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article imageOp-Ed: Greek bail out loans are not aid for the Greek people

By Katerina Nikolas     Feb 20, 2012 in World
Austrian Finance Minister Maria Fekter makes misleading statements when she refers to bail out loans to Greece as aid. The funds are not aid dispensed to assist the Greek people, but calculated payments to protect the eurozone and its bankers.
Eurozone ministers meeting in Brussels in Monday will be making further demands regarding the establishment of an escrow account for Greece, ring-fencing any funds from bail out loans to ensure that the first priority of the Greek government is repaying its debt obligations.
The FT reported that Austrian Finance Minister Maria Fekter said "That is being prepared on the technical level. The finance ministers will discuss this intensely at their meeting. I welcome such a special account." However, there are indications that such an escrow account is being pushed with a different agenda which will overstep the mark and impede on Greek sovereignty.
According to Greek Reporter "A European Union official says some euro countries are pushing for Greece to funnel government revenue into a separately managed account dedicated to servicing the country’s debts." If such a condition is attached it would force the Greek government to prioritise servicing debt repayments over state spending, effectively removing budget control from Greece's hands.
The bulk of the 130 billion bail out loan Greece is depending on will be used to pay interest to foreign banks. The Greek people are not receiving an aid package and the loan will do nothing to relieve the severe austerity that is imposed as a condition of the loan being granted. Yet in spite of this obvious fact Maria Fekter insists on referring to the loan as aid, as she says in defense of the escrow account "one can very well link the aid one gives to conditions."
The idea of an escrow account originated with German Chancellor Angela Merkel, according to the WSJ. In recent days she has distanced herself from the debate leaving her Finance Minister Wolfgang Schäuble responsible for dictating conditions.
It must be reiterated that if the loan is approved, with its myriad of conditions, it is not a financial aid package to the Greek people, who are expendable in EU fiscal policy. It protects the banks and helps to prevent the contagion feared if Greece suffers a disorderly exit from the euro. Previous loans have not helped the Greek people as the austerity conditions have caused a more severe downturn in Greece.
Greece is caught between a rock and a hard place, needing the loans to prevent default, yet inevitably sentencing the Greek people to horrendous long-term hardship if granted. The loans are not aid dispensed with the best interests of the Greek people in mind, but a political maneuver to protect the eurozone and its bankers.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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