Tag: Greece

Europe – an even bigger failure than Greece

Earlier in the evening I took a few minutes to study and sign an online petition on the Greece debt crisis. I also made the bold statement of changing my Facebook profile picture to a sticker expressing solidarity with the Greek people. As I went back to the desk to complete a report with an imminent deadline, I had problems concentrating because of the numerous questions and thoughts that kept whirling round inside my head about Greece. I am supposed to resist the urge to write about the unfolding menace until after the Sunday referendum, I reminded myself. What’s the point of waiting? The referendum won’t change everything, would it? And anyway, I need to clear my head of these nagging questions, these thoughts…

The founding fathers of the EU will be turning in the grave right now pondering about what has become of the Union they created? As if the inhuman treatment of refugees in the Mediterranean isn’t enough naked dances in the market square, there are subtle, yet concerted efforts now by the traditional conservative powers to oust the popular Syriza Government of Greece through sabotage. Truth be told, no government within the European Union has ever dared challenge the status quo in the manner that the current Greek government is doing. They are feared as the biggest threat to renewed growth, job creation, economic prosperity, political integration and peace in Europe. That is untrue and it reminds me of a Nigerian Igbo adage to the effect that when a peer fetches better firewood, he’s accused of fetching those in a forbidden evil forest. The truth is to be found in the story of how Greece got to where they currently are.

So how did the Greeks get here?

After Greece joined the monetary union of Europe in 2001, the tiny country of 10 million (about same population as Belgium and smaller than Lagos State, Nigeria) was flooded with money from elsewhere on the Continent. Over the course of the decade that followed, Greek leaders, who can’t be said not to be corrupt, ran an economy long rife with patronage and tax evasion. They borrowed billions from their imprudent friends at European banks, and then perfected a culture of non-disclosure to EU officials about mounting debts. When the financial crisis finally rolled into Greece in 2009 and 2010, the country was in an estimated $430 billion in debt[i], a staggering figure that imperilled the economic health of its near and distant neighbours — indeed, all of Europe. The European Commission, International Monetary Fund and the European Central Bank (often referred to as the Troika) agreed to bail out the sinking economy by loaning it $146 billion. The bailout was not without a price tag, which was fixed by the bailers (Troika) and signed by the bailed (Greek Government).

A bailout with huge price tag

The strangulating price tag for the Greek bailout had nothing seriously to do with raising new funds, through proper corporate taxes or social security contributions but had mainly to do with austerity measures that meted out untold hardship to the hardworking Greek men and women. Let’s look at just a few of them and what they resulted in. One of the effects was reduction in state spending by slashing pensions and wages, eliminating jobs and unreasonable rise in wage taxes. As if the 2009 austerity measures were not bad enough, in 2012 an even larger rescue provided only temporary succour. Major infectious diseases soon came fully back in Greece, the figures for HIV and tuberculosis went sky high and malaria made a nasty return after 40 years of absence. Meanwhile spending on mental health care fell between 2010 and 2011 by 20%, and another 55% between 2011 and 2012 resulting directly in a rise in depression and suicides by as much as 45%. Very quickly it became clear that the spending cuts are producing what many Greeks consider to be a humanitarian crisis. It is apparent from all objective analyses that the core beneficiaries of the so-called bailout were Greek, German, Dutch and French big banks, who had to be rescued partly on the back of the ordinary Greek citizens. The best that could be said about the bailers is that they made some wrong choices but it could very well be a case of criminal negligence.

In my May 2014 bid for a seat at the European Parliament, I was asked during a debate with colleagues of the liberal democrats political family, to adduce the basis of my social policy agenda.  I recall drawing attention to the growing inequality between people within Europe, but also between European citizens and people from other countries. The traditional parties won’t ever own up the fact that their neo-liberal and conservative social and economic policy path since the 1980s is the direct cause of the financial crisis of 2008, the euro crisis of 2010 and rising poverty  (25% or 121 million poor Europeans) especially youths and infant poor. Today Greece has 59.1% youth unemployment, Spain 55.9%, Italy 38.4%, and Portugal 38.3%. All efforts by the European progressives, and the genuine humane reform agenda of the Syriza government to institute people-centered economic and social policy driven by fair and equitable policies were all thwarted then as they continue to be thwarted today.  The large European political families are award-winners in blocking progressive Bills.  Dr Elizabeth Mestheneos, an Athens based British sociologist couldn’t be clearer when she said “It is a nasty game and of course going to the Drachma (the Greek national currency before the Euro) is not easy. We have few resources and a very split society. Politicians have often colluded in taking loans nationally and using them inappropriately, appointing Kin to jobs – I think this is familiar in Nigeria! And still going on! There are too many ideologies of diverse types. We even have Stalinists, Nazi types and plenty of anarchists. Too few people who know how to cooperate. Too many (mainly but not exclusively) male egos. I think most of us want the EU to work but it has been hijacked and the politicians are another generation without the same commitment to the European ideals. We are fighting for a better Europe, not run by bankers and big businesses” Greek debt exploded over a seven-year period up to 177%. The huge private debts in Greece were built by irresponsible behaviour of large European banks providing cheap credits. Of all the billions that have been made available in recent years, about 90% flowed back to the banks and other creditors hence Paul De Grauwe, a  leading Belgian Professor of economics had this to say “The creditors have not learned anything from the crisis. With their demands they push the Greek economy deeper into trouble and yet they manage to make the media believe that the Greeks are unreasonable, and not themselves”[ii]

The Troika miscalculations

The way and manner Eurogroup Chairman, Jeroen Dijsselbloem and EU Finance Ministers are conducting their negotiations with Greek’s Finance Minister, Yanis Varoufakis, is as though economics is an end in itself. There is no realisation that economics should be fashioned to serve people. They are beclouded by a tunnel vision resulting in unacceptably high human toll. The authoritative medical journal The Lancet reported that since 2008 the number of stillborn children increased by 21%. More and more pregnant women lack the resources for prenatal testing. Infant mortality increased by 43%. In many schools, private sector food banks are organised to stop school kids from fainting during classes.[iii]

It is not only Greece that needs saving. Europe needs to save itself too and all attentive watchers of Varoufakis would notice that he’s determined to lead that agitation to save Europe from itself and by so doing save Greece and others along with it. He ran his 2014 election making no secret of his agenda. In a book[iv] he co-authored in 2010 and revised in 2013 I read the following “Europe is fragmenting. As this happens, human costs mount, and disintegration becomes an increasing threat. . . . The fallout from a Eurozone breakup would destroy the European Union, except perhaps in name. And Europe’s fragmentation poses a global danger.”

I share these sentiments and would see the Greece troubles beyond my nose. It is Europe’s troubles too and by extension a global trouble. As all hands are put on deck, whatever the outcome of the July 5th referendum, a write-off of some parts of the Greek debt should not be ruled out. Except of course we want to rule out a sustainable solution to the crisis.

 

The author, Collins Nweke, was a 2014 candidate Member European Parliament and currently serves as Municipal Councillor at Ostend City Council. He made this contribution from Brussels Belgium

[i] Suzy Hansen (New York Times, 20 May 2015)

[ii] Paul De Grauwe in an interview in De Standaard, Belgium of 16 June 2015

[iii] The Lancet medical journal 2008

[iv] Y. Varoufakis, S. Holland and K. Galbraith: A Modest Proposal for Resolving the Eurozone Crisis, 2010, revised July 2013

 

Greece under radical left: a start for EU reform?

greece in eurozone

At breakfast on Sunday, 25 January 2015, I made a remark to the effect that it is the big day for the Greeks. My son made a passing response about his distaste for political extremism, be it on the left, or on the right of the political divide. He is 20 years old, a bachelor’s student of Social Work, passively but maybe inevitably interested in politics. Inevitably perhaps because he and his brother couldn’t possibly escape my constant political jabbing and therefore have to deal or contend with me. His comment reminded me of several Brookings Institute analyses that I have been reading in the last several weeks on the Greek elections. Following his comment, my boy and I had quite a chat, with his mum more or less as the perfect umpire. Shortly I shall let you into the outcome of the debate with him but allow me in the time being to let you into the thoughts that preoccupied the guys at Brookings.

I am unsure if this is representative of a broad U.S. perspective, but the key question at Brookings seemed to be whether a radical left victory in Greece will reignite the euro crisis, producing recession in Europe and some level of financial instability and slower growth in the U.S. While they thought this is unlikely, they felt it is a possibility. They played with a number of scenarios but settled for the view that a Syriza (Greek radical left party) victory would be the worst possible outcome from the point of view of the rest of Europe. They added a prediction that there will be considerable turmoil in the months to come,  though terrible outcomes will likely be avoided, ultimately. These thoughts and more shaped my mind as I set the Sunday breakfast table, invited my folks, took a place on the table and thought aloud by way of the remark I made that prompted the debate.

I didn’t think that a Student Social Worker would be moved by the economic arguments surrounding Greece. I thought I might just demonstrate my point if I built my case around the wrong economic choices made, misplaced policy decisions taken, among others. These had resulted in an unprecedented humanitarian crisis in Greece. I illustrated the crisis with two examples: over 40% of young Greek graduates can’t find jobs. Those who were initially under-employed eventually joined the joblessness. The zeal to undertake higher education was very low amongst the teenage Greek sons and daughters. Those who managed to stay in school had to study, not with their reading table alight with electricity but with candles because a serious austerity measure meant that electricity supply became a luxury rather than a necessity. I thought I managed to make the case that the situation at present is exceptional and extraordinary. Mainstream, everyday solution and policies won’t do it. This I argued was the basis of my Sunday prayers that the radical left not only wins, but wins big. I smiled when my boy finally said he was convinced by my arguments.

Now the results are in and my prayers, not the vision I saw in a dream, as some New Age Pastors will claim, have been answered.  The radical left took 149 seats, just shy of the 151 they needed for an absolute majority. Within hours, they announced a coalition with the Independent Greeks, a right wing anti-austerity party, giving their government a clear majority.  The question is how founded is the fear of the guys at Brookings Institute? Is the radical left victory a threat or opportunity for Greece and for Europe? My friend, Bart Staes, a three-term Member European Parliament, with whom I stood on the list in the May 2014 European Parliamentary elections, had released an unequivocal statement: ‘Syriza victory is an opportunity for robust Greek and European reforms’. I was also keen to know what my friend, an English Sociologist, based in Athens, whom I haven’t had contacts with in a while, thought about the situation in her adopted second home. She revealed that she reluctantly voted for the radical left. Reluctant because populism is not her cup of tea and she is curious to see if they can deliver. She, like many others were sick and tired of the old political ways. She’s reasonably confident about some able people with some experience who have joined the Syriza-led government. They do have the problem of the high expectations raised and pressures from supporters. She concluded that obviously the old system could not go further.  She also struck a note between caution and optimism ‘maybe they will play poker very well with the other Europeans and win a large gamble that some politicians realise  that the current system is not working for many in the EU especially in the Eurozone.

My English sociologist friend in Athens wasn’t particularly bouncing up and down with joy but I am! I am because like Bart Staes, I see this as a new start for Greece by getting rid of the old school.  Rather than the doomsday scenarios that some commentators have been painting, the victory of Syriza provides energy and optimism. Domestically one will hope that this wave of change will be the start of durable and robust reforms and greater social justice in Greece.  The incontestable fact of the Greek election result is that the vast majority of Greek citizens want progress, are impatient in their desire for genuine political reform and therefore want to break with an outdated, crippled political system where the oligarchs have basically ran the country aground.  Besides dismantling the ugly, capitalist fiscal and economic constructions of the oligarchy, that country has urgent need of fresh political ideas in the area of ​​sustainable economic development. Greece has enormous potential in terms of the generation of sustainable, renewable energy, sustainable agriculture and tourism.

I guess that the yardstick with which the radical left success will be measured is their ability to end the current humanitarian crisis in Greece. This will unavoidably go hand-in-hand with renegotiating economic policies with the governments of other Eurozone countries, the World Bank, the International Monetary Fund and any other external forces whose conditionalities have meant that Greek men, women and children have lost human dignity and are dropping dead bit by bit. This is certainly an Herculean task but not an impossible one. I contested the European parliamentary seat in May 2014 under a strong reformist agenda. Little wonder that rather than calling a halt to the radical change as started on Sunday, 25 January 2015 in Athens, I can only hope that similar wind of electoral revolution also blows into Madrid as well as in Rome. This appears to be the surest way to get the core Eurozone countries to get serious about renegotiating the terms of the EU social and economic policies.

Like I told my son at the Sunday breakfast table as the good people of Greece were going to the polls, the choice is between the far left and the far right. I hope that the established mainstream parties in Europe realise that the failure of Syriza through sabotage or other unholy means,  is tantamount to handing victory to the far right. I know it is a dilemma, the prospect is unpleasant but it is also about making a choice. The Greeks made their choice on Sunday. Hopefully Europe will make theirs too because this is about reorganising for a better and fairer Europe.

 

Collins NWEKE | Green Party Councillor at Ostend City Council Belgium

28 January 2015