Greece: What Happened to Bailout Billions?

The current Greek situation underscores the fact that a debt crisis cannot be resolved with more debt.

The 179 billion US dollar rescue package for the Greek economy, which was negotiated by the monetary authorities back in 2011, was anything but a rescue package. In reality it just kicked the can down the road.

But 179 billion US dollars isn't small change, particularly for a relatively small economy like Greece. After all, it is not and never was an industrial powerhouse of Europe.

So you would expect that when billions of dollars are thrown at a problem, it should be enough cash to at least keep the street lights burning for a number of years and the local civil servants in jobs with a bit of change left over. Additionally, there were no major national events to splash the money on and austerity had been imposed on the local population to the bone. 

Yet despite the multi-billion dollar rescue package, Greece remains in a sorry state, with youth unemployment over 50 percent, one in four of the workforce without a job, falling real wages and crumbling social services. But the so called billion dollar “rescue package” and severe cost cutting austerity programs didn't appear to be enough to keep the state afloat. So an unprecedented national asset stripping program has taken place too. Cash strapped Greece has been forced to even sell its Islands.

Its paradise Islands have been sold.

The Greek government is in the process of selling off 70,000 lots of state assets - everything from ancient palaces, to stretches of coastline, to the state gambling company to entire idyllic islands. These are up for grabs to the highest bidder.

The gorgeous island of Rhodes is unusual in that more than a third of its land is government owned and has been sold. The world famous Mandraki Marina in Rhodes town - the location, legend has it, of the Colossus of Rhodes – SOLD! 

Other stretches of the Rhodes coast - mile after mile of pristine beach on the turquoise waters of the Aegean Sea - are also up for grabs. They include a large tranche of land near the resort at Afandou, popular with hundreds of thousands of tourists each year.

The peninsula of Prasinisi, one of the best wind surfing venues in Europe has been sold.

Elsewhere in Greece the royal palace where Prince Philip, the husband of Queen Elizabeth II of Great Britain was born, was sold. The billionaire emir of Qatar has just finalized the purchase of six Greek islands and a Russian oligarch bought the island of Skorpios for $100m, as a birthday present for his daughter.

With Greece being stripped naked, an obvious question arises that mainstream never asks, what happened to the 179 US billion “rescue package”? Where has all the money gone?

Anyone seen an audit of the accounts? Surely, this information should be made publicly available? Public finances should be transparent, unless there is something fishy to hide. 

A private limited company is required to file accounts at a public office. But when it involves the state and billions of dollars, public access to accounts is made “complicated”.

The Greek public believes they know where the money has gone. It is also conjuring up old anti German sentiment.

A massive 80 percent of the bailout money is going back to German and French banks. The Greeks are rattled by the fact that most of the bailout money is going back to European banks. But it is Germany that is being blamed. 

What about the possibility of Greek politicians mismanaging or, let's be more blunt, embezzling some of the funds. That doesn't get airing and it just seems more convenient to make Germany a scapegoat. 

A journalist asks Greek protestors why they have targeted the German embassy and business interests. “Well, there is a lot of ill feeling [among] Greeks against Germany, because of the austerity measures which have been forced on the Greek people. And it is thought in Greece that it is by the Germans and therefore there is resentment,” said Robert Harneis.

On February 12, 2013 extremists calling themselves a 'group of popular fighters' declared that they are at war with 'the German capitalist machine' and made a rocket attack against the headquarters of Mercedes Benz. Is this just another example of a political drift toward extremes?

“This is a country that was occupied by Germany in WWII, which should never be forgotten, in a most savage way. It was followed by the bitterest civil war for a number of years between left and right – communists and non-communists – and then later on they had dictatorship of the colonels which incidentally was much encouraged by the US and NATO. So you have a very difficult record politically,” said Harneis. 

“One must remember that this whole crisis started with the Greek prime minister saying: “Well, we are going to have a referendum to decide whether or not we accept these austerity measures.” And he lasted about 48 hours after that, before the new prime minister came in and guess where he worked before he became the Greek prime minister? He worked for Goldman Sachs, the very bank that caused a lot of this trouble by allowing or persuading the Greek government to adopt all sort of dodgy manoeuvres so that they can disguise their true figures of their national accounts,” he said.

“The Greeks know all this, they are educated, informed and qualified people,” said Harneis.

So there is a lot cynicism and surprisingly old wounds going way back to WWII. Perhaps this is causing a tad of friction between some EU states, which might also be complicating a unified economic policy on the continent.