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Sunday 24 September 2023 Dublin: 14°C
Associated Press
Our Finance Minister has sided with the most hardline of Greece’s creditors this week – and that’s wrong, writes Ronan Burtenshaw.

LIKE MANY IRISH people watching the latest chapter of the Greek negotiations unfold in Brussels this week I feel a sense of shame at the behaviour of Michael Noonan as our Minister for Finance.

Siding with the most hardline of Greece’s creditors and to threaten the country with a shutoff of emergency funding was a cold and calculating political decision. Minister Noonan understands that a deal which alleviated austerity for Greece would reflect poorly on the Irish government’s inability to achieve similar measures in far more favourable circumstances. So, he decided to further reduce Europe to gunboat diplomacy.

Contrary to Minister Noonan’s position in these negotiations, here’s five reasons Ireland should be supporting Greece.

1. Debt relief would benefit Ireland

Ireland has borne a disproportionate burden for the eurozone crisis. In 2013, economist Michael Taft estimated that Irish people had paid 42% of its cost.

This continues today with Ireland spending over €8 billion on interest alone for our debt repayments. That’s roughly the same as we spend on the entire education budget.

If Syriza’s proposal for a European debt conference was adopted, Ireland would have €4 billion extra per year to pay for schools and hospitals, to reverse cuts to the most vulnerable, to extend credit to SMEs or to invest in jobs. Why shouldn’t we campaign for this?

2. Austerity policies haven’t worked in Greece

The two austerity memorandums implemented in Greece were supposed to “reform” Greece – making its debts manageable, cutting profligate spending and tackling corruption. Instead they have plunged it into a humanitarian crisis.

Between 2010 and 2014 Greek GDP fell 25%. The only contractions worse than this so far this century have been Syria and Zimbabwe.

During the same period Greek public debt rose astronomically, from 130% of GDP to 175%. It is now even higher.

Needless to say, both of these outcomes were hugely different to what creditor institutions predicted. Despite this demonstrable failure of their proposed remedies to the crisis, the institutions continue undeterred.

The consequences of their failed policies have been disastrous: more than half of the Greek population are threatened by poverty, 40% of the country’s children have fallen below the poverty line, one million people have no access to healthcare, and ambulances lie idle, unable to help the sick and dying for want of parts. This cannot continue.

3. Greece’s government is fighting for its people

In January a new government, led by the Syriza party, was elected to break the cycle of austerity and introduce measures to combat the humanitarian crisis.

Despite constant pressure of negotiations with its creditors, Syriza has delivered. Here are some of the measures they have introduced in just a few months:

  • An end to all evictions on houses valued under €300,000.
  • Free electricity, rent supplement and food stamp programmes for the poorest 150,000.
  • Universal, free access for Greeks to the public health system.
  • Reopening the public broadcaster ERT and rehiring 4,000 public servants, like the Finance Ministry cleaning ladies, sacked by austerity governments.
  • Abolition of steep pension cuts set to take place automatically in February 2015.

This doesn’t even include reforms to improve the conditions of refugees, granting citizenship to migrants, introducing civil partnerships for LGBTQ people, snaring tax-dodging oligarchs and many other measures.

What’s more, the Greek people respect the efforts of their government. The latest poll shows its lead over the austerity party it defeated in January more than trebling since.

4. Hammering Greece won’t solve the eurozone crisis

A distorted narrative of the European crisis has been fostered to justify the response of the EU, ECB and IMF to the banking crisis in 2009. The problem in Europe, we are told, was reckless peripheral states who spent beyond their means.

The problem with this telling of the story is that, as well as justifying Ireland’s unsustainable debt, it ignores two of its most serious contributing factors: the practices of financial institutions and the structure of the eurozone.

Once these factors are ignored they can be written out of the necessary remedies. People forget that for every reckless borrower there was a reckless lender. Or that the financial architecture which led to the biggest slump since the Great Depression remains largely intact.

It also shields the European Union and the euro from scrutiny. The crisis has exposed serious flaws in the eurozone structure – the disjuncture of a monetary union without a fiscal counterpart, the unanimous decision-making structure that leads to endless negotiations, the absence of a lender of last resort and the limited remit of the ECB in guarding only against inflation.

It has also exposed the counter-productive German dominance of the European economy. This is the fifth year in a row that Germany has a trade surplus above six percent of GDP, an infringement that should result in sanction, but won’t. (Just like when it pushed for a breach in the no bailout clause.) Germany is now second in export dominance internationally only to China.

This is bad in two ways for Europe – first because it tends towards deindustrialisation of peripheral states and second because excess savings from surpluses tend to be lent abroad, with a risk of further bubbles.

5. We don’t need to be taught lessons

As negotiations in Brussels have progressed in recent weeks one of the dominant reasons to emerge for not giving breathing space to the Greek government has been that it would encourage anti-austerity movements elsewhere – such as Spain’s Podemos or our Right2Water campaign.

Instead, Greece should be taught a lesson that may be passed on to others.

This approach to democracy should offend us. We are citizens of Europe, not its children in need of reprimand. It reminds too well of the decisions in Ireland to twice rerun referendums that didn’t go Europe’s way, to push us “quite hard” into a bailout we’re still paying for and to warn of financial “bombs” going off if we didn’t repay the Anglo bondholders.

These are not the words of people who respect democracy. The Greek government, on the other hand, is trying to respect the democratic mandate given to it by its people. 

Which side are you on, Mr Noonan?

Ronan Burtenshaw is co-ordinator of the Greek Solidarity Committee and vice-chair of ICTU Youth.

‘The last thing the government wants to see is Greece get a better deal than it could’

Paul Murphy accuses Michael Noonan of ‘stabbing the Greek people in the chest’

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