- Punitive conditions attached to the ‘rescue’ package mean the Greek financial tragedy may never end.
In an opinion article on UK’s The Guardian, Varoufakis highlights among others that:
- Having put Greece into a permanent coma, EU-IMF declared it “stability”. They pushed our people off a cliff & celebrated their bounce off the hard rock of a great depression as proof of “recovery”. To quote Tacitus, they made a desert and called it peace.
- The truth about the ‘end of Greece‘s bailout: Ridiculous VAT and small business tax rates. Fresh pension cuts & new punitive income tax rates for the poorest scheduled for 2019. A permanent budget target = harsh austerity (that the IMF thinks unattainable
Over the past week, the world’s media have been proclaiming the successful completion of the Greek financial rescue programme mounted in 2010 by the European Union and the International Monetary Fund. Headlines celebrated the end of Greece’s bailout, even the termination of austerity.
Buoyant reports from ground zero of the eurozone crisis portrayed Europe’s eight-year long Greek intervention as a paradigm of judicious European solidarity with its black sheep; a case of “tough love” that, reportedly, worked.
A more careful reading of the facts points to a different reality. In the very week that a devastated Greece entered another 42 years of harsh austerity and deeper debt bondage (2018-2060), how can the end of austerity and Greece’s regained financial independence be presented as fact?
On the European continent, a far worse drama was unfolding due to the EU’s odd decision, back in 1998, to create monetary union featuring a European Central Bank without a state to support it politically and 19 governments responsible for salvaging their banks in times of financial tumult, but without a central bank to aid them. Why this anomalous arrangement? Because the German condition for swapping the deutschmark for the euro was a total ban on any central bank financing of banks or governments – Italian or Greek, say.
So, when in 2009 the French and German banks proved even more insolvent than those of Wall Street or the City, there was no central bank with the legal authority, or backed by the political will, to save them. Thus, in 2009, even Germany’s Chancellor Merkel panicked when told that her government had to inject, overnight, €406bn of taxpayers’ money into the German banks.
To maintain the lie, insolvent Athens was given, under the smokescreen of “solidarity with the Greeks”, the largest loan in human history, to be passed on immediately to the German and French banks.
But did this nightmare not end last week? Not in the slightest. Technically speaking, the Greek bailouts had two components. The first entailed the EU and the IMF granting the Greek government some financial facility by which to pretend to be repaying its debts. Then there was the harsh austerity taking the form of ridiculously high tax rates and savage cuts in pensions, wages, public health and education.
In summary, after having bailed out French and German banks at the expense of Europe’s poorest citizens, and after having turned Greece into a debtor’s prison, last week Greece’s creditors decided to declare victory.
Full opinion article by Yanis Varoufakis here theguardian.