On Monday night, Mr. Alexis Tsipras, the Prime Minister of Greece for the past five months, is “on trial” in Brussels. The decision is more or less known. Our country has to pay the loan installments that the State has taken out from the international market. These loans could be considered usurious, because they were necessary: the State could not meet its obligations because its income was less than its expenses.
This has gone on for years – from time of the War of Independence in 1821, the State borrowed money from the international market ans was “unfortunate” to have them arrive in Greece truncated from foreign brokers and domestic embezzlers. The story has carried on since then and loans have often been the source of scandals – take for example the infamous structured bonds in recent times.
In our times external borrowing reached a point where the State did not and does not have the money to make its payments, so it turned to the European Union for an official loan – this was necessary so that State would not fall apart.
Our partners agreed to loan us under certain conditions. Not only do they impose onerous interest rates, but they also want to be certain that they will get back their funds. As such, they demand a significant role in managing the loan funds. Subsequently they begin determining the State functions and the quality of the people’s life. They want to define wages and pensions, taxes and charges – the people’s living conditions in general. This is the people who is called upon to pay for overspending in the past the irresponsibility of those in power, who either do not dare or are unable to take the measures necessary to pay off the loans. As a rule, in order to take care of overspending in the past, a generation will mortgage future generation or generations!
For the past few decades the people of this country have seen governments essentially surrender the economy to the vultures of the markets – who are growling today as they can sense new “opportunities” – in order to satisfy their voracious electoral clientele.
All of this is, or should be know to those in power or who had the ambition of governing this country. Unfortunately they appear to be deaf but not speechless when faced with the truth and reality. If we limit ourselves to the events of the past decade, we can identify the systematic “mistakes” and bluffs of almost everyone who governed the country.
In the 1980s Andreas Papandreou promised “even better days”, but after the elections he was quick to enforce a policy of austerity. Those in charge of subsequent governments followed the same policy more or less. The Prime Minister who essentially had the default time bomb blow up in his hands proclaimed that “there is money”. What followed is common knowledge, but there are certain gray areas. The party in power won the elections with slogans against the austerity and those who are lending us so that we can maintain to this day a quality of life that many European countries envy. When Mr. Tsipras became Prime Minister he obviously realized the seriousness and extent of the problem.
Unfortunately, neither did the current government dare say the whole truth to the people. Namely that we are essentially a bankrupt country that needs more and more loans to survive. To paraphrase a Chinese proverb, we would tell the international money-changers instead of lending a people, teach them how to earn a living on their own…
Because hope dies last, there are many who believe that at some point, a leader will realize that the country’s financial recovery necessitates its modernization.
All rational people are anticipating a government capable of creating the prospects and environment for growth, to pull the people out of doldrums of the recession.
After taking care of foreign obligations, will Mr. Tsipras dare break the domestic eggs?
Stavros P. Psycharis
Originally published in the Sunday print edition
