Banking scandals, insider trading, and other ways the mega-rich are screwing the world

Banking royal commission interim report released; blames greed for misconduct

the_big_bankerDid you happen to notice that the government of Australia had set up a Royal Commission to look into the world of banking? And that the Commission released its “interim” report last week?

What have they found so far, you may be curious to know.

The task of presenting the report fell to deputy leader of the ruling Liberal Party and the nation’s Treasurer Josh Frydenberg who . . .

“ . . . delivered a scathing rebuke to financial institutions for their greed-driven misconduct — and the banking regulator for not doing enough to punish poor behaviour.

“Banks and other financial institutions have put profits before people, greed has been the motive as short-term profits have been pursued at the expense of basic standards of honesty. Too often simply selling products has become the sole focus of attention.”

Frydenberg said the culture and conduct was reflected in the banks’ remuneration practices, with “almost every piece” of misconduct identified in the report “connected directly to some monetary benefit”.

citizensplutocracyHe said the report made it clear that, while behaviour was poor, “misconduct either went unpunished or the consequences did not meet the seriousness of what has been done”. 

In his report, Commissioner Kenneth Hayne, QC, said the Australian Securities and Investments Commission “rarely went to court to seek public denunciation of and punishment for misconduct” while the Australian Prudential Regulation Authority “never went to court”.

“Much more often than not, when misconduct was revealed, little happened beyond apology from the entity, a drawn-out remediation program and protracted negotiation with ASIC of a media release, an infringement notice, or an enforceable undertaking that acknowledged no more than that ASIC had reasonable ‘concerns’ about the entity’s conduct,” Hayne said.

ABC News added the following:

In the executive summary of the report, Commissioner Kenneth Hayne noted that the commission had exposed conduct by financial services firms that had attracted public condemnation.

fedreserve“Too often, the [cause] seems to be greed — the pursuit of short-term profit at the expense of basic standards of honesty,” he wrote.

“How else is charging continuing advice fees to the dead to be explained?”

Commissioner Hayne observed that from the executive suite to the front line, staff performance was measured and rewarded based on profit and sales.

“Selling became their focus of attention. Too often it became the sole focus of attention,” he noted.

“Products and services multiplied. Banks searched for their ‘share of the customer’s wallet’.”

However, the commissioner does not sheet home blame solely to the financial institutions, with the [so-called] regulators also failing to check [the banks’] greed.

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Like me, however, you may be curious about how a building or an institution like a bank can be motivated by a human emotion like greed, or make moral choices like putting profits before people, or policy decisions to reward employees for selling dodgy financial “products”.

You might think there must be some human beings in the upper levels of management making these decisions . . . and you might go on to wonder why these people can’t be identified and called to account.

money laundering

Well, that was the “interim” report, so we may hope that the final result will be some serious penalties handed down to some actual bank CEOs and their enforcers. Let’s wait and see!

While waiting for news from Australia, though, there was an interesting news item from Switzerland:

How a Swiss bank was toppled by a financial scandal in Malaysia

The world’s biggest financial scandal, over missing billions from Malaysian state-run development fund 1MDB, has left the country’s former prime minister, Najib Razak, facing charges of corruption – charges which he denies. In addition to bringing down a government, the scandal’s effects have reached as far as Switzerland, where Swiss bank BSI was forced to close after over 140 years of trading.

The 1MDB fund was overseen by Najib as prime minister, financial minister, and chairman of the advisory board, and was controversial from the outset in 2009. When in 2014 it was reported that 1MDB had amassed US$11 billion in debt, posing a threat to the Malaysian ringgit, the scandal began to unravel.

Documents leaked to investigative journalist Clare Rewcastle Brown’s website Sarawak Report in 2015 revealed how money appeared to have been funnelled out of the fund via a close friend of the prime minister, Malaysian tycoon Jho Low. He has denied any wrongdoing, but is currently facing an Interpol warrant for his arrest*.The Wall Street Journal then published serious allegations of financial fraud, including the transfer of US$681m into Najib’s personal account. Funds were alleged to have been siphoned off through a web of shell companies and bank accounts and lavishly spent on items including a luxury property, a private yacht, and even funding for a Hollywood film. Investigations into these and other activities continue; Najib and Low deny any wrongdoing.

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bankster_cartoon450*I hope there’s no connection to the disappearance of Interpol President Meng Hongwei – we don’t want to take conspiracy theories too far.

Anyway, it’s good to see some accountability in Switzerland for the banking mafiosi – though it would have been nice to know that the CEO and the owners were going to serve some prison time rather than just closing down the bank and probably starting a new one.

As for mega-rich listers’ accountability in the United States, I saw that Elon Musk had been fined $20 million over a securities fraud, where he “misled investors when he tweeted on August 7 that he had ‘funding secured’ to privatize the electric automaker at $420 a share, causing a brief spike in Tesla’s share price.” Musk was also require3d to stand down as Board Chairman of the Tesla Company.

Sounds like a pretty serious punishment, until you realise that Musk’s net worth is currently estimated at $20.6 billion. That $0.6 on the end actually means $600 million! So the $20 million fine won’t even scratch the surface of that, never mind the other $20 BILLION! And the guy will still continue as Tesla’s CEO, so we can safely assume that his future earning capacity won’t be seriously affected.

That’s justice for you.

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Kleptocrats looting their country and shifting the looted wealth offshore

Just as I finished reading that book, Treasure Islands by Nicholas Shaxson, about the offshore tax evasion system, this ad appeared in my gmail inbox:

Screen Shot 2018-09-28 at 09.08.17So I want to quote a few paragraphs from the conclusion to Shaxson’s book:

A kleptocrat loots his country and shifts the looted wealth offshore, the banks, accountants, and law firms that assist him are just as guilty as the kleptocrat.When a client gets caught and goes to jail, so should his or her relationship manager, accountant, trustee, lawyer, and corporate nominee. A few organizations like London-based Global Witness have sought to call these intermediaries to account— but we now need a sea change in the world’s approach. Get serious with these people at last.

kleptocracy-NYTFirst, policymakers, journalists, and many others can start to understand and accept how tax havens have become the fortified refuges of financial capital, protecting it from tax and regulation and in the process contributing to the latest crisis in many and varied ways.The veil of silence and ignorance can be lifted and the message spread.

Tax must now be brought squarely into corporate responsibility debates. Corporate managers are taught to think that they are accountable only to shareholders. From this perspective, escaping tax seems to be their duty. But we have forgotten the fundamental truth that corporations get their license to operate, and the tools and confidence to do so effectively, from society. Seen this way, tax is not a cost to shareholders, to be minimized, but a distribution to the stakeholders in the enterprise: a return on the investment societies and their governments make in infrastructure, education, law and order, and the other basic prerequisites for all corporate activity.

money-laundering-tease_pe5n9x

Wash your dirty money? If anyone can, London can!

The final and most important thing is to change the culture. When pundits, journalists, and politicians fawn over people who get rich by abusing the system— getting around tax and regulation and forcing everyone else to shoulder the associated risks and taxes—then we have lost our way.

When a private equity company shows record profits, we can be told how much of that comes from genuine productive improvement, and how much comes from gaming the offshore system.

When magazines carry alluring advertisements from seedy offshore promoters who may be inciting clients to criminal behavior, we can complain.When corporations talk about social responsibility, we can ask if they mean tax. When journalists need expert commentators to advise them about that tax story they are writing, they must understand that their interviewee from the big accountancy firm works for a business that makes a living out of helping wealthy corporations and individuals get around paying tax, and that their opinions will reflect that corrupted worldview. They must find alternative opinions to balance those views.

kleptocraqcy 2We can recapture our culture from the forces of unaccountable privilege that have taken it away from us.

It is time for the great global debate about tax havens to begin in earnest. Whoever you are, wherever you live, and whatever you do, offshore is at work nearby. It affects you. It is undermining the government you elect, hollowing out its tax base and corrupting your elected politicians. It is sustaining a vast criminal economy and creating a new, unaccountable aristocracy of corporate and financial power. If we do not act together to contain, control, and eradicate financial secrecy, then the world I found in West Africa more than a decade ago, a world of suave insiders, criminal complicity, and desperate poverty, will become the world we leave to our children. A tiny few will have their boots washed in champagne, while the rest of us struggle to make our lives in conditions of steepening inequality. We must avert this future.

You can find the book here.

Don’t trust that guy! The Lord Mayor of London!

London eyes partnership with Turkey’s business sector

lord mayor

Does he look evil? Read on . . .

This headline caught my eye in our English language daily yesterday. Coincidentally I have been reading a fascinating book about the world of offshore finance (why hadn’t I read it before?), and how it screws the world in the interests of corporate bankers and their cronies.

On the face of it, you might think Turkey should be happy to have “London” taking an interest in their economy. But the truth is – this guy doesn’t represent London at all. His clients are the shady world of international finance and the mega-rich. This is an excerpt from the news item, followed by a few relevant quotes from Nicholas Shaxon’s book, Treasure Islands:

London wants to be a partner of growth in Turkey’s business sector, said Lord Mayor of the City of London Charles Bowman.

Bowman said he is excited about visiting Turkey this week and has five objectives during the visit.

They include providing reassurance that in the context of Brexit, London and U.K. financial and professional services will remain preeminent and to enhance the strong ties between Turkey and the U.K. built over a number of years.

Bowman said the other objectives are to develop, harness and leverage bilateral opportunities in trade, investment and business, innovation in financial and professional services and engaging with Turkish communities and businesses with relation to Business of Trust—a program run by the Lord Mayor of London.

Underlining that as Lord Mayor of London, he is acting as the U.K.’s principal spokesperson for and on behalf of the U.K.’s financial and professional services, Bowman said those services employ 2.3 million people across the country.

The sector is home to and houses 250 banks within London itself, more than any other international financial center. [London] is a national, European and international jewel,” he said.

 “We have a strong relationship with Turkey built over a number of years. And this visit… there is no sense of accident behind the fact that we are traveling to Turkey. We scheduled early in my year, and I am really looking forward to leveraging, developing and harnessing those opportunities to further grow what is already a strong relationship,” said the Lord Mayor.

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treasure islandsExtracts from “Treasure Islands: Dirty Money, Tax Havens and the Men Who Stole Your Cash”, by Nicholas Shaxson

Few British people, let alone anyone else, know that the City of London is the most important financial center in the global offshore system. London provides endless loopholes for U.S. financial corporations, and many U.S. banking catastrophes can be traced substantially to those companies’ London offices.

Another important role for London has concerned a seemingly arcane practice known as “rehypothecation,” a way of shifting assets off banks’ balance sheets. The U.S. has firm rules to curb the abuses, but London does not—so ahead of the latest crisis, Wall Street investment banks simply went off to London where they could do it without limit. A little-noticed IMF paper in July 2010 estimated that by 2007 the seven largest players in the market—Lehman Brothers, Bear Stearns, Morgan Stanley, Goldman Sachs, Merrill/BoA, Citigroup, and JPMorgan—had shifted $4.5 trillion off their balance sheets in this way. So this London-based practice injected trillions more debt into the financial system than would otherwise have been the case. The City of London and Wall Street banks got rich off this—and ordinary Americans will pay for it for years to come.

[The City of London has a] kind of money-laundering filter that lets the City get involved in foreign dirty business but at sufficient distance to minimize the stink.

“In America they send hundreds of people to jail: in this country bankers don’t go to jail,” explains the British author and publisher Robin Ramsay. “There are no consequences in London.” Though Americans may roll their eyes at this, as they consider the financial crimes that have gone unpunished at home in the wake of the latest financial crisis, there is no doubt that London’s tolerance for abusive or criminal financial behavior is in a class of its own.

The head of the Corporation of London is the Lord Mayor of London—not to be confused with the mayor of London, who runs the much larger greater London municipality that contains the City, geographically speaking, but has no jurisdiction over its nonmunicipal affairs. And this separation of powers matters.

When the Queen visits the City, she stops at the boundary at Temple Bar and waits for the Lord Mayor of the City, accompanied by assorted City Aldermen and Sherriffs. This tourist ceremony, in which the Queen touches the Lord Mayor’s sword, strikingly highlights the political discontinuity between the City and the rest of Britain. When heads of state visit Britain the Lord Mayor throws more lavish banquets than the Queen. Each year the Chancellor, Britain’s finance minister, makes a speech at the Guildhall, the seat of City government, and at the Lord Mayor’s Mansion House, in which they justify how they have been serving the interests of finance.

In 1937, Britain’s then prime minister Clement Attlee became one of few politicians to have raised the issue. “Over and over again we have seen that there is in this country another power than that which has its seat at Westminster [the parliament]. The City of London, a convenient term for a collection of financial interests, is able to assert itself against the Government of the country.”

A belated tribute to Ursula le Guin

le-guin“If you cannot or will not imagine the results of your actions, there’s no way you can act morally or responsibly.”

When she died in January this year I did save the obituary published in the New York Times. I hadn’t read a lot of her work, but I have, over the years, read and re-read The Earthsea Trilogy – subsequently expanded, like Douglas Adams’s Galaxy Hitchhiker, into a quintology (I made that word up).

I’ve never been a big fan of science or fantasy fiction. I couldn’t progress past the second volume of “Lord of the Rings” – but Ursula le Guin had something else: a genuine belief that the world could be a better place. What’s more, she had definite ideas about how that could be brought about.

As the Turkish Lira plunges in the “money markets”, I’ve been increasingly forced to go hunting for free e-books online, and I’ve been delighted, if a little saddened, to find several of le Guin’s novels available.

earthseaSo, I’m reading “The Dispossessed”, according to the writer of the NY Times obituary “her most ambitious novel”, and I want to share a brief extract, on the subject of economics, banking and finance. Shevek, a theoretical physicist and the main character, from a planet colonised by socialist exiles from their home world where capitalism reigns supreme, has been brought to the latter by curious academics:

“[Shevek] tried to read an elementary economics text; it bored him past endurance, it was like listening to somebody interminably recounting a long and stupid dream. He could not force himself to understand how banks functioned and so forth, because all the operations of capitalism were as meaningless to him as the rites of a primitive religion, as barbaric, as elaborate, and as unnecessary. In a human sacrifice to a deity there might be at least a mistaken and terrible beauty; in the rites of the moneychangers, where greed, laziness and envy were assumed to move all men’s acts, even the terrible became banal. Shevek looked at this monstrous pettiness with contempt, and without interest.”

I can relate to that.

America cannot be trusted to run global economy

Turkey’s President Erdoğan has been copping plenty of flak from opposition at home and abroad recently. So what’s new? He’s been dealing with negativity, black propaganda, outright lies, a period of imprisonment and at least one attempted military coup for more than twenty years – so I guess for him it’s just business as usual.

Recep+Tayyip+Erdogan+G20+Nations+Hold+Hamburg+oF8eiMsk5dWl

Interestingly, Frau Merkel and M. Macron seem to be offering support these days!

After being re-elected as president, with increased powers under the new constitution, Mr Erdoğan appointed a new cabinet, as he is now entitled to do. Most of his appointments were relatively uncontroversial – but one has aroused considerable criticism and mockery: the choice of his son-in-law, Berat Albayrak, as Treasury and Finance Minister.

Well, certainly, it’s not a good look, especially since the gentleman concerned is only 37 years old; but I’m withholding judgment at this stage. For sure, young Mr Albayrak has a difficult road ahead. His age, for a start. He’ll be dealing with much older, more experienced, hard-headed businessmen (and women) all too ready to latch on to any sign of weakness. His father-in-law, for seconds. He has to live down the perception that he only got the job because of Baba Tayyip. Worst of all, though, is the fact that Turkey’s economy is going through a particularly hard time, with the Turkish Lira dropping to scary lows against the world’s big currencies – with an inevitable flow-on effect to internal prices.

Whatever you may think about President Erdoğan, I am sure few would deny that he is a very astute politician. His party came to power in 2003 after decades of hyper-inflation, regular military coups, and outrageous corruption in business and politics. They have won election after election – and Mr Erdoğan makes no secret of his desire to be at the country’s helm in 2023 when the Republic of Turkey celebrates its centenary. He wants to go down in history as the best thing to happen to his young nation since Mustafa Kemal Atatürk.

So, in my opinion, he’s not going to pick a dodo as Finance Minister at this critical time. He knows that much of his reputation in future will depend on his last years in office, maybe more than the earlier years; and his success (or failure) in bringing his country through the current financial crisis could be the crucial factor in determining how the history books will view his achievements.

So, what has the new Finance Minister got to say for himself? This report appeared the other day in Hürriyet Daily News:

America cannot be trusted to run global economy: Albayrak

Albayrak

After all, he’s about the same age as the President of France, and the Prime Ministers of Canada and New Zealand – and father-in-law’s got his back

The assault on Turkey’s economy must be viewed as an example of how the senseless use of economic pressure as a political weapon poses serious global risks, Turkey’s treasury and finance minister has said.

“By acting together with Turkey now, other countries can also help it create a common strategy to avoid artificial crises in the future,” Berat Albayrak wrote in an article titled ‘America Can’t Be Trusted to Run the Global Economy’ for the American news magazine Foreign Policy published on Sept. 7.

“This August, Turkey’s economy became the main topic in global news coverage. The reason was a systematic attack on the Turkish economy by the biggest player in the global economic system, the United States. It was one of the most disappointing moments in the history of the alliance between Turkey and America,” Albayrak said, accusing the Trump administration of overtly attacking the economy of a fellow NATO member through sanctions and tariffs.

Albayrak underlined that while the scale of the attack resulted in exchange rate fluctuations, the incident ultimately demonstrated the strong fundamentals of the Turkish economy.

“In the face of all the negative propaganda, and the attacks on its financial system, the Turkish economy has demonstrated its strength. It is important to reiterate that no economic indicators or macroeconomic data can account for the devaluation of the Turkish lira over the past month. Turkey’s financial structure and banking system have not experienced any fundamental changes during this time,” he said.

Turkish Central Bank’s independence 

Albayrak pointed to Turkey’s commitment to create an investor-friendly environment in an effort to take steps to address several economic weaknesses to prevent potential future vulnerabilities. He said the Turkish Central Bank’s independence, effectiveness and leading role in monetary policy would remain a priority for the government as it has been for the last 16 years. Albayrak said contrary to what some suggested, “it is not on our agenda to go to the International Monetary Fund”.

“Turkey will continue to secure foreign currency reserves from international markets as it has until now. Our goal is to ensure that Turkey continues to attract foreign direct investment and become a center for innovation and research and development for the global economy,” he added.

Albayrak said the U.S. attack on the Turkish economy also increased Turkey’s determination to strengthen its economy through structural reforms, new trade partnerships and the attraction of foreign investments and to take steps to rebalance the structure of the international economy so that powerful countries like the U.S. no longer would have the power to unilaterally disrupt the economic life of others.

Underlining the fact that Turkey never implemented rules that run counter to market principles, Albayrak said: “No crisis or financial assault can weaken Turkey’s commitment to those principles.”

‘Turkey not only country targeted by U.S.’ 

Albayrak pointed out that Turkey was not the only country that the U.S. recently targeted with sanctions under political pretexts.

“The single-handed exercise of tariffs by the United States against its trade partners in Europe, Russia and China proved that international trade, cooperation and stability should be secured by a stronger alliance among nations around the world and may necessitate taking countersteps to prevent catastrophic damage to the global financial system and international trade.”

Albayrak said the world faces incredibly complex challenges and Washington’s economic threats were a significant subset of those challenges.

“Unilateral sanctions, incitement of trade wars and haphazard use of economic weapons could potentially trigger another global economic crisis. At this critical juncture, developed and developing economies around the world need to promote strong and institutionalized cooperation to handle potential crises and financial attacks.

‘Cooperation, solidarity between Turkey, EU revived’ 

Albayrak said the Turkish government has been pleased to see promising new opportunities for the future of the international economy amid this artificial crisis created by the United States.

“Our European friends, including German Chancellor Angela Merkel and French President Emmanuel Macron, have made statements that clearly indicate they understand that Washington’s approach was dangerous and mistaken. The spirit of cooperation and solidarity between Turkey and the European Union has thus been revived, having proved critical for the political and economic well-being of both sides,” he added.

Albayrak highlighted that Turkey has been at the forefront of dealing with significant threats against Western countries for more than six decades.

“In recent years, this has included the fight against terrorist organizations such as al-Qaeda and the so-called Islamic State. During this period, Turkey has become a hope for millions of refugees running away from the brutal regime in Syria and the target of terrorist organizations that want to expand the war in that country to the West,” Albayrak said, adding that Turkey became an island of stability in one of the most unstable regions of the world.

In adopting sanctions against Turkey, the Trump administration invoked the flimsy pretext of an ongoing legal case involving a U.S. citizen with strong links to terrorist activities targeting Turkey’s peace and stability. The effects of the U.S. decision were nevertheless dramatic, with the Turkish economy experiencing immediate fluctuations. Referring to Andrew Craig Brunson, a U.S. pastor who is under house arrest in Turkey over terrorism charges, Albayrak said, “Washington’s brazen use of economic weapons served as a wakeup call for many countries and investors around the world. It was recognized as risky not only for the future of the alliance between Turkey and the United States but also for global markets.”

Credit rating agencies are fraudsters

Credit rating agencies are fraudsters, Turkish President Erdoğan says

Turkish President Recep Tayyip Erdoğan has called international credit rating agencies“fraudsters,” while promising his supporters “this too shall pass,” referring to the ongoing market volatility. 

erdoğan“They say that credit rating agencies say this or that… Leave those fraudsters. They say a lot of things about us,” Erdoğan said, addressing locals in the western province of Balıkesir on Aug. 31. “These firms are those that increased ratings of bankrupting states four notches at once. They are such a [crime] syndicate.”

His comments came after ratings agency Fitch, which downgraded 24 Turkish banks last month, said on Aug. 30 the 25 percent fall in the Turkish Lira since then had heightened risks and could lead to further rating cuts.

Earlier on Aug. 31, the Turkish president addressed newly graduated military cadets in Balıkesir, where he said: “Turkey will cope with this attack. For those who ask about foreign exchange rates, our answer is: This too shall pass.”

Hours before Erdoğan, Treasury and Finance Minister Berat Albayrak said rating agencies have been putting in intense efforts to create a pessimistic view of Turkey’s banks.

Fitch’s warning came two days after Moody’s downgraded its ratings on 20 Turkish financial institutions, citing the increased risk of a deterioration in funding. The operating environment is now worse than previously expected, it said.

Trust the world’s bankers – They know what they’re doing!

Good news for the global economy, from the economists at Time Magazine . . .

What the World Can Learn from the Greek Debt Crisis

jesus save greeceOn Aug. 21, Greek Prime Minister Alexis Tsipras announced the end of his country’s bailout era from the island of Ithaca*, a reference to the successful end of the Odyssey and its hero’s arrival home. Given Greece’s ongoing economic challenges, the more apt mythological analogy would have been Sisyphus rolling an immense boulder up a hill—only for it to roll down when it nears the top.

Ten years and more than $300 billion in rescue loans later, the country has begun its recovery, but Greeks still have an economy that’s 25 percent smaller than it was before the crisis began. Its unemployment rate is the highest in the Eurozone. A third of Greeks now live in poverty or close to it. In terms of length and severity, Greece’s economic slide is comparable to the U.S. Great Depression.

There are lessons here for the rest of the world. Here are some of the biggest.

greek austerityAusterity politics are dangerous, even if some countries, like Germany, still haven’t gotten the message. Populism is the driving political concern in today’s world, and austerity politics like those championed by policymakers in Berlin add fuel to the fire in two distinct ways. They widen the divide between haves and the have-notswithin individual societies, helping to make resentment and fear the driving forces in domestic politics. They also exacerbate inequality among European member states: Germany and Greece have seemingly never been as far apart in terms of quality of life as they are today. 

Austerity may be good at balancing bank accounts, but it’s disastrous at shrinking widening inequality of both the economic and political varieties. Europe will continue to pay the price for that miscalculation for years to come.

Relatedly, the failure of austerity politics in Greece has created strange anti-establishment bedfellows. the right-left divide of politics gives way to the “Us vs. Them” politics that pits political upstarts against the establishment, with increasingly little concern given to actual policy overlap. the Syriza-Independent Greeks coalition government it’s looking increasingly as a sign of things to come, heralding a future of increased political paralysis.

GREECE-ECONOMY-DEBT-EU-IMF-DEMOAnother critical lesson the Greek ordeal has taught the world: In the 21st century, the economic troubles of the present can extend far into the future. While most reports on Greece have understandably focused on the economic misery of the moment, the real tragedy of Greece’s lost decade of economic growth is that it will shortly become a lost generation of economic growth, even if the economy could manage to magically snap back to its pre-crisis levels tomorrow. Nearly 500,000 Greeks have already fled the country in search of better opportunities abroad, and there is little hope of these people returning as they start their careers and families elsewhere. 

This is not the first time there’s been a mass migration of Greek workers, but the ones leaving this time around are the most educated and capable individuals that the Greek educational system has produced. Their flight means that Greece’s already-broken pension system will be starved of the country’s most economically productive members, and will exacerbate a looming demographic crunch already in the making as the elderly and the young get left behind. In a globalized world where the movement of people is now easier than ever (and particularly within the European Union), a country’s current economic missteps have the potential to reverberate for years to come. 

As Greece continues to claw its way back to financial health [sic!], other countries would do well to track Greece’s progress. Nearly 3,000 years on from Homer’s epic poems, the country still has much to teach the world.

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*Ithaca -a tiny Greek island located in the Ionian Sea, off the northeast coast of Kefalonia and to the west of continental Greece. Ithaca’s main island has an area of 96 square kilometres and had a population in 2011 of 3,231.

So why didn’t Mr Tsipras announce his “good news” to crowds of adoring grateful supporters in the Greek capital of Athens? No prizes for answering that one!