Greek Prime Minister Alex Tspiras announced a July 5th Referendum on whether Greece should accept the Troika’s final demand that Greece accept additional austerity measures in exchange for further loans. Countering the ‘shock and awe’ tactics of the Troika, the Greek leaders have drawn a ‘red line’ in the sand: democracy, not neoliberal hegemony, will decide whether Greece will accept further austerity or cut loose from a dysfunctional European monetary system that was still born in 1992. As Greek Finance Minister Varoufakis stated:
The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals – proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt. I was even asked: “How do you expect common people to understand such complex issues?”. Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting!
Troika imposed austerity on Greece has today produced staggering results: Greece’s GDP has shrunk 25%; Greek unemployment hovers at 25% (50%+ for ages 25-35); Pensions cut by 40%; suicides up 35%; 20% of Greeks live below the poverty level and the carnage continues.
In 2013 the IMF acknowledged that their austerity measures made the situation worse for Greece. The IMF and their Troika colleagues must accept responsibility for the inhumane, ill-informed and illegal austerity they imposed on the Greece. The financial insanity imposed upon the Greeks by Troika becomes a slow motion debacle not only for Greece, but for Europe. The usurpation of European Democracy started in 2010 when private bank loans to Greece were absorbed by the EU; thus, imposing a direct burden on European taxpayers to ‘bail out’ French and German banks who ‘privately’ lent hordes of addictive credit to the Greeks. European Bank bailouts approximated 116 billion Euros. By contrast, Iceland jailed its irresponsible bankers while Europe bailed out the French and German banks on the backs of European Taxpayers – taxpayers who have been duped into blaming the Greeks for the Troika’s sleight of hand.
In terms of what brought Greece to the current position, the history of corruption, incompetent governments and ‘illiterate IMF’ hegemony rather than Syriza must bear responsibility for the abyss that Greece faces today. Alex Andreou writes in Byline:
It is true that the referendum leaves Greek people with the choice of types of extreme misery. Will it be an externally imposed misery or a self-determined type? But it is utterly unfair to suggest that this is a position to which Syriza has brought us. It is a position to which forty years of corruption and incompetent government and five years of economically illiterate IMF hegemony have brought us. Faced with the choice of an ever-expanding abyss of austerity, of death by a thousand paper cuts, Tsipras has opted to act as a catalyst and bring things to a quick and decisive end.
To pay off the massive 323 billion Euros in Greek debt, the Troika, disregarding the economic lessons of the 1930’s Great Depression, imposed a ‘moral solution’ to Greek Debt rather than seek ways to inject private investment into Greece, create jobs and help Greece grow its way out debt. In the ‘Alice in Wonderland’ logic of the IMF led Troika, austerity seeks to impose ‘cuts’ in government expenditure from pensions, wages and government services as if some ‘confidence fairy’ will magically restore investment in Greece. This reformulated ‘trickle down’ economic model is a hopeless policy built on the stilts of neoliberal illiteracy. Direct investment, not cuts in aggregate demand, similar to the Marshall Plan investments and debt forgiveness that rebuilt Germany, is what Greece needs to rebuild growth and manage payments on long term debt.
Coupled with the economic flaws inherent in the Troika’s Greek Austerity ‘diktats’, a recent investigation by the Greek Truth Committee on Public Debt found the insidious policies of the Troika to lack legal standing:
All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.
In addition to the recent findings of the Greek Parliamentary Truth Commission on Greek Public Debt, there is also precedent from the International Court of Justice which would find the above austerity measures contrary not only to national sovereignty but to international law. See the court ruling in Belgium v. Greece (1939) by the International Court of Justice where it was held that the ‘capacity of the nation’ to repay any debt must be part of any debt settlement agreement. This foundational legal precedent was brushed aside by the Troika when Greece offered to manage its debt through growth led bonds. Greece has real claims against the Troika for the humanitarian and economic damage inflicted upon Greece since 2010.
The Greeks, in the end are a nation and a people, not a colonial puppet strung to the neoliberal bankers, hedge fund managers and politicians who have attempted to moralize Greek debt while their policies have forced Greece into the abyss. Remember, but for the ‘greek heroes’ who stood up to Axis powers in WWII, there would be no Russian Victory, perhaps not even a D-Day or a V-Day … Greece lost 10% of its population ‘resisting’ the Nazis — the highest percentage of any allied nation; 250,000 Greeks died of starvation under German occupation. Greece has paid more than its fair share to help build the Europe of today.
Greeks should vote ‘OXI’ on July 5th.
Dr George D. Pappas is Executive Director at the International Center for Legal Studies (ICLS) in Asheville, NC.
Demonstrate: Solidarity with Greece – NO to Austerity YES to Democracy!
29 June at 18:00 in UTC+01
Trafalgar Square, UK
 Maastricht Treaty 1992 – Treaty on European Union
 As it happened – Yanis Varoufakis’ intervention during the 27th June 2015 Eurogroup Meeting
 20 percent of Greeks below poverty line, March 14, 2010., Neos Kosmos.
 IMF admits: we failed to realise the damage austerity would do to Greece, June 13, 2013, Guardian.
 The Greek debt: what creditors may stand to lose, June 19, 201, Guardian.
 Iceland convicts bad bankers and says other nations can act, Feb. 12, 2015, CNBC.
 Don’t Blink Greece, Alex Andreou, Byline, June 27, 2015.
 How Much Does Greece Owe?, Money Morning, March 25, 2015.
 The Greek Debt ‘Confidence Trick’, George D. Pappas, Critical Legal Thinking, Feb. 23, 2015.
 Executive Summary of the report from the Debt Truth Committee, June 17, 2015, Committee for the Abolition of Third World Debt.
 FASCICULE No 78 SOCIÉTE COMMERCIALE DE BELGIQUE, pg. 22.
Belgium v Greece was decided by the Permanent Court of International Justice; its observations on the Greek capacity to honour the commercial award were not part of the decision; the Court made it clear that the question of Greece’s ability to pay was, by agreement of the parties, ‘outside the scope of the proceedings by the Court.’ It is not surprising that this statement by the Court, in which the Court is only repeating the declaration of Belgium to that effect, has not been used as a precedent.
If anything, that Judgment reaffirms the international obligation of a country to honour all its debts equally. Contemporary developments in international human rights law, including as applicable at the EU level, do qualify that rule, to the extent to which as sovereign country is required to perform its public role in order to guarantee its citizens’ fundamental rights.
Having said all this, I completely agree with the thrust of the argument and with the position taken by Greece (puzzled though by its determination to remain in the Euro…).
You are correct, while the offical jurisdiction of the court precluded their ability to compell the parties to take into account the capacity of the Greeks to pay back their Belgium debt in 1939, their ruling provides a very clear ‘qualfication’ that such equitable capacity should be taken into account by the parties. To this extent, the court’s ruling does establish a foundational precedent. To wit, the court states
“Greek Government is justified, owing to force majeure,
in not executing the awards as formulated. For it is clear
that the Court could only make such a declaration after having
itself verified that the alleged financial situation really exists
and after having ascertained the effect which the execution of
the awards in full would have on that situation ; in fact, the
Parties are in agreement that the question of Greece’s capacity
to pay is outside the scope of the proceedings before the Court.
Nevertheless, though the Court cannot admit the claims of
the Greek Government, it can place on record a declaration
which Counsel for the Belgian Government, speaking on behalf
of the Agent for that Government who was present in Court,
made at the end of the oral proceedings.
This declaration was as follows : “If, after the legal situation had been determined, the Belgian Government should have to deal with the question of payments, it would have regard to the legitimate interests
of the Company, to the ability of Greece to pay and to the traditional friendship between the two countries.”
Upon a further reading, the court seems to have gone beyond precedent by citing “it can place on record a declaration which Counsel for the Belgian Government, speaking on behalf of the Agent for that Government who was present in Court, made at the end of the oral proceedings.” Therefore, by citing the Counsel for the Belgian goverment’s, the court made a ‘finding of fact”: a fact that was submitted not by the court per se but by the creditor! Here the court simply upon its own sue sponte authority, incorporated that finding as a substantive declaration outside of the proceeding to be part of the judicial record. Wihtout question, the ‘capcity to pay’ is not only a factual declaration by the creditor but an express incorporation into the court’s opinion.
I would definitely argue for it, not sure it would be successful!
Incidentally, a recent investment arbitration involving Greece saw the Tribunal rejecting the claim on jurisdictional grounds, which is good news of sorts I guess
I have not read the award yet, just the report of it.
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