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Greece needs debts cancelled and growth

Greek Crisis, based on photo by Dave HoggGreece goes to the polls this Sunday (25 January) and the anti-austerity party SYRIZA has been consistently ahead in the opinion polls for a number of months. A SYRIZA win would be a boost for all those opposed to austerity in Europe and beyond. The Greek economy has seen a devastating collapse, brought on by austerity policies as well as the efforts to pay off the debts incurred by bailing the banks and other speculators who lent to Greece. In the Guardian a number of economists have supported the letter below, which outlines some key economic demands on dropping the debt.

As economists, we note that the historical evidence demonstrates the futility and dangers of imposing unsustainable debt and repayment conditions on debtor countries; the negative impact of austerity policies on weakening economies; and the particularly severe effects that flow on to the poorest households.

We therefore urge the troika (EU, European Centra Bank and IMF) to negotiate in good faith with the Greek government so that there is a cancellation of a large part of the debt and new terms of payment which support the rebuilding of a sustainable economy. This settlement should mark the beginning of a new EU-wide policy framework favouring pro-growth rather than deflationary policies.

We urge the Greek government to abandon the austerity programme that is crushing economic activity and adopt a more expansive fiscal policy setting, targeting immediate relief from poverty and stimulating further domestic demand; to launch a fully independent investigation into the historic and systemic failure of the Greek public financial management processes (including any evidence of corruption) that led to the accumulation of debt, the disguising of the size and nature of the debt and the inefficient/ineffective use of public funds; and to consider the establishment of a judicial body or alternative mechanism that is independent of government and charged with a future responsibility of investigating corruption from the highest to lowest levels of government.

We urge other national governments to exercise their votes within official sector finance agencies and to pursue other diplomatic activities that will support a cancellation of a large part of the Greek sovereign debt and new terms of payment for the rebuilding of a sustainable Greek national economy.

Malcolm Sawyer Emeritus prof, University of Leeds
Danny Lang Associate prof, University of Paris
Prof Yu Bin Professor and deputy director, Chinese Academy of Social Sciences
Prof Ozlem Onaran University of Greenwich
Prof Mario Seccareccia University of Ottawa
Hugo Radice Life fellow, University of Leeds
John Weeks Professor emeritus, Soas, University of London
Prof Howard Stein University of Michigan, Ann Arbor
Anitra Nelson Associate professor, RMIT University, Melbourne
Prof George Irvin University of London, Soas
Dr John Simister Manchester Metropolitan University
Mogens Ove Madsen Associate professor, Aalborg University
Wang Zhongbao Associate professor, editorial director, World Review of Political Economy
Dr Susan Pashkoff Economist
Andrea Fumagalli University of Pavia
Pat Devine University of Manchester
Professor Ray Kinsella University College Dublin
Alan Freeman Co-director, Geopolitical Economy Research and Education Trust
Eugénia Pires Economist, member, Portuguese Citizens Debt Audit
Dr Jo Michell University of the West of England, Bristol
Michael Burke Economist, Socialist Economic Bulletin
Paul Hudson Formerly Universität Wissemburg-Halle
Dr Alan B Cibils Universidad Nacional de General Sarmiento, Buenos Aires, Argentina
Guglielmo Forges Davanzati Associate prof, University of Salento
Prof Sergio Rossi University of Fribourg
Faruk Ulgen Associate prof, University of Grenoble
Tim Delap Positive Money
Eleni Paliginis Middlesex University
Grazia Ietto-Gillies Emeritus professor, London South Bank University
Professor Radhika Desai University of Manitoba
Michael Roberts Economist, ‘The next recession’
Michael Taft Unite the Union, Ireland region
Dr Andy Denis City University London
Peter Kenyon Chartist
Professor Emeritus Geoffrey Colin Harcourt UNSW Business


(with thanks to Michael Burke of Socialist Economic Bulletin)


  1. David Ellis says:

    Growth is no longer a possibility. By the late 70s capitalism was already stagnant and oveproduction endemic. The thirty year bankers Ponzi Scheme and credit bubble was like giving steroids to a man with heart disease. Naturally the patient died. Overproduction without that credit bubble is now overwhelming and can only be exaserbated by the fake options of austerity or stimulus. The actual choice is between bourgeois austerity or workers austerity. The rediistribution of wealth from the poor to the rich as is happening now or the redistribution of the wealth from the rich to the poor. Economic consolidation is the only option. The only question is what form will it take. Talk of growth or stimulus as any sort of possibility is a lie.

  2. swatantra says:

    What’s a Greek earn these days?

  3. Barry Ewart says:

    Hope Syriza win! Read an excellent piece on the EC in the last New Left Review. The EC was originally set up to counter the then perceived threat of the USSR, to expand capitalism throughout Europe, and to give Europe a more independent voice against the economic power of the US. In fact it is argued that De Gaulle of France was originally against Britain’s entry because it would act as a Trojan Horse for the US which it eventually did and hence the desire for the Euro as the dollar was soon to dominate. The EC now covers a larger population than that of the US and Neo-Liberal capitalism seeks new former Eastern Europe and former USSR countries for capital accumulation. So the struggle over Ukraine for example is about profits – via Neo-Liberalism from the West and via the Oligarchs in Russian dominated areas (this is their area for their exploitation) so it’s the same old story – working people killing each other for the profits of others! There should be a negotiated solution and in the end you can’t force people to be part of a country they don’t want to be. But need democratic socialist groups on all sides – in the West (to kick Neo-Liberalism out) and in Russia (to kick Putin & the Oligarchs out). We should stay in the EC but redraw the treaties to kick Neo-Liberalism out and to enhance labour rights and rights for working people – a democratic socialist working peoples’ EC – grassroots, participatory and bottom up unlike the current top down model. So go Syriza and all the best in tomorrow’s election! Vote Syriza! PS – return the Elgin Marbles!

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