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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

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

While social security or public health care did not exist in the 1930s, Greece’s predicament today is equally dire.

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

 

The views expressed in this article are the author's own and do not necessarily reflect the publisher's editorial policy.

7 Responses to A humanitarian tragedy imposed on Greece

  1. iflyjetzzz Reply

    June 21, 2015 at 5:42 pm

    This article is littered with errors and does not address the Greeks’ culpability in their economic downfall.

    “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.”

    Wrong; the Great Depression exceeded 25% . And there was far more deep GDP declines throughout history than the US Great Depression. https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States Plenty of depressions in the 19th Century were steeper than the Great Depression.

    “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.”

    NOTHING is stopping the government from taxing the rich. It’s all talk, no action on Syriza’s part.

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

    The EU has made it clear that the Greek government can make alternative reforms, such as taxing the ‘rich’.

    “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).”

    And yet corporations do not thrive in Greece due to Greece’s anti-capitalist policies.

    I could go on with the many errors in this article, but this is a Greek problem. Greece took the economic gifts handed to them when they joined the EMU (much lower interest rates, for example) and pissed them away. And tax evasion is a national sport in Greece. Yes, their problems lie squarely at their own feet. But go on and blame others for Greek failure. Grexit can’t come soon enough.

    • Christopher Walker Reply

      June 23, 2015 at 1:34 pm

      I’m thoroughly disgusted and appalled of the level of MSM and bankster shill propaganda against Greece – that they are a nation of lazy, tax dodging loan defaulting thieves. The statistics show otherwise.

      The longest work hours in Europe and the 2nd in the OECD countries. They work over 2000 hours per annum. Compare that to Germany’s 1400 or so. The USA is about 1800 and UK 1650.
      http://www.oecd-ilibrary.org/employment/average-annual-working-time_20752342-table8

      They pay 22% of GDP in taxes and for a relative lowly paid country that’s quite a lot. Compare that to Germany’s 11.5% and the USA’s 10.6%. The people who dodge tax in Greece and other countries are almost the wealthy and are very difficult to apprehend. Some pathetic countries are even incapable of apprehending known tax dodgers where the bill paid would be in the hundreds millions/billions.
      http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS

      As for defaulting. They’re not the only European country to do so. Most of these defaults seem to be due to some war or crisis.
      http://en.wikipedia.org/wiki/List_of_sovereign_debt_crises

      There are always bad loans made and the lenders need suffer for it as part of their business for which they make provision.

      The German banks made many loans as way bribes to buy German goods and also to bribe Greek and other countries’ officials to pay over the odds for German goods. The former Portuguese PM is currently awaiting trial in Portugal for accepting a 20 million Euro bribe for buying German submarines, a case which has been hushed up in Germany who also bribed Greeks to buy their submarines, which were lopsided. So much for German precision engineering.

      The evil done here was that the Germans, via their control of the EU, forced their bad commercial loans to be placed on the shoulders of the Greek public. Their action is a disgrace and the more so since the Germans try to disguise it in some form of high mindedness when they are flesh eating Shylocks of the worst order.

    • Anonimo Reply

      July 3, 2015 at 5:33 pm

      Iceland resolved its problems by refusing to shoulders the banksters losses on taxpayers shoulders. They let the banks to default and put bankstes in jail.
      Unfortunatley, the greeks taxpayers were forced to shoulders there private banks losses, just like in USA, UK, Spain, Ireland, etc.

  2. iffycliches Reply

    June 21, 2015 at 10:40 pm

    “And tax evasion is a national sport in Greece. Yes, their problems lie squarely at their own feet. But go on and blame others for Greek failure. Grexit can’t come soon enough.”

    It’s not a national sport, it’s survival. I like how you ignored the whole part on the suicide rate and humanitarian crisis.

    For 9000 euros income A YEAR I was taxed for 7000. Just sit for a moment and imagine that. Also sit for a moment and imagine trying to exist with 500 euros income a month and with just rent being 200-300 euros. And that’s not even the worst part. Imagine trying to exist with no income at all.

  3. waky wake Reply

    June 29, 2015 at 12:44 pm

    It seems to me that Greek Prime minister, Alexis Tsipras and his leadership group made the decision to leave the Euro-zone weeks ago. I see their recent call for a July 5th voter referendum on whether to except the EU and IMF’s latest loan extension offer or not as a pre-scheduled umbrella tactic, designed to buffer them against the inevitable public-hardship fallout that will undoubtedly come, as the country transitions from the euro to their own, or a bridge currency. I suspect most Greek citizens understands this by now, so if they vote “NO” to this latest EU/IMF loan extension offer, it means they really want to leave the euro-zone and want to operate their economic interests through the BRICS system. They would have to transition to the BRICS system, because the U.S. controlled entities {IMF/WTB/ECB} would punish Greece by having them suspended from the SWIFT system, until their previous loans from said entities were satisfied and that will take a good long while, if ever.

    • anita Reply

      July 21, 2015 at 4:18 pm

      Once BRICS completes development of their own monetary transaction system, Greece will jump into BRICS, if they haven’t agreed already to do so. It is so unfortunate the average public must suffer so – and the puppet masters continue their evil games for personal profit through the centuries – unabated! “Humanitarian tragedy” is a nice way of titling this evil.

  4. Aridzonan_13 Reply

    June 29, 2015 at 3:36 pm

    Greece and any other country that is being harvested by the Anglosphere’s International Banking System, should take Iceland’s lead.. Iceland did everything “the pundits” said could not be done. They repudiated their fraudulently induced debt, jailed a PM / a few upper level bankers and held a lottery for their national elections. This was to make sure none of the rascals or their cohorts returned to power. Hence, Iceland’s bonds have steadily increased in value. I guess the rule of law works if you have the stomach to employ it. Selective enforcement of the law is how this problem began.

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