Greece has woken up to debtocracy

[marmar]

Greece has woken up to debtocracy
With memories of the dictatorship rekindled, Greeks are rejecting a political establishment that has sold its soul to the markets

Aris Chatzistefanou and Katerina Kitidi
guardian.co.uk, Saturday 9 July 2011


When there is a debt crisis, it is usually economists who are called in to sort it out. However, the really big debt crises, like the one currently facing Greece and the rest of the European periphery, cannot be resolved by economists alone. These crises constitute a direct threat to national sovereignty, to democracy and social peace. They tear apart the social fabric, and tear apart any notion of a social contract. In an instant, they can turn an "EU partner" into a third world country.

A financial analyst could never explain why the demonstrators in Athens now shout the same slogans as their parents did during the Greek dictatorship. An economist would find it hard to understand why the officials of the governing party now cannot show themselves in public in any part of Greece without being attacked by citizens. Foreign correspondents are left speechless when they hear hundreds of thousands swearing at the broadcasters of the biggest private news programme.

The Greek crisis is no longer financial. It is deeply political and social. The institutions created after the fall of the colonels' regime in 1974 are clinically dead. Of course, the country is not threatened again by a junta. Nonetheless, government policy is starting to borrow more and more elements from authoritarian regimes.

Some of the most respected jurists in the country claim that the financial policy is anti-constitutional. During the last big demonstration, police emptied more than 2,800 teargas grenades, containing a chemical substance whose use is prohibited during war by the Geneva conventions. Amnesty International and the most important Greek medical associations felt obliged to intervene, asking the government to put an end to police animosity. Authoritarianism is growing day by day. Slowly but steadily, democracy is giving way to debtocracy. The power of the people (demos) is handed over to foreign and local lenders, who ask from the Greek government solely one thing: some more time in order to transfer the Greek debt to the European Central Bank; that is to European taxpayers. ...........(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/2011/jul/09/greece-debtocracy

[no_hypocrisy]

1. There must be another way to restructure the debt and the payment plan

without selling off the country and starving the people.

[robcon]

4. Who's being starved? A little dramatic?

Greece has no one to blame for the crisis but themselves.

Unless you think someone else (the banks that financed the debt? the EU? the rest of the world?) should pay for what the Greeks spent over the last few decades, it's only about when, and at what interest rate, the Greeks pay for what they spent.

[laser_red]

5. restructuring... same as a default

a default would have many consequences

[ixion]

2. Greece is a bit further along on the exact same path we're walking now

despite some who might claim otherwise.

[Yupster]

3. It's not so much the debt

that's the problem.

To use the US as an example, our debt payments are very manageable. We pay less than 10 % of our budget to debt payments each year. Compare that to a family that pays 30 % of its income to mortgage payments.

The problem instead is our deficit.We're borrowing over 40 % of our budget. That would be like if that family bought a new house every year or every third year and never paid off or sold the last one.

So if we had to balance our budget tomorrow (or August 2nd if we don't raise the debt limit), it won't be the 8 % of the budget that goes to debt service that will be the problem.

It will be the 40 + % cut that will stop us from borrowing more.

We really need to get a handle on this. You can't spend almost twice as much as you bring in year after year and expect it not to eventually mean crippling cuts.