(Complimentary Chapter 2 from ‘Looting Greece’, October 2016, Clarity Press, by Dr. Jack Rasmus)
by Dr. Jack Rasmus
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The following entry is chapter 2 from my October 2016 published book, ‘Looting Greece’. It is a somewhat lengthy article, that explains how the creation of the Eurozone in 1999 has led to excessive indebtedness of the Euro periphery economies, to be benefit of the German and northern economies. The chapter is a ‘case study’ of how this imbalance was created in Greece. The logic applies, however, for many of the southern periphery economies in the Eurozone, including Spain, Portugal, Italy and others. German and northern ‘core’ Europe bankers have especially benefited, but so have producers and exporters in the ‘core’ economies. The ‘losers’ in the Eurozone arrangement have been left with a mountain of debt, both sovereign and private. The larger consequence has been a Eurozone banking system in general that is still fragile–eight years after the 2008-09 global banking crash. That fragility is again 2016-17 being revealed in crises emerging in the Italian banks, BBVA bank in Spain, Austrian and French banks, and event the giant Deutsche bank at the core of the system. Along with China, the Euro banks may prove to be the ‘weak links’ in the next global financial crisis. In the Greek case, it appears yet another Greek debt crisis event is on the agenda for 2017, proving the Euro debt crisis in general (and its fragile near-insolvent banking system) will almost certainly erupt once again.
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