Greece government refuses to go back on its election pledges to end austerity measures

Source: TeleSUR

Deputy Prime Minister says Greece hopes to reach agreement with EU lenders, but will not retreat from its red lines.

yiannis dragasakis greeceGreece seeks to reach an agreement with its international creditors but refuses to go back on its election pledges to end austerity measures, Greek Deputy Prime Minister Yannis Dragasakis told Sunday newspaper To Vima.

“Our objective is a viable solution inside the euro,”  told the paper.

“We will not back off from the red lines we have set.”

Government will roll back austerity measures while meeting financial obligations

Since being elected earlier this year, Greece’s left-wing Syriza-led government has vowed to roll back austerity measures, while still meeting financial obligations to international creditors.

Influential Nobel-laureate economist Paul Krugman echoed similar sentiments on Saturday in which he urged the government to stick to its guns over austerity measures.

Negotiations at a standstill

Negotiations between Athens and its European creditors are at a standstill, as its lenders are reviewing a list of economic reforms proposed by Greece in a bid to unlock up frozen bailout aid.

Greece was told Saturday to urgently deliver a detailed fiscal and debt plan to official lenders ahead of the April 24 gathering of the Eurogroup finance ministers in Riga, Latvia.

Since 2010, under a different government, Greece has taken close to US$256 billion in loans from the International Monetary Fund (IMF) and European Union, in exchange for promising impose harsh austerity measures.

3 thoughts on “Greece government refuses to go back on its election pledges to end austerity measures

  1. There is no long term rationale for austerity in any economy. The Greek government is politically and economically smart to insist on ending the austerity imposed on the Greek people.

    There are some important reasons why the Greek government is on the right side of history to end the EU-IMF inspired austerity. First and foremost, the EU-IMF austerity program has posed enormous social costs and pain on the Greek people in the form of thousands of lay-offs from the public and private sectors, increased suicides, increased hardships to provide for families, increased migration of educated and skilled workers from Greece and a rise in prostitution and crime. Secondly, the logic and rationale of the EU-IMF austerity program to bring about macroeconomic stability in Greece by cutting government spending on public projects like roads and schools, raising taxes to prioritize payments to international creditors in order to reduce the national debt and pursuing high interest rate monetary policies all of which severely reduce domestic demand and growth are counterproductive.

    Third, the EU-IMF austerity program being insisted upon by the EU and the IMF policies indicated earlier therefore stifles investment, employment, incomes and therefore growth which not only threatens the objective of macroeconomic stability supposedly sought by the EU-IMF alliance and particularly the Germany government.

    However, the contractionary fiscal and monetary policies at the very core of the EU-IMF austerity program in Greece not only create economic stagnation and instability but also threaten the sustainability of paying the creditors. In other words, the EU-IMF program is counterproductive not only to its stated goals of brining growth and prosperity to Greece but it also threatens medium to long term payments to the exposed creditors particularly the Germans who have billions of euros in loans to Greece.

    Fourthly and against the background of the foregoing, the Greek government’s insistence to end the EU-IMF austerity program is prudent and rational because it prioritizes the interests of the creditors and ignores the improvement in the conditions of the Greek people which requires growth and prosperity. In other words the austerity program of the EU-IMF in Greece has failed and will continue to fail stimulating growth and achieving stability in Greece because austerity is simply inimical to growth, prosperity and stability.

    Finally, I believe that it is important to understand that the current Greek government is not interested in exiting the EU or in reneging on its obligations to repay its creditors on the contrary the Greek government is simply and rightly requesting an ending of the austerity program so that it gets more space to use fiscal and monetary policies to grow its economy by creating jobs, attract investments etc while it repays its creditors and improve the lot of its people.

    The Greek government believes that there is no reason to leave the EU to achieve these goals because it believes that the creditors unease about being repaid and the imperative of having the sovereign ability to use discretionary fiscal and monetary policies are simultaneously attainable within the EU at this point.

    Time will tell whether they are right. However, I hope they keep all options open including that of leaving the EU should the latter option becomes the only viable one to end austerity and achieve growth and prosperity with equity for the people of Greek! Peace if you are willing to fight for it!

    • There are two additional reasons that fortify the Greek’s government rejection of the EU-IMF austerity program. Simply put, Greek’s 1 percent superrich classes of financiers, merchants and oligarchs continue to live their materially comfortable lifestyles without experiencing their deserved share of the adjustment costs to get the country out of the rut that they put in in through corrupted deals, financial manipulations and others. In other words, the austerity program is unfavorably impacting the middle and poorer classes of Greek society creating more poverty and hardships for the majority of the population.

      The latter leads to the other consequence of the EU-IMF austerity program namely that increasing numbers of Greeks are being improvised by the cuts in social services which creates job losses, income losses, increasing numbers of beggars and prostitutes and criminals in the streets among others.

      Thus the social indicators are likewise not showing any positive payoffs for the EU-IMF alliance who have chosen to remain in an impasse with the Greek government insisting on the essentials of the austerity program that have clearly failed to restart economic growth, prosperity and stability in Greece.

      The powerful countries in the EU such as France and particularly Germany that have billions of euro at stake in Greece and along with the IMF prefer to bludgeon the people of Greece to repay EU bankers cost it what it will .

      Paul Krugman is right in this context namely that the Greek government should not budge on their demands to end the austerity program. However, thought tactically it is imperative to get the economy stable and growing again so that the average worker in Greece can get jobs, incomes and pay their bills again, it is imperative to interrogate the viability of the capitalist system itself as to whether it has the capacity to solve the pressing problems of employment, the climate, social services and a rising as opposed to fluctuating living standards so characteristic of working and middle class who live in Greece and other capitalist societies!

  2. Pingback: Nobel laureate tells TIME that the institutions and countries that have enforced cost-cutting on Greece “have criminal responsibility” | JSC: Jamaicans in Solidarity with Cuba

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