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Generational Dynamics Web Log for 14-Aug-2010
14-Aug-10 News -- Germans selling submarines to Greece and Portugal

Web Log - August, 2010

14-Aug-10 News -- Germans selling submarines to Greece and Portugal

German prosecutors are investigating corruption

Prosecuting investigating sales of German submarines to Greece and Portugal

The near-default of Greece's government several months ago forced the EU to agree to a huge bailout. (See "11-May-10 News -- Europe's super-nuclear bailout.")

And as we reported yesterday, the bailout hasn't helped much, as Greece's economy shows signs of collapsing.

Portugal has not yet come close to defaulting, but it's one of the PIIGS countries (Portugal, Ireland, Iceland, Greece and Spain), and with a faltering economy and heavily in debt, many fear that it's not far behind Greece.

Both countries are implementing severe austerity programs to reduce the debt, and try to stave off default. These austerity programs are creating enormous hardships for their people.

So why are these two countries purchasing German-built submarines and other weapons, with money that they don't have? And why were some of these deals signed just as the bailout was being negotiated?

That's what German prosecutors would like to know. Deutsche-Welle reports that they're investigating corruption between German and Greek officials who sought to benefit from the bailout at a time when the German people were strongly opposed to it.

There were several large side deals, known as "offset contracts," signed along with the submarine deal, though little is yet known about the details. They would work as follows: Germany provides bailout money to Greece; Greece uses some of the ;money to purchase submarines and other weapons systems from German firms; the German firms would invest part of that money in projects in Greece favored by the Greek government. The money is effectively laundered, and everyone gets to pocket something.

The investigation is spreading to Portugal, according to EU Observer, and is touching on some high-level EU officials.

Greece and Turkey

Greece and Turkey

The deal has some important historical significant for Americans. Greece and Turkey are perennial enemies, and a post-war conflict between them in 1947 led President Harry Truman to declare the Truman Doctrine, which essentially made America the Policemen of the World. (See "President George Bush talks about a 'Third Awakening,' but he has his history wrong" for details on how America became Policemen of the World.)

Since that time, Turkey and Greece went to war on the island of Cyprus, and almost went to war on other occasions. Greece is the largest importer of conventional weapons in all of Europe, and it's thought that much of this weaponry is in preparation for a possible future war with Turkey.

(Comments: For reader comments, questions and discussion, see the 14-Aug-10 News -- Germans selling submarines to Greece and Portugal thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Aug-2010) Permanent Link
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Generational Dynamics Web Log for 14-Aug-2010 14-Aug-10 News -- Germans selling submarines to Greece and Portugal

Prosecuting investigating sales of German submarines to Greece and Portugal

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Generational Dynamics Web Log for 14-Aug-2010
14-Aug-10 News -- Germans selling submarines to Greece and Portugal