Monthly Archives: July 2015

Jubilee holds the high ground, both morally AND intellectually! NOW’S the time to speak up for Greece!

Greece – Leading Economists slam European Policies

Attached [link above] you will find new research of my own, showing how that the world’s leading economists warned European leaders five years ago that their policies would be a disaster, and have been scathing about them ever since. So just as we held the high ground, rationally as well as ethically, with ‘Third World’ debt, so now we do so in the case of Greece!

Dear Friends of NE-CAP,

As I write, the Greek people have just finished going to the polls, where they faced an unenviable choice – and one which should never have been foist upon them. It is clear they have voted overwhelmingly to reject the severe austerity imposed on them, with all the suffering which that has implied, hoping for a better future, but one which may well turn out to be even worse. They are going to need the support of people of compassion and conscience (‘Jubilee People’) around the world, far into the future!

Please go to: http://jubileedebt.org.uk/actions/greeces-debt-petition

JUBILEE 2000/JUBILEE DEBT CAMPAIGN HAS NEVER ACCEPTED, AND WILL NEVER ACCEPT, that lenders have the right to use their position of power to impose suffering without limit and without end on their debtors. In adopting this stance, we are simply reflecting the restrictions imposed by the jubilee laws of the ancient Hebrews, from which we draw our inspiration. Similarly, we DO NOT ACCEPT that debtors should be denied the right to fair and independent adjudication (see below). This applies whether the debtors are white people in Europe, or black people in Africa! In the case of Greece, the whole international jubilee movement has rallied to its side, including ‘Erlassjahr’ (Jubilee Germany).

A recent service organised by Erlassjahr in Dresden Cathedral, to which JDC’s Tim Jones was invited, had its amusing side! Surprisingly, the hawkish German finance minister, Wolfgang Schauble, attended and will have heard both Protestant and Catholic bishops calling for just such a fair and independent system – i.e., an international bankruptcy process – and for lenders to take more responsibility for debt crises. One of the prayers gave thanks for the debt cancellation Germany received in 1953, and called for it to do the same for others in similar situations! Tim says, “Herr Schauble looked quite grumpy when he left.”

In 1999, speaking of the debts of African countries, the great Kevin Watkins, then with Oxfam, said that the position of the international community was “as absurd in rational terms, as it was unacceptable in ethical terms”. He was right and this gave the lie to the charge, frequently levelled at us, that our positions are impractical in ‘the real world’. In fact, just the opposite is true! We face up to the reality which, time and time again, rich lenders cannot bring themselves to acknowledge – namely, that some debts are simply unpayable, at least at a cost to ordinary people acceptable in even a half-civilised world.

EUROPEAN POLICIES ARE UNACCEPTABLE IN HUMANITARIAN TERMS. The EU is supposed to be about ‘Ever Deeper Union’, whereas the measures imposed on Greece over the past five years have resulted in ‘Ever Greater Suffering’! As Professor Joseph Stiglitz, Nobel Prize winner in Economics and a former Chief Economist at the World Bank, wrote in February, “The contraction in government spending has been predictably devastating: 25% unemployment, a 22% fall in GDP since 2009, and a 35% increase in the debt-to-GDP ratio.” The fall in GDP is now said to be 26%; unemployment 27%; youth unemployment 50-60%; number of suicides since imposition of the punitive measures 11,000. [In contrast, the UK suffered a 6% fall in GDP.] In short, the country had been pushed into a spiral of economic and social disintegration.

The way Greece has been treated reminds me of nothing so much as the way doctors used to treat illnesses by bleeding the patient – and when he didn’t get better, they’d bleed him some more! Professor Roger Lloyd-Jones, of Sheffield University, agrees: “The implosion of the Greek economy is a tragedy for its people, but the common solution from the EU is yet more austerity!”

EUROPEAN POLICIES ARE UNACCEPTABLE IN POLITICAL (i.e., democratic) TERMS. They have been imposed on Greek governments and people, who have been denied recourse to any form of appeal.

They have been imposed without any consideration of the responsibility of Europe in driving a ‘coach & horses’ through its own rules in allowing Greece to join the single currency in the first place. Even more to the point, the responsibility of those who so foolishly and recklessly loaned such large amounts of money to Greece has also been largely ignored. [JDC has shown that 92% of the money loaned to Greece by Europe and the IMF since 2010 has gone – where? Not to the Greek people, but to bail out these European banks. So Germany and the others have, actually, been bailing out their own banks!]

In striking contrast to this high-handed arrogance, I cite the motion passed by Newcastle University’s Senate (its highest academic authority) on 19th June 2001, which stated that: “Senate congratulates the Jubilee campaign for poor country debt relief on its achievements to date and re-affirms its support… In particular, Senate endorses the call by Kofi Annan, Secretary General of the United Nations, for a new, fair and transparent procedure involving ‘a debt arbitration process to balance the interests of creditors and sovereign debtors and introduce greater discipline into their relations’ (Kofi Annan, 21st Century Action Plan).”

Such a ‘fair and transparent procedure’ would not only help to resolve debt crises when they occur, but would lessen their frequency and severity, since irresponsible lenders and financial speculators would no longer be able to assume they would be bailed out by the taxpayer, as they were during the ‘Third World Debt’ crisis of the 70s and 80s, and have been in the case of Greece.

FINALLY, EUROPEAN POLICIES ARE UNACCEPTABLE IN ECONOMIC TERMS. You would think that John Maynard Keynes had never existed, or that the terrible consequences of draconian cuts in public expenditure at a time of recession had not been played out for all the world to see in the Great Depression of the 1920s and ‘30s!

European policies have been as pointless and they have been punitive, pushing Greece into a deep depression and making a very bad situation a great deal worse and increasing its national debt (as a proportion of GDP) by a third in the process! As Professor Stiglitz states: “Europe should admit that it made a mistake. When you make a mistake of this depth, the worst thing in the world is not to admit it and not to change it.”

We want to see them change it! We want to the introduction of “economic sanity and humanity”, for which Joseph Stiglitz, Thomas Piketty and 24 other world-renowned economists called in a letter to the FT last month.

Please go to: http://jubileedebt.org.uk/actions/greeces-debt-petition

Please sign now!

With every good wish,

David

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A ‘Jubilee’ for Greece – Debt Slavery is as unacceptable in Europe as it is in Africa

[Jubilee Debt Campaign at Newcastle University highlights the academic case against Greece’s creditors. Dr David Golding CBE]

‘Bleeding’ the patient – and then bleeding him some more: The ‘treatment’ administered to Greece reminds me of nothing so much as the way doctors used to treat illnesses by bleeding the patient – and when he didn’t get better, they’d bleed him some more! Professor Roger Lloyd-Jones, of Sheffield University, agrees: “The implosion of the Greek economy is a tragedy for its people, but the common solution from the EU is yet more austerity!” 

Browse for: “Jubilee Debt Campaign: Sign the Europe-wide petition to Cancel Greek Debt”
How the world’s leading economists view European policies on Greece
 
Greece’s situation a “nightmare”; and policies meted out by Europe described as “beatings”: In January 2015, responding to the election of Syriza, Greece’s ruling anti-austerity party, 18 leading economists wrote to the FT to say that, We think that the whole of Europe will benefit from Greece being given the chance of a fresh start.” In the same month, they were joined by Professor Paul Krugman, the Nobel Prize winner in Economics, who wrote in the New York Times, describing the situation in which Greece finds itself as a “nightmare” and the measures imposed on it by Europe as “beatings”. [“In calling for a major change, Mr. Tsipras is being far more realistic than officials who want the beatings to continue until morale improves. The rest of Europe should give him a chance to end his country’s nightmare.”]
 
Consequences of European policies “devastating”: In February, Professor Joseph Stiglitz, Nobel Prize winner in Economics and former Chief Economist at the World Bank, wrote that, “When the euro crisis began a half-decade ago, Keynesian economists predicted that the austerity that was being imposed on Greece and the other crisis countries would fail… The contraction in government spending has been predictably devastating: 25% unemployment, a 22% fall in GDP since 2009, and a 35% increase in the debt-to-GDP ratio.” [The fall in GDP is now said to be 26%; unemployment 27%; youth unemployment 60%; number of suicides since imposition  of punitive measures 11,000. In contrast, the UK suffered a 6% fall in GDP.]
 
A terrible mistake: In May, Stiglitz tried again, telling the EU to admit the mistake it made imposing austerity on Greece and soften its stance or bear the consequences if the country exits the euro area. “Europe should admit that it made a mistake. When you make a mistake of this depth, the worst thing in the world is not to admit it and not to change it.”
 
26 world-renowned economists in “plea for economic sanity and humanity”: Then, on 5th June, as the crisis deepened, Joseph Stiglitz, Thomas Piketty and 24 other world-renowned economists demanded a major change of course, in a letter to the FT entitled “a plea for economic sanity and humanity”. They slammed the status quo, pointing out the abject failure of the austerity previously imposed on Greece and the terrible suffering which has resulted from it (with no prospect of improvement), and warning of the very real prospect of the collapse of Greek democracy and the emergence of “much more radical and dysfunctional challenges, fundamentally hostile to the EU” – a reference to the alarming rise of out-and-out fascist parties in Greece.
 
Germany’s own debt crisis, and its resolution.
 
Leading economists have frequently drawn attention to the generous treatment given to Germany in the ‘London Agreement’ in 1953 – whilst Germany itself and its partners have studiously avoided all mention of the fact! Half its pre- and post-war debts were cancelled and, more important, it only had to service the remainder when it ran a trade surplus.
 
“It was after substantial debt relief that the German economy was able to grow — and reform itself —­ in the 1950s.”(Prof Joseph Stiglitz & 17 others, Jan 2015)
 
“Germany was happy enough to accept massive debt cancellation after the second world war, under the Marshall plan. As the current German government itself seems incapable of even a modicum of humility on this score, surely this is something the world should be reminding it of before it succeeds singlehandedly in plunging Greece into the kind of crisis others helped Germany to avoid.” (Professor Naomi Eilan, University of Warwick)
 
For a more detailed account of debt cancellation under the Marshall Plan, browse for, Calling Germany on its hypocrisy in the Eurozone debt crisis”, by Professor, Albrecht Ritschl, of the LSE.
 
The Proposal advanced by the Senate of Newcastle University
is the key to unlocking these repeated debt crises!
 
The motion, proposed by Ian Kitchen, the Students’ Union leader, on 19th June 2001, and passed nem con, stated that:
 
“Senate congratulates the Jubilee campaign for poor country debt relief on its achievements to date and re-affirms its support… In particular, Senate endorses the call by Kofi Annan, Secretary General of the United Nations, for a new, fair and transparent procedure involving ‘a debt arbitration process to balance the interests of creditors and sovereign debtors and introduce greater discipline into their relations’ (Kofi Annan, 21st Century Action Plan).”
 
Such a ‘fair and transparent procedure’ would not only resolve debt crises when they occur, but lessen their frequency and severity, since creditors and speculators would no longer be able to assume they would be bailed out by the taxpayer, as they were during the ‘Third World Debt’ crisis of the 70s and 80s, and have been repeatedly since that time.
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