One year after the first rescue loans of the EU and IMF and the following austerity measures the debt keeps increasing in Greece. Since then the country has been experiencing a deep social crisis. Protests aroused. Hundreds of thousands took to the streets. In Germany and elsewhere politicians and the media blaim a bloated state and luxury lifestyle for the financial situation. But economists and activists paint a different picture. They argue that the aggressive export policy of Germany, excessive interest rates for rescue loans and corrupt Greek politicians fed among others by German corporations like Siemens have substantially contributed to the crisis.
Leonidas Vatikiotis: Greek Journalist, Author, teaches political Economy at Varne Free University of Cyprus
David Goeßmann: Welcome to Kontext TV. In our show today we are focussing on the crisis of the Euro and the European Union. We are going to talk about the backgrounds of sovereign debts of states like Greece or Ireland, about the root causes of the crisis, and about the rescue loans by the EU and the IMF and their severe consequences.
Fabian Scheidler: In many European countries massive cuts in social spending, education and health budgets are being pushed through. By these means, state deficits caused by bank bail-outs and the economic crisis, are supposed to be rebalanced. But in the case of Greece, the harsh measures have achieved quite the contrary of the alleged stabilization. The economy continues to shrink, sovereign debt has dramatically increased, and speculations about state bancruptcy are rising again. In Athens we talked to Leonidas Vatikiotis. He is a journalist, author of several books and professor of economy at Varna University in Cypre. He is among a group of academics who are calling for a Greek debt audit that is going to examine the legitimacy of Greek debts.
Leonidas Vatikiotis: In these days we have the conclusion from one year of the days of 2010 when greek government asked from European Union and the IMF to get into this mechanism and when they took 110 billion euros from European Union and IMF. Greek government on the other side was obliged to start an austerity program that is the most strict austerity program that has been applied in Greece all the after war period. In these twelve months unemployment have been risen at 15 percent. It was 9 percent before a year. And all economists believe that in the next months unemployment will climb much more. On the other side we had a very big increase in indirect taxes. I'm speaking about value added tax that has been climbed. On the other side we had a decrease in the corporate taxes. As you understand that makes sure it is very unjust for the public, for the majority of the people. We have thousands of small and medium enterprises that have been closed. All the national institutions and the European Union, too, were telling us all this measures are necessary if you want to decrease the debt. I must tell you that the public debt has been increased. Before a year it was 140 percent and now a year later the public debt has been increased to 150 percent. What we saw all this year is an increase of public debt and not a decrease as they were telling us. So every three or four months the government announces a new round of measures that is imposed by government, IMF and European Union. Our educational system is in a very very bad situation. This situation in health and education is becoming much worse in these days. I must tell you that the Greek government announced before a few days that it will close one thousand schools. That means that tens of thousands if not hundreds of thousand in the next years of children will have no education. In Greece will happen what happens in Africa, what happens in South East Asia. All this because the austerity programs of European Union and IMF. There are many hospitals in Athens that will close. The next months will close very big hospitals of Athens because of shortage of equipment. They don't have gloves for operation, that don't have masks, they do not have beds, they do not have the most basic medicine. There are many non govermental organizations that are saying that Athens is now like Uganda, is like Simbabwe. There are many many thousands of homeless, there are many many thousands of pensioners who must decide: with this very little money I buy medicine or food. The souvereign debt crisis is owed to four causes: The first cause is the very low taxation of capital. The direct taxation of capital in Greece was the last four decades much lower than German, much lower than the other countries of the European Union. You can unterstand vers well that this very low taxation could not fund the public system of health, the public pension system or the public system of education. This is a structural cause fort he very big deficit of Greek economy. The second causefor the current crisis is the participation of Greece in the European Union. Economies of the periphery like Greece, like Portugal, like Ireland could not compete Deutschland. It is very striking that these countries, Greece, Portugal and Ireland that now say theycan't efford anymore that very often had a devaluation of their own currency before 2000 they joined Europe. The moment that these countries lost the monetary independence now they have all of them these structural very serious problems in the competition with Germany. Another very serious cause for the Greek souvereign debt crisis the addiction of Greek capital of direct subsedies. For example before a few years we had the Olympic Games. The Olympic Games were a party for the Greek capital because they constructed infrastructures for only one use. The overall costs was about twenty billion euros. When Greece was entering the mechanism of IMF and EU before one year its government deficit was about 30 billion euros. These are the most profound causes of the souvereign debt crisis. As you understand this has no relation to what is said about the luxury life of Greeks or the leisure of Greeks.""All this countries that have given money to Greece and Ireland will be paid with interest rates of the markets. We must clearify to the German people or to the Finnish people that they do not give money to the Greeks or to the Irish free of charge. They are paid with the interest rate of the market. It is 5.5 percent. When Germany now takes money from the market it pays 2 percent. So the government of Ms Merkel gains from this participation. All this said from the government of Deutschland first of all give ground to the far right. They have very big responsiblity about the rise of the extreme right in the European Union. We are calling the Greek government to form an audit committee to open the books of public debt. In this letter there are signing many intellectuals for example Noam Chomsky from United States, Tony Benn from United Kingdom, Ken Loach, there are many others. Our demand is very simple: When you are going to a bookstore, when you are going to a shop to buy something no one could accept to pay for something without seeing the receipt. We want to know what we are paying for. Our demand is a democratic demand, it is a democratic right of the Greek people to know what we must pay for.