As Greece's anti-austerity SYRIZA-led government seeks a deal to give it badly needed funds to pay creditors and avoid a collapse of its banking system, 40 groups from across Europe are petitioning for Greece's debt to be cancelled.
The groups say the crisis-hit southern European country is not in a position to repay the debt and it should not have to shoulder a burden accumulated by previous governments.
A preliminary report on the audit of Greece's debt initiated by the Greek parliament declared on June 17 that the debt was “illegal, illegitimate and odious”.
Since March 2010, Greece received loans to “bail out” its economy from the European Union (EU) and the International Monetary Fund (IMF). But questions over the legitimacy of the debt centre on who benefited from the bailout funds.
An investigation by ATTAC Austria found at least 77% of the bail-out money went to the financial sector. These findings counter arguments by European leaders who argue it was the Greek population that mainly benefited from the rescue packages.
In fact, the funds were tied to Greek governments agreeing to brutal austerity measures that have created a humanitarian crisis in the country.
Under pressure from Berlin and Paris, billions of euros flowed from the bailout funds to Greece's creditors. There has been no transparency surrounding the way the funds have been handled and who has benefited from them.
ATTAC’s report revealed the “main goals of [the] government's crisis management policy since 2008 has been to save the fortunes of the wealthiest. The political elites accept tremendous unemployment, poverty and misery — to save a sector beyond remedy.”
The EU and IMF have reneged on promises and withheld needed funds by weeks. This has raised pressure on Greece and forced the government to issue more short-term bonds to avoid bankruptcy. Since these bonds carry very high interest rates, this further raises the Greek debt.
This is the main reason critics say the aim of the “Troika” of the IMF, EU and European Central Bank is not to help Greece out of debt. Rather it is to push it to the reforms it wants — more austerity and the destruction of workers’ rights.
Greece has been on the front line of the economic crisis in Europe since late 2009. It has become a symbol of how the global financial system favours the interests of banks and elites, to the detriment of ordinary people.
War on Want, one of the groups calling for debt relief, said investigations into the origins of the Greek debt crisis have started to uncover its true causes. These include lending by irresponsible European banks, borrowing by the corrupt Greek elite, and a global network of tax havens that allowed money to flow out of the country.
The petition calls for “recovering money from the banks and financial speculators who were the real beneficiaries of bailouts”. It calls for “an end to the enforcing of austerity policies that are causing injustice and poverty in Europe and across the world”.
Instead, it advocates “the creation of UN rules to deal with government debt crises promptly, fairly and with respect for human rights, and to signal to the banks and financiers that we won’t keep bailing them out for reckless lending”.
The Greek situation draws strong parallels with that of Ecuador, which in December stopped payments on 2012 and 2030 bonds.
The Ecuadorian government's partial debt default came after a commission charged with auditing the debt ruled the initial negotiation process for contracting the debt was riddled with irregularities and the bonds were “illegitimate”. These were similar findings to the recent audit in Greece.
Speaking in Brussels in May, Ecuadorian President Rafael Correa said of Greece's debt: “All those measures are not meant to overcome the crisis, they are just to liquidate the debt.
“On one hand, they give money and funds to you, on the other hand they impose you some harsh measures: low salaries, no allowances, mass dismissals in the public sector … it is to find the money to pay a private debt.
“So, at the end of the day countries are indebted with multilateral treaties. All this just to guarantee a private debt. The common people get nothing. They are not out of the crisis.
“We see that all this is being repeated in Europe. It means the absolute supremacy of capital over human beings on behalf politics.”
[Compiled from TeleSUR English.]
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