By Reginald Johnson
It was good to see Greek Prime
Minister Alexis Tsipras yesterday rebuke the representative of Germany in the European Parliament over the issue of Greece's debt.
Germany, France and other members of the Euro Zone have been acting
indignant over Greece’s inability to pay back loans made by Euro Zone members, as well as
banks and the International Monetary Fund.
German officials in particular have been
insisting that the debts must be repaid, despite the harsh austerity Greeks
have been enduring in recent years. They say that the Greek demands for debt
reduction and more favorable repayment terms are out of line. In a referendum
last weekend called by Tsipras, Greek voters decisively rejected plans for more
austerity in return for more loans from the EU.
German EU member Manfred Veber accused
Tsipras of having misled Greek voters, destroyed trust in Europe,
and insulted other leaders.
In a speech seen on Euro News, Tsipras
responded, “I want to remind you, Mr.
Veber, that the strongest moment of solidarity in Europe was in 1953 when your
country came out indebted and looted after two world wars and Europe and all
European countries showed the greatest solidarity in a 1953 London agreement
and they decided to write off 60 percent of the German debt and agreed to a
growth plan. That was the greatest moment of solidarity in recent European
history.”
Tsipras, other Greek officials, as well as
some notable economists such as Thomas Piketty and Richard Wolff, have recently
been pointing out the German hypocrisy on the issue of Greece’s debt. In fact, Greek officials said earlier this
year, that Germany had still not paid Greece for the agreed-upon debt from World War II. Under the
Nazi regime, Germany invaded and occupied Greece during the early 1940s.
Piketty, who rose to prominence last year
with a book on inequality, told the German magazine Die Zeit: “When I hear the
Germans say they maintain a very moral stance about debt, and strongly believe
debts must be repaid, then I think, what a huge joke! Germany is the country that has never repaid its debts. It
has no standing to lecture other nations.”
Greece now owes in the neighborhood of 350 billion euros, on
loans made by governments, private banks and the International Monetary Fund.
In return for bailout money, Greece agreed to an austerity program involving wage and
pension cuts and service reductions. The nation’s economy has gotten worse and Greece is virtually bankrupt.
Following the referendum on Sunday, Greek and EU officials have been meeting to try to arrive at some sort of
agreement where Greece will get more bailout funds and possibly a long-term debt reduction,
or “haircut.”
Even IMF leaders said in a recent report that
the terms of debt for Greece had been too harsh, there had been negative results,
and that a debt reduction is now needed.
But German Chancellor Angela Merkel isn’t
budging, saying on Thursday that debt relief was out of the question.
If an agreement can’t be reached, Greece would be forced out of the Euro Zone and credit would
be cut off. The nation would then have to print its own money.
Greek banks reportedly only have enough money
to last until Monday.
James S. Henry, an economist, lawyer and senior
fellow with Columbia University’s Center for Sustainable International
Investment told the CounterPoint radio show on WPKN that it was time for
officials of the EU and the European Central Bank to stop being so hard-headed
about Greece, and work out a more favorable deal for that nation.
“Any
settlement has to contain debt relief from an objective standpoint. The current
debt level is not serviceable,” he said. http://btlonline.org/2015/seg/150717af-btl-henry.html
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