A humanitarian tragedy imposed on Greece
June 20, 2015, 6:12 am

As I began to write these notes in the late afternoon on June 19 (Brussels time), EU ministers were still discussing a way out of the ‘Greek crisis’.

To Grexit or not to Grexit, that’s the question.

By the time my remarks are published, things may have changed considerably. Or then again, they may not.

There’s talk of a meeting of heads of states next Monday to tackle the issue ‘on a political level’. As if until now the crisis had not been political.

Before we discuss the options available to the Syriza government lead by Alexis Tsipras, we need to assess what the ‘Greek crisis‘ actually means.

Without ignoring the financial problems that the country is facing, there is a need to acknowledge that what Greece faces is much more than just another economic crisis.

The austerity program imposed on Greek society is a humanitarian tragedy.

Greece has lost more than 25 per cent of its GDP over the last five years. This is without historical precedent.

Even the Great Depression more than 85 years ago was not this bad.

Greek Prime Minister Alexis Tsipras with German Chancellor Angela Merkel [Image: gov.gr]

The unemployment rate among the young is as high as 60 per cent and public health care is down to Third World levels.

A country which once had one of the lowest suicide rates in the world, it is now on top of the list.

Yet, this human tragedy is not the reason why things risk getting out of hand.

The EU institutions (European Commission and European Central Bank) and the IMF dispatched their representatives to Athens every three months for the last five years to assess and impose their agenda.

So they know.

They are fully aware of the impact austerity measures have had on Greek society.

Different narrative

The real reason for the present political escalation is that the people of Greece in January 2015 voted and said no to further austerity.

The Syriza government, which was voted into power then, has come up with totally different solutions for repayment of the national debt: taxing the rich is one of them.

Since the crisis unfolded in 2010, the EU has never insisted on taxing the wealthy – everything had to come from wage and pension reductions.

Even today, corporations do not need tax evasion, they have total tax exemption, a generous gift in the Greek constitution inherited from the fascist dictatorship (1967-1973).

For the EU this has never been a demand for reform – and one wonders why.

The Western media has sold the idea that the crisis is borne of a flat Greek refusal to accept reasonable reforms.

In reality, what we have is a total refusal from the EU side to even consider the Greek proposals for a reform of the fiscal system.

Why? This is not about money; it is about politics and about ideology.

Countering orthodoxy

For Brussels, it is out of the question that any EU country could come up with solutions to the crisis that would go against prevalent orthodoxy.

The EU wants to send a strong message not just to the Greek people, but also to Spain.

Spain is not a tiny economy in the EU. The idea that Spain might also elect an anti-austerity government come November is unacceptable. Therefore, Athens must be humiliated and defeated.

The Greek parliament has installed a committee of experts to establish the constitutionality of the Greek debt. On June 17-18, Eric Toussaint, head of this committee, presented preliminary findings. The hypocrisy is astounding .

Here is what the inquiry found (in a nutshell). The Greek financial situation in 2009 was bad enough, but not much worse than other countries.

The situation of the Greek public debt was purposely dramatized for entirely different reasons. The private banks in Greece were on the verge of collapse and were going to take down several French, German and Dutch banks with them.

The committee found reports and documents to corroborate the conclusion that the EU decided to sacrifice the Greek state budget to save these European banks.

The IMF in an internal report of March 2010 knew already that the conditions of the 2010 memorandum for the loans to Greece would lead to a social blood bath, and to a collapse of the economy.

They knew that the loans were unsustainable, as confirmed by the facts five years later.

Then head of the IMF Dominique Strauss-Kahn – hoping to become president of France – hoodwinked his own board of directors to accept the loans to Greece.

The EU blackmailed the Greek parliament to vote an 800-page memorandum within 24 hours of receiving it or the ECB would terminate liquidity assistance.

Toussaint’s conclusion: the Greek debt is illegal, illegitimate and odious. More details will follow in the coming weeks.

There is near complete media silence about this all over the EU.

Putin? Or Obama?

This is the reality of the situation.

What options does Alexis Tsipras have? Not that many, but still enough to make EU institutions very nervous.

A complete takeover of the Greek debt by Russia, China or the BRICS-bank is not a realistic option. Russia does not have the money and neither Russia nor the BRICS countries want to antagonize the EU even further.

But president Putin might give more indirect assistance. That could give Athens still more time to insist on their kind of reforms.

Then there’s the other elephant in the room, the one that everybody keeps pretending not to see. US President Barack Obama has on several occasions insisted on a more pragmatic approach by EU institutions.

He does not do that out of admiration for the present Greek government, let alone out of respect for democracy. What really worries him is that Greece might leave NATO as a consequence of leaving the euro and of finding other beneficiaries in the region – Russia.

I do not consider a Greek default a possibility. The risks of such a scenario are just too high for the EU and the eurozone. Things might still get out of hand, but I honestly don’t think it will get to that.

But even if a workable situation is found to keep Greece in the eurozone in a manner acceptable to the Greek government, what is there to stop Greece from further developing economic ties with Russia.

After all, should we not expect that Greece might want to ‘diversify’ its economic interests, following what it has endured since 2010.

All options are on the table.

The author also contributes to the website DeWereldMorgen.be