On November 27th the Eurozone’s Council of Finance Ministers announced its decisions regarding the Greek public debt. This decision, deadly for Greece’s fiscal situation, destroys the lives of the people, putting their interests behind the interests of the creditors. It allegedly lowers Greek debt by 40 billion euros, by lowering interest rates, extending interest repayments, providing for a debt buy back scheme, and extending loan maturities. On the other hand,
It demands horrific austerity measures, which include even further reductions in wages, pensions, and social spending, plus widespread redundancies of civil servants, etc.
It is rife with inaccuracies and steeped in vagueness regarding the measures planned, for example a debt buy back scheme that may or may not actually be implemented, or at least not in the amount currently foreseen.
It increases the public debt by 43.7 billion euros, equivalent to the size of the new loan tranche. Thus it burdens taxpayers and workers with new obligations, on top of the 148.6 billion which Greece had already borrowed from the Troika (126.9 from the Eurozone and 21.7 from the IMF). This lending in its entirety constitutes an odious and illegitimate debt.
It heightens the illegitimate nature of the Greek public debt, as 23.8 billion euros awaiting disbursement in December will be directed towards the banks, under the bank recapitalization scheme, and will not cover any fiscal needs of the budget. Debts of the banks are thus being socialized, whilst profits remain private.
It by no means solves the problem of public debt sustainability. Even by the Troika’s own estimates, debt will approach 175% of GDP in 2016, and will fall to 124% after 2020. But it was at this level in 2009, before the whole ‘stabilization’ packages started.
It does not impose, leaving it for the future, the necessary bold reduction of Greek debt. In fact, it makes debt reduction dependent on political developments in Germany, envisaging it for after the October 2013 German elections.
It holds Greek society to ransom, and does this even officially, through the appointment of foreign Gauleiters and the official opening of the escrow account, in which all loan disbursements will be put, together with any revenue from privatizations and any fiscal surplus. All these funds will solely be used for debt repayment.
It leaves the door wide open for more and more austerity measures, implemented though ‘structural mechanisms’, which will apparently guarantee that fiscal targets are fulfilled. Since the recession will remain until at least 2014, Eurogroup’s decision means automatic reductions in wages and pensions.
It allows, through the ‘creative ambiguity’ of its terms, a debt buy back scheme to be implemented by Greek pension funds and Greek banks. This will bring the dissolution of Greek pension system and the hasty de-Hellenisation of the Greek banks
For all these reasons, the Greek Debt Audit Campaign believes that the decision of the Eurogroup’s Council of Finance Ministers deepens rather than solves the fiscal crisis, and must therefore be overturned by society itself.
The Greek Debt Audit Campaign insists that conflict with the creditors, i.e. the IMF and the EU, who absorbed the majority of Greek public debt, is unavoidable. Standing up to the creditor loan sharks includes suspension of capital and interest payments, and unilateral rescinding of the Loan Agreements and the Memoranda, on sovereign state terms. Only this path can lead to the necessary cancellation of most, if not all, public debt. The establishment of an Independent Audit Commission, which will open up the books of public debt, is necessary!
This Eurogroup decision harms tax-payers and public finances!
Debt is illegal!
Disobey the creditors!