Greece: Stable Depression

Brussels, 22 May 2017

Commenting on today’s meeting of the Eurogroup, German-Italian MEP Fabio De Masi (DIE LINKE.), member of the Economic and Monetary Affairs Committee and Financial Assistance Working Group of the European Parliament, declares: 

“There is method to the madness of the ‘Euro-rescue’. Greece is once again entering a recession, which is prolonged by every new ‘bail-out’. No economic indicator is pointing towards a recovery, a recovery that every developed economy not implementing austerity policies would experience. The targeted primary budget surpluses are impossible to achieve, and everyone knows this.”

De Masi continues: “The Commission is celebrating the unexpectedly high primary surplus in Greece and is happy about the stabilization of economic expectations. What Greece needs, however, is a recovery and not a stable depression. Unfortunately, the majority of Greek people do not expect anything anymore from politics. This is democracy’s death knell.

The new measures violate international law regarding the guarantees of collective bargaining and collective agreements. Public infrastructure will be filleted and sold off to private investors at discount rates. The abolishment of collective bargaining, the easing of mass-layoffs and another round of pension cuts of around one percent of gross domestic product – Greeks have already lost around 27 per cent of their income and with unemployment at 25 per cent, pensions are often the only source of income for families – will, however, not generate growth. The Commission has so far not provided a social impact assessment of the new cuts, as envisaged in the Memorandum of Understanding. She will know why.

90 per cent of the bail-out billions for Greece was used to service debt. The Greek bail-out was in fact a bank bail-out. It’s absurd to force an over-indebted economy to take on new debt to service old debt, while at the same time cutting income through austerity dictates. Whole economies are being terrorized, because German finance minister Wolfgang Schäuble is too timid to admit the failure of German Euro-politics and the embezzlement of taxpayer money in advance of the German federal elections.”

De Masi concludes: “Greece needs a debt relief and all available means to invest. The ECB needs to accept Greek government bonds as collateral again. A recovery is only possible with an end to austerity.”