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Some of us have been saying for awhile that the story on Greece is wrong. We've been hearing that Greeks are lazy (proven wrong by OECD studies, they work very long hours), that they lied to gain entry into the eurozone (they were well under the budget deficit limits), that Goldman Sachs secretly engineered a scam swap (it was announced everywhere, EUROSTAT and everyone knew about it, and all countries in the eurozone did the same deal), that they retire early (average retirement age is 62.1, later than Germany's), that they are huge tax evaders (14% of the populace evades its taxes and causes 27.5% tax evasion, but the country still collects 40% of GDP in tax revenue, which is double what is collected in the USA--we shouldn't differentiate too much between high evasion of high taxes and low evasion of low taxes).

But the one story that's rarely mentioned in the western press is that of a Euro clientelist, kleptocratic vendor-financing scam in which there is great collusion between multinational companies and gov't ministers. Read below:

   "I remind you that I served Greece for 30 years and knew a lot of well-known citizens and politicians," said the former minister. "Of course I knew the part that they all played. We all judge and are judged. Today, I'm not just being judged but I've been thrown into a modern-day Colosseum created for political reasons. My turn to judge will come. By exposing the whole truth, everyone will have to take on his share of the responsibility."

    The 73-year-old ex-minister is accused of pocketing as much as 2 billion euros through his alleged under-the-table dealings but says that his arrest in April a few weeks before national elections and subsequent prosecution is purely politically motivated.

    "In front of the judge, I will reveal the plot that has been hatched," he said. "The former leader of PASOK and representative of New Democracy, Antonis Samaras, have formed an unethical front against me with the aim of saving all their ministers and leaving me as the sole person responsible.


Oh where oh where did all that money go to?

If the corrupt in this ring of officials pocketed 2 billion in bribes, how much was purchased?

Given the Thyssen-Kruppe bribe scandal, the ratio of bribe to outlay was 1 to 20 or 5%. 2 billion x 20 = 40 billion.

And this is just one defense minister!

Some more background on this:

Investigators became suspicious when they discovered a questionable payment to a supposed consultant for the deal. A few years ago, a Greek man reportedly contacted the Essen-based conglomerate Ferrostaal and demanded a double-digit million euro amount in connection with the submarine transaction. At the time, Ferrostaal had formed a consortium with ThyssenKrupp subsidiary HDW. When company executives in Essen refused to pay, the man threatened them with a lawsuit.

They eventually agreed to an out-of-court settlement brokered by a Zurich lawyer in 2006. Shortly thereafter, Ferrostaal transferred €11 million. What was the payment for? That is precisely what the Munich state prosecutor who is investigating the company's top executives would now like to know. Ferrostaal CEO Matthias Mitscherlich, who was recently forced to leave the firm and is one of the defendants in the case, allegedly knew about the dubious payment.

Greek authorities have now also taken a keen interest in the submarine deal. Investigators in Athens are looking into suspicious payments that were reportedly made via Austria, the Caribbean, Liberia and Cyprus. The beneficiaries have yet to be identified.

The cost of the bribe is essentially added to the bill paid for by the public.

One estimate claims that up to 150 billion in military goods were purchased this way since the adoption of the euro.

"Since the 1974 Turkish invasion of Cyprus, Greece has spent an estimated €216bn on armaments, although I am 100% certain that in absolute terms its defence expenditure is much greater than official documents would show due to the so-called secret funds the state has access to," said Katerina Tsoukala, a Brussels-based security expert.

"The problem is that unlike Britain, for example, Greece has never had a transparent and democratic defence procurement strategy. Instead, everything is veiled in secrecy and people like me have to go to Sipri to find out information that in other countries would be readily available."

The murkiness has ensured that over the years the Greek arms trade has become increasingly associated with high-level bribery and corruption – the very practices abhorred by Berlin, Athens' main provider of rescue funds.

This article puts it into more context:

Finally, to show that there is continued blackmail going on, see this article and this video:

Greek and French officials said President Nicolas Sarkozy was personally involved and had broached the matter when Papandreou visited France last month to seek support in the financial crisis.


The Greeks were so sensitive to Sarkozy's concerns that they announced on the day Papandreou went to Paris that they would go ahead with buying six Fremm frigates worth 2.5 billion euros ($3.38 billion), despite their budget woes.

The ships are made by the state-controlled shipyard DCNS, which is a quarter owned by defense electronics group Thales (TCFP.PA) and may have to lay workers off in the downturn.

Why am I calling it a vendor-financing scam? Well, because after one such purchase by the Greek gov't from Siemens, the very next week Greece sold 10-year bonds on the market. Almost all of it was sopped up by Deutsche Bank. The CEO of DB, Ackermann, was a Siemens board member at that time. So, the bank loans the money, the company gets the contract, and if the deal blows up (as all Greek deals have) then the taxpayers bail out the banks. But, it's not the German taxpayers who pay up (I say this because according to BIS, the German banks with exposure to Greece have had their exposure reduced by 90%, they've been recapitalized through the bailout), but rather, it's the taxpayers in other countries who had little to do with lending to Greece.

Here's indignation about the whole matter in the Euro Parliament:

Yes, indignation in the Euro Parliament, but the story is about welfare cheats in Greece. They are treated like Reagan's welfare queens.


Where is that money?

Well, as we all know, there’s no such thing as economic isolationism in this day and age. Despite the miles of ocean separating the United States and Europe, economic struggles on one side of the pond have pronounced negative effects on the other. For example, when the Greek government cannot get the money it needs from its modern-day equivalents of Aristotle Onassis (72 billion Euros have been moved out of the Greek banking system in the past couple of years alone), that only prolongs the time until it can stand firmly on its own economic feet once again. If you’re not convinced how critical it is for a country to tax its wealthiest individuals, consider the fact that nearly 37% of U.S. tax revenue comes from the richest 1%.
Well, at least Switzerland is helping out, even though it's not an EU member:

Greece, Switzerland to Sign Accord to Crack Down on Tax Evasion
Here's one anomaly you may not be aware of. Greece has been a fascist country for part of the 20th century. Most people don't realize this because it was invaded by fascist countries during the 1940s, so they believe the Greek leftists were overthrown. In fact, the fascist Metaxas gov't ruled during the 1930s, and it was they who told the Nazis and Mussolinis to take a hike. In the 1950s, after the rightwing won over the resistance guerrillas in the Civil War, the gov't took orders through Langley, Va. essentially. It wasn't until the 1960s that Greece redeveloped a democracy on the order of what it had in the 1920s. But, in 1967, the fascist thugs seized power again, and held it until 1974 when they had a emperor-has-no-clothes moment (Turkey invaded cyprus, and NATO didn't help, showing the fascists had no backers outside Greece).

Why is this relevant now? Because the fascists in that junta period used to jail dissident MPs in the joke of a parliament without any evidence against them whatsoever. So after the fascists fell, the Greeks instituted a law which stated that gov't ministers and representatives could not be jailed. Uh--what to do about corruption, then?

Only recently has the law been overturned to allow prosecution of corrupt ministers, but the MPs have not yet voted to allow themselves to be prosecuted for corruption. Were I the EU, this is the very first thing I would have insisted on in terms of Greek reforms.

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