By all accounts, the Greek austerity plan has failed. We were told that if they accepted the largest bail-out package in history, Greece would rise from the ashes of financial disaster. This has not happened. Quite the opposite in fact; the Greek situation is more desperate than ever. Greek unemployment rates were supposed to peak at 16%, but instead have leapt to 25%. GDP has lurched into a death-spiral not seen since the depression era. Only the most ideological of capitalists could possible argue that Greece doesn’t embody the disastrous failure of austerity politics. But it is those ideological capitalists that seem to run the Eurozone, and they are flat out refusing to change direction.
There is no denying that some belt-tightening needed to be done, but the severity of Greek austerity, as has been seen in many other countries also, embodies the cruelty of a capitalist system that rewards financial recklessness at the top while seeing welfare and help for society’s most vulnerable as the most expendable of public spending projects. Austerity politics has left three out of five Greeks, some 6.3 million people, living in poverty or under the threat of poverty. Child poverty has almost doubled in the past six years, and over half of young people are unemployed. That the powers of Europe want to continue down the same path, encouraging further austerity in exchange for further loans, is madness. Worse than madness, it is grossly immoral.
This is not about left-wing and right-wing. Many were sceptical of Greece’s bailout package, but it happened regardless. Now that it is has failed, regardless of where you lie on the political spectrum, it is clear that a different approach is needed. To tackle Greece’s financial woes we need a new outlook; an understanding that both lenders and borrowers must share responsibility for the creation of debt, and that the effects of debt are a moral issue. Our current system focuses so hard on economies and growth, that it forgets the very reason we care about these things; the alleviation of human suffering and our shared desire to live comfortable and happy lives. Given the failure of lending to Greece to improve the fortunes of the Greek people, it is vastly irresponsible – in fact, totally immoral – that they should bear the brunt of this irresponsible lending. This is not to mention how deeply undemocratic the Greek debt issue is; Greeks were offered no referendum on accepting their enormous bailout package, but their clear democratic choice to abandon austerity goes totally ignored by their European lenders.
In order to reach a solution that best services those in Greece who have suffered the most for financial crimes they did not commit, in a global market over which they have no control, a compromise must be reached. Reforms must be made, sure, particularly on Greece’s poor tax collection record, but a portion of the debt must be written off. This may appear dissatisfactory to lenders, but if the European Union really cares about democracy, and the alleviation of human suffering, then this is the route they must take. Financially, too, a default would surely be disastrous. If Greece runs out of money, the lenders will lose everything, Greece will be forced out of the Eurozone and this would surely spell disaster for all concerned.
Greece’s external debts, now at 170% of GDP, cannot possibly be paid back without implementing a level of human suffering upon Greece’s most vulnerable people beyond the tolerance of any just or democratic society. This is where the moral issue lies. The Germans should be more aware of not just the moral issue of debt relief, but also its implications as they have previously faced a similar crisis. After the Second World War, Germany stared into the abyss of financial ruin. There were many who argued that the perpetrators of the Second World War did not deserve debt relief; that they had made their bed and must now lie in it. Others argue now that Germany deserved relief then, and the Greeks do not now. It has been argued that much of German debt after the Second World War was money borrowed during the First World War that had allowed the Nazis to flourish. Yet Nazis are flourishing now in Greece, with support from 10% of the Greek population. Having been provided with debt relief, the Germans used this opportunity to build one of the fairest and most democratic societies that exists today. Not only this, but from a position of the greatest conflict the world has ever known, Europe is now more unified than ever.
There are many lessons to be learned here. To prevent the immense suffering of thousands, to bring ourselves back in line with our values, and to continue forward as a unified Europe, providing Greece with debt relief is as much a moral as it is a pragmatic solution. How can we support a European Union that would rather force out its members to immense suffering, than allow its most wealthy and prosperous to bear some of the brunt? We are supposed to all be in this together, we are told, but I cannot support a union that would rather see millions suffer than make humanitarian concessions in a time of crisis. We must abandon our leftist/rightist partisan ideologies in our approach to Greece; austerity politics has failed and people are suffering. If this crisis is to be resolved, we must take a new approach. Pragmatism must override our sense of economic fairness, and humanitarianism must trump ideological capitalism. If we fail to do this, we will be repeating the mistakes of history at our peril.