The European Union, its institutions like to tell us, was founded on the values of respect for human dignity, liberty, democracy, equality, the rule of law and respect for human rights. It is an area of freedom, security and justice without internal frontiers which combats social exclusion and discrimination. We are endlessly told it promotes the protection of the rights of the child. It champions economic, social and territorial cohesion and solidarity among Member States.
It’s enough to make your heart bleed.
You wonder though how those soaring violins you hear square with reports from one of those liberally-endowed Member States, Greece, of children being abandoned. From cases of newborn babies wrapped in swaddling and dumped on the doorsteps of clinics to children being offloaded on charities and put in foster care, Greece’s struggle to pay off its debts is assuming dramatic proportions. Propelled by poverty, 500 families asked to place children in homes run by the charity SOS Children’s Villages, according to the Greek daily Kathimerini. One toddler was left at the nursery she attended with a note that read: I will not return to get Anna. I don’t have any money, I can’t bring her up. Sorry. Her mother. http://www.theguardian.com/world/2011/dec/28/greek-economic-crisis-children-victims
You may ask how all that solidarity and justice helped the sharp increase in those taking their own lives in despair.
In June 2011, when a new round of austerity measures was met with protests and strikes, suicides among both men and women increased by 36 percent and remained high. A 77-year-old retired pharmacist shot himself in the head in the central square of Athens, leaving a note saying that he could not bear the idea of scavenging in dustbins for food and becoming a burden to my child… And anybody who knows Greece well can probably think of at least one acquaintance whose death was prompted, entirely or in part, by financial desperation. http://www.thetoc.gr/eng/economy/article/greeks-lost-almost-40-of-their-income-during-the-crisis
A new study estimates that the average Greek household lost almost four tenths of its income in the first five years of the crisis, reports The New Athenian website. Most of that loss – 23.1% – was in direct income. A further 8.8% was lost to increased taxation and another 7% to inflation not matched by increases in income over the period 2008-2012.
The EU’s desire for solidarity is such that a whole nation is being crushed under its weight. Just how much freedom, security and equality the Greeks can take is open to question. Of course, it’s their own fault and they shouldn’t have been so profligate and lied about their borrowing and their debts and it’s time to pay the price. After all, it’s not as if Britain is in debt, is it? http://www.nationaldebtclocks.org/debtclock/unitedkingdom
The UK would never a debtor be – certainly not long term in a way that implied it would never pay off its debts. Or would it…Here is BBC News last year:…some of the debt being refinanced by the Treasury dates back to the 18th Century. One of these bonds was issued by William Gladstone in 1853 to consolidate the capital stock of the South Sea Company which collapsed during the South Sea Bubble financial crisis of 1720. http://www.bbc.co.uk/news/business-29844961
Should the angelic host of human rights protectors in Brussels remember that proper scrutiny of the national accounts at the time of entry to the common currency would have revealed the stark truth that Greece was never ready for Euro membership…or should they admit that the momentum of the political project to unite us all in liberty overruled the basic need for due diligence? Were the people of Greece, the ones suffering today, responsible for the cover-up of their national debt? Did they even know? Or were they, like working class British citizens today, paying the price for the mistakes and greed of the elite – the political fixers, the institutional investors and the bankers…
And if the Greek state, manipulated by the coalition since swept away by Syriza, was cooking the books, who helped them? Here’s a clue. Greece’s debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period – to be exchanged back into the original currencies at a later date. Such transactions are part of normal government refinancing…But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks. This credit disguised as a swap didn’t show up in the Greek debt statistics. http://foreignpolicy.com/2015/02/02/the-secret-berlins-bankers-dont-want-europe-to-know-euro-german-exports-greece/
And what about those Germans, fed up with feather-bedding the lazy Greeks. Why should they subsidise the inferior workshy types unable to run their own affairs? (Sound familiar?) This is Der Spiegel. It has become a rule of the euro crisis: While a number of euro-zone countries suffer, Germany profits…A projection by the Munich-based Ifo Institute for Economic Research found that the economies of France, Spain, Italy, Belgium, Greece, Portugal and Cyprus would likely shrink. The German economy, on the other hand, is still expected to grow…Germany is benefiting from an influx of new skilled professionals…Germany also profits from a simple symptom of the crisis – the weak euro…For German companies, the sinking euro acts as a kind of crisis buffer. While it reduces demand for German products within the euro zone, these make up only around 40 percent of the country’s exports. But for the rest of the world, a weak euro means cheaper German products, which means they’re more competitive. http://www.spiegel.de/international/europe/profiting-from-pain-europe-s-crisis-is-germany-s-blessing-a-808248.html
And if Greece borrowed far more than it could afford, who lent it to them for profit? Bloomberg knows the answer: Germany’s banks were Greece’s enablers. Thanks partly to lax regulation, German banks built up precarious exposures to Europe’s peripheral countries in the years before the crisis. By December 2009, according to the Bank for International Settlements, German banks had amassed claims of $704 billion on Greece, Ireland, Italy, Portugal and Spain, much more than the German banks’ aggregate capital. In other words, they lent more than they could afford. http://www.bloombergview.com/articles/2012-05-23/merkel-should-know-her-country-has-been-bailed-out-too
And when Germany pulled its money out, it was money from the rest of the currency zone nations that filled the gap, allowing Germany to avoid taking the whole hit – look! solidarity in action…. http://www.bloombergview.com/articles/2012-05-23/merkel-should-know-her-country-has-been-bailed-out-too
There’s another irony here seldom mentioned. Historically, Germany has been described as the biggest debt transgressor of the 20th Century, with restructurings in 1924, 1929, 1932 and 1953. Total debt forgiveness for Germany between 1947 and 1953 amounted to somewhere in the region of 280% of GDP, according to economic historian Albrecht Ritschl of the London School of Economics. Today, Greece has an external debt-to-GDP ratio of roughly 175%.
Germany was shown the kind of solidarity and justice the Allies fought for during Hitler’s war and they made massive investments to rebuild the defeated country. Today’s Germany is reluctant to face up to that history. In December 1942 Greece was forced by Nazi authorities to loan German 476m Richsmarks to cover the cost of the German occupation, which it says it has never been paid back. €279bn is 125 per cent of Greece’s €223bn GDP – the money is around a tenth of Germany’s GDP. The modern-day euro figure is the Greek government’s own calculation of what the loan would be worth today.
Will anybody stand up for our Greek friends and fellow Europeans? It doesn’t look to me as the founding principles of the EU are being upheld and that instead Germany is being allowed to run the show for its own seemingly inevitable advantage. The EU is pursuing a pro-austerity, profit-first, beggar-my-neighbour approach which should scare every one of the smaller and economically fragile Member States. A Greek currency exit could bring even worse hardship for Greeks along with a rejection of the entire EU principles leading to withdrawal from all the institutions. The fall-out from that failure could wound the whole project.
And yet, surely one of the biggest losers would be Germany itself. As Paul Mason writes: If Greece is forced into an accidental default, damage to the euro project and to the EU’s image would be massive. A central bank seen to be colluding in the bankruptcy of banks it is supposed to supervise, and willing the breakup of a currency union it is supposed to be running, would tarnish the ECB’s reputation for a decade.
With Germany as the leading economy in the EU system and viewed as having instigated the exit, its assumed primacy would be damaged – and Europe’s enemies heartened. A longer-term, lower-cost bail-out and carefully constructed people-based restructuring is a smaller cost.
It is time to return to the founding ideals of Churchill, Monnet and Schuman and come to the aid of a European partner in dire straights, one from which Europe learned the very basics of ancient democracy and one which paid a heavy price once before in the 1940s in the war that so horrified civilization that it drove the European movement we know today. Human dignity, liberty and respect!