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      I Upset My Least Favourite Big Fat Greek Minister

      May 20, 2013
      From the column 'Greg Palast's Column'


      The author and Greek minister Theodoros Pangalos.

      Greg Palast is a New York Times bestselling author and fearless investigative journalist whose reports appear on BBC Newsnight and in The Guardian. Palast eats the rich and spits them out. Catch his reports and films at www.GregPalast.com, where you can also securely send him your documents marked, "confidential".

      It wasn't too difficult picking out the Fat Bastard in the crowd of Russian models, craven moochers and media mavens. Besides, Fat Bastard and I were both desperate for coffee and heading for the same empty urn.

      (We’d both signed on for Kazakhstan’s annual Eurasia Media Forum, a kind of Burning Man festival for Eastern oilgarchs and their media camp followers.)

      Now, it is my policy never to mention an interlocutor’s weight, nor question the legitimacy of their birth, given my own vulnerabilities. (A would-be groupie told me, "You could do a few sit-ups, you know." Yes, I know.)

      But this particular Fat Bastard is asking for it. I had tried to put the belly of this beast out of my thoughts, but I still had a New York Times story folded in my pocket that begins:

      ATHENS – As an elementary school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.

      Fat Bastard – or Theodoros Pangalos, leading member of the Panhellenic Socialist Party (PASOK), Greece's equivalent to Labour – thinks the little Greek kiddies should stop belly-aching. Pangalos, as you can see from the photo below, is not bent over with hunger pains. In fact, he looks more likely to be bent over with labour pains, but in truth he probably just can’t bend over at all.

      Pangalos is best known for blaming the working people of Greece for the horror and the hunger among the ruins of what was once Greece’s economy. However, it is, of course, not his fault; until last year, and through the core of the crisis, he was just Greece’s Deputy Prime Minister – why should he be held accountable for anything?


      Pangalos reclining.

      Minister Pangalos is much loved by Europe’s banking chieftains, by vulture speculators and by Prussian President Angela Merkel because they’ve got themselves a gigantic Greek who will mouth their mantra: that his nation’s sudden collapse can be blamed squarely on olive-pit-spitting, lazy-ass Greeks who won’t work more than three hours a week, then retire while they’re still teenagers to swill state-subsidised ouzo.

      Pangalos leads the Fifth Column of Greeks calling to accept Germany’s terms of economic surrender: austerity, meaning cuts in food allowances, in pensions, in jobs. As of this week, more than one in four Greeks (27 percent) are out of work.

      While we hunted for caffeine, Fat Bastard told me that anyone who complains about the austerity diktat, “Is a fascist or a communist or a conspiracy theorist.” He didn’t tell me which of these three categories the 11-year-old kids complaining of hunger pains fell into.

      Just for the record, Greeks who can get a job work 619 more hours per year (see table) than the average German (and way, way more than Britons or Americans, as well).

      But in the world according to Pangalos, Merkel and poobahs of the media, Greece went to hell in a handbag because the entire nation suddenly turned into work-shirking grifters. 

      But there’s another explanation for wrack and ruin: Greece is a crime scene. And its working people are not the perpetrators of the crime, they are the victims – scammed, defrauded, their national industries looted and their treasury drained by financial flim-flam.

      In 2001, Greece dropped the drachma for the euro. The drachma was good enough for Aristotle and very good for tourism, Greece’s main industry. But when sun-and-fun was re-priced in euros, tourists swam across the Adriatic for kofte meatballs priced in dirt-cheap Turkish lira. Pre-euro tourist visits to Greece outnumbered those to Turkey by millions; but by last year, it was the just the opposite, with two-thirds of tourists tanning in Turkey.

      With its Treasury bleeding hard currency, the government of Minister Pangalos’s PASOK joined together with the opposition in a complex international currency kiting operation to conceal the losses from the public and, most importantly, from the European Central Bank.


      German chancellor Angela Merkel with Greek Prime Minister Antonis Samaris. (Image via)

      Why the cover-up of the deficit? The answer is that the euro is more than a currency: it is a straitjacket, a set of constricting rules that, for example, prohibit any euro nation from running a deficit of more than 3 percent of GDP. 

      That’s impossible in a recession – not to mention plain insane – as it requires cutting public spending when spending is needed most. The USA, China, Brazil, India – the nations that pulled the world from depression’s brink – all ran deficits way over the nutty 3 percent cap. I asked finance wiz Nomi Prins to calculate America’s debt-to-GDP ratio using euro rules, and she estimates that Obama’s deficits are now way down from recession’s peak – to 10.2 percent of GDP.

      Greece, fearing expulsion from the euro loony bin, turned to Goldman Sachs. For a mere $400 million (£263 million) in fees, plus golden sacks of ill-gotten trading gain, the investment was willing to cook the nation’s books via a complex set of derivatives transactions. [For the particulars of the derivatives con, see "How Goldman Sacked Greece".]

      Since the con was busted open in 2009, the Greek public has had to pay cheated bondholders a premium to insure against default of the nation’s debts. The credit default insurance costs an average of $14,000 (£9,218) per family per year. 

      When I was a racketeering investigator working with the US Justice Department, in the days when we pretended America still had justice, we would have called the derivatives trick a “fraud on the market”. We’d handcuff the perpetrators, lock ’em up, or, at the least, make them cough up their purloined profits.

      So, should Goldman pay up? Not according to Pangalos, because – in the worldview of our rulers – the victims of the scam are as guilty as the victimisers. Pangalos even put it into a famous (or infamous) motto: mazi-ta-fagame. That’s Greek for “We all ate it together” (a sample of which was used in a Plastic Flowers song). 

      But the visible evidence suggests Pangalos, not Pantelis – the kid doubled over with stomach pain – ate all the pies.

      The mass privatisation of public property at wiener schnitzel prices has German speculators dipping in their spoons as well, though the Federation of German industry is complaining about Greece’s own “princes” gobbling up the assets.

      I was going to invite Minister Pangalos to lunch to test his theories, but he left in a pachydermic huff when I asked him about Geir Haarde. Haarde, the former Prime Minister of Iceland, was found guilty of criminally concealing his knowledge of the trickery used by Iceland’s banks before they melted that nation’s finances. 

      I asked Fat Bastard, “Do you think you too should be in prison for” similar conduct in the Greek government? 

      Maybe that’s why Minister Pangalos didn't want to go to lunch with me.

      This article was amended at 11PM on Tuesday, the 21st of May to correct a subbing error which incorrectly stated that Theodoros Pangalos was the leader of PASOK.

      First two images courtesy of Anthony DiMieri/Palast Investigative Fund.

      Greg Palast’s book Vultures’ Picnic, including chapters on Greece and Goldman, will be published in Greek in early autumn by Livani. Download the first chapter, Goldfinger, and videos at www.VulturesPicnic.org.

      Follow Greg on Twitter: @Greg_Palast

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      Topics: theodoros pangalos, Greece, economic collapse, austerity, greek crisis, Greg Palast, Angela Merkel, Euro, bailout, goldman sachs

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