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Editorial: To save EU, forgive Greek debts

BY DI EDITORIAL BOARD | JULY 09, 2015 5:00 AM

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In the aftermath of Greece’s history-shattering decision to proclaim a big fat “NO” as a response to Germany’s incessant pro-austerity measure bullying, the European Union seems to be teetering before the brink of oblivion. Greece and Spain are acting as dead weight, pulling apart what once used to be an exemplary monetary union, rooted in post-war economic aspirations and capitalist ambition. With the UK threatening to leave the union and France sitting idly by as Greece bleeds, Germany sits as an anchor in the center of everything.

But the German demands are severe. The term austerity, when removed from economic discourse, is defined as “conditions characterized by severity, sternness, or asceticism,” and it is apparent that the Greek ascetic no longer parallels that of the EU nor Germany, which is perhaps the first European example of such since the Chicago boys went marching on down to Chile with that neoliberal “Structural Adjustment Plans” that have been flat-out refused.

There may be consequences for the Greeks, as the organization has threatened removal of Greece from the EU if it were to not accept these measures. This would render it currency-less, because the Greeks ditched their “drachma” for the euro way back in 2002.

So, what now? The Greek economy still lies in smoldering shambles and a monumental debt hangs like wet laundry over Greek heads.

Perhaps this grand economic experiment could continue and the “troika” (organizations representing creditor interests) could simply forgive the Greek debt, cutting a break to an already crippled economy.

The International Monetary Fund, a member of this troika, has already concluded the notion of Greece repaying its debt is far-fetched, to say the least. Reuters writes, “The IMF argues that Greece’s debt burden of nearly 185 percent of gross domestic product can only be made sustainable if the Euro Zone provides considerable extra financing through a mixture of new loans and a debt restructuring.”

Interestingly enough, Euro Zone countries such as Germany, attempted to block this report, because it vindicates the austerity-measure rejection by Greece.

On the subject of Greece’s debt, economist Thomas Piketty, in an interview with “The Wire,” said, “[Germany] has no standing to lecture other nations” and later, urges his German interviewer to “think about the London Debt Agreement of 1953, in which 60 percent of German foreign debt was canceled and its internal debts were restructured.”

This debt agreement he speaks of arguably directly contributed to Germany’s standing as the European economic powerhouse it is now. And at this point, with the world economy even more so tangled than it was in the postwar period, room for negotiation is more crucial than ever.

The EU cannot let Greece sink. These euro crises have marked the start of meandering path toward the steady deconstruction of the EU, and the pieces will continue to crumble until alternatives are found when traditional neoliberal strategies fail.


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