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article imageReview: 'Michael Portillo's Great Euro Crisis' Special

By Alexander Baron     May 11, 2012 in Politics
Athens - Recently, politician turned TV presenter Michael Portillo visited Greece to make a documentary. And to explain why he thinks Greece should dump the Euro.
Portillo said he had not visited Greece for twenty years, since he was a government minister. On arrival and on catching a train, everything seemed normal, but on visiting what is left of a shopping centre, it became obvious things were anything but. One shop remained, and that was selling at a heavy discount. Worse than that, people were queuing up in the street for daily hand outs of food, something that has recently increased enormously.
Greece signed up for the Euro on New Year's Day, 2002, said Portillo, and lost the power to print its own money. Therein lies the problem. Alas, Portillo demonstrates that like so many politicians - and ALL mainstream economists - he doesn't understand economics. The drachma was the currency of a weak economy, by ditching it in favour of the Euro and linking it to Germany, the country he refers to as the powerhouse of Europe, Greece has lost its competitiveness. It has been unable to export - in particular tomatoes and olives - and the Euro has sucked in manufactured imports, including the German luxury car he drives in this programme.
What Portillo is confusing is money and wealth. Olives and tomatoes are real wealth, as are Germany luxury cars. If you were stranded on a resourcessless desert island, which would you take?
1) five hundred tins of tomatoes
2) five hundred bottles of stuffed olives in brine
3) a Germany luxury car
4) a million drachmas
5) a hundred million Euros?
Before you answer that question, click here, and then arrange the 5 above in the correct order.
The answer is 1) followed by 2) or 2) followed by 1), then 3. 4) and 5) can be discarded, unless you get cold of a night time and wish to build a bonfire.
On second thoughts, you could make that 1) or 2) followed by 3) or 2) and 3) followed by 1), because you could use the car for shelter from the elements (at the cost of an even more restricted diet), but money that is not backed by goods and services has no value at all.
If German car manufacturers and other companies want to keep giving you good and services for bits of paper, fine.
Portillo meets with a hedge fund manager who talks him through the boom years, which were made possible by an influx of cheap credit. The problem is that Greeks having spent the money, their creditors expect to be repaid. Or perhaps that should be paid, because we all know where money really comes from, the people who control the monopoly of credit, in the words of Major Douglas.
The consensus of Greeks appears to be that the government is responsible: corruption and cronyism. If only. The aforementioned hedge fund manager, who has written a book on the Greek situation, blames it in part on tax evasion; he calls for a fair tax system. Greeks need a hedge fund manager to tell them that?
Portillo also visited a car plant in East Germany - nice work if you can get it. 90% of the cars made here are for export, he says. Again, what he and no mainstream economist seems to realise is that exporting is sending wealth out of the country. Unless goods of equal value are received in return. This is clearly not happening, and naturally ordinary Germans are not too happy about what they see as them bailing out Greece, but these bailouts do not go to Greece, they go to the banksters.
After meeting with both German workers and a bankster, Portillo returns to Greece to speak to its appointed Prime Minister, who addresses him in fluent English, but prior to this, he mentions one tiny but significant fact, the bailout is allowing Greece to service interest on old if not ancient debts. The Prime Minister insists the way forward is for Greece to restructure its economy and repay its debts by exports. This is cloud cuckooland stuff. Greece should tell the usurers to get stuffed, as should all the rest of us.
The great irony is that Greece is not a poor country, certainly it has a superb infrastructure. Then why are people queuing up in the streets for handouts of food, and queuing up for free medical treatment? The bottom line is because the coffers are empty, and the sovereign nation of Greece is not permitted to print its own money thanks to the Maastricht Treaty, which in effect makes slaves of us all. The beneficial effects of a responsible national authority printing all its own money debt-free rather than allowing banks to do so at interest was established on the Island of Guernsey way back in the early 19th Century.
Although he doesn't advocate this, quite, Portillo does see the wisdom of Greece leaving the Euro; unfortunately no one he speaks to in either Greece or Germany shares that view. Except perhaps the angry crowds in the streets.
Michael Portillo's Great Euro Crisis is part of BBC 2's This World series, and can currently be found on iplayer.
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