Debating the Greek Situation
Euro on the Greek flag

Last week we finally had an agreement between Greece and its euro-zone partners. After a thrilling series of negotiations between the heavily indebted country and the Euro-group, a compromise has been reached. But when we read about what has been agreed, it is obvious that Greece was forced to compromise the most. That of course makes sense to many, as it is the country in need. It cannot expect its partners to keep supporting its economy, while erasing its debt. Yet here is where the misconceptions begin. Very little of the money that Greece has received from the other Euro-zone members, have actually been absorbed by the Greek economy. Most found their way into the Greek banking system and in extension, their bondholders.

It is not a coincidence that the bondholders are not solely Greek; German, French and many other European nations, including the USA, are among them. All of these people naturally want their money back. As a result, they are using EU tax payers’ money in forms of bail-out loans, to secure a maximum return and limit their financial losses. But if we think about it, Greece becomes a money laundering machine in which taxpayers’ money are thrown in to support the whole European banking system and to keep it wealthy. The recent LuxLeaks and SwissLeaks scandals are also pointing out that the financial institutions and neo-liberal financial policies govern Europe. They are only the tip of the iceberg.

Our continent is ruled by a political elite whose ideology is that profit, banking secrecy or supremacy and economic growth is above everything, even against the interests of their voters. No one doubts that Greece had major problems and shortfalls in its economy, and that major reforms had to take place. But the kinds of reforms that the country needed have not happened in their majority. It has been mainly tax increases, privatizations and harsh salary cuts that the former Greek government were implementing. While other reforms like sorting out the country’s taxation system, establishing a land registry or making serious efforts to tackle tax evasion, are still in the process.

It is very peculiar to observe the Greek situation; while it was the former governments of PASOK/New Democracy to be blamed for the Greek economy’s failures, the European elites were not particularly happy to see them go and get punished. Repeatedly, EU officials and other European leaders, most notably the EU Commission’s chief Jean-Claude Juncker, have warned Greece against electing "extreme forces" into power and said he would prefer "known faces". But if these two parties were the ones who allegedly lied about Greece’s finances to enter the euro-zone, shouldn’t they be the ones that the European elites are loathing?

In reality, it is highly unlikely that nobody knew about the Greek government’s lies, because if that scandal is true, it would mean that the way the euro was created and how the EU institutions are run, are totally shambolic. The more possible scenario is, that the European partners of Greece either advised the Greek government to do so in order to join the euro-zone, or that more governments were engaging in the practice of “book cooking” in order to keep their finances in check; and Greece just went overboard. Another observation is that other countries, such as France, which is deemed as “too big to fail” by EU officials, are being treated much more leniently and are given more time to adjust their books, if they will ever bother to do so.

That casts the Greeks and other EU nations under a bail-out program as second class citizens, as the ones who must be sacrificed in order to save the single currency and Europe’s banking system, while others do not face the harsh reality of austerity. The Greek people were threatened to keep voting for the established political parties that are predictable, willing to cooperate and do whatever Greece’s European partners are expecting them to do. Syriza on the other hand, is unpredictable and an outsider to European politics. You see, inter-governmentalism is the real problem of Europe. The current EU governments’ agenda is not to simply fix the European economy; but mainly to safeguard the interests of the rich elites and the banks. They are all in this agreement together. Because if they really wanted to help the overall European economy, austerity would not be applied solely to the periphery states, as they are not the main cause of the faults within the euro-zone. How can a country that amounts for only 2% of the euro economy like Greece, be mainly at fault for the club’s woes?

Many prominent economists have pointed out that austerity should be combined with a growth plan. You cut salaries, raise taxes and you limit the number of the public sector jobs, but you invest what you save from these measures in creating new jobs. The people who become unemployed from the public sector cuts should be able to find jobs, thus not becoming a burden to the country’s social welfare services. If you keep the middle class strapped of cash, you are technically destroying the country’s internal market. Once the people do not have any money to spend, the whole economy shrinks. Plus, with high unemployment the country has fewer tax payers to support those who are out of work, who are draining the social security system. How could any of this be of any help in a non-competitive economy?

We should instead want to create a better, more equal continent, thus opting for policies that promote this vision. The events in Greece can be at the forefront of this development. The election of Syriza is a great opportunity for the peripheral EU economies, the countries of the East and South Europe and the overall European working class, to bring more democracy and balance in Europe. But for this to be achieved we need more countries to stand behind Greece and Syriza. Sadly, the governments of Ireland, Cyprus, Spain and Portugal that agreed to a bail-out are Right Wing and overall conservative to side with Greece and kick-start a positive change in Europe. 

The EU institutions now want to crush Syriza and his demands, so nobody else will dare to seek ending austerity. Instead of compromising and giving Greek people some relief, they are insisting on their policies. But if Syriza is crushed and he loses the next Greek elections, the voters might turn to even more radical euro-sceptic parties, like the Golden Dawn. Would that be preferable? The European elite’s selfishness poses a real danger for the continent. Germany in particular seems to be on the vanguard of the support for austerity policies.

How can we justify that certain European nations must obey the policies imposed by one of the union’s governments, which is not elected by the rest of the EU’s voters? This poses a real democratic deficit, as no Greek or Portuguese has voted for Mrs Merkel and her government. The EU lawmakers should reconsider austerity as a policy across the block, for the very important reason of gaining the public's trust and support in the European institutions.This economic crisis has done a great damage on the citizens' confidence in them, due to the fact that very few policies are ever aimed at their interests or at the greater good.

The EU has merely become an economic experiment, hijacked by almost fanatic economists, lobbyists and bankers that seem to be ignoring the reality of the millions of EU citizens. For them, succeeding with their projects at all costs is of the utmost importance. The euro and its economics, or any of its financial institutions should exist for the betterment of a society as a whole, not just for the privileged few.