cc. On 22 May the Greek Parliament passed a legislative package of more than 7,000 pages with the votes of the governing parties. This is to meet the requirements of other EU governments. They had made radical measures a condition for new loans. The legislative package includes additional financial limitations for all Greeks, further steps to sell out of national wealth and more loss of sovereignty. On the disastrous consequences of this policy René Zeyer has already pointed out by the previous decisions of 9 May.
The classic Greek tragedy follows a fixed structure, serves catharsis and has primarily an end. Their purpose is to bring about a change of heart and mind, a cleaning in the audience. The modern version under the title “Greek bailout” neither follows these rules nor any other rules.
In the last six years grants were committed in the total amount of 360 billion euros and around 241 billion euros were paid. This was complemented by a haircut of about 100 billion euros which was driven by the German Chancellor, but only expropriated private financiers against their will. At the last second in the night to Monday, the Greek Parliament again agreed to the demanded reforms and savings, including the tenth pension reduction since of 2010.
In all these years there was no single sign of a fundamental improvement in the economic situation of this battered country recognisable. The debt of the central government, the provinces and municipalities and the social insurance amounted to an estimated 316 billion euros in 2015, without interest and repayment. By 2016, a further decline in GDP, the total economic output, to 170 billion euros is expected. Next year alone, the total debt of the central government will rise to 200 per cent of GDP, a new record.
About 80 per cent of all grants were used for the repayment of old debts, bank restructuring, interest payments and repayments. The unemployment rate remains at about 25 per cent, among the 15 to 24 year olds it is 51.9 per cent. Value-adding investments cannot be identified. Investors and the capital markets lacks any confidence. At the same time, an exodus of highly educated entrepreneurs, researchers and professionals takes place. Those who can leave; those who stay have lost all hope in a better future.
From 2023 onwards Greece should begin with the previously deferred repayments. This should be possible by the for now six years promised, but not even today on the horizon visible, economic recovery. These bold predictions were created before the refugee crisis with its additional costs. All these facts, which are only incompletely addressed here, have one thing in common: They include the increase of impossible.
Who has previously lived culpable or innocent beyond its means, have to stop for a while, has to spend less, consume less, save, repay debt and then is doing better and well after some time again. That is until today the common view among Eurocrats. Via Troika and others in no way democratically legitimised authorities, Greece is imposed to one “reform” and “economy measure” after on another. These authorities regularly complain that Greece is implementing the measure too slow. At the same time the Greek Government is confronted with waves of protests and general strikes and rightly fears that the state loses control of its country as a peacekeeping power.
By contrast, EU government actions are aimed only at short-term goals: No new burden on the taxpayer, especially for the main creditor Germany. No new upspring of the hot Greek crisis before the British vote on the proposed referendum on United Kingdom’s membership in the European Union in June – as the next major payment milestone for Greece is due only in July. No discussions on a new haircut while looking at the equally highly indebted countries Spain, Italy or France. No admission that the current policy has failed. Therefore, the EU summit of Finance Ministers presented – without any surprises – just more “debt relief” measures. But what was right at the beginning of the crisis, is valid even today: Only a massive debt cut and the immediate exit from the euro, with bankruptcy or without, offer the only chance to restart the Greek economy. Even the International Monetary Fund, which so far has supported the bailout with relatively small sums, now calls for debt relief and will otherwise refuse further aid packages.
Once again, Germany is there alone, insisting on a continuation of the obvious failure bailout policy: Everything is possible except a debt cancellation. Ironically, Germany, which is responsible for the first sin in the Greece debacle – at the instigation of its Chancellor Angela Merkel 2012 – forced a haircut of private creditors. Amongst others German banks were affected.
Those who had been nationalised after the financial crisis one have overburdened losses to German taxpayers. For reasons of pure power preservation Merkel will not repeat this again. Therefore, she will fail. One could get over this. But Greece is also failing. After six years of enormous suffering in the general population, that destitute and impoverish, a whole generation of young people with no present and no future perspectives, Greece is now worse off than in 2010. This has nothing to do with a responsible government policy. This is criminal torture without purpose and sense. It is a tragedy; those who are responsible and acting in the EU have fallen into a hopeless situation, the approaching disaster can no longer be averted.
But they are not “guiltless guilty” but have acted with intent, against their better knowledge. And the Greek spectators do not shudder in the presence of the piece given on stage, but getting it martyred in their own bodies. •
© René Zeyer, first published in “Basler Zeitung” from 12 May 2016
(Translation Current Concerns)
According to the “Neue Zürcher Zeitung” from 9 May 2016, a study, issued by the European School of Management and Technology (ESMT), concluded that “the lion’s share of the EU bailout funds or the ones of its institutions like the International Monetary Fund (IMF) has been spent for the repayment of already existing governments debts (86.9 billion euros) and for interests on existing government debts (52.3 billion euros). Further assets were the repayment of the Greek banking sector and the providing of ‘appropriate incentives’ for the Greek government debts restructuring in 2012 (29.7 billion euros). […] To put it plainly, […] the funds given to Athens first and foremost saved European banks.”
(Translation Current Concerns)
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