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Arabica Robusta

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greekdebttruthcommission.org

greece odious debt economic crisis varoufakis

shared by Arabica Robusta on 08 Jan 18 - No Cached
  • Several weeks later, it was very clear that neither Tsipras or Varoufakis were open to publicly, in front of the media, mentioning the work of the commission.
  • I performed this work with the 30 members of the commission. The work done by the commission, I would say, consists of more than 1500 or 2000 hours of work performed over eight weeks among 30 persons. We worked day and night to produce a very efficient and rigorous report, and my expectation was that there was some possibility that several ministers of the SYRIZA-led government — ministers of the then-SYRIZA faction “Left Platform,” jointly with Zoe Konstantopoulou and the pressure from the streets and from the other radical-left groups and the trade-union left — could pressure the government to use our work. But I was not really very optimistic because I was very well informed about what Varoufakis was doing with his team of advisers. I was receiving clear information about the concessions that he was ready to give to the creditors.
  • In the first two chapters, we analyze the building of the Greek public and private debt before the crisis. We explain what happened in the 1990s and in the first decade of the 21st century. We showed that the accumulation of debt was linked to huge amounts of military expenses encouraged by the U.S. government and the French and German governments, which are the main sellers of weapons to Greece. We showed also that interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher… The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation. paid by Greece at the end of the 20th century increased the debt, as also happened with other peripheral countries.
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  • we demonstrated that the debt to the troika was an odious debt, meaning a debt accumulated against the interests of the people, and that the creditors or lenders knew that they were giving loans against the interests of the people. And, in the case of the troika, this was absolutely evident, because the troika was dictating to the Greek government the terms of the loans — which laws to change, which new laws to adopt, what wage and pension reductions and privatizations to enact. The troika were not only accomplices but they were direct commanders — they were the initiators of these violations.
  • The Debt Truth Commission was dissolved by the new president of the Greek parliament, Nikos Voutsis, in October 2015. We were opposed to its dissolution, and so we decided collectively to transform ourselves into an independent organization with the same name. We are active now as the Debt Truth Committee, recognized by Greek law, and we have met several times in the past two years.
  • Now the ECB is demanding that Greece repay the full amount of the Greek bonds the ECB bought at a discount price. It is demanding the full nominal value of the bonds — and with a very high interest rate, 6.5 percent — at the same time that the ECB is lending money to the private banks at zero interest.
  • what a government that would like to really help the Greek people’s interests would be to, on the basis of our audit, enact another unilateral, sovereign action of repudiation of other parts of the debt. It is clear that this would provoke a huge verbal reaction. But for the past seven years, since the first memorandum of 2010, the creditors have criticized the Greek government and the Greek population, shown the Greek population as “lazy” and as “delinquent” at the level of tax payments. I think that they cannot, as creditors, inflict more pain on the Greek people than they already have.
  • recently the IMF but also the Bank of International Settlements — it is a bank of the big central banks based in Basel, Switzerland — have been saying there are new financial bubbles. These bubbles have been provoked by an inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. of the price of assets, with a massive injection of liquidity decided by the big central banks like the U.S. Federal Reserve, the European Central Bank, and the Bank of England.
  • But these types of crises generally deliver a huge amount of pain to the majority of the population, so we should be conscious of what capitalism is preparing for the population of the world. We have to combine a struggle against illegitimate debt with other demands about private banks, about taxes, against climate change, in favor of social justice. We need to chart a radical turn opposing the capitalist model.
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