The blood sucking of the insured by the stock exchange

Submitted by GrouchoMarxist on April 25, 2012

From the ’50s all Greek governments found in the insurance funds an unlimited source of cash which they systematically robbed in order to fund their stay in power.

With laws voted by the gangs of the parliaments, throughout time the insurance reserve funds were robbed “legally”, with which the State funded the policies of capitalist growth. Today the usual tactic of robbing the insured by the governments has become even more imperative not only because of the large State deficits, but also because the depreciation of insurance funds constitutes a strategy of political importance so much for N.D. as well as PASOK.

While the procedure of political and economic bankruptcy of the insurance system in Greece goes ahead since the ’90s independently of what government is in power, the government of N.D from the first moment it came into power in 2004, first promised directly to the insurance companies via Karamanlis, the “reform” of insurance policies and the privatization of insurance.

The insurance reform opens a new field of exploitation by capital, promises mythical profits from the private exploitation of insurance and its utilization becomes even more imperative today amidst the crisis that eats away at the profits of the capitalists. Already the vultures of the bankers under the name “Union of Institutional Investors” persistently apply pressure so that they can get the reserve funds in order to “invest” them.

Greek governments for years now are used to, through their appointed people in the leading positions of funds, buying with the reserve of the insured invested products, which are appointed to them by unscrupulous individuals who either hold chairs in ministries or excel in brokerage and investment businesses.

The known revelations about the bond of €280 million which was secretly printed by the general accounting office, went through a speedy process of re-sales and ended up over-priced to the pre-arranged buyers which were four funds {TAEDY (Greek pension fund), TEAPOKA (social insurance workers auxiliary pension fund), TSEYP (news vendors and press agency employees pension fund), TEFY (pharmaceutical workers pension fund)}, and showed that the perpetrators and their practices had all the characteristics of a multiplex criminal organization.

Secret deals between State and economic factors, underground re-routing of hundreds of millions of euros for the cover-up of State deficits and reinforcement of party funds, systematic looting of the funds of the insured by the gangs of international financial and investment conglomerates (i.e. JP Morgan) and the vultures of domestic financial businesses (i.e. Akropolis), bribes of many millions of euros that ended up in the pockets of politicians and sectors of the market which were the protagonists of the big scam.

And since we know that a part of the truth saw the limelight and since more bonds were printed and sold to more than the already known ones, we realize that the magnitude of the crime is incalculable for millions of insured.

The policy of managing the reserve through the capitalist market, their increase or decrease depending on the performance of investment tools, has now been legalized in the conscience of most.

This is why the criminal history of placing millions of euro from many funds into different financial derivatives they call “structured bonds”, while it should have become a reason for a social explosion because of the audacity of governments to use the reserve of those insured to feed their hidden accounts, fund State deficits, making themselves richer and finance multinationals, instead of it becoming a reason to overturn the policy of using this social wealth for investments in brokerage products, on the contrary, we saw a ridiculous critique being developed starring the media and political parties, which focused on bribery and the violation of the terms of the market itself in the sales of “bonds”, which were bought from the “capped” funds.

The matter now is not about if the money of the insured should be used in stock market gambling or not – this is considered legalized in the people’s minds – , but if this is happening based on the laws of the markets, if the managing is done by “specialized institutions” and if the agreements are of “of interest or not” for the funds.

This way, no one refers to the great theft that happens to IKA (social insurance organization) through the AEDAK (collective investment scheme), the activities of which, as well as the real accounts, are permanently covered by a shroud of mystery. This specific company which is essentially led by the National Bank, was composed with law 1902/90 in order to control the IKA reserve, and has assumed management of the reserves of OGA (farmers insurance organization) and OAEE (insurance organization for the unemployed).

The big feast with the reserves of the above funds takes place with the blessings of N.D. and PASOK. Besides the fact that part of the known structured bonds were specifically bought from AEDAK – a fact kept silent-, a large part of the reserves are used for the purchase of shares from the managing banks.

The large financial conglomerates of Greece Alpha, EFG, Eurobank, National and Commercial bank through their affiliates, have managed a partnership through AEDAK and snatch the incomes of those insured by financing their scams and filling their funds. As well they have transformed the funds into garbage bins where they throw away the mutual bonds they printed for the listed in the stock exchange and for which they cannot find another buyer. In the fund with the submissive managements that are controlled by the two major parties, they find the always willing buyer for all their investment garbage.

Let’s remember 2007 when the looting of the funds through the structured bonds became known, much of the media spoke of the “sound management of the AEDAK of the insurance funds” where “specialists in financial markets” (the vultures of the National Bank and other banks) “manage the capital of the funds bringing profits, and not the party superiors, who know nothing about financial matters and additionally they are easily bribed”.

Let’s remember that the example of the insurance funds and AEDAK was used repeatedly to urge other funds to follow the same tactic. Today, specifically let all those who spoke then about the AEDAK tell us, when has IKA and the other funds seen their drawers fill up from the “high returns of sound investments” that the company made? Mainly let them explain to us why, despite that the “good management” they announced took place, OAEE has empty drawers and is selling-off assets to pay those insured? Let them explain to us how IKA, the largest fund in the country, almost collapsed and how one fund after another finds it impossible to cover its responsibilities towards those insured.

And while the financial capital in Greece eats the reserves of the funds with the blessing of the State, the government of Nea Dimokratia passes one law after another for the reform of the insurance system and after contributing greatly in the looting of the funds, pretends to legislate for their salvation.

From the beginning of the ’90s, both governments of PASOK and N.D. voted a series of laws that increased the pension age and increased the contribution of the workers, while decreasing the contributions of employers (Sioufas law), decreased the pensions themselves, cut the early retirement pensions (Reppas law), undermined the public pharmaceutical health-care and at the same time pushed the funds deeper and deeper into the quick-sand of stock investments.

The workers terrorized by the heavy changes in the insurance system that the government passed in 2008 and having to deal with even worse terms of retirement – if they are allowed to, by the age limits that keep on going up -, turn more and more to private insurance companies. This reaction of the workers does not concern a non-desirable casualty of the insurance reform, but a desirable outcome for N.D. as well as PASOK, which comes as a result of a long-term policy of theirs for the depreciation of the public insurance system.

The privatization of social insurance means that the insured take on the weight of their insurance and are left completely to the appetites of the markets, or otherwise the financial authority, which the only thing it wants from this procedure is even more margins for profit.

The demands of the insurance companies, the financial institutions with interests in the insurance markets and the major businessmen who ask for even more decreases of their contributions to workers insurance, has succeeded in many countries, the partial and in others the complete, privatization of the social insurance system.

Insurance companies and major pension funds are in our days one of the largest categories of institutional investors managing more than $12 trillion worldwide. On the other hand, the explosion of mergers of the last years brought the insurance companies to connect organically with other multinationals of a different kind (see. Allianz with Siemens) gaining a leading position in the global market. The modern multinationals – multiform monstrosities created through a long period of accumulation -, now set as a target the control of the pension system of the countries where either it’s still public or it’s under partial control of the markets.

In countries where the State has completely destroyed the public health care system, such as the U.S.A., workers pay increased contributions to secure a questionable-sized pension and their fate has been identified by the speculation of the company in which they are insured and the course of its stock. The collapse of large companies – common phenomenon in our capitalist era – might not mean the economic destruction of the large shareholders and managing executives – who usually abandon ship before it sinks -, but definitely means the complete destruction of those who not only lose their jobs but mainly, lose their contribution which they paid until the moment of the collapse in order to have health care and a pension.

With the contributions of those insured, large sums are gathered that are diverted into the stock market for “investments”. This way Capital manages another raw looting at the expense of the workers. In stock market gambling the reserves of the funds are used as a “mound” in the increasingly larger investment risks taken by major investors. Pension funds were a main buyer of the securitized debts from the banks that opened the market for mortgage loans in the U.S. And it is not of course the first time this happens. It’s a usual practice as we know very well from the Greek example of structured bonds.

In a similar way the insurance funds in Greece and even before the privatization of social insurance was completed, become a mound in the current crisis protecting the Greek financial institutions. The unrestricted snatching of the reserves of the funds by large-scale capitalists is carried out for years with the blessings of the governments of N.D. and PASOK, the other parties and the media, filling the pockets of the major investors, who either directly or indirectly are connected to the vultures of the banks which manage the money of the insured.

It is an intermediate stage before total privatization, for which in order to happen, presupposes the complete depreciation of the funds and the collapse of the existing insurance system. This depreciation has already happened and this is proved by the fact that the government just recently went ahead and printed bonds worth €4.6 billion to cover the major financial needs of IKA, a fact that confirms the collapse of public economy and justifies the rush to the polls on October 4th [2009].

If this course is not overturned by a major social revolution, in the immediate future the economic indices of businesses, their competitiveness, their position in the market, will determine the level of pensions and health benefits.

The fate of the capitalist will become our fate. We will see in their riches the possibility to have a decent pension, we will see their economic difficulties as our obstacles in health and the threat we might find ourselves in the social margin as we get older. We will see the trembles of the freemarket as a threat to ourselves and when the company collapses (just as it happened with Enron in the United States and with the dozens of companies that collapse today because of the crisis) our contributions, or whatever is left of them, will be in the luggage of managing executives which will be abandoning ship as it sinks, and the right to insurance will drown in the shipwrecks of company interests.