Despite this, there is a lot of
talk these days about the “sustainability” of Greek public debt, a
measure that emerges from the rather arbitrary ratio of debt to GDP.
The
trajectory of sustainability is estimated via various fanciful and
imaginative economic baselines and other scenarios which try to locate
the precise ratio at which Greek debt would be sustainable.
Prior to the 2009 deficit revaluations, the debt was 110% of GDP, a
ratio that was used to terrorise citizens with the danger of default by
suddenly awakening them to its ΄obvious΄ non-sustainability.
It was on
the ΄necessity΄ of lowering this ratio that the memoranda (the austerity
packages) were based on.
The packages try to convince that after the
Greek state has forcefully indebted itself at least an extra 247 billion
euros for its ΄salvation΄, and after it reaches the projected peak of
175% in 2016, a scenario of debt to GDP in ten years time (in 2020) at
124% will in fact be sustainable.
As the Greek Debt Audit Campaign, we stand against the debt dictatorship and its supposed sustainability for the following reasons:
1- The august institutions of the IMF, ECB and EC
have proved they are totally incapable of predicting the direction of
the Greek economy and its related debt sustainability.
Compare the Troika΄s
projections with the ruthless reality and it is clear they cannot
forecast even three months ahead with any precision, let alone assess
debt sustainability in two, three or ten years.
However, it was on the
basis of their estimations, that the governments of the memoranda and
the international lenders have shut schools, hospitals, and thousands of
businesses – all in the name of a debt sustainability (which they
simply hadn΄t calculated correctly).
2- After the hasty bundling of public utilities΄
debt (18 billion) and the Golman Sachs-soured swap (5.4 billion), public
debt came to 329 billion euros in 2010.
After three and a half years of
fiscal adjustment and social disaster, the debt for 2013 has reached
322 billion (or 175% of GDP).
And they still talk about debt
sustainability, even though 563 billion euros were already paid in
public debt servicing between 1992 and 2013.
3- If we were to use a different concept to
sustainability, such as illegitimacy or odiousness, then we would reach
very different conclusions about the acceptable levels of debt.
The
concept of debt illegitimacy raises concerns about the degree to which a
state΄s resources should or should not be tied for debt repayments when
simultaneously butchering social and labour interests and rights.
This
was, by the way, the position of the independent expert of the UN who
visited Greece to assess the consequences of foreign debt repayments and
the austerity it entails.
4- Using other ratios to assess the levels of debt,
such as the amount the state spends on health or on education, we would
forthrightly say that the debt has long been unsustainable.
For example,
by looking at the draft budget of 2012, we see that interest payments
on public debt absorbed 2.5 times as much money than pensions did, and
3.5 times more than education.
5- When a state is unable to fulfil its obligations
to its lenders and simultaneously manage the needs of the populace, it
can call on the ΄state of necessity΄ to defend itself from the
haemorrhage of debt repayments.
So, rather than figuratively hiding
behind a ΄state of emergency΄ to repress and prohibit protests and to
justify the increasing use of Legislative Acts, the state could draw
upon legal practise and precedent to stop debt repayments.
6- The Memoranda and Loan Agreements were signed and
imposed in a manner with no legitimacy or credibility for the populace.
They did not even meet formal requirements of the constitution or
parliament.
Consequently:
a. it is necessary to remind ourselves of the
reasons why Greece entered the memoranda and bailouts.
The Memoranda and
continuous austerity was imposed to ensure the sustainability – not of
Greek debt – but of major multinational banks, rather than high wages or
an uncompetitive economy jeopardising the entire euro zone.
b. We do not question the debt from primarily a
legal perspective but a political and social one.
From the instant the
accumulation of debt works against the interests of people within Greece
we would say it is illegitimate.
We do not forget the magnitude of the
debts foreign banks gave to local authorities which were later offloaded
to the government budget, nor the over-costing of public works, or the
exorbitant cost of the Athens Olympic games.
The list is endless.
c. After the PSI and the extensive imposition of
bilateral and multilateral loans, the Greek debt profile is completely
altered.
The greatest amount of Greek debt is held by the EU member
states, the IMF and the European bailout fund EFSF.
Only 23.7% remains
as bondholder debt, in the hands of various hedge funds
who have made millions from it.
The Troika is not only lending us the
money and imposing strict disciplinary austerity to make sure the banks
wont collapse, but now, to make sure the Troika΄s own loans will be
repaid.
d. The first bailout calibrated the loans on the
basis of the amount each country contributes to the ECB΄s capital,
meaning Germany would give 22.3 billion, France, 16.7 billion etc.
From
the expected 80 billion, 73 billion was disbursed and Germany ended up
lending 15.7 billion, with high and variable interest rates.
The rates
may have come down but the draconian surveillance remains, rendering
these loans a good investment for the member states.
It is from the
sweat and blood of the people, i.e. the primary budget surplus that the
government of Samaras-Venizelos has warmly welcomed, that their
investments will come to fruition.
e. Any
agreement that is defined by and for the creditors will simply reflect
the continuation of these obviously failed debt management policies.
We
therefore propose to stop paying the debt, to engage in a debt audit and
proceed to cancellation.
