Take the case of Georg Funke, who ran Depfa, a German public mortgage bank. Depfa helped Athens get a star credit rating, raised âŹ265 million for the Greek government railway, helped Portugal borrow âŹ200 million to build up a water supplier, and gave âŹ90 million to Spain to construct a privately operated road in Galicia. For a while, the middle class in Greece like the middle classes in Spain and Ireland, benefited from the infrastructure spending stimulus. When Depfa nearly collapsed in 2008, Funke was fired.
Or take the case of Georges Pauget, the CEO of CrĂ©dit Agricole in France, who bought up Emporiki Bank of Greece for âŹ3.1 billion in cash in 2006. Over the next six years, Emporiki lost money year after year, blowing money on one foolish venture after another, until finally, CrĂ©dit Agricole sold it for âŹ1 â not âŹ1 billion or even âŹ1 million â but a single euro to Alpha Bank in October 2012. CrĂ©dit Agricoleâs cumulative loss? âŹ5.3 billion.
Money poured in from other banks like Dexia of Belgium. Via Kommunalkredit, Dexia loaned âŹ25 million to Yiannis Kazakos, the mayor of Zografou, a suburb of Athens, to buy land to build a shopping mall. It made similar loans to other Greek municipal authorities including Acharnon, Melisia, Metamorfosis, Nea Ionia, Serres, and Volos.
âThe tsunami of cheap credit that rolled across the planet between 2002 and 2007 ⊠wasnât just money, it was temptation,â financial writer Michael Lewis wrote in Vanity Fair. âEntire countries were told, âThe lights are out, you can do whatever you want to do, and no one will ever know.
But as Stiglitz has noted, these German and French banks have now been rescued. An ATTAC Austria study showed that 77 percent of the âŹ207 billion provided for the so-called âGreek bail-outâ went to the financial sector and not to the people.
How the Greeks will vote on the European Union austerity package this Sunday is hard to predict, but more must be done â it is time to investigate the bankers who created the EuroZone crisis and hold them accountable.
But the bankers are not the only ones. There must be repercussions for the European Union bureaucrats and politicians who promoted the idea that free-market competition in financial services would benefit everyone.