by John Galt
June 3, 2012 11:15 ET
The news from Athens continues to bleak over the past few weeks. A 90 year old mother and her 60 year old son jumped to their deaths off on apartment building (See Ekarthimeini article here). A 62 year old pensioner hung himself off of a tree on the outskirts of Nikaia (See Athens News article here). Migrants are being attacked and are desperate to leave the country. Pharmacists are now refusing the government benefits card and demanding cash only for life saving drugs because they fear not being paid in Euros by the Greek bureaucracy, as payments are already many months behind in reimbursements. Sadly, soup lines are the longest since the end of World War II as the middle class has fallen into dire straits of poverty, forcing dumpster diving by parents and children around the nation.
Even with all of this hardship, the banksters of Brussels and Berlin have noted the anger and frustration of the Greek electorate and fear a victory by the anti-austerity forces but attempting to force the gyro (they’re out of turnips) to bleed is a field of expertise that the financial industry is unfortunately well known for. The bankers have elected to engage in a new strategy and it will create a humanitarian crisis unseen on the Continent since the siege of Sarajevo and the misery of the Soviet occupation: Starve the Greeks into voting for compliance with austerity.
The lines of credit for many importers in Greece has already been greatly reduced if not outright terminated by many European companies due to the crisis. One must remember that Greece imports 40% of its total food supply and with this reduction in credit, that is a major blow to the government and its ability to ensure sufficient food supplies for the people. However, a more dire blow was struck this week when several major insurers declined to cover shipments of goods into Greece in case their is a default on payment. This has had the effect of extinguishing credit available to many Greek importers and the concerns are obvious.
On Friday June 1st, the news was exacerbated when the Wall Street Journal reported that the insurance company Atradius, one of the three largest credit insurers worldwide, would cease underwriting policies for export credits to Greece (See: Atradius Won’t Insure New Greek Export Credits, WSJ, June 1, 2012). When taken in combination with the actions by two other insurers, the largest being Euler Hermes along with Coface and the stunning headline and story from the Greek newspaper Protothema begins to make sense:
(Click on the title above to read the article in full)
This excerpt from the article tells the tale of woe about to hit the Hellenic Republic:
The danger of goods missing from supermarket shelves is now a reality, epsecially after the informal “embargo” that big insurance houses of primary goods have imposed upon Greece.
The beginning was marked by Euler Hermes SA (ELE) the biggest insurance house for primary goods in the world, which will not cover imports to our country.
It is an act that reminds us of rats evacuating the ship before it sinks since the company has French interests and links with the German company Allianz.
At the same time, rumours say that Allianz as an insurance company will try to get out since our country is now considered a lost cause.
There will be more products out of stock since the Austrian company OeKB Versicherung has announced that they won’t be covering exports from Greece, whilst Coface SA announced they will only do business with healthy Greek companies.
The bottom line is that only those Greek importers with extraordinarily strong balance sheets or with cash on hand to make purchases will be covered by some of Europe’s largest credit default insurers. To make matters worse, if the Greek people decide to support the so-called fringe parties and elect pro-sovereignty, pro-growth policies over further submission to misery under the Troika’s iron boot, then the ability of the nation to feed all of the nation’s citizens is thrown into doubt. With the threat of famine overhanging the upcoming vote, do not be shocked if those parties which are trailing in the current polls make extravagant hollow promises about bread and jobs for all but while staying within the Eurozone structure.
This new tactic, which from a business sense is logical, will further restrict credit to a nation which is essentially bankrupt, into submitting to the will of the bankers or face starvation. By imposing a credit rationing program on imports to Greece, the agony of the middle and lower classes will continue to expand and thus the inherent instability of the nation as a whole. Many might view the insurers as acting outside of this reach of the financiers of Brussels and Berlin but the world does not function in such a vacuum, and that belief is naive at best, overdosed with hopium and delusion at worse. The stories about further financial restrictions being placed on the importation of goods into Greece is nothing more than using food as a weapon, to starve the Greek voting population into submission to guarantee the bankers get their money back.
Unfortunately for the short-sighted and historically ignorant bankers, this too shall fail. As every time they have tried to impose their will on nations who are at the end of their rope, it ends in one and only one fatal conclusion:
Revolution, collapse, and WAR.