Commission, the European Central Bank and the IMF.

Three important waves of mass emigration took place after the formation of the modern Greek state in the early 1830s, one from the late 19th to the early 20th century, another following World War II [5], and another in years after 2010. The first wave of emigration was spurred by the economic crisis of 1893 due to corruption, spending to build the Corinth canal, and the rapid fall in the price of currants - the major export product of the country – in the international markets. In the period 1890-1914, almost a sixth of the population of Greece emigrated, mostly to the United States and Egypt. This emigration was, in a sense, encouraged by Greek elite authorities, who saw remittances as helping to improve the balance of payments of the Greek economy. Throughout the 20th century, millions of Greeks migrated creating a thriving Greek diaspora. Net migration started to show positive numbers from the 1970s, but until the beginning of the 1990s, the main influx was that of returning Greek migrants. The second wave of emigration occurred following World War II. The countries of Southern Europe, Greece among them, were the main contributors to migration to the industrialized nations of Northern Europe. More than one million Greeks, 10% of the population, migrated in this second wave, which mainly fell between 1950 and 1974. Most emigrated to Western Europe, the U.S., Canada, and Australia. Economic and political reasons often motivated their move, both connected with the consequences of the 1946-1949 civil war and the 1967-1974 period of military Junta rule that followed. Official statistics show that in the period 1955-1973 Germany absorbed 603,300 Greek migrants, Australia 170,700, the U.S. 124,000, and Canada 80,200. The majority of these emigrants came from rural areas, and they supplied both the low end national and international labor markets. However, the oil crises of 1973 and 1980 caused economic uncertainty and a sharp fall in the demand for labor, which in turn led northern states to introduce restrictive immigration policies. Immigration flows were severely reduced and return migration increased. Other factors contributing to these changes included integration difficulties in the receiving countries, the restoration of democracy in Greece in 1974, and the new economic prospects developed following the 1981 entry of the country into the European Economic Community (EEC). Between 1974 and 1985, almost half of the emigrants of the post-war period had returned to Greece. The third wave of emigration was due to the Greek debt crisis which started in 2010. It was the educated Greeks that migrated now because they could not find work in Greece. Greek schools turning out graduates could not be absorbed by a service economy undergoing large cuts in employment. By 2012 25% of Greek workers and 55% of young people were unemployed. Educated Greeks leaving are replaced with mostly uneducated non-Greeks arriving. Some 10% of the Greek population are immigrants from Europe, Asia and Africa.

Traditionally, Greece is a creation and vassal of the great European powers. The Greek state was established following defeat of the Ottoman-Egyptian fleet by a combined European fleet at Navarino in 1826. In 1827 Kapodistrias was chosen as the first governor of the new Republic. He was greatly respected but was assassinated in 1831 by the Mavromichalis power elite clan of Mani. Power had passed from the people to royal elites, in alliance with the West, in control of government. The Greek people were not invited to their own table and were left to struggle for rights and representation. What have the royal elites done for the Greek people? The short take is that the country is continually bankrupt or on the verge of default (it defaulted in 1826, 1843, 1860, 1893 and 1932), with weak institutions and its citizens depend on the will of the mighty, laws are applied selectively, and selfishness and lawlessness reign. Greece is in constant need of foreign loans and intervention and yet at the same time Greeks believe they are unique in their Ancient and Byzantine virtues. For search of work and bread commoner Greeks migrate to more forgiving lands.

Since freed from the Ottomans by the Europeans, for the next century and a half, Greece was governed by royalty imported by the Europeans. Otto (1831-62), George I (1863-1913), Constantine I (1913-17, 1920-22), George II (1922-24, 1935-47), Paul (1947-1964), Constantine II (1964-73). In 1843 Greece defaulted on her loans and an uprising forced Otto to grant a constitution and a representative assembly. Due to his unimpaired authoritarian rule he was eventually dethroned in 1862. That same year Greece again defaulted on her loans. George I's reign of almost 50 years (the longest in modern Greek history) was characterized by territorial gains as Greece established its place in pre-World War I Europe. In 1893 Greece again defaulted on its loans. During the First Balkan War, George I was assassinated. In sharp contrast to his own reign, the reigns of his successors proved short and insecure. Constantine I was commander-in-chief of the Hellenic Army during the unsuccessful Greco-Turkish War of 1897 and led the Greek forces during the successful Balkan Wars of 1912–1913, in which Greece won Thessaloniki and doubled in area and population. He succeeded to the throne of Greece on 18 March 1913, following his father's assassination. His disagreement with Eleftherios Venizelos over whether Greece should enter World War I led to the National Schism. Constantine I forced Venizelos to resign twice, but in 1917 he left Greece, after threats of the Entente European forces to bombard Athens; his second son, Alexander, became king. After Alexander's death, Venizelos' defeat in the 1920 legislative elections, and a plebiscite in favor of his return, Constantine I was reinstated. He abdicated the throne for the second and last time in 1922, when Greece lost the Greco-Turkish War of 1919-1922. The 2000 year Greek presence in Asia Minor ended and 1.5 million Greeks were resettled in Greece. The government executed its generals but left its royal elites in place. Constantine I was succeeded by his son George II. Aided by an upwelling of socialist and communist ideas, a republic was proclaimed on 25 March 1924, and George II was officially deposed, stripped of his Greek nationality and his property confiscated. On 4 August 1936, George II endorsed Metaxas's establishment of dictatorship - signing decrees that dissolved the parliament, banned political parties, abolished the constitution, and created a "Third Hellenic Civilization". King George II, ruling with Prime Minister Metaxas, oversaw a fascist regime in which political opponents were arrested and strict censorship was imposed. An Index of banned books during that period included the works of Plato, Thucydides and Xenophon. In 1941, the Germans invaded and occupied Greece and George II went into exile in Britain.

The German occupation ended by October 1944 and Greece was in the hands of communist led guerrilla fighters. A British military force arrived and demanded that the guerrillas hand over their weapons. A bloody clash between the British and guerrilla forces occurred in December 1944 and the guerrillas marched away from Athens taking hostages. A civil war had just started. The British brought in troops from Egypt and formed a new Greek army composed of loyal royalists and incorporating wartime Quisling security battalions. The royal elites rode the British coat-tails into Greece and formed its first post WW II government. With the electoral registers revised under Allied supervision, the announced results of a plebiscite claimed 69% in favor of the King's return on a 90% turnout. George II returned to a country facing economic collapse and political instability. He died in 1946 and was succeeded by his son King Paul that same year during the Greek Civil War (1945-49 between Greek Communists and the British sponsored non-communist Greek government). The Greek civil war was fought with U. S. money and military assistance. In the 1950s Greece recovered economically, and diplomatic and trade links were strengthened by Paul’s state visits abroad. However, links with Britain became strained over Cyprus, where the majority Greek population favored union with Greece, which Britain, as the colonial power, would not endorse. Eventually, Cyprus became an independent state in 1960. Meanwhile, republican sentiment was growing in Greece. Both Paul and his wife Frederika attracted criticism for their interference in politics, frequent foreign travels, and the cost of maintaining the Royal Family. Paul responded by economizing and donated his private estate at Polidendri to the State. He died in 1964 and was succeeded by his son Constantine II whose reign soon became controversial: Constantine II's involvement in the Apostasia of July 1965 made him unpopular in broad parts of the population and aggravated the ongoing political instability that culminated in the Colonel's Coup of 21 April 1967. The palace coup stood on scant legitimate ground until Constantine II, as head of state, agreed to inaugurate the putchist government, thereby legitimizing it; this act became the subject of much criticism. On 13 December 1967, he was forced to flee the country following an abortive counter-coup against the Junta, although he remained de jure head of state until 1 June 1973, when the Junta abolished the monarchy and declared a republic. This abolition was confirmed after the fall of the Junta by a plebiscite on 8 December 1974, which established the Third Hellenic Republic. Constantine II was not allowed to return to Greece to campaign.

In 1974 the Greek military Junta backed a coup in Cyprus. The coup, ordered by the Junta in Greece and staged by the Cypriot National Guard in conjunction with EOKA-B, deposed the Cypriot president Archbishop Makarios III and installed Nikos Sampson in his place. In response, the Turkish military invasion of Cyprus, was launched on 20 July 1974. More than one quarter of the population of Cyprus was expelled from the Greek occupied northern part of the island where Greek Cypriots constituted 80% of the population. A little over a year later in 1975, there was also a flow of roughly 60,000 Turkish Cypriots from the Greek south to the Turkish north after the conflict. The Turkish invasion ended in the partition of Cyprus along the UN-monitored Green Line which still divides Cyprus today. In 1983 the Turkish Republic of Northern Cyprus (TRNC) declared independence, although Turkey is the only country which recognizes it. The post Junta government brought charges of high treason and mutiny against the principal leaders of the 1967 coup who were sentenced to death for high treason but, after the sentences were pronounced, because of their strong military and American connections, they were commuted to life imprisonment. Royal elites in 1974 were more lenient than royal elites in 1922.

The Greek monarchy (1831-1974) and its Greek acolytes were Greece's royal power and wealth elites. Throughout these years, Greece remained an agricultural and seafaring society with the majority of its population rural and uneducated. The royal power elites were politicians, generals and a huge bureaucracy with enough voters to keep the royal elites in power. Royal wealth elites were the Greek shipowners and merchants whose wealth came from international trade, churches whose wealth came from land ownership, donations and endowments, and landowners, all helped by favorable laws and rules enacted by the royal Greek government. It was the royal elites who brokered and benefited directly and indirectly from foreign loans and squeezed their commoners after loans defaulted, always leaving the royal elite structures in place. The funds from loans were spent by royal elites on themselves and wars which, initially, aggrandized the state but eventually resulted in the national disasters of the Asia Minor catastrophe (1922) and the Turkish takeover of northern Cyprus (1974). Commoner Greeks migrated and were replaced by an almost equal number of non-Greek immigrants.

Since becoming a nation back in 1830, Greece has been a vassal of and always tied to the dictates of Europe. Greek elites are fee brokers between Western elites and the Greek people whom they profess to democratically represent. Greece has gone bankrupt and has been kept alive by external loans 5 times and, not withstanding its democratic vote in June of this year, is surely headed to the poorhouse again. Greece (11 million people) has a shrinking $310 billion GDP, an insurmountable $500 billion debt ($50,000/capita), a $21 billion annual deficit, an anti-production and consumption economy, endemic corruption, and an enormous parasitic state sector. The country, poor to begin with, has always lived beyond its means and, since antiquity, millions of Greeks have emigrated to escape their economic condition. Today, Greece is a service economy (85%) which cannot produce enough exports to pay for its food, fuel, industrial and military imports.[6] Greece cannot compete globally and without loans it cannot survive as a modern state.

Before WWII Greece lived off European loans, and remittances by its diaspora, to fight its wars, preserve foreign investments and maintain its royal elites. Since WWII ended for Greece by 1945, the country has lived off grants and loans to pay for its infrastructure and for lifting its society to European standards. Beginning with the Marshall plan after WWII (America's need to contain the Soviet Union) and the EU and Euro money standard (Europe's need to sell its industrial production) Greeks have lived on easily obtained international grants and loans. On the upside, one can say, Greeks benefitted by joining the EU and adopting the Euro money standard, thereby quickly transforming and lifting themselves into a modern consumption and service society. On the downside, they are now faced with paying their bills, giving up their jobs, incomes and social benefits, and being pushed back to peasant status for years to come. Having won the cold war with the Soviet Union, the West no longer has interest, military or economic, in making easy grants and loans to Greece. However, as discussed below, political interest in keeping Greek elites in power is another matter. Located next to an increasingly strong Turkey (remember Cyprus) Greeks are left with no choice but the painful and dangerous choice of living within their own means. To mitigate their vulnerable condition, they must realign with world powers: unless Europe forgives debts, they can stay with Europe (as vassals) and/or go East to Russia and China (who need to contain the West's military and commercial hegemony and sell their own industrial production). Perhaps a mix of options is their best choice. On 17 June, 2012 Greek voters elected to stay with Europe.

There is no allocation for blame except self interest, since both politicians and citizens charmed by the elite's European siren calls voted themselves into this mess over the past 60 years, during the easy loan times. Self interest because the 1% dominant elite class (bankers, shipowners, landowners, contractors, industrialists and stock brokers) and their politicians always benefit from external grants and loans and secure power and profits by making policies and laws which shift all risks to the 99% public working class. And, self interest because the 99% public working class always votes its support for the 1% dominant elite class policies in exchange for jobs, incomes and social benefits. As money now evaporates and bills become due, no democratic vote by a subsidized citizenry can change the fact that the country is unproductive and perennially broke. As classes polarize and threaten the state, the 1% political elite class, as always, aligns itself with its European allies-creditors and the 99% working class resists giving up their jobs, incomes and social benefits. In peacetime, elites cooperate with their Western elites to squeeze loan payments from people which they use to gain wealth and keep themselves in power. In wartime, they choose sides between their Western allies again to gain wealth and keep themselves in power. And when wars were lost, elites made sure they survived. The Asia Minor and Cyprus catastrophes were presided over conveniently by royal elites in Athens. It was the people who paid the price of defeat. During WWII the1% dominant elite class abandoned the 99% working class, by splitting in two, half joining the losing German side as Quislings and the other half joining the winning allied side as post war governors, each side allied with the other. The working class had to survive on its own a brutal German occupation, only a few joined the split 1% dominant class and many fought as guerrillas in the mountains only to be defeated by the British forces and American aid after the war ended.

After WWII the Greek people's standard of living was lifted to European levels, a plus for democratic elites, through loans and grants brokered by its elites which the present Greek debt crisis seeks to cancel, a minus for democratic elites. The issue is not who won and who lost. Clearly, although traditional losers, more recently the Greek people have won and then lost, but democratic elites have preserved their power and wealth, at least for the moment. Today,Greece is split in two. No minister or MP can appear in public without being heckled. On one side are politicians, bankers, tax evaders and media barons supporting the most class-driven, violent social and cultural restructuring western Europe has seen. The "other" Greece includes the overwhelming majority of the population. The abolition of the old right nationalist-left socialist division has been replaced by a divide between the new democratic elites and the people. Europe will decide how to deal with the debt, with the Greek government a sad observer. Two dynastic parties NEW DEMOCRACY (Nationalist) and PASOK (Socialist) have alternately ruled the country over the last 40 years, creating the inflated, ineffective public sector which they now attack. The same democratic elites who created the problem are now fixers and redeemers. Over the years, they turned a blind eye to tax evasion and created a generous system of tax avoidance. They ran up debt even after the problems became clear, eventually leading to the European intervention. Power, profit and wealth were the aims of all elites, royal or democratic. For common Greeks, the hope of a better life elsewhere is drainingGreeceof its most-educated citizens who migrate, even taking low scale jobs, cooks, servants, janitors.

The despair that Greeks feel about the future is matched by their contempt for elites. Just 9 percent of Greeks believe that the rich deserve their wealth, and only 27 percent trust Greek companies to act professionally and fairly. Trust in multinational companies is lower still, at 21 percent, while fewer than one in five (18%) has any trust in the Greek government to act in the best interests of society. These levels of social pessimism, resentment towards wealth and business, and anger toward the political class raise questions about how long the status quo and political centre in Greece can be maintained, especially in light of the Greek political parties NEW DEMOCRACY and PASOK share of the vote collapsing after they pushed this year’s European bailout and the rise of the GOLDEN DAWN (Nazi) and SYRIZA (Socialist and Communist) groupings.

Since WW II Greece has been ruled and ruined by three elite political dynasties which created a bloated system of cronyism that is hard to change. Shedding its predecessor's royalist disposition, this new democratic elite class, with the Papandreou, Karamanlis and Mitsotakis families at its core, established a system of economic patronage. They threw around billions the government didn't actually have and showered friends and relatives with prosperity that was all based on credit. These leaders bloated their country's administration so that everyone could have a piece, and created a bureaucratic monster in the process. The political partie's business dealings were always more about favors than policies. Anyone with access to public funds used them to buy friends and voters, who were then beholden to the party -- and to the family running it. The result for Greece has been a feudal democracy, where the generations come and go, but the names remain the same: Papandreou and Karamanlis and Karamanlis and Papandreou, with a Mitsotakis thrown in every now and then. No other European democracy has seen the likes of political mafias. With political parties fleecing the nation wholesale, the people also grabbed whatever they could. The rich evaded taxes to the tune of billions, the poor scraped by with under-the-counter work and public officials opened their doors to bribery. Ministers of government took bribes for procurements. Papandreou's grandfather, who was also called Georgios, founded the family's political dynasty, serving first in various ministerial positions and later as prime minister. He was the democratic face of King George II's royalist government exiled in Egypt during WW II and was dumped by the royalist elites soon after their British allies landed in Greece and endorsed their power. After the 1967-1974 military dictatorship, Georgio's son Andreas Papandreou created the socialist party PASOK. In the 1980s, he gave so much to his cronies and supporters that the country's debt ballooned. Greece's conservatives, meanwhile, were led more by a clique than a family, and they alternated with the Papandreous for turns at the helm. Konstantinos Karamanlis, the family patriarch, held office multiple times before his nephew, also Konstantinos, or Kostas, took over. Occasionally there was also a bit of room at the top for the Mitsotakis family. Konstantinos Mitsotakis served as prime minister and, more importantly, has maintained a position as the most powerful man in the NEW DEMOCRACY party for two decades. In his 2004 election campaign, the younger Karamanlis promised to reform the country. After his win, though, the scandals began to pile up, with billion-euro property deals and money shifted out of retirement funds. Karamanlis' people falsified the financial data reported to the EU, and shortly before being voted out of office, quickly created tens of thousands of administrative posts for relatives and friends of the party. By the end of their term, the conservatives had doubled the national deficit. Mitsotakis' daughter Dora Bakoyannis, foreign minister at the time, then tried to take over leadership of New Democracy. Antonis Samaras managed to squeeze her out to become the party's leader -- with the elder Mitsotakis still performing the function of honorary leader. The "ruling class of politics and capital made the country its prey" and caused this mess. Greek representatives have only one interest, namely maintaining their privileges. They don't give a damn about anything else.

Greece has always been a vassal state of Europe governed by broker elites strongly bound to Europe's elites. Whether it stays or leaves the European Union, Greece is a failed state. By adding more debt and not modernizing, loans by its European allies are spent subsidizing a corrupt system, keeping elites in power and squeezing Greek commoners paying the debt. The West's deeper concern is not Greek debt destabilizing banks but fear that Greek socialism is a threat to Western capitalism. For sure, if SYRIZA takes over power in Greece, by vote or rebellion, its paradigm may stand as a pattern for socialism to spread globally. Initially, if SYRIZA takes over, the Greek economy will surely follow the Cuban model from which it can never recover unless it morphs into a Chinese model, a semi-capitalist state in which the old democratic elites are gone and a new set of socialist elites emerges to organize the Greek state and economy. Cutting the European umbilical cord will be difficult for SYRIZA but it can be done if the idea captures world attention, especially as the West's financial problems worsen and its grip loosens. The old elites and their Western capitalist allies will do all they can to keep this from happening. If the Greek elites feel seriously threatened they will ally themselves with the GOLDEN DAWN Nazis and use their power and wealth, and help from their Western elites, to stabilize their capitalist system. The Greek people will have to wait for a better day or migrate.

Willful and deliberate bait, trap, guile, negligence, and infringement of duty are the hallmarks of Greek politics which have led the country into unemployment, poverty, crime and sorrow. Within the past ten years, elites have taken about $250 billion out of the country, money whose sources were loans citizens now must pay. No one has been held to account but the government, composed of NEW DEMOCRACY, PASOK and a smaller party, proposes to discharge all sins, to legitimize and reward all its elites who looted the state and robbed the country by proposing they be first discovered and convicted in a Greek court (of appointed elites) and pay a 5% to 10% tax on their illegitimate property, thereby preserving intact the corrupt state structure. As always, law is the first tool elites have to survive. But, lets not forget, Greek citizens have no one to blame but themselves – they voted this mess by their elites.