On 25th of last January, the Greek
people made a courageous decision. They dared to challenge the one-way
street of the Memorandum’s tough austerity, and to seek a new agreement.
A new agreement that will keep the country in the Euro, with a viable
economic program, without the mistakes of the past.
The Greek people paid a high price for
these mistakes; over the past five years the unemployment rate climbed
to 28% (60% for young people), average income decreased by 40%, while
according to Eurostat’s data, Greece became the EU country with the
highest index of social inequality.
And the worst result: Despite badly
damaging the social fabric, this Program failed to invigorate the
competitiveness of the Greek economy. Public debt soared from 124% to
180% of GDP, and despite the heavy sacrifices of the people, the Greek
economy remains trapped in continuous uncertainty caused by unattainable
fiscal balance targets that further the vicious cycle of austerity and
recession.
The new Greek government’s main goal during
these last four months has been to put an end to this vicious cycle, an
end to this uncertainty.
Doing so requires a mutually beneficial
agreement that will set realistic goals regarding surpluses, while also
reinstating an agenda of growth and investment. A final solution to the
Greek problem is now more mature and more necessary than ever.
Such an agreement will also spell the end
of the European economic crisis that began 7 years ago, by putting an
end to the cycle of uncertainty in the Eurozone.
Today, Europe has the opportunity to make
decisions that will trigger a rapid recovery of the Greek and European
economy by ending Grexit scenarios, scenarios that prevent the long-term
stabilization of the European economy and may, at any given time,
weaken the confidence of both citizens and investors in our common
currency.
Many, however, claim that the Greek side is
not cooperating to reach an agreement because it comes to the
negotiations intransigent and without proposals.
Is this really the case?
Because these times are critical, perhaps
historic–not only for the future of Greece but also for the future of
Europe–I would like to take this opportunity to present the truth, and
to responsibly inform the world’s public opinion about the real
intentions and positions of Greece.
The Greek government, on the basis of the
Eurogroup’s decision on February 20th, has submitted a broad package of
reform proposals, with the intent to reach an agreement that will
combine respect for the mandate of the Greek people with respect for the
rules and decisions governing the Eurozone.
One of the key aspects of our proposals is
the commitment to lower – and hence make feasible – primary surpluses
for 2015 and 2016, and to allow for higher primary surpluses for the
following years, as we expect a proportional increase in the growth
rates of the Greek economy.
Another equally fundamental aspect of our
proposals is the commitment to increase public revenues through a
redistribution of the burden from lower and middle classes to the higher
ones that have effectively avoided paying their fair share to help
tackle the crisis, since they were for all accounts protected by both
the political elite and the Troika who turned “a blind eye”.
From the very start, our government has
clearly demonstrated its intention and determination to address these
matters by legislating a specific bill to deal with fraud caused by
triangular transactions, and by intensifying customs and tax controls to
reduce smuggling and tax evasion.
While, for the first time in years, we charged media owners for their outstanding debts owed to the Greek public sector.
These actions are changing things in
Greece, as evidenced the speeding up of work in the courts to administer
justice in cases of substantial tax evasion. In other words, the
oligarchs who were used to being protected by the political system now
have many reasons to lose sleep.
In addition to these overarching goals that
define our proposals, we have also offered highly detailed and specific
plans during the course of our discussions with the institutions that
have bridged the distance between our respective positions that
separated us a few months ago.
Specifically, the Greek side has accepted
to implement a series of institutional reforms, such as strengthening
the independence of the General Secretariat for Public Revenues and of
the Hellenic Statistical Authority (ELSTAT), interventions to accelerate
the administration of justice, as well as interventions in the product
markets to eliminate distortions and privileges.
Also, despite our clear opposition to the
privatization model promoted by the institutions that neither creates
growth perspectives nor transfers funds to the real economy and the
unsustainable debt, we accepted to move forward, with some minor
modifications, on privatizations to prove our intention of taking steps
towards approaching the other side.
We also agreed to implement a major VAT
reform by simplifying the system and reinforcing the redistributive
dimension of the tax in order to achieve an increase in both collection
and revenues.
We have submitted specific proposals
concerning measures that will result in a further increase in revenues.
These include a special contribution tax on very high profits, a tax on
e-betting, the intensification of checks of bank account holders with
large sums – tax evaders, measures for the collection of public sector
arrears, a special luxury tax, and a tendering process for broadcasting
and other licenses, which the Troika coincidentally forgot about for the
past five years.
These measures will increase revenues, and
will do so without having recessionary effects since they do not further
reduce active demand or place more burdens on the low and middle social
strata.
Furthermore, we agreed to implement a major
reform of the social security system that entails integrating pension
funds and repealing provisions that wrongly allow for early retirement,
which increases the real retirement age.
These reforms will be put into place
despite the fact that the losses endured by the pension funds, which
have created the medium-term problem of their sustainability, are mainly
due to political choices of both the previous Greek governments and
especially the Troika, who share the responsibility for these losses:
the pension funds’ reserves have been reduced by 25 billion through the
PSI and from very high unemployment, which is almost exclusively due to
the extreme austerity program that has been implemented in Greece since
2010.
Finally–and despite our commitment to the
workforce to immediately restore European legitimacy to the labor market
that has been fully dismantled during the last five years under the
pretext of competitiveness–we have accepted to implement labor reforms
after our consultation with the ILO, which has already expressed a
positive opinion about the Greek government’s proposals.
Given the above, it is only reasonable to
wonder why there is such insistence by Institutional officials that
Greece is not submitting proposals.
What end is served by this prolonged
liquidity moratorium towards the Greek economy? Especially in light of
the fact that Greece has shown that it wants to meet its external
obligations, having paid more than 17 billion in interest and
amortizations (about 10% of its GDP) since August 2014 without any
external funding.
And finally, what is the purpose of the
coordinated leaks that claim that we are not close to an agreement that
will put an end to the European and global economic and political
uncertainty fueled by the Greek issue?
The informal response that some are making
is that we are not close to an agreement because the Greek side insists
on its positions to restore collective bargaining and refuses to
implement a further reduction of pensions.
Here, too, I must make some clarifications:
Regarding the issue of collective
bargaining, the position of the Greek side is that it is impossible for
the legislation protecting employees in Greece to not meet European
standards or, even worse, to flagrantly violate European labor
legislation. What we are asking for is nothing more than what is common
practice in all Eurozone countries. This is the reason why I recently
made a joint declaration on the issue with President Juncker.
Concerning the issue on pensions, the
position of the Greek government is completely substantiated and
reasonable. In Greece, pensions have cumulatively declined from 20% to
48% during the Memorandum years; currently 44.5% of pensioners receive a
pension under the fixed threshold of relative poverty while
approximately 23.1% of pensioners, according to data from Eurostat, live
in danger of poverty and social exclusion.
It is therefore obvious that these numbers,
which are the result of Memorandum policy, cannot be tolerated–not
simply in Greece but in any civilized country.
So, let’s be clear:
The lack of an agreement so far is not due to the supposed intransigent, uncompromising and incomprehensible Greek stance.
It is due to the insistence of certain
institutional actors on submitting absurd proposals and displaying a
total indifference to the recent democratic choice of the Greek people,
despite the public admission of the three Institutions that necessary
flexibility will be provided in order to respect the popular verdict.
What is driving this insistence?
An initial thought would be that this
insistence is due to the desire of some to not admit their mistakes and
instead, to reaffirm their choices by ignoring their failures.
Moreover, we must not forget the public
admission made a few years ago by the IMF that they erred in calculating
the depth of the recession that would be caused by the Memorandum.
I consider this, however, to be a shallow
approach. I simply cannot believe that the future of Europe depends on
the stubbornness or the insistence of some individuals.
My conclusion, therefore, is that the issue
of Greece does not only concern Greece; rather, it is the very
epicenter of conflict between two diametrically opposing strategies
concerning the future of European unification.
The first strategy aims to deepen European
unification in the context of equality and solidarity between its people
and citizens.
The proponents of this strategy begin with
the assumption that it is not possible to demand that the new Greek
government follows the course of the previous one – which, we must not
forget, failed miserably. This assumption is the starting point, because
otherwise, elections would need to be abolished in those countries that
are in a Program. Namely, we would have to accept that the institutions
should appoint the Ministers and Prime Ministers, and that citizens
should be deprived of the right to vote until the completion of the
Program.
In other words, this means the complete
abolition of democracy in Europe, the end of every pretext of democracy,
and the beginning of disintegration and of an unacceptable division of
United Europe.
This means the beginning of the creation of
a technocratic monstrosity that will lead to a Europe entirely alien to
its founding principles.
The second strategy seeks precisely this: The split and the division of the Eurozone, and consequently of the EU.
The first step to accomplishing this is to
create a two-speed Eurozone where the “core” will set tough rules
regarding austerity and adaptation and will appoint a “super” Finance
Minister of the EZ with unlimited power, and with the ability to even
reject budgets of sovereign states that are not aligned with the
doctrines of extreme neoliberalism.
For those countries that refuse to bow to
the new authority, the solution will be simple: Harsh punishment.
Mandatory austerity. And even worse, more restrictions on the movement
of capital, disciplinary sanctions, fines and even a parallel currency.
Judging from the present circumstances, it
appears that this new European power is being constructed, with Greece
being the first victim. To some, this represents a golden opportunity to
make an example out of Greece for other countries that might be
thinking of not following this new line of discipline.
What is not being taken into account is the
high amount of risk and the enormous dangers involved in this second
strategy. This strategy not only risks the beginning of the end for the
European unification project by shifting the Eurozone from a monetary
union to an exchange rate zone, but it also triggers economic and
political uncertainty, which is likely to entirely transform the
economic and political balances throughout the West.
Europe, therefore, is at a crossroads.
Following the serious concessions made by the Greek government, the
decision is now not in the hands of the institutions, which in any case –
with the exception of the European Commission- are not elected and are
not accountable to the people, but rather in the hands of Europe’s
leaders.
Which strategy will prevail? The one that
calls for a Europe of solidarity, equality and democracy, or the one
that calls for rupture and division?
If some, however, think or want to believe
that this decision concerns only Greece, they are making a grave
mistake. I would suggest that they re-read Hemingway’s masterpiece, “For
Whom the Bell Tolls”.
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