Greece and debt relief
Sir, – Much of the current criticism of Greece’s government’s hard-line stance in relation to its debts comes down to the idea that Greece is expecting citizens of other euro zone countries to underwrite their decades of unrestrained profligacy. This is simplistic and the reality is a little more nuanced, especially if one wishes to consider the histories of all the countries involved.
The EU can’t have it both ways either. If its attitude is one of “united we stand” it would, of course, be more honest of it to admit that a sizable proportion of current Greek debt was the result of a similar situation to Ireland in that it relates to private banking debt and much of this British, French and German. Of course, it won’t do this. It would upset the “bigger players” and interfere with the established narrative.
However, in the interests of balance, it’s instructive to recall how, 62 years ago this month, creditors of postwar Germany came together in London to hammer out an agreement, the end result of which was a complete cancellation of 50 per cent of Germany’s postwar debt. It’s worth noting that, despite what was inflicted upon that state during the course of that same terrible war, Greece was one of the countries which acquiesced to this deal again, with the “united we stand” or “all for one” philosophy in mind. Private as well as public debts were cancelled at that time and the deal covered all creditors. The idea being that with a stronger German economy, Europe as a whole stood to gain. In express consideration of this, a somewhat generous clause in the agreement allowed that Germany only pay for debts out of its trade surplus, and these repayments were limited to a maximum 3 per cent of export earnings every year. As a result, Germany’s creditors had to buy German exports in order to be paid, resulting in Germany only being required to make recompense from genuine earnings, without recourse to new loans. And it meant Germany’s creditors had an interest in the country growing and its economy thriving.
The modern medicine which consists of bailing out reckless lenders via new loans, while simultaneously forcing governments to implement “austerity” and free-market liberalisation to become “more competitive”, has only resulted in increased poverty, deepening inequality and depleted economies. Despite some overoptimistic hyperbole, the Irish economy is in far from rude health and 2015 promises only more of this misplaced medicine.
I applaud the Greeks in resisting the destruction of both their economy (which has shrunk almost 25 per cent since 2008) and its people’s lives in order to appease a greedy elite a stance which stands in marked contrast with the idea of “constructive dialogue” (to quote Enda Kenny) which has been the hallmark of the deferential approach of our leaders from the outset. – Yours, etc,
Stillorgan, Co Dublin.
Sir, – A Leavy (February 6th) is right. The Greek electorate decided in its wisdom to vote into power a government that has more in common with the old guard of communist dictatorships than it has with any current European democracy.
That government now cries foul when the empty rhetoric of its inner circle is laid bare for closer examination by those who must pay the piper.
I sincerely hope this lesson is not lost on the Irish electorate in the coming 12 months or so.
We have more than our fair share of flat-earth politicos waiting in the wings – primed and ready to provide us with free lunches. – Yours, etc,
Sir, – It would be misguided for Ireland and the other “debtor” nations to seek a debt relief conference. In many quarters this is perceived as virtuous nations picking up the tab for the “partying” of the irresponsible. An EU economic recovery conference is required, with debt relief being just one strand. Who could argue that Europe-wide growth is not in the interest of every member state?– Yours, etc,
Sir, – I wish to congratulate The Irish Times on its coverage on February 7th of the Greek post-election standoff with the rest of Europe. The articles by Cliff Taylor, Denis Staunton, Stephen Collins, the cartoon by Martyn Turner, and the editorial, while expressing totally different viewpoints, showed Irish journalism at its best.
I’ll stop there as I am liable to relapse into pontificating from my own particular perspective on the issue and that would spoil the point I am trying to make. – Yours, etc,
Sir, – There is one thing I would like to ask those who are adamantly opposed to debt relief for Greece – how, exactly, is a country with 25 per cent unemployment, and no large exporting sectors, supposed to pay off a debt of over 170 per cent of GDP?
This is not economically or fiscally possible.
If the intention is to punish the Greeks for “their sins”, I was not aware that the poorest strata of Greek society, or those who are fully tax compliant, were totally responsible for the state of the country.
Syriza plans to tackle corruption and tax evasion – unlike previous Greek governments. So why are so many opposed to co-operating with a Greek administration that is finally dealing with Greece’s real problems? – Yours, etc,
TOMÁS M CREAMER,
Sir, – In advance of and shortly after the recent Greek elections, Syriza was referred to in the media (including The Irish Times) as “a far-left party”. More recently, however, it has been referred to as “left-wing” party. What will it be next week, I wonder? “Centrist”? – Yours, etc,
MICHAEL J DONNELLY,