GREEK DEBT REPUDIATION: Is Varoufakis about to make a distinction between borrowing obligations and odious debt?


Some of you may remember a Slogpost here three years ago in which strong (but also very odd) allegations were made about how Berlin actually encouraged the Papandreou regime in 2009 to exaggerate the size of Greece’s debt hole. To quote the piece:

‘Somewhere in the midst of these talks, Berlin requested a smaller meeting with the Greeks. At this meeting, three sources (two Greek and one German) allege, the small German delegation made an astonishing observation: the situation would “have to look more desperate” in order to justify a bailout to the other eurozone members. That is to say, only widespread fear of the entire eurozone being damaged would get the member States to pile in with bailout monies.’

Although several German (and French) motives were involved at the time, in the light of Syriza’s recent election to power in Greece, the rationale behind this strange request is becoming a little more clear.

What’s highly significant here is that the new Government immediately launched an enquiry into post-crisis debt management, and how the country’s subservience to the Troika emerged. I understand there is a great deal to observe, especially in relation to Evangelos Venizelos and his ruthless attempt to airbrush the event from Elstat history.

Elstat (the Greek statistical authority)’s board member Zoi Georganta caused a sensation by alleging in 2011 that the declared deficit for 2009 had been been massaged upwards in November 2010 by her boss Andreas Georgiou. In June 22011, six Elstat board members had been dismissed after clashing with Elstat chairman Georgiou on the subject of Greek debt exaggeration.

The matter was never satisfactorily explained, but the reason for the fraud (it now emerges) may well have been a deliberate attempt by Wolfgang Schauble to load unrepayable debt onto Athens and make it The Bad Guy example to reassure the Bond markets that there would be no pussyfooting around when it came to potential eurozone defaults.

In fact, during the time since, two separate lifelines out of the current debt structure have been strongly put forward at EC level…and turned down flat by Berlin. The Euronauts don’t want a solution to the Greek dent problem: they want a dead goatskin to drape over the fundamentally flawed euro.

Now comes news that the Greek parliamentary committee is focusing largely on the legal topic of ‘odious debt’.

“The committee will examine how Greece entered into the bailout agreements with its international lenders, as well as any other matter related to the memoranda’ implementation,” Syriza Parliamentary Secretary Christos Mantas explained, “We are fulfilling our commitment and the social demand to explore the causes and responsibilities of an unprecedented crisis that devastated the vast majority of society”.

This offers Tsipras and Varoufakis the chance to repudiate debt which is not an obligation in international law. The latter has said Greece will fulfil all its “obligations”….but not including funny-money and invented debt scammed by Berlin.

Greece begins its traditional all-banks-closed Easter break later today. The rumour still persists that, after closure of the markets worldwide this afternoon, there could well be an announcement about this very important matter.

19 thoughts on “GREEK DEBT REPUDIATION: Is Varoufakis about to make a distinction between borrowing obligations and odious debt?

  1. These ClubMeds will resort to all sorts of Levantine subterfuge to welch on physically accrued debt. Look at the Argentines dismissing the Griesa rulings . It s in their DNA.

    If one of tthem finds a loophole the others will go class action and cite it as precedent .

    The fact I borrow 100 at xyz interest rate is a fact . It us immaterial that I did not need to borrow 100 . The fact remaibs 100 plus compound interest remains on my debit kedger until paid off.

    End of .


  2. Missy teuton you see the very process creates odious debt & since it’s not actually 100 but a estimate,that like our debt is growing by the second the difference between real debt repayments & evaluated debt repayments is the damage it does to economies for paying debt is hard enough being linked to economic activity generated by the said debt ,against a evaluated debt & what is actually attainable,both can lead to bankruptcy but the second kind guarantees it


  3. But what JW is saying is that you didn’t borrow the 100, but that someone else asserts that you did and therefore you owe 100 plus interest.
    Not that difficult to understand.


  4. I’m guessing that the debt, less the settlement made today, leaves a remainder equal to a sum that could be rationalised as “odious debt”.


  5. Eurocrats and big cons have bribed or blackmailed Greek governments in keeping the denomination of their salaries and their mizas in euro, with the cost of drying every euro out of the Greek economy and the average Greek.
    But the average Greeks are gulity in that so far they have been fantasizing that they will have a free ride keeping a strong currency in order to wed their kanakaris and coconas, despite the fact that their economical and patriotic behaviour were never deserving such a currency.
    Now, this is a terrible mess.


  6. @angie
    Since you mention facts:
    Greece, historically (after 1821 etc.), has been exclusively a borrower.
    On one UNIQUE historical occasion it has been a LENDER: to the occupying forces of the NAZI Germany by means of the enforced loan that your ancestors imposed and NEVER paid back.
    Since you like to present yourself as knowledgeable of financial matters, can you provide us with a guesstimate of what modern day Germany owes to Greece because of the enforced loan from the Nazi-scum occupiers?


  7. Angie, Angie, when will those clouds all disappear?
    Angie, Angie, where will it lead us from here?
    With no loving in our souls and no money in our coats
    You can’t say we’re satisfied
    But Angie, Angie, you can’t say we never tried
    Angie, you’re beautiful, but ain’t it time we said good-bye?


  8. At least they didn’t ask Russia for any money, not to say it wasn’t discussed, to be resolved at a later date, they just haven’t asked for any right now.


  9. Pingback: John Ward – Greek Debt Reputation : Is Varoufakis About To Make A Distinction Between Borrowing Obligations And Odious Debt? – 10 April 2015 | Lucas 2012 Infos

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