Greece’s Leftists Have a Good Idea
by   /  Jan 27, 2015

Amid the populist rhetoric that propelled the far-left Syriza party to victory in Greece’s parliamentary elections, there’s one idea that Germany in particular should take to heart: revive growth in the euro area by giving the hardest-hit countries a break on their debts. Syriza leader Alexis Tsipras, who was sworn in Monday as Greece’s new prime minister, has long been calling for a “European debt conference” — a summit meeting at which the region’s leaders would reduce the debilitating obligations of Greece and other financially troubled euro-area governments. Unlike the rest of the party’s program, this idea makes sense. Greece has already been granted some debt relief, but not enough to make its fiscal position sustainable. Tsipras is calling for a writedown of about one-third.

There’s plenty of historical precedent for relief on this scale. One case in particular ought to resonate with German officials, who are among the most steadfast opponents of debt relief. After World War 2, Germany’s creditors recognized that full payment of the country’s debts would make revival harder and could destabilize the whole of Europe. In 1953, they agreed to forgive about 50 percent of West Germany’s debts, and made the rest contingent on economic performance. The creditor countries acknowledged at the time that the debt relief was in their own interests.

Today, Germany is the most powerful creditor nation in the euro area. A prolonged financial and economic crisis — together with fiscal and regulatory mismanagement on all sides — has left Greece and others in financial distress. Concerned that further debt relief would encourage profligacy, Germany opposes writedowns and insists on severe fiscal austerity. The results have been disastrous. In Greece, one in four workers is unemployed and — by one estimate — almost half the population is now in poverty.

This enforced hardship isn’t improving the countries’ ability to pay their debts or helping the European Union’s economic prospects. Slow growth has eroded the fiscal benefits of austerity. Despite spending cuts and tax increases, Greece, Italy, Portugal, Spain and even France will be unable to get their ratios of debt to gross domestic product down to the euro area’s permitted maximum of 60 percent in the foreseeable future. Debt forgiveness tied to pro-growth economic reforms would help. In some countries, the cost of servicing debt exceeds 10 percent of government expenditures. Some of this money would be better used for spending that would put people back to work. Higher employment and faster growth would make it easier for governments to pay their remaining obligations. That’s why, in circumstances as dire as these, the true cost of debt relief to creditors is low, at worst, and in some cases could even be negative. There’d be other benefits too — above all, easing the suffering already inflicted on Greece and others, and restoring popular support for the European project. As a principal stakeholder in that project, Germany stands to gain a lot. Its refusal to countenance further debt relief is economically damaging and politically dangerous. For its own sake, Germany should think again.


“The Peristeri health centre is one of 40 that have sprung up around Greece since the end of mass anti-austerity protests in 2011. Using donated drugs – state medicine reimbursements have been slashed by half, so even patients with insurance are now paying 70% more for their drugs – and medical equipment (Peristeri’s ultrasound scanner came from a German aid group, its children’s vaccines from France), the 16 clinics in the Greater Athens area alone treat more than 30,000 patients a month. The clinics in turn are part of a far larger and avowedly political movement of well over 400 citizen-run groups – food solidarity centres, social kitchens, cooperatives, “without middlemen” distribution networks for fresh produce, legal aid hubs, education classes – that has emerged in response to the near-collapse of Greece’s welfare state, and has more than doubled in size in the past three years.”

Greece’s new finance minister Yanis Varoufakis and outgoing finance minister Gikas Hardouvelis during the handing over of the reins to the ministry. (photo: Marios Lolos)

Radical left is right about Europe’s debt
by Wolfgang Münchau  / November 23, 2014

Let us assume that you share the global consensus view on what the eurozone should do right now. Specifically, you want to see more public-sector investment and debt restructuring. Now ask yourself the following question: if you were a citizen of a eurozone country, which political party would you support for that to happen? You may be surprised to see that there is not much choice. In Germany, the only one that comes close to such an agenda is Die Linke, the former Communists. In Greece, it would be Syriza; and in Spain, it would be Podemos, which came out of nowhere and is now leading in the opinion polls.

Thousands gathered in Madrid in a rally organized by Podemos, following the recent victory of the eurosceptic Syriza party in Greece.

You may not consider yourself a supporter of the radical left. But if you lived in the eurozone and supported those policies, that would be your only choice. What about Europe’s centre-left parties, the social democrats and socialists? Do they not support such an agenda? They may do so when they are in opposition. But once in government they feel the need to become respectable, at which point they discover their supply-side genes. Remember that, François Hollande, France’s president, explained the policy shift of his government by saying that supply creates demand. Of the radical parties that have emerged recently, the one to watch is Podemos. It is still young, with an agenda in the making. From what I have read so far, it may be the one that comes the closest of all those in the eurozone to offering a consistent approach to post-crisis economic management.

In a recent interview, Nacho Alvarez, a senior member of the party’s economics team, laid out his programme with a refreshing clarity. The 37-year-old economics professor says the Spanish debt burden, both private and public, is unsustainable and needs to be reduced. That could include some combination of a renegotiation of interest rates, grace periods, debt rescheduling and a haircut. He also said Podemos’ goal was not to leave the eurozone – but that equally the party would not insist on membership at all costs. The aim is the economic wellbeing of the country. To an outsider, that seems a balanced position. Not so in Spain. The establishment fears that this agenda will turn the country into a European version of Venezuela. But there is nothing controversial about the statement that if debt is unsustainable it needs to be restructured. Or that if the euro were to bring decades of suffering, it would be perfectly legitimate to question the eurozone’s institutions and policies. The Podemos position recognises a simple truth about the eurozone in late 2014. It is logically inconsistent for the single currency to enter a secular stagnation and not restructure its debt. Since nothing is being done to avoid the former, there is a probability approaching 100 per cent of the latter happening.

Yet, for the moment, European governments keep playing the “extend and pretend” game. Where such a short-sighted strategy leads to can be seen in Greece. After six years of economic depression, the government finds itself in an acute political crisis. Syriza is leading in the polls, and stands a good chance of assuming power at the next general elections, possibly in 2015. Spain is not yet at that juncture. Podemos might deprive the largest parties – the Popular party of Prime Minister Mariano Rajoy and the opposition Socialist party – of an absolute majority in next year’s elections. It might force the two into a German-style grand coalition – which would establish the new party as the main opposition.

The situation in Italy is different but no less serious. If Prime Minister Matteo Renzi fails to generate an economic recovery in his remaining three years in office, the opposition Five Star Movement would be in pole position to form the next government. Unlike Podemos, this is a truly radical party, a firm advocate of euro exit. So are the National Front in France and Germany’s Alternative für Deutschland. What Podemos still needs to do is offer a coherent vision of life after a debt restructuring. It would be a good idea if the party organised itself at eurozone-level beyond its alliance with Syriza in the European Parliament, because that is where the relevant policy decisions are made. A debt resolution for Spain, necessary as it is, can only be the start of a wider policy shift. The tragedy of today’s eurozone is the sense of resignation with which the establishment parties of the centre-left and the centre-right are allowing Europe to drift into the economic equivalent of a nuclear winter. It is a particular tragedy that parties of the hard left are the only ones that support sensible policies such as debt restructuring. The rise of Podemos shows that there is a demand for alternative policy. Unless the established parties shift their position, they will leave a big opening to the likes of Podemos and Syriza.

Bank of England governor attacks eurozone austerity
by Larry Elliott /   28 January 2015

The Bank of England governor, Mark Carney, has launched a strong attack on austerity in the eurozone as he warned that he single-currency area was caught in a debt trap that could cost it a second lost decade. Speaking in Dublin, Carney said the eurozone needed to ease its hardline budgetary policies and make rapid progress towards a fiscal union that would transfer resources from rich to poor countries. “It is difficult to avoid the conclusion that, if the eurozone were a country, fiscal policy would be substantially more supportive,” the governor said. “However, it is tighter than in the UK, even though Europe still lacks other effective risk-sharing mechanisms and is relatively inflexible.” Carney’s remarks come just three days after the election of the Syriza-led government in Greece presented a direct challenge to the austerity policies championed in the eurozone by Germany’s Angela Merkel. While not mentioning any eurozone country by name, Carney made it clear that he thought the failure to complete the process of integration coupled with over-restrictive fiscal policies risked driving the 18-nation single currency area deeper into a debt trap. “Since the financial crisis all major advanced economies have been in a debt trap where low growth deepens the burden of debt, prompting the private sector to cut spending further. Persistent economic weakness damages the extent to which economies can recover. Skills and capital atrophy. Workers become discouraged and leave the labour force. Prospects decline and the noose tightens. “As difficult as it has been, some countries, including the US and the UK, are now escaping this trap. Others in the euro area are sinking deeper.”

Since the start of the eurozone crisis more than five years ago, Europe’s policy makers have been calling for the creation of a banking union and a fiscal union to stand alongside the monetary union that created the single currency. There have also been calls, from the European commission, the European Central Bank and individual governments for economic reforms to make the eurozone more competitive. Carney noted: “As of this evening, progress on structural reforms in the euro area remains uneven. Cross border risk sharing through the financial system has slid backwards. Europe’s leaders do not currently foresee fiscal union as part of monetary union. Such timidity has costs.” The governor added that there are four features of Britain’s economic model that showed how to escape a debt trap: an integrated financial system that channelled savings into investment; fiscal policy that moved money around the UK and was flexible enough to allow budget deficits to rise during downturns; the economy was open and flexible; and the monetary policy operated by Threadneedle Street was credible. He contrasted the UK with the eurozone, where output unadjusted for inflation has increased by 5% in almost seven years and inflation excluding fuel and food prices has been below 1% for over a year. “This is potentially dangerous. Low nominal growth is intensifying the euro area’s debt burden. The fear of stagnation is holding back spending and investment.”

Carney has been vocal in his support for the European Central Bank’s decision to start buying government and commercial debt in its own version of the quantitative easing programmes, but said the Frankfurt-based central bank was unable alone to eliminate the threat of a prolonged stagnation. “These exist primarily because, in most respects, the current construction of the euro area is unfinished.” The governor expressed scepticism about whether improving competitiveness through driving down costs – a process known as internal devaluation – would work. “Internal devaluations simply reallocate demand within the currency union. They do not boost aggregate demand in the euro area as a whole. Put another way, since competitiveness is relative, a solution for some cannot be a solution for all.” Carney said the eurozone’s unemployment rate of 11.5% was more than double that of the UK, but its fiscal deficit – the gap between tax revenues and spending – was only half the size of the UK’s. The eurozone, he said, should be using a “constructive” fiscal policy to support demand and mitigate the “tail risks of stagnation”. He added: “Europe needs a comprehensive, coherent plan to anchor expectations, build confidence and escape its debt trap.”

by   / 17 January 2015

Forgiveness: it’s a rare enough quality in family life, let alone international policymaking. But if, as the polls suggest, the populist Syriza party wins next weekend’s Greek election, Athens will be asking its European brothers and sisters to forgive and forget some of the €317bn (£240bn) it still owes, so that its economy – and society – can recover from more than six years of austerity and recession. Instead of the defiant tone that once saw Syriza’s leader, Alexis Tsipras, threatening to ditch the euro altogether, the party now hopes to negotiate an agreement with Germany and other creditors that could allow Greece to remain in the single currency – but set it on the path to recovery.

London-based pressure group Jubilee Debt Campaign, which has studied the fate of heavily indebted countries around the world, says Greece is right to demand a more generous approach from its creditors, because although it has received an extraordinary €252bn in bailouts since 2010, just 10% of that has found its way into public spending. Much of the rest poured straight back out of the country: in debt repayments and interest to its creditors, many of them banks and hedge funds in the core eurozone countries, including Germany and France; and in sweeteners to persuade lenders to sign up to the 2012 bond restructuring that helped prevent the country crashing out of the euro. In effect, the “troika” of the European Central Bank, the International Monetary Fund and the European commission has simply replaced the banks and the hedge funds as Greece’s paymasters. The country’s overall debt burden has actually increased in the almost five years since it was first “rescued”, and of the amount still outstanding, 78% is now owed to public sector institutions, primarily the EU.

Stephany Griffith-Jones, an economist who is an expert on debt crises in developing countries, says: “They have got quite a lot of relief already; but a lot of that money that came to the government has gone to servicing the debt, including to the private banks. It wasn’t really money to help the Greeks. This is exactly like when I used to study Latin America in the 1980s: then, it was American and British banks, now it’s German and French banks.” She quotes former US labour secretary Robert Reich, who described America’s bank bailouts as “capitalism on the upside and socialism on the downside”. In fact, leaked minutes of the 2010 IMF meeting that agreed the bailout for Greece showed that Latin American countries scarred by their own experiences expressed deep disquiet about the policy.

Argentina, which is still being dogged by wrangles with its private-sector creditors more than a decade after first defaulting in 2001, said debt relief should be on the table, and warned: “It is very likely that Greece might end up worse off after implementing this programme.” Brazil said the bailouts “may be seen not as a rescue of Greece, which will have to undergo a wrenching adjustment, but as a bailout of Greece’s private debt holders, mainly European financial institutions”. That’s precisely the point made by Jubilee Debt Campaign: the reckless lenders that poured speculative cash into the country in the runup to the crisis escaped largely unscathed (though they were forced to accept some reduction in the face value of their bonds – known as a haircut – in the 2012 restructuring that accompanied Greece’s second emergency bailout). It has been a very different path to that taken in Iceland, which forced foreign banks to take heavy losses and has since seen its economy bounce back strongly.

In some ways, now might seem a strange time for Greece to send out a cry for help. After five years of harsh spending cuts and tax rises imposed at the behest of the troika, the Greek government has battled its way back to a so-called primary surplus. That means if it wasn’t for having to pay the interest on its debts, it would no longer be living beyond its means. Yet look up from this dry financial calculus, and it is clear the Greek economy is in a perilous state. Unemployment was more than 25% at the last count. GDP has collapsed by more than 30% since its peak before the crisis: a decline comparable only to that seen in the US during the Great Depression. And it’s not clear that there is any way out. Greece’s debts are still worth 175% of its GDP: well above the level considered sustainable by economists. Despite repeated wage cuts that should have made its exports more competitive – a process known as internal devaluation – the country is running a large trade deficit. And the rest of the eurozone – Greece’s major export market – is sliding towards recession.

Syriza, whose view is backed by a growing chorus of experts, would like to see an international creditors’ conference for Greece, along the lines of the meetings that drew up the London Agreement in 1953 that gave generous debt relief to West Germany. The starting point, instead of what financial markets would bear, would be what Greece could reasonably manage to pay while rebuilding its shattered economy – and maintaining social cohesion, which has been stretched to breaking point by repeated salary reductions for public servants and cuts in the country’s public services. With a bit more fiscal leeway, Syriza argues it could raise public sector salaries, slow the pace of job cuts and raise pensions, helping to boost consumer demand and rekindle economic growth. It would also like to raise more in taxes from wealthier Greeks. Francesco Caselli at the London School of Economics says: “I think it’s a pretty reasonable thing to be asking for.” He adds that even if Syriza cannot persuade its eurozone neighbours to slash its debt burden, it should at least demand a relaxation of the cuts regime. “Perhaps more importantly, what they should be asking for is a less demanding path of fiscal consolidation: less aggressive austerity.”

Ann Pettifor of the economics thinktank Prime says: “To me, it’s about process and what would be fair. We should do for Greece what the Allies did for Germany, and say that she should not spend more than 3% of her export revenues on debt servicing, and that should be the deciding factor.” A survey of economists by Bloomberg last week found that more than half expect Greece to receive some debt relief after the election – notwithstanding the purported “moral hazard” of bailing out prodigal debtors. In fact, some experts believe letting Greece off the hook for at least some of its borrowing would be good not just for the Greek people, but for the rest of the eurozone too. The Oxford economist Simon Wren-Lewis argued that point in a blogpost last week. “In reality, reducing the debt burden in Greece (and probably elsewhere) would do the eurozone a lot of collective good,” he said. “Greece would be able to relax the crippling austerity that has had disastrous economic and social consequences. The core countries and the IMF could at least partially undo the mistakes they made from 2010 to 2012 in first delaying default, and then failing to impose a complete default.”

He added: “German taxpayers might be encouraged to understand that the problem since 2010 has not been Greek intransigence but the actions of their own governments in trying to protect their own banks and in dispensing unrealistic degrees of austerity.” Support for the idea of a debt conference has also come from some surprising sources. German public opinion is generally viewed as opposed in principle to any more help for the Greeks. But Hans-Werner Sinn, president of the Ifo institute in Munich, one of the country’s key economic thinktanks, last week became one of the most prominent German voices arguing for an international summit to agree a debt write-off, from the pragmatic point of view that Germany is unlikely to get its money back anyway. “Unemployment in Greece is now twice as high as it was in May 2010. Industrial production has plunged by 30% compared to its pre-crisis level. The country is sitting in a trap,” he said. Sinn also argues that Greece needs a devaluation to have any chance of recovering its competitiveness, which would require it to leave the euro temporarily. Even if Syriza succeeds in forming a government and manages to convince its neighbours they should show it some forgiveness, coming up with a deal that is economically feasible and politically sellable will be a formidable challenge for international diplomats. Indeed, Griffith-Jones argues that the best approach might be to kick off talks in private. “What’s important is not just the size of the debt relief but the way you do it,” she says. “Another risk is that they have a major bust-up and the markets panic.” And Caselli at the LSE says he would not rule out the possibility that the end result of the delicate negotiations over the coming months is that Greece crashes out of the euro. “It’s definitely within the realm of the possible,” he says. “Greek society has been – over the last five, six years – under a level of stress that is not sustainable for much longer.”

Secret of the ‘German Miracle’
Germany’s “economic miracle” (or wirtschaftswunder), which saw the defeated country rebuild its shattered infrastructure to become a world-beating industrial powerhouse, was made possible by a deal struck in London in 1953, which saw half of the debts it owed to the rest of the world written off. Since the global financial crisis of 2008, Germany’s has been one of the strongest voices advocating programmes of unflinching austerity for Greece and the other bailed-out European economies. Yet in the wake of the second world war, West Germany managed to secure 15bn deutschmarks of debt forgiveness, in what became known as the London agreement. The deal is less celebrated than the well-known Marshall plan, which saw US aid flood into Europe; but it was critical to Germany’s re-emergence as a major economic force. Its creditors feared the threat from the communist east, and believed the West German economy must be allowed to recover. In a proposal drafted in 1950, the US, UK and France argued that “the restoration of German solvability includes an adequate solution for the German debt which takes Germany’s economic problems into account and makes sure that negotiations are fair to all participants”. After talks that dragged on for several months in 1953, and included private sector lenders as well as governments, all participants agreed to write off about half of the country’s outstanding debt – much of it contracted before the Nazis had come to power, in order to pay off the reparations imposed on Germany after the first world war. Crucially, it was made a condition of the deal that West Germany would only have to make repayments when it was running a trade surplus: in other words, when it had earned the money to pay up, rather than having to borrow more, or dip into its foreign currency reserves. Its repayments were also limited to 3% of export earnings. Germany’s creditors therefore had an incentive to buy the country’s goods, so that it would be able to afford to pay them. This approach was widely seen as helping to sow the seeds of the powerful export sector that has become such a dominant characteristic of the German economy over the past 60 years.

Lloyd George, the British prime minister, signs the Versailles treaty, after ‘Keynes’s unsuccessful plea to lower Germany’s reparations burden’.

Greece’s new prime minister wants Germany to pay for Nazi war crimes
by Ishaan Tharoor  / January 26 2015

After the seismic victory of Greece’s leftist Syriza party in national polling Sunday, the country’s new prime minister, 40-year-old Alexis Tsipras, is leading all of Europe down an uncertain path. Syriza has vowed  to renegotiate the crippling debts saddled on the Greek economy by European lenders — a move that some fear could threaten the unity of the eurozone. Tsipras and his allies, meanwhile, see their ascension as a historic opportunity, as WorldViews discussed here. But it’s not just the future that’s on Syriza’s agenda. In what was virtually his first act as prime minister Monday, Tsipras journeyed to the memorial site at the Kaisariani rifle range, where in 1944 Nazi soldiers executed some 200 Greek activists in retaliation for the death of a German officer killed in a Greek ambush.

The visit was drenched in symbolism. The past half-decade of crippling austerity in Greece is the consequence of terms dictated by the “troika” —  the European Commission, European Central Bank and the International Monetary Fund. Germany, Europe’s largest economy, played a key role in delivering Greece’s bailout and enforcing its strict conditions. Ill will toward Germany is high in Greece, where ordinary citizens blame their country’s dire economic state in part on the high-handed policies of a distant European elite. Syriza, in particular, has been outspoken about the need for Germany to atone for its past in Greece, or at least show a bit more leniency now as compensation. Tsipras has campaigned on the issue for more than a year, including in the build-up to Sunday’s election. “We are going to demand debt reduction, and the money Germany owes us from World War II, including reparations,” he said earlier this month.

A 2013 study carried out by the previous Greek government of defeated Prime Minister Antonis Samaras estimated that Germany owed Greece some $200 billion for damages incurred during the Nazi occupation, the cost of rebuilding destroyed infrastructure as well as loans Nazi authorities forced Greece to pay between 1942 and 1944. The Samaras government, whose critics accused of being handmaidens to Brussels’ harsh mandates, did little with the report. Another advocacy group claims that the sum owed to Greece could be as much as $677 billion. But Syriza may likely invoke this legacy in its bid to win greater debt forgiveness now. It has the sympathy, at least, of German leftists.

“From a moral point of view, Germany ought to pay off these old compensations and the ‘war loan’ that they got during the Occupation,” said Gabriele Zimmer, a leading member of Die Linke, a socialist German party that is allied with Syriza in the European parliament.

As is often the case, though, the question of reparations is a fraught one. Not many countries have received reparations from Germany, which itself was ravaged by the war and then carved up by the victorious Allies. According to the New York Times, some experts believe that as many as 300,000 Greeks starved to death during the Nazi occupation. Brutal reprisals like that carried out at the Kaisariani site were not uncommon, given the active nature of Greece’s resistance movement. Syriza’s grandstanding on the issue can also be read as a savvy move to win over nationalist voters who would perhaps otherwise not favor the leftists. The far-right Golden Dawn party, which has neo-Nazi origins, polled far behind Syriza, but still came in third among the country’s many jostling parties. “It is our duty to pay homage and not forget that the European peoples live free and have defeated the specter of intolerance, the dark ideology of fascism,” Tsipras said last April, ahead of European elections. “There were thousands of those who sacrificed their lives in our country.” That battle against “fascism” may have been won once more Sunday, but Tsipras and Syriza have long a fight ahead of them to win the larger concessions they now demand.

In an article printed in Spain’s El Pais, Alexis Tsipras argues how a SYRIZA win in Greece will show the way for Spain and the rest of Europe   /  16 Jan. 15

Below is the full article as it appeared in El Pais  (translation by

“On the 25th of January Greece will shut the door on the past. SYRIZA’s victory is the hope of the worlds of labour and of culture in all of Europe for change. To make the necessary step forward. From the darkness of austerity and of authoritarianism, into the light of democracy, of solidarity and of sustainable development. For this reason, Greece is only the beginning. Within this year, Spain’s turn is coming. The change begins from the South. The defeat of the political sponsors of austerity, foreclosures, of insecurity and fear, of corruption and the scandals has its launching point in our countries. Our people will take the future in their hands and open the door of tomorrow for young and uncorrupted individuals. For their own people who have a clear gaze. For this reason, the victory of the Greek people and of SYRIZA carries the message of a new and hopeful course for Spain. A course which, as is shown by public opinion polls, the Spanish people are steadily turning towards. This is how the South will move forward, to change Europe.

Europe today is not a victim of the crisis – the crisis, in any case, ended where it began, in the USA, thanks to the expansionary monetary and fiscal policy. Europe is a victim of austerity. It is at risk from the conservative policies of all those who impose in their countries the selfish choices of Ms Merkel. The neoliberal management of the crisis has led the entire South to a politically unacceptable and economically unstable equilibrium of crisis. We exist between the stagnation and low GDP growth, in deflation, high indebtedness, high unemployment and spreading poverty. And it is either a convenient delusion or a political contrivance for one to state that, with the Eurozone essentially in stasis (0.8% in 2014 and 1.1% in 2015), they will grow by themselves. And indeed when they are on the verge of deflation, have an increased public debt – over 100% of GDP this year – while at the same time being obliged to cut fiscal deficits. Regardless of how much they may cite the generous projections of European Commission, commonsense will prevail in the end. For this reason, the struggle of our peoples for change is the struggle of commonsense versus ideological fanaticism. It is the struggle of dignity versus servitude.

For us the equilibrium of the crisis is not an option. It is an opportunity for change. SYRIZA’s victory is a new beginning for the broadest possible cooperation of all the progressive forces and forces of the left of the European South. To stop that which is fueling stagnation, unemployment and over indebtedness: austerity. It is the launching point for the coordination of our policies for growth. To restore economic security and dignity to our countries. To repatriate the exiled youth – the young migrants. These days, the European Central Banks holds the key to Europe. The policy of quantitative easing is one of the proposals for the collective and sustainable exit of the Eurozone from the crisis. If it is adopted it will be welcome, even after such a long delay. But for it to be effective it will have to completely reflect Mario Draghi’s ‘whatever it takes’ statement. This means that it will have to be broad, without conditions and exemptions. That is, to include all of the countries that need it. But monetary policy alone cannot counter the challenge of growth. We urgently need:

  • Expansionary fiscal policy in all the countries in the Eurozone where it is possible according to the current rules.
  • A European ‘New Deal’. That is, strong, European funding of broad scale development programs with high added value, and a plan to support industry – in particular in European economies with particularly high unemployment.
  • A lightening of the debt burden in the framework of a ‘European Debt Conference ” along the lines of the London Conference of 1953 which facilitated the post-war development of Germany. The collective and socially sustainable restructuring of the over indebtedness of the Eurozone is not a moral hazard for Ms Merkel, but a moral duty.”


May 2012 – “The following is translated from the daily bulletin of Italy’s Communist Refoundation Party, which has published the official program of the Greek coalition of the radical  left, SYRIZA. The text was first translated by and posted at The Greanville Post. It is posted at Links International Journal of Socialist Renewal in the interests of informing the discussion on the left response to the Greek crisis.”

1. Audit of the public debt and renegotiation of interest due and suspension of payments until the economy has revived and growth and employment return.
2. Demand the European Union to change the role of the European Central Bank so that it finances states and programs of public investment.
3. Raise income tax to 75% for all incomes over 500,000 euros.
4. Change the election laws to a proportional system.
5. Increase taxes on big companies to that of the European average.
6. Adoption of a tax on financial transactions and a special tax on luxury goods.
7. Prohibition of speculative financial derivatives.
8. Abolition of financial privileges for the Church and shipbuilding industry.
9. Combat the banks’ secret [measures] and the flight of capital abroad.
10. Cut drastically military expenditures.
11. Raise minimum salary to the pre-cut level, 750 euros per month.
12. Use buildings of the government, banks and the Church for the homeless.
13. Open dining rooms in public schools to offer free breakfast and lunch to children.
14. Free health benefits to the unemployed, homeless and those with low salaries.
15. Subvention up to 30% of mortgage payments for poor families who cannot meet payments.
16. Increase of subsidies for the unemployed. Increase social protection for one-parent families, the aged, disabled, and families with no income.
17. Fiscal reductions for goods of primary necessity.
18. Nationalisation of banks.
19. Nationalisation of ex-public (service & utilities) companies in strategic sectors for the growth of the country (railroads, airports, mail, water).
20. Preference for renewable energy and defence of the environment.

21. Equal salaries for men and women.
22. Limitation of precarious hiring and support for contracts for indeterminate time.
23. Extension of the protection of labour and salaries of part-time workers.
24. Recovery of collective (labour) contracts.
25. Increase inspections of labour and requirements for companies making bids for public contracts.
26. Constitutional reforms to guarantee separation of church and state and protection of the right to education, health care and the environment.
27. Referendums on treaties and other accords with Europe.
28. Abolition of privileges for parliamentary deputies. Removal of special juridical protection for ministers and permission for the courts to proceed against members of the government.
29. Demilitarisation of the Coast Guard and anti-insurrectional special troops. Prohibition for police to wear masks or use fire arms during demonstrations. Change training courses for police so as to underline social themes such as immigration, drugs and social factors.
30. Guarantee human rights in immigrant detention centres.
31. Facilitate the reunion of immigrant families.
32. Depenalisation of consumption of drugs in favor of battle against drug traffic. Increase funding for drug rehab centres.
33. Regulate the right of conscientious objection in draft laws.
34. Increase funding for public health up to the average European level.(The European average is 6% of GDP; in Greece 3%.)
35. Elimination of payments by citizens for national health services.
36. Nationalisation of private hospitals. Elimination of private participation in the national health system.
37. Withdrawal of Greek troops from Afghanistan and the Balkans. No Greek soldiers beyond our own borders.
38. Abolition of military cooperation with Israel. Support for creation of a Palestinian state within the 1967 borders.
39. Negotiation of a stable accord with Turkey.
40. Closure of all foreign bases in Greece and withdrawal from NATO.

Policemen protecting bank from graffiti