Open letter to anti-Greek Eastern European bloc


Dear Slovaks, Lithuanians, Latvians, Slovenians,

I am certain you have been following the Greek drama unfolding in recent days, weeks and months.

You have been following it because your countries were asked to contribute to bailouts as Eurozone states.

You must also know full well that should Greece default on its EU debt, you will in fact have far more to lose as a proportion of GDP than even Germany.

It seems completely unjust from a redistributive point of view why your countries, where income levels are lower than those in Greece, were asked to contribute. In fact you are justified to be struck by this. It is very odd indeed.

But here’s the thing. There are a couple of facts you need to be made privy to.

The most significant is that your money wasn’t actually used to bail out Greece. It is a well-established fact that over 90% of the money you sent to Greece was never actually spent ON Greece. It bounced back immediately in the form of interest payments, in order to keep the Eurozone solvent.

The reason for this was that major banks of Western Europe, primarily in France, Germany and Holland, were heavily exposed to Greek debt in 2010. What was officially called a bailout for Greece was in fact an effort to create public debt out of the private one held by these banks, deemed to be systematically risky.

Bankers made erroneous judgments financing the corrupt business elite and oligarchs of Greece.

But their mistakes were socialized: the debt ended up with the European Central Bank and various EU funds. Your politicians were actually spending your money not bailing out Greece, but inapt bankers and immoral Greek politicians.

What happened in Greece during the same time? 30% wage cuts, pensions by 50%. Public servants were fired in tens of thousands. Taxes were raised in such an unjust way, that according to studies, while the top half of society was only affected by 9% of those cuts, the middle and working classes took in a staggering 338!!!

While social support for the poorest was cut, the exorbitant military expenditure of the country was left intact, as well as the tax base of the elite that was stashed away in havens. In fact the word “offshore” never appeared in the documents of austerity forced upon Greece.

What was the effect of this enormous austerity programme, far bigger than in any other country? Unemployment hit a quarter of its population and half of its youth. Due to thousands being sacked and income reductions, demand for the goods and services of entrepreneurs dropped, causing a downward spiral of further lay offs.

The expenditure of the Greek state was cut in all areas that could possibly reignite economic growth.

After austerity, Greece spends significantly less on education than any other EU country. It spends only a fraction of what other European countries spend on research and development. And in spite of the biggest economic disaster in the modern history of the country, Greece spends just 7 percentage points less on social policy than the EU average.

In fact your politicians back home have used your tax money to finance this devastating austerity in a fellow EU member state. Contrary to widely held belief, Greeks were not demonstrating for more and yet more loans. They were demonstrating so that you DO NOT send more money to finance the bailout of the banks while they undergo this social carpet-bombing.

Perhaps now you can understand why 61% of Greeks voted NO to further austerity. You are probably unaware, but as many as 85% of young Greeks were part of the NO vote.

The global economic elite has spoken out to support the Greek government in its effort to secure help from Europe to be able to end austerity, raise people out of poverty, raise demand for entrepreneurs, hold oligarchs accountable, invest in human resources and make Greece grow.

Joseph Siglitz, Paul Krugman, Amartya Sen (all Nobel prize winners), Dani Rodrik, Thomas Piketty, Jeffrey Sachs, Charles Wyplos, Barry Eichengreen, Paul de Grauwe, James Galbraith, Marc Carney, Steve Keen, the global crème of the economics profession has published opinions rejecting the logic of austerity, above all in financial but also social terms.

Oh, and by the way: those wages. It is not that Greek wages were too high, but your wages are too low. Due to the lack of determined trade unions capable of collective bargaining that covers almost all employees, the share of wages in GDP in Eastern European OECD economies is a full ten percentage points lower than in Northern, Western and Southern European countries.

Collective bargaining and agreements is one more thing that the Greek government is fighting for, since the Troika astonishingly banned it a few years ago as a part of forced austerity, slashing into the social fabric of the country.

Today, European Central Bank measures (not raising the Emergency Liquidity Assistance ceiling) mean that Greeks can only withdraw sixty euros from their ATMs each day. The reason why young Greeks still voted NO was because sixty euros is actually not all that little for many of them who, just like you, make no more than four hundred euros a month.

I thought you should know all this, because your domestic media might oversimplify things just ever so slightly…

Republished with permission from

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