Athens: As my plane circled over the Aegean sea before landing into Athens, the city lay sprawled below, gleaming white in the bright summer sun. I was thinking of the heated arguments I had had with friends before leaving. “The Greeks have after all been greedy and must face consequences” they said, almost indignant, “Surely one has to pay their debts?” You are probably asking yourself the same question. Chances are, you have or only want to hear the “creditor version” of the story, haven’t yet read David Graeber’s book on debt or haven’t been to Greece in this last week that saw deep turmoil in the run up to the referendum.
Reaching out to Greek people to find out if whether they’d vote “yes” or “no” in the referendum, I’d ask them hesistantly what they did for a living. They’d proudly respond that they were “ex-plumbers” or “ex-sailors”. Athens is the only city in the Europe, of at least 50 odd I’ve reported from in the last decade, where in charity clinics I saw more poor locals than immigrants, lining up to get free medicines and basic health care. The doctors there told us, people were distraught and depressed, having lost their jobs and homes. A quarter of Greeks and half of the country’s youth are unemployed. They’re grappling with brain drain, rising child mortality and an alarming jump in suicides rates.
I’d never seen so many old people out in the street at once, lining up in the sweltering heat: at ATMs to withdraw just 60 euros per day or walking to polling booths to vote for the referendum. Some were over 90 years old, and couldn’t walk unassisted. The voter turnout was 65%, one point less than for the general elections. Clearly, Greeks turned up in large numbers, because they felt they had something important to say.
In Syntagma in central Athens, where the Greek Parliament looms over a large square, many young Greeks, out of jobs, would offer to speak to us to tell us they didn’t see a bright future in their own country and felt “humiliated” by what the European instituions were offering “as if we are their slaves”. 30-year old Mohammad, Greek born and of Libyan origin, was helping me with translating interviews and news releases. He works as a journalist and seldom gets paid for it. Unlike the “corporate media”, which he says, tows the line of those who wield real power in Greece- the rich and the corrupt “we report the real news instead of spreading panic”. Mohammad was all fired up, pleased to see the television crews swarming in the square. He said he was happy the world was finally watching. “All we want is a life of dignity”, he said. Mohammad was only echoing what I would hear over and over again in the eventful week that I spent in and around Athens.
The debt is crushing
I got into a taxi and zipped past the square behind the University of Athens. It was here the ruling Syriza held its victory rally in January. Alexis Tsipras, who is now the Greek PM, was on stage as people danced to “Rock the Casbah” by The Clash. Defiance is the new mantra in Greece. Syriza’s win was seen as a shift in ideology, ushering in a new era in a country mired in problems of massive tax evasion and corruption. It’s the crushing debt and the austerity that have shaken people out of complacency.
As we reached closer to my hotel, we got into a traffic snarl. A common occurrence during the week, as mass rallies from the “yes” and “no” camps blocked streets everyday. Stuck in the jam for fifteen minutes, with no hope of moving anytime soon, I started worrying that the taxi meter would break my budget. But another ten minutes later, I got off having to pay only 10 euros. Everything seemed exceedingly affordable to me in Athens (I live in Paris). Sumptuous meals for just 8 euros, a four-star hotel with a stunning view of the Acropolis for just 100 euros. In fact, as a foreigner, I could withdraw as much money as I wanted, as the 60 euro cap applied only to Greek account holders, most of whom were panicking that hair cuts in savings would strip them of the little they had. I felt privileged, and a bit guilty.
We may instinctively think debts have to necessarily be repaid but what if the debt is really is just impossible to repay? Should the creditors then be allowed to wield arbitrary powers? Greece’s debt is more than 175 per cent of GDP. But to see how the moral force of “debt” works in irrational ways, you may want to rush to read Graeber’s book, Debt, the first 5000 years. Graeber tells the story of how Mafiosi trap people in their debt so they can use these people to return favours . They do so simply by offering free breakfasts to those they know will not be able to offer a free breakfast back. Later they broker this power into “greater wealth, greater power, greater debts.” Graeber writes of the sheer arbitrary power of the creditor, “If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt – above all, because it immediately makes it seem that it’s the victim who’s doing something wrong”.
Cut to Germany vs Greece. Germany, “a nation of hard workers” who are being asked to rescue the culprits: “the lazy, immoral Greeks who are refusing to repay their debts”. This version suits Germany. But there are three things that puncture large holes into its sanctimonious balloon. Much of this has already been said, but in case you weren’t paying attention, read on.
One, Germany’s own debts were written off in 1953 and allowed it to prosper. Greek PM Tsipras in his address to the Greek parliament on 10th March, 2015 said, “Germany, despite the crimes of the Third Reich and of the Hitleric hordes that burned the world to the ground, despite the totalitarian evil of the Holocaust, was benefited – and rightfully so – by a series of interventions. The most important of these were its WWI debt write-off, with the Treaty of London in 1953, and of course, with the humongous sums that were disbursed by the Allies in order to rebuild the country.”
French economist, Thomas Piketty echoed the same view in a recent interview: “What a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.” Piketty says that Germany’s economic miracle was based on the same kind of debt relief that we deny Greece today.
The roots of German success
Two, when proud Germans say they are hard workers and their Chancellor says the bailout has been generous, (hinting that lazy Greeks are complaining for nothing), they forget to attribute any of their success to the fact that they’ve been getting a free ride on the back of the common currency. German success has much to do with the fact the Euro allowed them to remain competitive despite the export boom, something the Deutsche mark would not have allowed.
Three, and this will come as a big surprise, the Greeks are not lazy! OECD figures show Greeks work the longest hours in the Eurozone. A recent Wall Street Journal article found that if pension figures are adjusted for the fact that Greece has a lot of older people, its pension spending is below the eurozone average.
How did the Greeks get into the soup in the first place? “By living beyond their means”, is what the general perception is. “Diabetics should remain off sugar”, someone said on Twitter. Good point. Except that it wasn’t the majority of common Greeks who were diabetics who chose to go to the patisserie to commit suicide.
When Greece adopted the Euro in 2001, Goldman Sachs helped the government cook the books to make it look like it qualified under EU’s debt rules. Was the rest of Europe naïve? Once Greece was in the Euro, French and German banks starting lending blindly to Greek banks at insanely low interest rates. Had its lenders assessed Greece correctly, it would not have sunken so deep in debt. Did the citizens approve any of this? It’s like asking if Americans approved of the subprime mortgage crisis.
When the 2008-9 crisis hit Europe, the Greek government had to bailout its domestic banks. Greek government bonds were downgraded and the country was brought down to its knees. Greek citizens then had to receive a bailout and before they knew it, they were deep in debt and bearing the burden of austerity measures that led to their GDP plunging by a quarter and unemployment soaring to 25% and as high as 50% among youth.
So did Greek people swallow or squander this money? No. Hardly any money went into their pockets, it all went to the French and Greek banks. And it’s no less than the former Bundesbank Chief, Karl Otto Pöhl, who said the bailout was to protect French and German banks. So why did the European governments pay private debts and are now making it the “responsibility” of the Greek governement to crush their citizens under the weight of reform in order to repay this debt?
The Greek PM, Alexis Tsipras, told the European Parliament on Wednesday, “According to a study by Credit Suisse, 10% of Greeks possess 56% of the national wealth. And that 10% of Greeks, in the period of austerity and crisis, were left untouched–they haven’t contributed to the burdens as the remaining 90% of Greeks have contributed.”
Ineffective tax system
In fact Tsipras said he is not claiming “evil foreigners” are responsible for his country’s woes. He says Greece is on the verge of bankruptcy because the previous Greek governments created clientelism, supported corruption and left tax evasion on vast amounts of wealth unchecked. Oligarchs, private bank interests have a strong grip over the country. When names on the Greek HSBC list were revealed by a Greek journalist, he was sent to jail. Nothing was done with the list since. The country’s tax collection system has been ineffective so far. But Syriza claim they want to change that. When I visited their party headquarters in Athens, the young party members, were calm and confident, speaking of the “blackmail” of European institutions, that they said must come to an end. They believe theirs is a unique ideology, which sets them apart from “the pack of wolves” who have a stranglehold over their country.
When their motor-cycle riding, star Finance Minister, the former economics professor Yanis Varoufakis resigned last week, it was because people in Brussles couldn’t stand him for his outspoken ways. In his much talked about parting quote, Varoufakis said European institutions were behaving like “terrorists”. But his exit doesn’t mean Greece’s stand will soften. Euclid Tsakalotos, who took over from him as Greek Finance Minister, had famously told a gathering in Ireland, “Their fear of Syriza has more to do with the aspirations of their own people for social justice and a new model of socially inclusive development; it is you that they fear, not us.”
By voting in a new kind of party to power, Greek people tried to make amends. You may dismiss them as leftist-romantics who believe in “splurge now , rant later” or cast them as juvenile and inexperienced, but the reality is that today the Greek “no” is shaking up all of Europe and making the Troika very giddy.
Whether Greece “deserves” to stay in the Euro or go out is not the right question. It’s better to ask what Greece and the rest of Europe “needs”. In any case, the cracks in the European project have been exposed. And this may not end in Greece. More than 2000 kilometers away in Spain, the one year old party Podemos, fared exceeding well in local elections barely two months ago and are gearing up for the general elections in December. I met their leader Pablo Iglesias in Madrid in April. Podemos see Syriza as their allies. Both want to break from the traditional left-right divide and focus on an agenda that puts anti-austerity and anti-corruption right at the centre of their campaigns. Greek PM Alexis Tsipras’s tweet on election night was very telling, “First we take Athens, then we take Madrid”. Clear signs, that the story of unbearable debt burdens, could resonate in other parts of Europe.