*The Greek debt crisis*The Greek debt crisis made the newspaper headlines from January to July 2015. And for a good reason: it is directly linked to our everyday lives as Europeans. Since May 2010, Greece has applied austerity and reform measures to its economy. In exchange, it has received loans to pay back its public debt. These measures, called «memoranda», and the attached loans are provided by a group called the ‘Troika’. This group brings together the three institutions that have become Greece’s main creditors: the International Monetary Fund, the European Central Bank and the European Commission. In 2015, an independent international committee was set up by the Greek Parliament. Its goal was to carry out an audit of Greece’s debt in order to understand why the country has such a huge debt and to figure out if this debt is in whole or in part illegitimate, unsustainable, odious or illegal. These are the Committee’s findings:ILLEGITIMATE DEBT: Political concept used several timesby the UN and various governmentsto refer to public debt that is not usedfor the benefit of the population.Before the 2008 crisis, Greece was already part of the most indebted Eurozone countries. There are two reasons for that. First, an accumulation of very high-interest loans and second, insufficient public incomes. In the 80’s, Greece, alongside with many other ‘peripheric’ countries, is bearing the full brunt of the monetary policies implemented by the US and the rich European countries. It had to borrow on the markets at particularly high interest rates. Those rates are even higher than the growth of the national wealth. As a result, the Greek debt increased very fast. This ‘snowball effect’ accounted for two third of the increase in public debt between 1980 and 2007. During the years 2000, taxes and social contributions financed less than 35% of the Greek government budget while on average they amount to 41% of the other Eurozone member states’ incomes. The rest is financed through loans. This difference between Greece and the Eurozone can be partly explained by inefficient tax collection mechanisms and by fraud. But, first of all, it is explained by tax benefits awarded by the Greek government to a handful of privileged people. The Greek tax authorities themselves acknowledge that more than 75% of the population duly contribute to public revenues by paying their taxes. The problem is that those citizens who pay little or no taxes hold the majority of the country’s wealth. To sum up, given that the rise of the public debt before 2008 was due to high interest rates and insufficient public income because of a minority of wealthy citizens not contributing as they should, we can conclude that this debt wasn’t used for the benefit of the population and wasn’t the result of excessive public expenditure either. ‘Greek people have been living beyond their means’? Bullshit! 2008: the Greek debt exploded. Thus was the beginning of the public debt crisis. Public? Really? In the early 2000’s, the countries that had adopted the Euro as their currency followed an economic development strategy based on four steps: 1. The peripheric countries in the Eurozone such as Greece were perceived by the major economic powers such as France and Germany as new potential markets for their exportations. The banks of these rich countries were thus encouraged to invest their money reserves in the banks of peripheric countries. 2. These then used the funds to lend massively on their national market 3. This growth made it possible for French and German companies to export more and more to Greece. 4. These companies’ profits were then deposited into their accounts, completing the cycle and starting another one. Between 2001 and 2009, in Greece, banks increased their loans to households by more than 600% and those to companies by 300%. Greek banks accumulated a 150 billion euros debt toward European banks. The total of the private debt increased from 74% of the GDP in 2001 to 122% in 2009, and nobody seemed to care. In 2008, this credit bubble eventually burst with the financial crisis just as it had in the US, in Spain and in Ireland. Greek banks, like all other European banks at the time, had lost a lot of money on the stock markets. They found themselves in a critical situation: They had no money left for loans whether to households or to companies, and the borrowers couldn’t afford to pay back their debts. French and German banks started worrying that they couldn’t see any acceptable return on their investments. Those two countries thus exerted pressure on the Greek government and the European institutions for the Greek State to borrow and bail out its banks. Thanks to this, those banks could in turn pay back the European banks. However, even after borrowing huge amounts on financial markets, Greece couldn’t bail-out its banks on its own. But the EU leaders knew that European citizens would not accept to pay again for banks’ negligence. Eurostat and the Greek government concealed the existing situation by literally manipulating the State’s accounts to inflate its debt and make the bank crisis look as though it was a public debt crisis. These manipulations were aimed at finger-pointing the public administration and the citizens instead of the banks. They also made the Troika’s intervention and the implementation of the memoranda possible in order to carry the bank losses over to the government and, as a consequence, to the people. The Troika lends to the Greek government money that was collected from European citizens. The more it lends, the more banks can be paid back. Eventually, the European banks were out of the danger zone. The new loans granted by the Troika then only served to pay back the Troika itself for the loans it made before. By now, three memoranda have been implemented. They represent 330 billion euros of public money. 110 billion euros for the first one in 2010, 130 billion euros for the second one in 2012 and 86 billion euros for the last one in 2015. More than half of this amount has been used to pay back the debt and almost a quarter paid for the bail-out of Greek banks. The remaining quarter has mainly been used to cover the costs of the 2012 debt restructuring and to finance the budget deficits. A significant portion of that money simply never reached Greece and was transferred through a special account opened in the European Central Bank. The point has never been to ‘save’ Greece. On the contrary: those loans resulted in terrible austerity measures for the Greek population.UNSUSTAINABLE DEBT: A debt can be defined as ‘unsustainable’when it can’t be paid back without violatingthe UN Conventions or the population’s fundamental rights,nor deteriorating its living conditions.Despite all those loans and the massive drain endured by the Greek economy, its condition continues to deteriorate. While the public debt didn’t exceed 103% of the GDP in 2007, it now represents 175% of the GDP while the GDP fell by 25% in four years! Given the weight of the public debt and the weakness of the national economy, it is crystal clear that the government can’t pay back the creditors without systematically deteriorating the population’s living conditions. The socio-economic impact of the stringent austerity measures that came along with the memoranda is dramatic: Serious rise in poverty driven by falling wages in private and public sectors, VAT increase, falling pensions, suppression of early retirement and explosion of the unemployment rate. Closure of 230,000 SMEs. Loss of 600,000 jobs and impossibility for many people to pay their electricity bills, their rent or even medical care. Hospitals closures, shortage of medical equipment, medicines and vaccines. Deterioration of the reception conditions for asylum seekers. Rise of social marginalization. Emigration of thousands of young people. Threats of seizure on 260,000 mortgaged proprieties and facilitation of procedures for movable property seizure. Degradation of working conditions due to the dismantling of the collective agreements system. Weakening of agriculture and tourism resulting from the tax increase for the companies of these sectors. Reduction of public services as a consequence of waves of privatisation, massive public job displacements and cuts in healthcare, justice, research, culture and education promising more poverty and more social marginalization during the years to come. In short, so many terrible consequences that it is impossible to enumerate all of them.In Greece,2.4 million people are living below the poverty linewith a daily income lower than 12€ per day for single personor lower than 6.6€ per personin a family of 4 people.ODIOUS DEBT: A debt is odious when it violates democratic principles,is used against the best interests of the populationor when the creditor knows it or ought to know it.But why would the Troika act this way? In addition to protect Greek and foreign banks, the memoranda made it possible for the creditors, a.k.a. the Troika and the Eurozone countries, to charge interests on the loans provided to Greece. For example, in April 2015, the IMF had already gathered 2.5 billion of profit thanks to those loans. Moreover, becoming Greece’s creditor ensure a favourable position to demand reforms fostering free trade, competition and flexibility on the Greek markets for the benefit of banks, big international companies and great European powers and at the expense of the population. Economically crushed as it is, Greece has become the EU’s laboratory for neoliberal economic policies What is currently experimented in Greece is intended to be implemented all over Europe. An IMF confidential internal document the Truth committee had access to shows how aware they were of the devastating social and economic consequences of the Memoranda since March 2010. Creditors know what they are doing and persist in their policiesILLEGAL DEBT: An illegal debt does not abideby the Constitution or laws currently in forcein either the creditor or debtor countryor by international lawor by the statutes of the institutions involved.The terms of the loans agreements violate: -Several Greek laws, European Treaties and International Conventions such as the Charter of Fundamental Rights of the European Union, UN Conventions on human rights as well as the UN Charter. They all stand for such fundamental human rights as social security, paid work, healthcare, decent accommodation. -Several articles and the general spirit of the Greek Constitution as well as the principle of people’s self-determination as guaranteed by the Vienna Convention and by a resolution of the UN General Assembly. Greece was coerced into relinquishing its sovereignty and sell off its resources. Indeed the third Memorandum was imposed in spite of the Greeks having refused austerity measures in the referendum on 5 July 2015, and the Constitution was violated with each of the three memoranda. Moreover, from now on, any bill of law proposed in the Greek parliament first has to be vetted by creditors. Finally, not only Greek institutions but also Greek citizens have been the targets of threats by the European institutions such as being excluded from the euro area. These are serious acts of interference with what should be the sole concern of the Greek government and acts of illicit constrain. -The principles of political neutrality applied to Central banks. The European Central Bank went beyond its mandate and failed to provide financial protection to members of the euro area as it refused help to Greek banks as long as there was no agreement with the Tsipras government. At no time was it at all concerned that the liquidity shortage it engineered made the humanitarian crisis only worse. It didn’t do anything to prevent bank deposits to be transferred abroad whereas it regularly acknowledges that this is indeed one of its main missions. -The IMF’s own statutes. -The Treaty on the functioning of the European Union -The Universal Declaration of Human Rights, the European social Charter and the international convention on economic, social and cultural rights. We can add that decisions reached by Greek courts are not respected by the Troika. On 10 June 2015, the State Council deemed the cuts in retirement pensions unconstitutional. It did not prevent the Troika from imposing even more radical cuts as part of the third Memorandum. What is happening is the Troika taking over power, not only in economic terms, but also in political terms. The audit Committee thus concludes that the Greek debt as a whole is unsustainable and the part owned by the Troika, which amounts to 85% of total Greek debt, is illegitimate, odious and illegal. Over the last months, the media have entertained the most unfounded clichés about the Greeks, who are presented as though they were responsible for the catastrophe befalling them. After analysing the facts we consider that the debt crisis can in no way be attributed to the Greek population. Not only could it have been avoided but after it had started it has not been managed in the interest of the people, quite the opposite. It might have been otherwise, and it is high time we turn to a different strategy in order to restore the Greeks’ dignity and to give Europe back to its citizens. Cancelling illegitimate, odious, unsustainable and illegal debts only depends on political determination and on a popular mobilisation leading to it. How can this concern us, European citizens? The measures now implemented in Greece could be applied in Spain, Ireland, Cyprus, Portugal and in fact to all EU citizens. Since the European fiscal pact was signed in 2012, the logic of austerity has been part of EU law. All over the continent, citizens have to pay the debt incurred in the bank crisis, which has dire consequences on their living conditions. What many still call ‘the European project’ is deprived of any meaning in the name of financial markets. Nobody who is at all aware of how valuable it is to live in a society that moves towards democracy and general welfare can ignore this. What the Greeks have to face could become our lot. Do we want this tragedy to be played again? Please check our sources, raise controversial issues, send comments, share this video, talk about it, and find out for yourselves that contrary to what many political leaders claim, there are many alternatives which deserve to be taken into account.