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June 4th, 2012 
FAKE NEWS for the Zionist agenda Greece is the epicenter of the eurozone debt crisis. It is headed for the second parliamentary elections, expected on June 17, following a political impasse since May 6 elections when no party gained enough seats in the elections.
There are worries that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.
Press TV has conducted an interview with economist James Meadway to further discuss the issue. The following is a transcription of the interview.
Press TV: Have I painted the picture too dramatically or are we trembling on the brink?
Meadway: Perhaps not dramatically enough in some ways. This is the end of the line, I think, for the euro. I don’t think there’s much chance of Greece remaining a member of the single currency for any significant period of time, perhaps even a few months.
The Greek banking system is insolvent, it’s defunct, and it’s depending now on a lifeline from the European Central Bank. Really, it’s a drip feed of continual cash going into the place.
The Greek government itself is liable to run out of money by the end of June as it finds that the economy’s in such a bad state. It has no tax money coming in. It can’t afford to pay some workers. It’ll probably start to write up little notes saying ‘I promise to pay you 100 euros at some point in the future.’ Now once you add all that up, really you’re out of the euro by that point. That’s one side of it.
The other side is what’s happening in Spain where everybody’s lost faith in their banking system. They simply don’t believe that banks can be relied on to look after their cash anymore. So what people are doing at least with Bankia and perhaps turning into other banks in Spain as well is turning up and trying to get their money out as fast as possible. If everybody does that at once the bank collapses and that’s the kind of prospect that we’re looking at right now.
Press TV: Let’s go back to Greece for a minute. If the Greek government that emerges from the election effectively either withdraws from the euro by fiat or places such conditions on continuing in the euro that the eurozone countries can’t accept it, what happens to all the billions of euros that have been given to Greece by the European Central Bank and by the eurozone countries already? Is that all lost? Is that written off?
Meadway: Bear in mind this isn’t money given to Greece. This isn’t money going to help ordinary Greeks. When we talk about bailouts, this isn’t to make sure that Greek hospitals stay open or the Greek public employees can still get their salaries. This is money that goes into the Greek government and then the Greek government pays off its creditors with that money.
Just to be clear about the bailouts, it’s already not really going to help ordinary people there. It’s certainly not supporting the economy in anyway. It’s going straight back to the European banks.
Press TV: Sure, take that point but will the lenders get it back?
Meadway: I doubt it. I think if the government’s got any sense and bear in mind that the party now topping the polls, SYRIZA, on 30 percent, not guaranteed but liable to fall in major parts of the governments says it won’t make any more payments on the debts that it’s owing, they will lose out.
So that means that those who hold Greek loans, whether that’s private banks, whether that’s the ECB, they start to lose out because what they thought was a valuable asset suddenly gets wiped out.
Press TV: What happens to those who lent it then? Will that cause further pressure on our banking system?
Meadway: Quite possibly. If you’re looking at British banks at the moment, they have for the last few years been ditching any Greek borrowings that they have, any Greek credits that they’ve built up over the last few years. They’ve desperately getting rid of Greek loans so they’ve reduced their holdings quite substantially.
On the other hand, big European countries like France and Germany still have quite large exposures to Greece. Not as much as they did have because they’ve also been trying to get rid of it but pretty substantial. Their banks are still quite tied up.
British banks have large holdings in French and German banks, so anything that happens in Greece transmits all the way down the system, all the way into Britain.
It’s quite likely that if a major upset occurs in Greece, of course also in Spain, but if it does occur in Greece then it’ll feed all the way back down the system and it’ll start hitting British banks.
Press TV: Quick prediction, James, Spain next after Greece?
Meadway: It could even come first.
Press TV: Even come first. Absolutely remarkable! The election result in France, is that likely to change this paradigm in any way? We can’t predict what it’ll be but it would seem logical that it would be a left of center victory.
Meadway: It looks like it. After Francois Hollande won the French presidential election on a campaign that says we would like growth not austerity, he’s run straight into the immovable object of Angela Merkel and the CDU government in Germany.
They won’t budge on this. They have their own reasons for sticking to this and I think there’s a belief that if we just go, if they go and promote growth everywhere that just means more borrowing. If there’s more borrowing, there’s already so much debt inside Europe that this can’t possibly continue.
My guess is that if we get another push to try and end austerity it’s not going to happen. Germany isn’t going to move, northern Europe isn’t going to move from this. There’s a real deadlock right in the heart of the system.
GMA/HGH
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