Yiorgos Chatzis went missing on 29 August 2012. He was last sighted at the social security office in the small northern Greek town of Siatista, where he was told that his monthly disability allowance of €280 had been suspended. Eyewitnesses reported that he did not utter a word of complaint. ‘He seemed stunned and remained speechless,’ a newspaper said. Soon after, he used his mobile phone for the last time to call his wife. No one was at home, so he left a message: ‘I feel useless. I have nothing to offer you any more. Look after the children.’ A few days later his body was found in a remote wooded area, suspended by the neck over a cliff, his mobile phone lying on the ground nearby.

When a large-scale crisis hits, it is tempting to attribute it to a conspiracy between the powerful. Images spring to mind of smoke-filled rooms with cunning men (and the occasional woman) plotting how to profit at the expense of the common good and the weak. These images are, however, delusions. If our sharply diminished circumstances can be blamed on a conspiracy, then it is one whose members do not even know that they are part of it. That which feels to many like a conspiracy of the powerful is simply the emergent property of any network of super black boxes.

Friends and journalists often ask me to describe the worst aspect of my negotiations with Greece’s creditors. Not being able to shout from the rooftops what the high and mighty were telling me in private was certainly frustrating, but worse was dealing with creditors who did not really want their money back. Negotiating with them, trying to reason with them, was like negotiating a peace treaty with generals hell-bent on continuing a war safe in the knowledge that they, their sons and their daughters are out of harm’s way.

What was the nature of that war? Why did Greece’s creditors behave as if they did not want their money back? What led them to devise the trap in which they now found themselves? The riddle can be answered in seconds if one takes a look at the state of France’s and Germany’s banks after 2008.

[...] Overnight, France’s main banks would be facing a loss of 19 per cent of their
‘assets’ when a mere 3 per cent loss would make them insolvent.

To plug that gap the French government would need a cool €562 billion
overnight. But unlike the United States federal government, which can shift
such losses to its central bank (the Fed), France had dismantled its central bank
in 2000 when it joined the common currency and had to rely instead on the
kindness of Europe’s shared central bank, the European Central Bank. Alas, the
ECB was created with an express prohibition: no shifting of Graeco-Latin bad
debts, private or public, onto the ECB’s books. Full stop. That had been
Germany’s condition for sharing its cherished Deutschmark with Europe’s
riff-raff, renaming it the euro.

[...] France’s top officials knew that Greece’s
bankruptcy would force the French state to borrow six times its total annual tax
revenues just to hand it over to three idiotic banks.

It was simply impossible. Had the markets caught a whiff that this was on the
cards, interest rates on France’s own public debt would have been propelled
into the stratosphere, and in seconds €1.29 trillion of French government debt
would have gone bad. In a country which had given up its capacity to print
banknotes – the only remaining means of generating money from nothing –
that would mean destitution, which in turn would bring down the whole of the
European Union, its common currency, everything.

his move was less an apostasy from PASOK’s socialists, his former crowd, and more a sign of what was to follow once the second bailout demanded a grand coalition government.

There are 10 million Greeks living in Greece (falling fast due to emigration), organized in around 2.8 million households with a ‘relationship’ with the tax authorities.

Of those 2.8 million households, 2.3 million (and 3.5 million tax file numbers) have a debt to the tax authorities that they cannot service.

One million households cannot pay their electricity bill in full, forcing the electricity company to ‘extend and pretend’, thus ensuring that a million homes live in fear of darkness at night and the electricity company is insolvent. Indeed, the Public Power Corporation is disconnecting around 30,000 homes and businesses a month due to unpaid bills.

For 48.6 per cent of families, pensions are the main source of income. Meanwhile the troika demands that pensions be cut even further. What was the €700 old age pension has been reduced by about 25 per cent since 2010 and is due to be halved over the next few years.

The minimum wage has shrunk (on the troika’s orders) by 40 per cent. Other benefits have been cut by more than 18 per cent.

Some 40 per cent of the population say they will not be able to meet their financial commitments this year.

Unemployment has risen 160 per cent so that 3.5 million employed people now support 4.7 million unemployed or inactive Greeks.

Of the 3 million people constituting Greece’s labour force, 1.4 million are jobless.

Of the 1.4 million jobless only 10 per cent receive unemployment benefit and only 15 per cent any benefits at all. The rest must fend for themselves.

Of those employed in the private sector 500,000 have not been paid for more than three months.

Contractors who work for the public sector are paid up to 24 months after they provide the service and pre-pay the sales tax to the tax office. Between 2008 and 2014 small and medium-sized companies reduced their workforce by 29.3 per cent and their output (in value added terms) by 40.2 per cent.

Half the businesses still in operation throughout the country are seriously in arrears with their compulsory contributions to their employees’ pension and social security funds.

In 2013 36 per cent of the population officially lived at risk of poverty or social exclusion. That percentage is on the rise.

Household disposable income has contracted 30 per cent since 2010.

Healthcare expenditure was cut by 11.1 per cent between 2009 and 2011 alone, with significant rises in HIV infections, tuberculosis and stillbirths.

[...] Since 2010 the troika had been promising the Greeks that the silver lining to the cloud of wage cuts would be a growth in exports, as the reduction in the costs to business within Greece would increase its competitiveness. By the end of 2014 the troika and the government were on an I-told-you-so spree, along with the foreign media, financial newspapers, government and EU economists. ‘Greece posts first current-account surplus for many decades,’ they trumpeted.

Had they considered the last time Greece posted a trade surplus, they might have understood that the situation was actually awful. This was in 1943, under the Nazi occupation, when Greeks could not afford to eat, let alone import goods from abroad, but still managed to export a few oranges, a few apples and the like. In 2014 the economic collapse had produced a similar state of affairs. The sorry reason for our current account surplus was that the deepening recession had crippled imports, while exports of goods were flat despite the massive reduction in labour costs. 8 A cause for mourning had been spun as a reason to celebrate.