The grave mistakes of the European leadership on Greece and the way out of the crisis

citizen-correspondent                                                                                   By Christos Mouzeviris

Ever since the victory of Syriza and the formation of the current Greek government, the country found itself on the spotlight of the European and global media. Speculations on a potential Grexit, combined with scathing attacks against Syriza’s policies and leadership became common. But is solely Greece, all which is wrong in Europe and the euro-zone? Perhaps the reality is very different if we examine some facts.

The country did not need an excessive amount of debt thrown on it, in the form of two bailouts; one just to repay the first one. Greece should have been allowed to default since it was made clear, that its debt is not sustainable. Instead, the European elites used Greece as a scapegoat, to justify the billions of tax payers’ money that they give to the European banks via Greece. So they encouraged propagating attacks against the Greek nation, with the help of the European media.

In the beginning they blamed the Greek people’s alleged “laziness” for the crisis in the country. When this argument was burst, they then used the tax evasion argument.  It was then discovered that German companies were among the bigger tax evaders in Greece or that the Netherlands and Luxembourg, are contributing to the problem by acting as tax havens.  So they currently argue of the importance of sticking to the rules and honouring the previous government’s signatures. They clearly don’t like democracy enough, to respect the Greek electorate’s wish to end austerity.

The European leadership now is desperate to bring the Syriza government down. They fear that if a Leftist government succeeds more countries will follow its example, threatening the neo-liberal agenda that the EU institutions have been promoting for decades. But by scolding Syriza and its leadership so much, they may get something even worse: the Far Right is still prominent in Greece. The Golden Dawn is the third party in the country right now. And France, together with many other countries is not far behind. Europe should be glad that the Greeks went leftward instead of towards the Right.

Syriza is more manageable than the Golden Dawn. The cabinet of the current government consists of high-ranking university professors, unlike the Golden Dawn, whose members are often involved in criminal activities.  Besides, the average Greek citizen was forced to choose this government, by the ruthless measures that were imposed on the country by the Troika. A similar reaction we observed in the past in Germany itself.  A deep recession combined with an international humiliation, resulted in the far right Nazi party coming to power. It seems that Europe never learns from its mistakes.

In addition, Greece is now isolated. Countries like Spain or Portugal, who would ideally benefit from a Syriza victory are distancing themselves from it, because they have right-wing governments. Their leadership belongs to the same European political group as Angela Merkel’s party.  It is up to the EU to win over the hearts of the ordinary Greeks again, by compromising. Not for the sake of Syriza, but for Greece’s citizens, the unity of the EU and the euro. If the Greeks see some relief and an end to the constant humiliation, they may gladly return to the established, mainstream political parties. Further cooperation between Greece and its creditors will be easier then.

The country now needs growth and investments to lift its population out of poverty, kick-starting its economy. Yet it seems that finances and the banks are far more important for the European elites than population living standards and human dignity. They do not help the Greek economy; they actually make it worse. European austerity policies have destroyed whatever little competitiveness and productivity Greece had. They levelled Greece’s middle class that kept the Greek market alive. By slashing Greek salaries by 40%, they have taken any disposable income out of the Greeks’ pockets and thrown it to the banks.

Greece is supporting the whole European banking system right now, as all banks in our continent are interconnected. German, French and other countries’ banks and bondholders have substantial shares in the Greek banking sector. The austerity policies mainly ensure that these wealthy European banks get the maximum return on their money; despite being the ones who created this crisis in the first place with their miscalculations. As a result, there is simply no money left to kick-start the economy.

Greece currently solely relies on foreign aid. Instead of the Troika-imposed policies, the Greek governments should have privatised some of its public companies and slashed pensions and salaries, but not by 40%. Austerity would have to coexist with growth stimulus. Whatever money Greece would save from the cuts and sell-outs it should put back into the economy with investments for growth, not give it to the banks. In other words, Greece should have allowed the banks to fail, just like Iceland did.

The Greek government should have limited the public sector by firing unnecessary, excess staff. But because it would have created new job positions in the private sector, the newly unemployed would not be a burden to the country, draining funds in social welfare payments. They would pay taxes and in addition contribute to the economy by being able to consume, thus supporting the Greek market. If the former Greek governments had adopted these policies, with the support of the EU and ECB, the country would have had a much greater chance for recovery. Now it has simply been placed on a financial life support program.

To conclude, what Greece should have done is what Europe must do, in similar future scenarios. We need to radically reform the current capitalist system, so that the banks do not play a primary role. We should create a union of the people, of social cohesion and equality among its citizens and member states. Finance, single currencies and banking unions are not the best ingredients to achieve a united Europe. As the economy goes from boom to bust, so will the foundations of any union built on such values.

 

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Christos Mouzeviris is originally from Greece, but found his home in “Ireland, Europe and the world.” He is a blogger and a journalist, interested in politics, culture, history, music, traveling and nature. He considers himself a European and a Citizen of the World, and would like to seadmin-ajaxe our continent and the world more united, and more democratic. To this end he has created The Eblana European Democratic Movement, which focuses on debates about culture, politics, E.U. issues, and society.

 


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