Archive, Human Rights, Issues, News, Social Justice

Power to the People


The never-ending austerity that Europe is force-feeding the Greek people is simply not working. Now Greece has loudly said no more.

As most of the world knew it would, the financial demands made by Europe have crushed the Greek economy, led to mass unemployment, a collapse of the banking system, made the external debt crisis far worse, with the debt problem escalating to an unpayable 175 percent of GDP. The economy now lies broken with tax receipts nose-diving, output and employment depressed, and businesses starved of capital.

The humanitarian impact has been colossal—40 percent of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50 percent. Corruption, tax evasion and bad accounting by previous Greek governments helped create the debt problem. The Greeks have complied with much of German Chancellor Angela Merkel’s call for austerity—cut salaries, cut government spending, slashed pensions, privatized and deregulated, and raised taxes. But in recent years the series of so-called adjustment programs inflicted on the likes of Greece has served only to make a Great Depression the likes of which have been unseen in Europe since 1929-1933. The medicine prescribed by the German Finance Ministry and Brussels has bled the patient, not cured the disease.

Together we urge Chancellor Merkel and the Troika to consider a course correction, to avoid further disaster and enable Greece to remain in the eurozone. Right now, the Greek government is being asked to put a gun to its head and pull the trigger. Sadly, the bullet will not only kill off Greece’s future in Europe. The collateral damage will kill the Eurozone as a beacon of hope, democracy and prosperity, and could lead to far-reaching economic consequences across the world.

“Right now, the Greek government is being asked to put a gun to its head and pull the trigger.”—Piketty, et al.

In the 1950s, Europe was founded on the forgiveness of past debts, notably Germany’s, which generated a massive contribution to post-war economic growth and peace. Today we need to restructure and reduce Greek debt, give the economy breathing room to recover, and allow Greece to pay off a reduced burden of debt over a long period of time. Now is the time for a humane rethink of the punitive and failed program of austerity of recent years and to agree to a major reduction of Greece’s debts in conjunction with much needed reforms in Greece.

To Chancellor Merkel our message is clear; we urge you to take this vital action of leadership for Greece and Germany, and also for the world. History will remember you for your actions this week. We expect and count on you to provide the bold and generous steps towards Greece that will serve Europe for generations to come.

Sincerely,

Heiner Flassbeck, former State Secretary in the German Federal Ministry of Finance

Thomas Piketty, Professor of Economics at the Paris School of Economics

Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University

Dani Rodrik, Ford Foundation Professor of International Political Economy, Harvard Kennedy School

Simon Wren-Lewis, Professor of Economic Policy, Blavatnik School of Government, University of Oxford


Global campaign group Avaaz organized this open letter to Angela Merkel after running a petition that garnered over 500k signatures, demanding an end to failed austerity policies – policies the GOP has been enacting with similarly dismal results from governorships across the U.S.

Let’s hope Chancellor Merkel sides more with Mark Dayton than Scott Walker, more with Barack Obama than David Cameron, more with working people than with the banking class.  

John LoughlinChair Communications CommitteeEthnically European

The opinions expressed in this footnote are those of the author, and do not necessarily reflect those of the Point Loma Democratic Club of which he is a member.

 

3 Comments

  1. patrickschultheis says

    It’s fair to say ”Let’s hope Chancellor Merkel sides more with working people than with the banking class,” but it misses the point. The situation in Europe is not the kind of black-and-white picture that the authors of this open letter are trying to paint.

    This is not the struggle of a democratically elected government against a bunch of technocrats. It’s the struggle of a democratically elected government against 27 other democratically elected governments. Merkel represents one of them. She knows exactly what the working people who voted her into office three times in a row expect from her. By balancing European solidarity and the interests of an increasingly eurosceptic public, she managed to prevent the rise of any relevant right-wing populist parties in Germany. Her coalition partner, the German Social Democratic party, has her back.

    I hope Germany will use its hegemonic role in Europe to bridge the extremes on both sides of the spectrum: By pushing back against those who want to abandon the Greeks to their faith, but also against a Greek government that decided to continue most of the bad habits of its predecessors by lying, manipulating and making promises to their voters they can not keep.

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    • Rather than missing the point I think the letter writers directly address and refute the ’accepted’ dogma of debt and its uses.

      Lenders also have a responsibility to the stability of the currency and Europe. High-risk loans (at high interest rates) may not always be repaid in full. Many times in the 20th century it was better that they were not. The European lending institutions are not run by ‘democratically elected’ leaders, but can be removed by them. The power given to central banks must not be unchecked.

      Over the next few days (and weeks) we’ll see who best ‘honors’ their promises to voters. When facts change it’s okay to alter conclusions.

      Here in the U.S. during the next weeks and months we’ll see the GOP move to block many of Obama’s policies with spending bills and control of the appropriations process. Since 2008 and the aftermath of the financial shenanigans the question remains:

      Do we live to work and pay off debt, or use debt to live?

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