economic crisis has perhaps been eclipsed by
Europe’s refugee crisis, terrorist attacks, and by
the forthcoming Brexit referendum. But it has not
gone away. Greece’s Syriza coalition faced violence
on the streets and a 3 day general strike last week
that had brought much of the country to a halt. In
spite of the protests the government of Alexis
Tsipras pushed through legislation to amend the
country’s tax and pension system with the backing of
153 MPs, a measure required by the lenders in order
to continue the debt negotiations. Addressing the
300 seat house, Prime Minister Alex Tsipras said we
are determined to make Greece stand on its 2 feet at
these developments, I’m joined by Michael Hudson.
He’s joining us from New York. Michael is a
distinguished Research Professor of Economics at the
University of Missouri-Kansas City. His latest book
is Killing the Host: How Financial Parasites and
Debt Bondage Destroyed the Global Economy. Michael,
many thanks for joining us today.
HUDSON: It’s good to be back.
Michael the International Monetary Fund is pushing
for comprehensive measures to tackle Greece’s debt
burden. They want the lenders to get creative in
terms of debt cancellation and the measure that
they’\’re proposing seems to be fairly progressive
compared to what the lenders are talking about. Tell
us more about the IMF’s proposal and how the lenders
are reacting to it.
IMF says it will not reduce Greece’s debt by a
single penny. It will keep the debt in place. The
problem is the way that the European central banks
keep their balance sheets, if it breaks down
Greece’s debt owed to the IMF, then the countries
Germany, France and other countries whose banks are
bailed out will have to take a loss and they refuse
to lose a single penny. So the IMF has not made a
creative proposal. It has repeated what it said a
year ago without changing a single word. It says
okay, we’re going to keep every penny of debt in
place but we’re going to give you a fudging number.
We’’e only going to charge you 1.5% interest and you
won’t have to pay the debt for 25 years. So you
don’t get a debt markdown, but you won’t have to pay
interests for 25 years and we’ll charge you only a
little bit of interest.
only one kicker. You’re going to have to cancel your
pensions, write them down, impose austerity,
privatize your government, and you’re going to have
to shrink your economy so that it will shrink by
about 1, 2, 3% a year so that the 1.5% interest that
we’re charging as little as it is, is going to
absorb all the income growth you have. Every penny
of growth of have from the next 25 years ,you’ll
have to end up paying the German banks.
Now we know you can’t do it. We know that when you
cancel the pensions you’re going to shrink. We know
your labor’s on strike. We know they’re going to
a way out. You can sell your ports, your land, your
public utilities, your railroads, your airports,
anything you have you can sell to the Germans and at
the end of this time you won’t have a single thing
and all we ask is that all you Greeks get out of our
country, now that we own you. That’s what the IMF is
saying. It’s not creative; it’s absolutely brutal.
That’s why the Greeks are out on strike.
why are the lenders then acting the way they are?
Because they’re using finance as the new means of
war. There is a war going on in Europe but it’s not
a military war anymore. They’re now using finance
instead of war and they’re using finance to say, we
can grab your country. We can put you out of work.
We can control you and we don’t have to kill you, we
can just make you immigrate by taking away your
pensions and taking all your money. There’s a land
grab just as if it were an invasion to grab Greece’s
ports, to grab Greece’s railroads, and to grab
everything else. This is war.
the international press has been reporting on
Monday’s meeting with the finance ministers as if it
was a success and Prime Minister Alexis Tsipras and
the finance minister came out of it with smiles,
Because they sold out. Because you’re supposed to
smile before a camera, that’s the polite thing to
do. You’re supposed to smile as if you’ve somehow
defended your constituency. Mr. Obama always smiles
whenever he does another giveaway to Wall Street.
But the smile does not reflect anything that’s good
for the great people and the great people obviously
know this as you can see by their political
these attack reforms and pension reforms that now
they have to swallow, the people of Greece. What
does it really mean for the people?
means, the opposite of what reforms used to mean.
For the last 100 years the whole reform movement
meant you give more authority to government. You
give more emphasis on economic growth. Reform used
to mean making the economy fair. But today we’re in
a Orwellian doublethink world where we reform means
wiping out the reforms that Greece did after WW II.
Wiping out the pension reforms, wiping out the tax
reforms, and wiping out the tax reforms apparently.
It’s a rollback to what you could call neofeudalism.
It’s the opposite of the reform movement. So the
newspapers use the word reform but it’s exactly the
Alright then the left wing and the Syriza party.
What are they saying in light of what we just heard?
Well they’re appalled and as you know Yanis
Varoufakis, whom you’ve had on your show resigned
rather than become the undertaker imposing austerity
on Greece. They’re simply appalled and think nothing
could be worse and that they realized there is a war
going on and they’d hoped that they’d be supported
by other left wing movements and France and Spain
and Portugal. But there’s a bitter class war of
debtors against creditors or creditors against
debtors going on in Europe and all they can do right
now is expose the hypocrisy of the IMF. If you’re
talking about Greece, let’s juxtapose the IMF
supporting a really insolvent economy of kleptocrats
in the Ukraine.
The IMF is
preparing to bail out Ukraine, to say you don’t have
to pay your debts that you owe to Russia or any
governments that the U.S. doesn’t like. You have to
sell off your land to George Soros and the people
whom the U.S. government does like. Look at the duel
standard that the IMF is imposing on Greece compared
to what it’s doing for the Ukrainian government. You
see that the IMF has become a tool of the New Cold
War and the Syriza people and the Greeks can do is
point out how unfair this is and to try to let the
world know that what is happening is a movement way
to the right wing of the political spectrum and that
finance is war.
Finally, Michael, what choice does the Greek
government have? What can they do?
Tsipras says they have no choice. He says the choice
is only to surrender and in fact the argument now is
not between Greece and the IMF. Not between Greece
and Germany or Europe. The arguments that keep going
on are solely between the IMF and Germany as to
whether the IMF is going to break its traditional
rules and make a loan in violation of all of its
principles. Under its articles of agreement, the IMF
is not allowed to make a loan to a government that
cannot afford to repay the loan. All of the staff of
the IMF have unanimously found that Greece cannot
pay the loan because the terms of IMF loans, the
conditionalities, shrink the economy and make it
impossible to pay.
So the IMF
says that we’re going to break the rules of that and
we’re going to lend, essentially because the U.S.
tells us to do that and Greece is going to have to
pay so we can demonstrate that if Spain tries to
stand up and pay its pensions to people, if France
pays its labor, if Italy pays its labor, we’re going
to smash their economies, we’re going to smash their
labor unions, and we’re going to smash their labor
just as we do to Greece. Greece is a demonstration
very much like when the Nazis bombed Spain, in the
Picasso drew the great drawing for. This is the
IMF’s version of the Nazi bombing of Spain to say,
this is what’s going to happen to labor throughout
Europe if you don’t surrender.
Alright Michael as always, such a pleasure to have
you on and we’ll be back on the Greece trails so I
hope you join us again.
Thank you so much Sharmini.
thank you for joining us on the Real New Network.
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