Explaining the dilemma facing Greece on whether to continue austerity to pay off debts, or to fight for “debt forgiveness”, Immanuel Wallerstein offered the following commentary.
In order to put things in perspective, Wallerstein gives the following breakdown of the two sets of political actors and their arguments dueling over Greece’s economic future:
The “reform” camp (i.e. the EU)
- Greece’s difficulties are self-created because successive Greek governments and Greek citizens have spent recklessly money they didn’t have in order to sustain a collective life style beyond their level of collective income.
- Greece must cut collective expenditures in order for it to repay its extensive loans.
- Over time Greece will emerge stronger.
- Reform camp’s most vocal and uncompromising spokesperson has been Germany’s Finance Minister Wolfgang Schäuble. He has been making two main arguments: Greece should leave the Eurozone temporarily and Greece should be held to the strict payment of all outstanding debts.
- Greece’s problems started essentially when the military dictatorship was overthrown in 1974 and a left party, PASOK, led by Andreas Papandreou, emerged as a major force on the scene. This date puts the blame solidly on Greece itself for adopting the social-democratic policies of successive governments.
Anti-austerity camp (i.e. Syriza’s supporters)
- Austerity is cruel and heartless, forcing an ever-growing part of the Greek population into abject poverty.
- A regime of austerity will not, cannot lead to an end to the present acute depression in Greece.
- Each successive loan has increased, not decreased, the rate of unemployment and has made it less possible to achieve its ostensible goal of restoring Greece’s competitivity in the world market.
- Call instead for substantial debt forgiveness and a reversal of the demands of creditors that Greece make cuts in pensions and other parts of the social security net.
- Debt forgiveness has increasing support from prominent economists like Joseph Stiglitz and from Christine Lagarde, the president of the International Monetary Fund (IMF).
- Greece’s problems started earlier, somewhere in the 1930s, when the West European governments, and particularly Germany, imposed a subordinate quasi-colonial system in Greece. This puts the blame squarely on capitalist and imperial forces.
Syriza betrays the Greek people?
- Syriza promised voters it would not deal with the troika (IMF, The European Central Bank, and the European Union). However, Varoufakis found that no one would talk with him if he didn’t talk with the troika, and had no choice but to break this promise
- Referendum ended in victory for no (OXI) vote against the terms of further austerity
- Greek government committee voted down Finance Minister Yanis Varoufakis’ “Plan B” or “Grexit on Greece’s terms” prompting Varoufakis to resign, despite that he had promised he would resign if the aforementioned vote resulted in a Yes, when in fact it resulted in a No (this confused many people)
- Many now see Syriza leader Tsipras as a “traitor” for agreeing to even harsher reforms than Greece had faced at the beginning of the negotiations