The new colonialism: Greece and Ukraine
Date Written: 29/08/2015
Year Published: 2015
Resource Type: Article
Cx Number: CX17936
According to Jack Rasmus, aA new form of colonialism is emerging in Europe. Not colonialism imposed by military conquest and occupation, as in the 19th century. Not even the more efficient form of economic colonialism pioneered by the U.S. in the post-1945 period, where the costs of direct administration and military occupation were replaced with compliant local elites allowed to share in the wealth extracted in exchange for being allowed to rule on behalf of the colonizers. In the 21st century, it is 'colonialism by means of financial asset transfer.' It is colony wealth extraction by colonizing country managers, assigned to directly administer the processes in the colony by which financial assets are to be transferred. This new form of colonialism by direct management plus financial wealth transfer is now emerging in Greece and Ukraine.
The $50 billion Privatization of Greek Government Assets Fund will remain in Greece. However, it will operate "under the supervision of the relevant European institutions," according to the MOU. The Troika will decide what is to be privatized and sold at what (firesale) price to which of its favored investors. In the meantime, privatization sales in progress or identified will be accelerated.
In Ukraine's case, only once U.S. and Euro bankers were installed as Ministers of Finance and Economics last December 2014, were more loans promised to Ukraine. The U.S. and EU put in another $4 billion in January, and the IMF quickly announced the new $40 billion deal in February. After the $40 billion, Ukraine's debt rose from $12 billion in 2007 to $100 billion in 2015. The new $100 billion debt will mean a massive increase in financial wealth extraction in the form of interest payments on that $100 billion.
Another form of transfer will occur in the accelerating of privatizations. No fewer than 342 former government enterprise companies are slated for sale in 2015, including power plants, mines, 13 ports, and even farms. The sales will likely occur at firesale prices, benefiting U.S. and European "friends" of the new US and European ministers. So too will the sale of Ukraine private companies approved by the new Ministers. One of every five are technically bankrupt and unable to refinance $10 billion in corporate junk bond debt. Many will default, the best scooped up by U.S. and EU shadow bankers and multinational corporations. What both Greece and Ukraine represent is the development of new more direct management of wealth extraction, and the transfer of that wealth in the form of financial assets. In past government debt bailouts, the IMF and other institutions set parameters for what the bailed out country must do. But the country was left to carry out the plan. No longer. It's now direct management to ensure the colony does not balk or delay on the transfer of financial assets enabled by ever rising debt.