Can’t Pay, Won’t Pay: It’s Time for Greece to Say No to the Murderous Austerity of Its Creditors

I couldn’t let this week pass without a mention of the crisis in Greece, where the left-wing Syriza government has called a referendum for Sunday, so that the Greek people can either approve — or turn down — the latest crippling austerity package from the Troika of the European Commission, the European Central Bank, and the International Monetary Fund. If they choose yes, the slow death of the economy and of Greek society will continue — a slow death that appears to have no end and will continue, generation after generation — and if they say no, it looks like they will have to leave the Euro, entering uncharted waters and dealing a major blow to the entire Euro project that will have repercussions way beyond Greece’s borders.

I have not written about Greece for many years, but back in 2011, when revolution was in the air via the Arab Spring, and I had recently visited Greece, for a family holiday, just before the collapse of the Greek economy began in earnest, I wrote a number of articles — The Revolution Reaches Europe: Tens of Thousands Protest in Greece and Spain, Crisis in Greece: Experts Call for Return of the Drachma, As Prime Minister Cancels Bailout Referendum, We Are All Greece: Expert Explains How the Greek Crisis is Being Manipulated by Banks and Governments to Enslave Us All (featuring a video in which, as I explained at the time, “Spanish author and professor Pedro Olalla, who has been living in Athens since 1994, discuss[es] the crisis, what it means for Greece, and for the wider European community, in which, in clear language that can be understood by those without specific economic expertise, he explains how Greece’s crisis has largely been manufactured by financial speculators and their willing and unquestioning servants in government”), New Perspectives on the Euro Crisis, and the Need for Greece to Default, Can’t Pay, Won’t Pay: Greeks Rise Up Against Austerity, and, in 2012, Greek Despair: Will the EU and the Bankers Finally Accept That Austerity is Killing Greece? and Austerity Under Attack in Europe: Can Socialism Offer A Cure, and Keep Fascists and Conservatives at Bay?

Some of those previous articles summed up my position, which hasn’t changed since. The Troika’s punishment of Greece for having lived beyond its means (after it was allowed into the Euro project when it shouldn’t have been) is a disaster of almost unbelievable cruelty — a siege conducted using modern methods; in this case, horrendous austerity measures that are so punishing that, as well as crippling Greek society and the economy, with essential services savagely cut, unemployment rampant, and suicides on the rise, are so severe that the economy cannot recover, and, moreover, the debts will never be paid off.

Unless the Troika realises this, and significant debts are written off, Greece’s living death will continue — possibly without end — which appears to be a form of economic torture. The alternative — leaving the Euro — is fraught with problems, which is, I think, an indictment of the failures of the Euro project, as what Greece should have been able to do from the beginning was to devalue its currency to become competitive, which, for example, would have allowed it to become, once again, the cheap holiday destination it used to be, and would have made its exports viable.

Below I’m posting an article from ROAR Magazine (Reflections on a Revolution), which I first came across in 2011 during the Arab Spring. This particular article is by Leonidas Oikonomakis, a PhD researcher in Social Movement Studies at the European University Institute, a rapper with the Greek hip-hop formation Social Waste, and an editor for ROAR Magazine. An unwilling exile from his home country, he chronicles a few key events in Greece’s recent history, and concludes with a cry for support for a “no” vote on the basis that it restores a necessary dignity to the Greek people. I also recommend his colleague Jerome Roos’ article here, which includes the following key passage:

The gravest irony is that, all this time, there was a very straightforward and socially acceptable way out of the deadlock. The sensible solution would have been to write off a significant chunk of Greece’s debt. But, as even the IMF has since officially admitted, this option was politically unpalatable to Greece’s “partners” from the very start. In the early years, the Europeans feared that a debt write-down would lead to the collapse of some of their biggest private banks. Now that Greece’s debt has effectively been socialized, these same European leaders fear an electoral backlash from their Euroskeptical taxpayers, who now stand to bear the brunt of the impending Greek default.

In other words, it was the very intransigence of the creditors, the utter unwillingness to tell their own voters the truth about the Greek bailout and their stubborn refusal to even contemplate a sustainable and socially just resolution of the crisis, that led us to this dramatic apotheosis.

I’m also cross-posting an article by the economist Joseph Stiglitz, published in the Guardian, in which, while conceding that “[n]either alternative — approval or rejection of the Troika’s terms — will be easy, and both carry huge risks,” a “no” vote to the continuing asphyxiating austerity is marginally preferable.

Stiglitz states, in a blunt condemnation of the Troika’s actions, “I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.”

His most penetrating paragraph, however, is the following, which reveals how, throughout the European Commission, the ECB and the IMF, ideology has destroyed common sense and fairness. “We should be clear,” he writes, “almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors — including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other ‘official’ creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.”

I hope you find these articles useful, if you haven’t read them already, and that you will share my compassion for the Greek people, who should not be expected to continue living in an economic nightmare that has no end. As Joseph Stiglitz states, “A yes vote would mean depression almost without end,” whereas “a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands.” Or, as Leonidas Oikonomakis puts it, a “no” vote is “a matter of dignity” — and, I should add, a necessary message to Greece’s creditors that the Troika’s debt machine is all-consuming monster, out of control, which is at least as much to blame as those it lent money to for the inability of the indebted to pay back debts that should never have been allowed in the first place.

No more ‘Yes to all’: time for a proud and dignified ‘NO!’
By Leonidas Oikonomakis, ROAR, June 29, 2015

Finally, the Greek people will be able to say a dignified ‘NO!’ to austerity. We owe it to those who suffered, those who migrated — and those who died.

First Scene: Kastelorizo island, April 2010

The then-Prime Minister Giorgakis Papandreou (son of Andreas and grandson of Giorgos) appeared on state television to send his televised message to the Greek people from the harbor of Kastelorizo: “Our ship is sinking,” he said, “and we have to turn to our partners, the IMF and the EU, who will provide us with a safe harbor where we can rebuild it.”

As the saying has it: “a ship is safe in harbor — but that’s not what ships are for.” However, this is how Greece’s self-destructive dance with the Troika began. At the time, the country’s public debt was at 120% of GDP, the unemployment rate at 12%, the youth unemployment rate at around 30%, and suicide rates were an unfamiliar concept.

Second Scene: Syntagma Square, June 29, 2011

All I can remember is my friends’ faces covered in Maalox, teargas grenades and Molotov cocktails all over the place, even inside the Metro, the riot police going on a frenzy and beating up people, and — above all — the repetition of those “Yes to all!” statements on the radio, expressed by the majority of deputies inside the Greek Parliament.

It was the day Parliament would vote on the so-called mid-term agreement, a new round of austerity measures that included the shrinking of the Greek public sector and welfare state and the privatization of key state assets. It was also during the heyday of the Movement of the Squares, whose activists had called for a 48-hour general strike starting on June 28.

For the day after — the day of the vote — the plan was to “besiege” the Parliament so deputies wouldn’t be able to enter and vote, or if they did so at least they would feel the pressure from outside and vote no. Ambitious plan, you may say, Quixotic even, but that was what the Syntagma Assembly had decided.

It didn’t work.

“Yes to all,” the deputies said … gas grenades were falling … Maalox for those affected … chemicals … “Say no, for god’s sake!” … people fainting in the metro … beatings … arrests … the cops in the square destroying the camp … and yet again: “Yes to all …” I think those “Yeses to all” hurt us more than any of the chemicals or the beatings of the cops.

Third Scene: Florence, June 2015

Like many of my friends, a generation of well-educated young people (owing to the fact that education in Greece is free), I don’t live in the country anymore. Still, I follow the political and economic developments and I try to spread the word of the economic and social destruction Greece is going through as much as I can.

You know, when we were finishing our university studies we were known as the “Generation of 700 euros”: a generation of well-educated young people who were obliged to live on 700 euros per month, the lowest salary in Greece at the time, which was considered far too little for anyone to survive in dignity in Athens, Thessaloniki, or any other of the big cities in the country.

Little did we know back then that, five years later, under the austerity measures dictated by the economists of the Troika and imposed by a series of slavish Greek governments, the lowest salary would have fallen to 500 euros, our parents’ salaries and grandparents’ pensions (which were not that generous either) would have been slashed by 30-40%, that the unemployment rate would reach 28%, the youth unemployment rate 50%, that suicide rates would quadruple, and that a neo-Nazi party would be in Parliament.

At the same time, the public debt skyrocketed to 180% of GDP, the rich (who would obviously benefit from the 40% reduction in worker salaries) kept becoming richer, and many of us (200,000, to be more specific, or roughly 2% of the population) would be forced to emigrate as a result of the crisis. The world’s biggest brain drain, as The Guardian called it.

None of the above is a coincidence. All of this is the direct result of the social and economic policies imposed by the Troika with the help of Greece’s “Yes to all” governments. Exactly the same policies that they are trying to blackmail Greece into continuing today.

However, this time we are being asked by the government — that of Alexis Tsipras — what we really want it to do. And for once, we will be able to say a proud and dignified ‘NO!’, as we had always wanted the deputies who were supposed to be representing us to say! We owe it to our friends who migrated, our parents and grandparents who saw their salaries and pensions being slashed, our comrades who were beaten up and arrested by the cops, and to our dead: to Pavlos and Shehzad Luqman, who were assassinated by Golden Dawn, and to the thousands who committed suicide over the course of the past five years.

It is a matter of dignity — something that can not be measured and cannot fit into the Troika’s economic statistics, but that can give strength to the humiliated to rise up against those who have humiliated them for so long.

Joseph Stiglitz: how I would vote in the Greek referendum
The Guardian, June 29, 2015

Neither alternative — approval or rejection of the Troika’s terms — will be easy, and both carry huge risks

The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend.

In terms of transforming a large primary deficit into a surplus, few countries have accomplished anything like what the Greeks have achieved in the last five years. And, though the cost in terms of human suffering has been extremely high, the Greek government’s recent proposals went a long way toward meeting its creditors’ demands.

We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors — including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

But, again, it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable — not only austerity measures, but other regressive and punitive policies.

But why would Europe do this? Why are European Union leaders resisting the referendum and refusing even to extend by a few days the June 30 deadline for Greece’s next payment to the IMF? Isn’t Europe all about democracy?

In January, Greece’s citizens voted for a government committed to ending austerity. If the government were simply fulfilling its campaign promises, it would already have rejected the proposal. But it wanted to give Greeks a chance to weigh in on this issue, so critical for their country’s future wellbeing.

That concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members’ governments did not seek their people’s approval to turn over their monetary sovereignty to the ECB. When Sweden’s did, Swedes said no. They understood that unemployment would rise if the country’s monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.

And, sure enough, what we are seeing now, 16 years after the eurozone institutionalised those relationships, is the antithesis of democracy: many European leaders want to see the end of prime minister Alexis Tsipras’ leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.

It is hard to advise Greeks how to vote on 5 July. Neither alternative — approval or rejection of the troika’s terms — will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country — one that has sold off all of its assets, and whose bright young people have emigrated — might finally get debt forgiveness; perhaps, having shrivelled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

I know how I would vote.

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University. His most recent book, co-authored with Bruce Greenwald, is Creating a Learning Society: A New Approach to Growth, Development, and Social Progress.

Andy Worthington is a freelance investigative journalist, activist, author, photographer, film-maker and singer-songwriter (the lead singer and main songwriter for the London-based band The Four Fathers). He is the co-founder of the “Close Guantánamo” campaign, the co-director of “We Stand With Shaker,” calling for the immediate release from Guantánamo of Shaker Aamer, the last British resident in the prison, and the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison (published by Pluto Press, distributed by the University of Chicago Press in the US, and available from Amazon, including a Kindle edition — click on the following for the US and the UK) and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. He is also the co-director (with Polly Nash) of the documentary film, “Outside the Law: Stories from Guantánamo” (available on DVD here — or here for the US).