Goldman Sachs, Greek economics and the Madoffian model

Screen Shot 2015-02-01 at 22.40.46In Greece, all roads lead to disaster

The pyramid scheme that was the Greek economy

Most of the Greek population appeared to benefit from the scheme that has now collapsed, Dalrymple writes. The two main political parties before the rise of Syriza

operated a system of patronage paid for by borrowing on a huge scale. The system would have been corrupt even if no politician had enriched himself personally. And the European élite believed, or affected to believe, that the national accounts concocted by the Greek politicians in collusion with Goldman Sachs qualified the country for membership of the euro.

The country having acceded to the euro,

French and German banks proceeded to act as if Greek debt were more or less the same as German debt, because membership of the eurozone was supposedly irreversible.

When the equivalence of Greek and German debt

turned out not to be the case, as any tolerably observant visitor to Athens for half an hour could have told them, the fool’s paradise in which the Greeks were living collapsed.

Today

the circle cannot be squared. There is no way out that could possibly justify the hopes placed in Tsipras and his party.

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