Guardian: "What you're about to read does, I admit, sound like a conspiracy theory. It involves powerful people meeting in private offices, hundreds of billions of euros, and clandestine deals determining the fates of entire countries. All that's missing is a grassy knoll or a wandering band of illuminati. There are, however, two crucial differences: these events are still unfolding – and they're more worrying than any who-killed-JFK fantasy I've ever heard.
... Charles Dallara and Josef Ackermann. They're two of the most senior bankers in the world – among the top 1% of the 1%. Dallara served in the Treasury under Ronald Reagan, before moving on to Wall Street, while Ackermann is chief executive of Deutsche Bank. But their role in the euro negotiations, and so in deciding Greece's future, was as representatives of the International Institute for Finance.
The IIF is a lobby group for 450 of the biggest banks in the world, with members including Barclays, RBS and Lloyds. Dallara and Ackermann and their colleagues were present throughout those euro summits, and enjoyed rare and astounding access to European heads of state and other policy-makers. EU and IMF officials consulted the bankers on how much Greece should pay, Europe's commissioner for economic affairs Olli Rehn shared conference calls with them.
By now you'll have guessed the punchline: that July agreement was terrible for the Greeks, and brilliant for the bankers. It was widely panned at the time, for slicing only 21% off the value of Greece's loans, when Angela Merkel and many others agreed that financiers ought to be taking a much bigger hit. As the German government's economic adviser, Wolfgang Franz, later remarked in an interview: "If you look at the 21% and our demand for a 50% participation of private creditors, the financial sector has been very successful." Another way of putting it would be to say that the bankers overpowered even the strongest state in Europe.
None of this was inevitable. Iceland had made it clear that simply defaulting on one's loans didn't immediately lead to economic apocalypse. Across Greece, there were massive, repeated protests about the enormous spending cuts that citizens would suffer by paying off Goldman Sachs and the rest. And there was a growing movement in Greece and Portugal and France, among other countries, questioning the legitimacy of some of these loans.
None of these voters, none of these opinions got even a fraction of the consideration, let alone the face time, that was extended to Dallara and Ackermann. At Corporate Europe Observatory in Brussels, Yiorgos Vassalos has been tracking the negotiations over Greece: by his reckoning only the IIF got to have such personal, close-up access. These were summits settling how much misery would be imposed on the Greek people – and no trade unions or civil society groups got a say in them. "The only key players in those meetings were European governments and the bankers," says Vassalos.
So the bankers whose excesses helped land Europe in this mess then get to sit round the big EU table, like any other government, and decide who should pay for it. And the answer, unsurprisingly, is: not them. The bigger question is: why finance has been granted such power? In a forthcoming paper entitled Deep Stall, the Centre for Research on Socio-Cultural Change gives one compelling reason: because so many countries across Europe are, through both their public and private sectors, so dependent on financiers in other countries for credit."