The Troika’s Policy in Greece: Rob the Greek people and give the money to private banks, the ECB, the IMF and the dominant States of the Eurozone
On
20 August 2018, the Greek government of Alexis Tsipras, the IMF and
the European leaders celebrated the end of the Third Memorandum.
On
this occasion, the major media and those in power spread the
following message: Greece has regained its freedom, its economy is
improving, unemployment is on the decline, Europe has lent Greece 300
billion and the Greeks will have to start repaying that debt in 2022
or in 2032.
The
main claims are completely unfounded as Greece remains under the
control of its creditors. In compliance with the accords that the
Alexis Tsipras government signed, the country must imperatively
achieve a primary budgetary surplus of 3.5% which will force it to
continue brutal policies of reduction of public spending in the
social sector and in investment. Contrary to the dominant message
that Greece will not begin to repay its debt until some time in the
future, it should be clearly understood that Greece has been repaying
considerable amounts constantly all along to the ECB, the IMF and to
private creditors, and this prevents it from responding to the needs
of its population.
by
Eric Toussaint
Part
21 - The disappointed hope of 2015
In
January 2015 the Greek people voted Syriza into government on its
promise to put an end to the MoA. While the Tsipras government was
merely a week old, the ECB took an utterly ruthless measure to put
maximum pressure on Syriza. On 4 February 2015 it announced that
it was shutting off Greek banks’ access to the liquidities it
granted; this was clearly part of a swift and aggressive strategy to
destabilize the Greek government. Faced with such aggression the
Tsipras government should have responded with bold daring.
The
demand included in the Thessaloniki Programme should have been put
forward: the cancellation of most of the debt, explaining that it was
illegitimate, odious, illegal and unsustainable. Of course, European
leaders could not accept this request but the Greek government could
have developed an international campaign of explanation in order to
gain broad public support. It could have initiated an audit process
and declared a moratorium until the audit was completed.
It was
essential not to get caught in the wheel of repayment. It was
necessary to use the principle of international law that allows a
state to declare a moratorium on payments in view of the state of
necessity in which it finds itself.
The
existence of a humanitarian crisis was the indisputable proof of such
a state of necessity. The following reasoning had to be developed:
“We are launching an audit (with citizen participation) because
what is at stake is finding out why we have reached such a high level
of indebtedness – national and international public opinion must
know. We do not anticipate on the results of the audit, but it is
only normal for payments to be frozen during an audit. Therefore, we
suspend repayments during the audit, except for short-term debt. We
were elected to replace the Memorandum with a new reconstruction
plan. Let’s give time to the negotiation process and meanwhile be
patient as we suspend scheduled payments on long-term debt.”
If it
had launched and used an audit process, the Greek Government should
have said, in order to strengthen its position vis-à-vis the Troika:
“I am merely enforcing Article 7 (9) of Regulation 472 adopted
by the European Parliament on 21 May 2013 requiring EU Member states
subject to a structural adjustment plan to carry out a full audit of
their debt in order to explain why the debt has reached an
unsustainable level and to detect possible irregularities.”
Payment
suspension had to be urgently decreed, for instance on 12 February
2015. Indeed, between 12 February and 30 June 2015, Greece was to
repay €5 billion to the IMF. If we take into account the other
amounts to be paid to the IMF in 2015, an additional €3 billion
must be added. The ECB demanded repayment of more than €6.5 billion
to be made in July-August 2015.
Action
also had to be taken regarding banks. As the ECB took the initiative
to intensify the Greek banking crisis, it was necessary to act at
this level as well and implement the Thessaloniki Programme which
said: “With Syriza in government, the public sector will take
over control of the Hellenic Financial Stability Fund (HFSF) and
exercise all its rights over the recapitalised banks. That means that
it will make decisions about the way they are run.”
It
should be noted that in 2015 the Greek State, through the Hellenic
Financial Stability Fund, was the main shareholder of the four
largest banks in the country, which accounted for more than 85% of
the total Greek banking sector. The problem is that, because of the
policies pursued by previous governments, its shares had no real
weight in the banks’ decisions because they did not entail the
right to vote. It was therefore necessary for the Parliament, in
accordance with what Syriza had pledged, to transform the so-called
preferential shares held by the public authorities (which do not
entail voting rights) into ordinary shares giving the right to vote.
Then, in a perfectly normal and legal way, the state could have
exercised its responsibilities and provided a solution to the banking
crisis.
Finally,
two important steps still had to be taken. Firstly, in order to deal
with the banking and financial crisis sharpened by Stournaras’s
statements since December and by the ECB’s decision on 4 February,
the government should have decreed a control of capital movements in
order to put an end to flight of capital out of the country.
Secondly, it should have set up a parallel payment system. Varoufakis
claims that he had a concrete proposal in this respect but he did not
propose to implement it following the ECB’s aggression on 4
February.
What was
needed was to issue a call to international solidarity before public
opinion, social movements, political parties and to encourage, as a
government or as Syriza, the creation of solidarity committees in as
many countries as possible while negotiating with creditors so as to
develop a wide global movement of solidarity.
Let us
recall that from the end of February 2015 to the end of June 2015,
Yanis Varoufakis and Alexis Tsipras made repeated statements aimed at
persuading public opinion that an agreement was in sight and that
things were going to mend. If after each major negotiation meeting
they had on the contrary explained exactly what was at stake through
press releases, oral declarations to the media, speeches on public
squares, in front of the seats of European institutions in Brussels
and elsewhere, if in other words they had shed light on what was
being plotted in the shadows, it would have resulted in gatherings of
tens of thousands of demonstrators; social networks would have
relayed this alternative discourse to hundreds of thousands or
millions of recipients.
Tsipras
and his government did not choose this path of resistance. They
vainly attempted to reach an agreement with European leaders. In
their bid to win them over, they repaid the country’s public debt
on the dot. This means they emptied the public treasury to pay €7
billion from February to end of June 2015.
Faced
with the harsher demands of the European leaders, who refused that
the government meet its promises to the Greek people, Tsipras called
a referendum that was held on 5 July 2015. On that day, the Greek
people rejected the creditors’ demands with 61.5% of votes. A
couple of days later, Alexis Tsipras betrayed the popular mandate and
capitulated in Brussels.
Yet an
alternative to capitulation was possible and necessary, as we have
repeatedly shown. On the basis of the Truth Committee on Greece’s
Debt’s findings as presented to the Greek Parliament on 17 June
2015, it was possible to suspend debt repayment and combine the
decision with a number of measures relating to banks, taxes,
currency, privatizations, wages, retirement pensions, etc. The Greek
people would have supported such a programme, as shown by the
referendum results.
Instead
of showing the courage to implement alternatives, the Tsipras
government dragged their country into the gruelling experience of a
third Memorandum that ended on 20 August 2018.
During
the three years covered by the third Memorandum, attacks against the
economic, social, cultural, civil and political rights of the Greek
people multiplied as a consequence of decisions made by the Tsipras
government, which consistently yielded to the demands of European
leaders, Greek and foreign big capital and the IMF.
There is
no cause for celebration as the third MoA comes to an end because
Greece has not recovered its freedom to act. It is constrained by a
number of binding agreements and the burden of the debt that is
exacted will remain unbearable for a long time to come.
***
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