The day after the rescue

Α clean exit… to a debtors’ colony

Yanis Varoufakis
We’re done with bailout programs? Seeing as dialogue has long since been abolished in Greece, let’s begin the discussion from what exactly is meant by ‘bailout’: it doesn’t mean obligations to Brussels. All EU member states operate under such obligations. Even Germany. No, ‘bailout’ means something more than obligations of the sort laid out in, e.g., the European ‘Stability and Growth Pact’.
A bailout means an interconnected network crafted by the lenders to facilitate us repaying them, by means of recessionary and austerity measures, under the supervision and orders of the Troika composed of the European Central Bank, the European Union, and the International Monetary Fund—such that, e.g., in order to receive an installment you must reduce pensions, or to decrease the next payment you must increase taxes, etc.

We would truly be through with these programs if there were to be an end to the quarterly ‘evaluation’ conducted by the Troika and to the linkage of austerity measures with debt interest repayments.

But nothing of the sort is forecast by the recent Eurogroup agreement, certainly not before 2032 and, given the debt rollover set for 2032, not until … 2060. (In fact, it seems an even more brutal linkage will exist between recessionary measures and debt interest repayments.)

The only conclusion suggested by an honest glance at the agreement between the Greek government and the creditors is that we are hardly making an escape from these programs. Instead, from today onward, the end of the third bailout program will sink us even deeper into a state of debt bondage.

  1. Even our own funds which the ECB owes us and which they have agreed to return to us in installments until 2020—just for us to give them right back, of course, and so pretend that we are paying them back—will be released to us quarterly, following an evaluation conducted by the ECB, the EU and … the IMF.
  2. In essence, the so-called debt relief program means nothing more than the facilitation of payments until 2032, with repayments of about 100 billion euros postponed until after 2032.  
  3. This postponement will always be conditional upon on us meeting primary targets that will require incredibly harsh austerity (in perpetuity) and guarantee the leveling of the private sector; of family investments but also public ones.
  4. In essence, then, this is a brutal debt burden, since from 2032 until 2060 the Greek state will be required to make repayments of 15-20% of its GDP, or 55% of its current tax revenue (which, incidentally, will continue to decrease over time because of the recession-debt vortex).

In sum, today the third bailout program comes to an end, and Bailout-Greece is fully consolidated—our debtors’ colony. The only hope for true liberation, for a clean exit, is the immediate enactment of the 7 urgent policies proposed by MeRA25.
2018-08-20 00:14:54
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