International

In actual fact I shouldn’t, according to the banking experts, be writing this weeklog at all: if I say things aren’t going well for Greece, I’ll add to the unrest on the financial markets, making myself partly responsible for the disaster which lies in wait, not only for Greece itself, but for countries such as the Netherlands and Germany. But I won’t let myself be blackmailed by speculators: as things stand things are going very badly in Greece and the chance that the Greeks will ever be able to pay off their debts in full is practically nil. That being the case, the chances are great that it will not be the speculators but, once again, the taxpayer who will have to foot the bill. The sole reason for this is mismanagement by European finance ministers who are stuck in their own wishful fantasies instead of looking the facts squarely in the face, and who, worse still, always allow themselves to be guided by the interests of the speculators.

Perhaps it all seems very complicated, but that’s how they like it. Greece has spent years fiddling the books, until the business came out, and Greece, in one fell blow, lost all credibility - and the financial markets lost all faith in the Greeks. And so the interest rate that Greece has to pay on its loans grew ever higher, and Greece reaped a bitter harvest.

The other members of the Eurozone were anxious about Greece going bankrupt, not only due to the consequences this would have for the euro, but principally because many of their own banks and pension funds were amongst the creditors. And so taxpayers’ money was used to give Greece a cheaper loan than would have been possible on the free market. The interest rate was still hefty, but at least it offered some relief in the short term. The neoliberal governments also thought that the business would come out well in the end for Greece, at least as long as extremely deep spending cuts were implemented.

Last week this dream turned out not to come true. The budget deficit for 2010 came out at 10.5% instead of the estimated 9.4%, while the debt reached almost 143% of GDP, a clear 3% higher than had been hoped. Suddenly the newspapers were full of the comments to the effect that Greece, despite the deep cuts in spending, was not going to succeed in putting its budgetary affairs in order.

I find all of this rather hypocritical. It’s well-known that overly drastic spending cuts lead to economic shrinkage, and that is precisely what has happened in Greece. Moreover, on of the biggest of Greece’s problems is that endemic nepotism and corruption on the part of the rich mean that much too little is paid in taxes. That can’t be put right in the space of a few years; it takes a cultural transformation, and that will take a long time.

It is then also scandalous that the question of whether Greece would be better leaving the Eurozone temporarily. The introduction of a weaker currency together with debt forgiveness would give Greece a better starting position than it currently enjoys. Furthermore it would mean in effect that the speculators had chipped in. After earning huge interest from Greek loans, they would have to take losses were Greece not to repay a proportion of the resulting debt.

Meanwhile the situation has become even more complicated. The European Central Bank (ECB) has bought up most of the commercial banks’ Greek debt. If this debt was now purged, it would mean that once again the speculators would get away with paying very little, the ECB taking the biggest losses. And if the ECB loses money, the national central banks will be obliged to deposit additional funds. This would mean, for example, that the Bank of the Netherlands would be able to transfer less to the state from its profits, and you’ve already guessed what that would imply – another blow to the treasury and thus to all of us.

It’s always the same story: the speculators’ interests weigh more heavily in the Brussels balance than do those of the taxpayer. If in the short or medium term we are going to have to foot the bill, then I hope that Brussels won’t look only to the taxpayer. Speculators’ bonuses must be reined in, a tax on banks and on financial activities introduced, and banks split into a speculative section and a normal section. In these ways we could ensure that, for once, the speculators would have to pay up.