¡ LIVE NOW @ live.novaramedia.com !
deep state nurses psoe space strikes ukba zac goldsmith dilma rousseff nuit debout whiteness mexico bjp fianna fail subversion ttip Niki Seth-Smith ref free trade borders orientalism treasury work ethic demographics tabitha bast reclaim the streets comedians david cameron ncafc bae systems telefonica native tories pablo iglesias ACAB denis o brien BBC rbi remembrance foreign policy nato france occupation left bloc libspill jo cox sexuality antifascism kurds marx barcelona en comu michael gove election fraud bonuses london mayor survivors star trek refusal of work world cup asylum malcolm turnbull cost of living novaraeu value capitalism blockadia eire latin america accessibility music establishment university brazil mike brown assad desire full unemployment zero hours mubarak help to buy christianity independent media basic income migration chuka umunna presidential race 2016c utopia nypd climate citizenship mayoral election employment mental health week iww social cleansing right to buy trolling romania magdalene laundries millbank teachers chris grayling pops interest UKIP consumption clegg eastern europe red wedge pay gap malcolm x housing crisis 15m justice inflation owen smith bulgaria money environmentalism roma ethics projects democracy human rights airstrikes rojava obr wallasey bouchart martin lewis malawi start up videos social housing bis 22o extraction imf david harvey europe jo johnson hotels easter rising ulu rmt holocaust tsipras print media hsbc climate change turkey #elite coup electoral reform reshuffle idf future radicalism trident evictions slovakia privatisaton sadiq khan asia housing migrant labour technology nus digital media birmingham costas lapavitsas uffc ahora madrid crisis yes scotand occupy izquierda unida britain first student strike athens green party prison europe week cameron communism risk precarious europe e-voting magna carta erdogan indonesia indignados asn spain privatisation unite ferguson yemen spaceX catalan independence momentum nicky morgan tesla uk uncut labour split deportation palestine rent Aaron Bastani sturgeon diane abbott universities morality transport another europe is possible rhodes solidarity free education dover daesh Policing global south nuclear safety long read global warming geography big pharma gender neoliberalism debt james meadway journalism owen jones work deficit peter singer populism antiziganism dan whittall is renting tax reform sexual violence Secular Crisis salmond boko haram rotherham john mcdonnell rpi philanthropy hillary clinton westminster cantona legitimacy arts security grants iraq angela mcrobie gdp uk tampon tax workers reparations david willetts food lexit fbu law legal aid masons corruption catalunya arran james ukraine mental health lse books Media bias engels fortress europe palm oil progressive alliance migrant reproductive rights nick clegg dale farm george osborne social networks unidos podemos pluralism heathrow mark regev football care work democrats comedy saudi arabia modern monetary theory cnd uprising Tom Abree stealing women ge2012 war fuel poverty pay greece petrobras eurovision bnp marketing depression netanyahu west papua frankfurt jesus natalie bennett financialisation riots suicide grassroots organising columnism andrew dolan social strike picketprofiteers anarchism bank of england brexit oxi freefede boris johnson student loans architecture mcgettigan vaga de totes genocide yarls wood north alienation hydra welfare state post-capitalism mitterand revolt of the ladders class struggle james butler alia al ghussain arms industry germany he blockupy forest fire hospitality automation orange order Tuzla gangs no borders ultras cooperatives property Claudia Jones academies bingo theft housing benefit sexual assault terrorism landlords literature internet willetts Tory south america paris attacks novara10k sian berry elon musk austerity IndyRef individualism synthetic hedge wages ireland india armenians middle east silicon valley precariousness lgbt catalonia miners strike soas monarchy labour leadership greek election private schools international brigades syrian civil war plaid cymru labour movement class tuition fees syriza international privatization culture uber sweden uk industry YesVote benefits government womens liberation visas rusell brand precarity estate pedagogy social democracy international development ual gaza politics organising tony abbott privacy barclays results trans egypt racism australia secret employee business barts health isis young people refusal arab spring tax evasion pasok energy proportional representation higher education production television loans immigration hague syria portugal panama papers bds productivity fascism age ello review universal basic income iwgb schools pop culture anti-capitalism spending tactics ge2020 police brutality marxism cop21 usa obama relationships calais working class armenia maria miller free papua balls putin unionism west bank sexism Adam Ramsay libdems christmas charlie hebdo charlie lahr theresa may memes national liberation electoral fraud strike mark carney Scottish Independence morsi radical reformism angela eagle living wage political economy Gentrification demands councils golden dawn arms trade state cup buy-to-let environment united left olympics cpi british empire clr james house of commons novara wire deflation funerals sussex irish water hollaback unions blair wales andy burnham general election care tabloids atheism leaders debate news cable libertarianism economic ge2015 local media kurdistan public sector canada inequality new democracy student politics pharmaceuticals refugees junior doctors newham university of london lawrence and wishart scotland socialist isil pasokification police violence squatting omar aziz housing action michel temer crimea nhs revuelta de escaleras industry strategy of refusal publishing warwick post-industrial Police pfi Labour Party not fair not safe degrowth deselection intervention ipr #copsoffcampus ucl monogamy revolution media bma eu referendum burnham sinn fein support conference season property guardians youtube jeremy hunt manifesto reappropriation cities bernie sanders kobane ciudadanos glasgow focus e15 left charity bell hooks uaf data electoralism carpenters aboriginal eurozone hamas autonomism grexit apps radical housing network Elections sophie lewis couriers eric pickles northern ireland workplace reappropriation james meek fees religion effective altruism aristocracy science budget2014 sport social reproduction Race china cuts conchita madness lobo unemployment eleanor penny mhairi black extremism al qaeda gypsies tax industrial action feminism gary barlow communities zabludowicz crime mark zuckerberg infidelity ludova strana nase slovensko reselection freedom of movement local government edl property rights maps growth boycotts travellers rape culture student movement islamophobia krugman sussex five podemos education bias romanichal psychiatry Centre Left far-right labour budget protests migrants kerry Dawkins tube house of lords paul nuttall nef radical lives rob ford troika ucu domestic violence nationalism tower hamlets ecology colonialism mob health free speech primaries coalition utilitarianism open democracy corbyn economics queer armenian genocide met socialism romani England trade unions student debt protest politicians drones steel industry colombia social movements global debout jobs jeremy corbyn rape students free syrian army eu people's assembly poverty detention london rabina khan israel direct action caroline lucas modi rent strike m18 homelessness oil bennett new labour snp bullshit jobs footwear spanish election foreign aid post-fordism left unity london underground conservatives fracking yes scotland outsourcing love he white paper divestment finance interviews tuc pride varoufakis new york iran ubi prevent tef ecb adam stoneman esol localism pensions midwives greens social media workfare anxiety facebook russia nut history miliband aid intersectionality Economy thatcher regeneration sisi fe banks spanish civil war mark duggan community organising

In Defence of Greece: 6 Myths Busted

submit to reddit

Events in Greece are coming to a head. Over the weekend the leadership of Syriza offered the Greek people a referendum on whether to accept austerity measures – including cuts to pensions and public sector spending, and labour market de-regulation – as the conditions for obtaining funds with which to service its debt repayments. However, by all accounts Greece may be forced to leave the Eurozone before the end of the week. As Syriza has been consistently represented in the mainstream media as an irresponsible and ideologically-driven leftist government, it is important to unpack the seemingly common sense arguments against Syriza.

1. ‘People have to pay their debts. Why shouldn’t Greece?’

When someone lends money to someone else with the intention of making a profit, they take on a risk, as does the person borrowing the money. Because both sides take on a risk with the hope of some future gain, they ought to share responsibility for the outcome. This is why debtor-prisons – common in the 18th and 19th centuries – were abolished: they unfairly punish one party for a scenario created by both lender and borrower. However, neither Europe’s banks which took on risky debts, nor the political institutions which made the policies that encouraged unsound financial practices, are willing to accept any responsibility for the current situation. Vital public services are being destroyed while the Greek economy shrinks because no one apart from Greece is shouldering responsibility for what is a shared failure.

Second, 90% of the bailout money was spent on bailing out the banks, not on Greek spending. The majority of Greece’s national debt (78%) is owed to the ‘Troika’ – the IMF, the EU Commission and the European Central Bank. These institutions lent money to the Pasok government so they could pay back Greek and foreign banks who had recklessly lent money to all European countries before the global financial crisis of 2008-9. When it became obvious that the banks’ predictions about the economic growth of countries like Greece and Ireland were wrong, they immediately demanded their money back. This is what sparked the debt crisis, and led Greece to request bailout loans. The money Greece owes to the Troika was used to bailout bankers who’d got their sums wrong. Only 10% of the loans Greece received from the Troika have reached ordinary Greek people.

Third, if the aim is for Greece to pay back its debts, the Troika’s current policies make no economic sense. If it is to be able to pay back some of its debts Greece’s economy needs to grow, but the consequence of Troika’s policies has been the opposite. As the Syriza government have been arguing: Greece needs to invest to grow its way out of recession, just like Germany did in 1953 after its foreign debts were cancelled and its repayments tied to economic growth.

2. ‘Greece shouldn’t have borrowed to begin with.’

This idea ignores the structural reasons for Greece’s borrowing. All countries borrow money to invest in their economies and compete in the world economy. By 2009 the smaller Eurozone economies – Greece, Portugal, Ireland, Spain – were all burdened with massive debts because their borrowing failed to make them more competitive. As Costas Lapavitsas has shown, the reason for this is simple: the German government froze wages so as to out-compete countries like Greece. Given its superior economic and technological starting point, Germany was always going to win if its wages were low enough. Greece therefore built up a big trade deficit which was proportional to the German trade surplus. So Greek borrowing was actively encouraged by Germany which is now demanding Greece shoulder the blame for what was a failure of the entire Eurozone.

3. ‘Greece should just accept the terms offered.’

The deal offered by the creditors would have condemned to years of austerity a country which, since the first bailout in 2010, has seen years of recession, wages shrink by 25% and unemployment skyrocket. Spending cuts and economic uncertainty have been linked to a spike in suicide rates.

The conditions imposed by the Troika are the same as the Structural Adjustment Programmes (SAPs) which the IMF has been imposing on debt-stricken countries (primarily in the global south) since the 1980s. In Greece, as in those other countries which have accepted IMF loans, the vast majority of the money provided by the IMF will go straight back into the coffers of multinational banks. As per the Greek case, SAPs demand wholesale privatisations, financial and market liberalisation, government austerity, and the destruction of labour rights. These are the exact opposite policies which the Greek population voted for by electing Syriza.

The conditions attached to IMF loans should be an anathema to the left. Yet insiders too, such as Joseph Stiglitz – former Chief Economist at the World Bank – argue the effect of the IMF’s conditional loans has only been to enrich global financial institutions. Even right wing economists who historically approve of the IMF’s behaviour are coming out in opposition of the terms being imposed on Greece by the Troika. This is because whereas the IMF would usually force investors to take a significant debt haircut – i.e. cancel some of the debt owed by the debtor country in return for structural adjustment – the pressure from Eurozone governments and a desire to crush progressive movements in Europe meant Greece was not offered such restructuring.

4. ‘Why can’t they sort it out themselves?’

In a globalised world, economies are interdependent. A trade surplus in an exporting country implies a trade deficit in an importing one, if, as was the case with Greece and the rest of the Eurozone, the exporting countries adopt policies to diminish the economic potential of their rivals. Economic crises therefore require collective solutions rather than the beggar-my-neighbour policies Germany and the Troika are opting for at present.

At the moment the Troika is actively preventing Greece from sorting out its economy by enforcing austerity, which is having a negative effect on growth rates. Because Greece doesn’t have its own central bank it can’t use monetary policy to escape recession, so what the government has been asking for in negotiations with the Troika is debt relief which would allow it to invest in economic growth. But the Eurozone as a whole has rejected these standard Keynesian policies in favour of harsh cuts to investment and public services.

5. ‘Shouldn’t Syriza have tried everything it could to stay in the Eurozone?’

It did. Syriza is widely portrayed by the media as having turned its back on the Eurozone, yet the situation is the exact opposite. At the start of this year Syriza was elected with a mandate both to de-escalate the effects of austerity while remaining within the Euro. Despite some voices inside the party arguing against the so-called ‘good Euro strategy’, Syriza’s leadership have tried relentlessly in negotiations to balance their popular anti-austerity electoral mandate against the will of the creditors.

As recently as Thursday last week it appeared that Syriza’s leadership was willing to accept compromises in the form of further austerity in order to obtain further bailout funds. Negotiations broke down when, late in the day, the final deal offered by the institutions contained neither debt relief nor investment funds, and so if accepted would draw Greece into seemingly endless depression.

6. ‘This doesn’t matter to me.’

Syriza’s negotiations with the Troika have fulfilled a pedagogical role of showing the unwillingness of undemocratic institutions such as the EU and IMF to respect the democratic will of sovereign nation states. Moreover, the unwillingness of the Troika to tie debt repayments to economic growth demonstrates the need to produce political and economic strategies that suggest ways out of the neoliberal economic paradigm.

Greece being allowed to go to the rocks is an outcome that will restrict democratic movements throughout Europe. It will represent the defeat of the first serious democratic challenge to a technocratic neoliberal order in Europe. There is only one party in Greece which will gain from such a scenario: Golden Dawn.