Why the Greek referendum is relevant to people living in austerity Britain


04 July 2015

As George Osborne goes to the dispatch box next week to deliver his emergency budget, the collective voice of Greece’s people will reverberate through his mind. They will either have accepted the policies of the European Union and International Monetary Fund (IMF), and assured him that fear can beat hope, that austerity will continue to be the order of the day. Or they will have rejected these terms and shown people across Europe that it is possible to say ‘enough’ to the rule by financial markets. 

As a Greek friend told me last week, the destruction of this current Syriza government would represent ‘just another event for Greece, but a tragedy for Europe’. The Greek referendum is the only thing standing in the way of unending austerity and ‘market dictatorship’ in Europe. So serious is the threat to the economic status quo, that the Troika, the collective name for the European Commission. European Central Bank and the IMF, is prepared to risk the stability of the Euro in its desire to stamp out this challenge.

Illegitimate debt

Responsibility for Greece’s debt can be laid at the door of three parties: a corrupt Greek elite which took out too many loans; a European banking system which recklessly pushed those loans, notably in order to sell military hardware which Greece didn’t need; and European politicians who allowed these banks to do whatever they like no matter the cost to society. This debt became critical when western banks went into meltdown in 2008.

Those responsible for Greece’s debt  have walked away scot free, wealth intact. Instead it is the ordinary people of Greece who have been punished. The imperial Troika, suspending even the veneer of democracy, has forced Greece into the worst depression since the second world war, with spiralling poverty, unemployment, crime and suicide. The welfare state has been dismantled with the national health service facing collapse, food banks proliferating and state assets being flogged off to the same hedge funds that have profited from Greece’s woes.

Even by it’s the Troika’s stated aim, their policy has been a disaster. The debt burden on Greece has rocketed. That’s because the debt is not only deeply unfair, it’s completely unpayable, as everybody knows.

So why are these policies being imposed? Because the European elite is standing behind the banks, and Greece’s’ ‘bailout’ loans were nothing more than massive bank bailouts. Jubilee Debt Campaign calculates that the Troika has lent €252 billion to the Greek government, of which 90% was used to bail out the reckless lenders who created the crisis. The most recent wrangling centres around how much more economic torture Greece should take in order to receive a new ‘bailout’ which again will almost all leave the country, to return to those giving the loans.

Nor is Greece the first country to experience such treatment. Dozens of Latin American, African and Asian countries in the 1980s and 1990s were similarly ‘restructured’ in order to pay back Western banks who should never have lent money to them in the first place. On three continents, millions of people were pushed into poverty, hunger and illness as countries newly emerged from the shackles of empire were ‘put back in their place’.  

Occasionally a government would rebel against having their economic policies dictated to them by unelected institutions. But few dared to take this route too far.

That’s what makes Syriza’s actions so special. The Greek referendum is the first time a country has put austerity measures directly to popular vote. Greece has also joined only a handful of countries in opening up its debt to democratic scrutiny to ascertain who was responsible for the debt and how much should be paid.

That’s also why European elites are so furious . Greece has begun to expose the contradiction between democracy and the economic status quo. Our deeply unequal global economy relies on ordinary people having no real voice over economic decisions.

European governments know what to do if they really have any intention of helping Greece. They would help to hold those responsible for the crisis to account. They would regulate their own banks so it can’t happen again. They would create international mechanisms to ensure that lenders share responsibility for debt. And they would help the Greek people who have suffered a terrible injustice, by cancelling debts and assisting in programmes of growth.

It’s even happened before. After the second world war Germany  received massive debt cancellation –  ironically from countries including Greece – because it was thought unwise to push a country, no matter what it had done, into a depression.

Today, if Greece is pushed out of the EU, the collapse of the Euro could follow with serious consequences for the global economy. So the Troika is playing with fire, but they calculate it’s worth the risk to destroy Syriza and put other governments off taking their path.

That’s why we must defend the Greek people if they stand strong and vote ‘no’ in the referendum on Sunday. A no vote would strengthen the battle for a fairer, more humane, people-centred Europe. A yes vote will push us further down an anti-democratic road where ever more of our society is sold off, inequality continues to spiral, poverty and unemployment are seen as personal failings and a ‘good life’ can only be found in the market. It could be the final nail in the coffin of a progressive, social Europe. 

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