The Secret Plane Stuffed Full of Cash That Saved the Euro

7/30/2019 The Secret Plane Stuffed Full of Cash That Saved the Euro

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The secret plane stuffed full of cash that savedthe euro: When Greece burned and its banksmelted, the EU talked tough and threatened tocut it loose... but covertly flooded it with10billion

The European bank Troika boosted Greek banks through secret flights

Billions of euros were flown to Greece and Cyprus to save the currencyBy Faisal Islam

PUBLISHED: 21:00 GMT, 24 August 2013 | UPDATED: 12:58 GMT, 25 August 2013

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To the casual observer there was nothing odd or even surprising in the sight of cargo planes lumbering east

over the Adriatic or occasionally skimming southwards over the Alps towards the Balkans and beyond to

Greece.

Some of these aircraft, giant Boeings, bore the distinctive livery of Maersk, the international carriers. Others,

smaller, more discreet, were painted in the pale blue and white of the Greek military.

Had anyone bothered to pay attention, or even note down the serial numbers such as the plane marked

OY-SRH seen landing in Cyprus earlier this year surely they would not have guessed at the purpose of these

journeys or their extraordinary cargo.


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Rescue mission: Maersk flights to Athens and Larnaca carried billions-worth of euros on

each flight to save the Greek - and the eurozone - economy

Because the flights to Athens and Larnaca that began in 2011 were nothing short of a secret airlift.

The mission was neither to save lives nor even to preserve a fragile democratic freedom like the famous airlifts

in post-war Berlin, but to protect and prolong the economic experiment of a multi-national currency. Billions in

freshly minted euro notes made a clandestine journey to struggling Greece a drama worthy of a John Le

Carr novel but authored in Frankfurt am Main, known as Mainhattan, world headquarters of the euro.

It was well known that Greece was running out of cash, in metaphorical terms at least. In June 2011, after

months of stalling on its economic reform programme, the foreign Troika that effectively controlled the country

had run out of patience.

Consisting of the European Union, the European Central Bank and the International Monetary Fund, the

Troika made it clear that it would withhold the final instalment of a 110 billion bailout, agreed in May 2010.

This last 12 billion payment of foreign funds was needed desperately to pay pensions, public servants and

interest on Greeces huge debts. It was funding that Greece could raise neither in taxes from its own people,

nor from the financial markets.

But what most people did not know was that Greece was running out of cash quite literally, too.

There were shortages of all denominations apart from the 10 note. Greeks had responded to the Troikas

threat to pull the 12 billion payment by withdrawing euros from their bank accounts at a record rate.


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On the brink: Protesters clash with riot police in Athens, Greece, as its government was

teetering on the edge of collapse over the austerity measures

Soon there would be not enough euro notes in the country to cope with the number of Greeks trying to get

their hands on their money from cash machines and banks. And so a secret plan was activated. Were talking

about June 2011, a senior official overseeing Greeces bailout told me. Greeks were taking about one to two

billion euros a day from the banking system. The Greeks had to send military planes to Italy to get banknotes.

It got to that point.

A decade after it gave up the drachma, the worlds oldest existing currency, Greece faced the crushing reality

that it did not have the sovereign authority to meet the demand for paper currency from its own citizens.

It could mint euro coins and there were also plates for the 10 note. But coins and small denomination paper

were not going to satisfy the demand.

Only the German Bundesbank, the National Bank of Austria and the Luxembourgers have ever had the plates

for the highly prized 500 note, the highest-value paper currency in the world. (This form of manufacturing

would appear to have been confined to German-speaking countries.)

Intentionally or not, the ability of Greece to meet a huge surge in demand for banknotes had been effectively

proscribed.

By June 2012, Greek demand for paper currency had nearly trebled and amid last summers electoral tumult,

the secret missions started in 2011 were once again required.

The response was extraordinary. While issuing public threats to Greeks, in private the Troika authorised

military and commercial cargo planes to feed them euros billions-worth on every flight. They were intended

not only to preserve Greeces fracturing social stability, but also to preserve the single currency itself.

Greeces European partners were worried, and no wonder. The Governor of the Bank of Greece, George

Provopoulos, subsequently explained that if the demand for notes had not been met, an impression would

have been created that the banks were unable to repay depositors.


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It would have caused a collapse of confidence with dire consequences for financial stability and the general

outlook of the country, he said.

A Northern Rock-style bank run in Greece could have spread quickly across the Mediterranean investor

concern had already spread to Italy.

A Troika figure told me: There would have been complete and immediate panic. They had no time.

A billion, two billion per day in banknotes is a lot of money. This then becomes an industrial problem.

The airlift was only the first stage of the mission. Scores, if not hundreds, of journeys by truck and boat spreadthe new notes across the mainland and the Greek islands, from Rhodes to Corfu, from Crete to Komotini.

Staff worked through the night to ensure that bank branches across Greece had sufficient notes to meet

depositor demand, and contain any incipient bank run.

Incredibly, this operation proceeded without anyone noticing. The Bank of Greece tracked demand for paper

money through bank branch orders. It did not have to deploy teams of bank-run spotters as the Bank of

England did in the crisis of 2008.

As far as ordinary Greeks were concerned, the cash machines continued to function. However, underneath

their very noses a monetary revolution was taking place.

The value of notes in circulation in Greece doubled from 19 billion in 2009 to 40 billion in September 2011.By the summer of 2012 the total had reached 48 billion, of which at least 10 billion possibly much more

had been delivered through secret airlifts.

Typically, developed economies have cash in circulation worth between four and seven per cent of gross

domestic product. In 2009 in Greece, the figure was 8.2 per cent. By 2012 it had trebled to 24.8 per cent.

On these numbers, in mid-2012, Greece had a greater value of euro notes in circulation than the Netherlands,

even though the Dutch economy is four times that of Greece.

Tens of billions of euros were yanked from Greek banks in the bank runs of 2011 and 2012, yet the authorities

estimate only a third of it was spent. Another third was taken abroad for investments in, for example, London

property, and a third was hidden under mattresses and floorboards in Greek homes.

It was not long before Greeces near neighbour and cultural sibling, Cyprus, found that it too was in crisis. This

time, Berlin was determined that a large chunk of the bailout would come from savings deposited in Cypriot

banks. Bedlam, bank holidays and bank runs were the predictable result. As dusk fell over Nicosia on March

27 this year, the shouts of protesters were drowned out by the angry buzzing of helicopters and deafening wail

of police sirens.


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Safely kept: Money is seen stored overnight at Central Bank of Cyprus

The uproar seemed to be converging on the Central Bank. Had the previous days sit-down protest by bank

workers turned into a riot?

The truth was much stranger.

At the Central Bank, tense meetings between international financiers, American management consultants,

British Treasury advisers and Cypriot bankers suddenly broke off. Four very large green juggernauts laden

with euros had arrived from the European Central Bank, just hours before Cypruss banks were due to reopen.

An historic just-in-time delivery. That afternoon a Maersk Star Air cargo plane had parked up at the end of therunway at Larnaca airport. Flight logs record that the plane, registration OY-SRH, had flown from Cologne to

Munich in the early hours, and then, via Athens, to Larnaca. It was carrying 5 billion euros in notes not a

bailout, but an epic logistical effort to sate the Cypriot desire for paper money.

The cash had been transferred from the Bundesbank logistical reserve at the request of the ECB. But only

after the Cypriot government had done its homework, complying with Troika demands for economic and

financial reform.

After the notes had been loaded on to the trucks, their journey to Nicosia was accompanied by squads of

police cars, while helicopters buzzed overhead. The cash had come courtesy of Cypruss real central bank,

the one based in Frankfurt, 1,500 miles away the European Central Bank. Effectively, the ECBs threat made

a week before to pull emergency liquidity funding to the islands banks was a threat to withhold the cash that

arrived on this plane. The consequences would have been dire.

It is perhaps understandable that this and the other cash flights remained clandestine but, in their secrecy and

urgency, they offer a window to a still more extraordinary landscape of lies and half-truths told across the

continent to keep the single currency alive.

Greeces membership of the eurozone was, from inception, built on misleading data about the state of its

economy. The Cypriot entry in 2008 was waved through, yet only now have the Cypriots been told that their

main industry, an offshore banking sector, needs to be dismantled amid fears that it has aided tax evasion and

money laundering.

But even these extraordinary lapses pale into insignificance against the two mega lies untruths in the very


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structure of the euro which persist even now, despite the seemingly calmer weather in the currency bloc. A

blueprint for revival is being drawn up in the German headquarters of the European Central Bank. The ECB is

in absolutely no doubt that the euro will survive.

But the people of the crisis countries Spain, Portugal, Greece, Cyprus, Italy and Ireland are yet to be

enlightened by their politicians about the price to be paid: in short, the survival of the euro means much lower

wages for them.

To use the jargon, the Mediterranean countries must be internally devalued, which means pushing down

average wages that had risen sharply, to regain competitiveness and promote growth. The existence of acommon currency means, of course, that old-fashioned currency devaluation the standard method of

achieving these things in the past is impossible.

I know for a fact that two ministers in charge of struggling Mediterranean economies (sadly, they must remain

anonymous) are happy to boast about the scale of the cuts in workers wages when addressing international

bond traders. Would they ever dream of saying this in public? Decisively not.

The public would not take it, one crisis economy minister tells me.

Meanwhile, even in the final weeks of a German election campaign (which Angela Merkel seems likely to win)

the voters remain ignorant that they too must pay a price: that they are about to foot a bill of billions of euros

as Greece heads inexorably for a third bailout.

It will happen safely after the votes are counted, of course.

Germany benefited the most from the introduction of the euro through trade within Europe, a cheaper currency

for exports outside Europe, and ultra-low interest rates on its debts. But it now seems inevitable that northern

European taxpayers, and German ones in particular, will bear a heavy share of the cost of rescuing the

currency.

After all, the northern European taxpayer has effectively replaced bankers in funding Greeces remaining

debts. The first test will come from Greece, which will soon require a remarkable third bailout and yet another

default on its debt, having already had the worlds biggest sovereign default in 2012.

This will be just the start of a process where public debts across the eurozone are shared. A de facto fiscal

union and, soon enough, a form of banking union will follow.

Underlying all of this will be political union a super state.

The Maersk Star Air OY-SRH that landed in Larnaca five months ago was the equivalent of a printing press in

a nation that had ceded its monetary sovereignty. Such planes are a visible symbol of the loss of national

power necessary to prevent the currency itself from crashing.

After the German elections next month, this truth will be revealed. A resumption of the airborne rescue

missions is possible; turbulence is guaranteed. Fasten your seatbelts.

This is an edited extract from The Default Line: The Inside Story Of People, Banks And Entire Nations On The

Edge, by Faisal Islam, published by Head of Zeus at 15.99. To buy a copy for 12.49 with free UK p&p, call

the Mail Book Shop on 0844 472 4157 or visit mailbookshop.co.uk

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Comments (185)

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This article appears to have overlooked one important point, the Euro is not backed by any tangible assets, it is purely paper money

printed on demand, it is worthless in real terms.

- Tony , Bristol-England, 25/8/2013 16:17

Click to rate Rating 8

Report abuse

It may interest readers to know that when the euro was issued Spain was allocated 7 per cent of the 500 euro notes that were

disbursed. It is now estimated that 40 per cent of those notes are now languishing in mattresses in Spain.

- limey dog , Lymington, United Kingdom, 25/8/2013 16:04


Report abuse

The planes full of cash that go to the eu and into their vaults with no accountability are being used to fund the takeover of European

countries and their NWO 'projects' like the building of underground cities in the US which are NOT for us.

- An Englishwoman , Newcastle UK-Tampa FL, 25/8/2013 15:34


Report abuse

...and another thing...vote for UKIP(WHILE THEY STEAL) is a fake party set up by liebour and toerags for suckers who lack the balls

to vote for the only BRITISH party, All the parties are traitors.

- gildedtumbril , South Tyneside, 25/8/2013 15:08


Report abuse

That is an awful lot of toilet paper flying about. Thank goodness it wasn't real money, like the stuff that got Abe Lincoln and both

Kennedys shot...


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- gildedtumbril , South Tyneside, 25/8/2013 15:00


Report abuse

Lets go go go go go go out out out of of of the the the EU. EU. Eu. how many times do you need to be told ???

- Sunny China , Yuncheng, China, 25/8/2013 14:38


Report abuse

And still you have politicians and business leaders insisting we must remain in the EU! They must have so many millions of Euros to

lose if we leave because no one in their right mind can fail to see what a monumental catastrophe the EU is for the people of

Europe. If this isn't resolved soon it will CREATE another war, not stop one and I wouldnt want the UK to be a part of it.

- Excalibur , UK, United Kingdom, 25/8/2013 14:20


Report abuse

"Anyone wondering how our contributions to the EU are spent? Wonder no longer. Meanwhile, our public services continue their

downwards spiral.- Anon, London, 25/8/2013 13:53"..................... I think that this question also applies a little nearer to home. Don't

you ever wonder how your contributions are spent in the UK - and why the country is broke & the public services dire? I'll tell you

why - waste, mismanagement, incompetence, holding on to dogma's and ideals which have long since passed their best before

dates..............

- and another thing... , In the sun, 25/8/2013 14:11


Report abuse

Another reason why the UK should leave the EU - the list of reasons gets longer every day.

- Michael Jay , Cambridgeshire, 25/8/2013 14:06


Report abuse

If Cameron or Merkel want the EU to work then the south has to be cut loose, a Northern Alliance formed with an end to "ever closer

union" and more emphasis on trade and the single market, and the demolishen of the EU parliament would be a fantastic symbolic

gesture. If Cameron can deliver that I'll vote for him.

- Jon1Burd , Cardiff, 25/8/2013 14:04


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The Secret Plane Stuffed Full of Cash That Saved the Euro

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