Open letter by Sahra Wagenknecht (deputy chair Left Party) to Angela Merkel, published in BILD

[magical thyme]

on 10 July 2015

http://www.sahra-wagenknecht.de/en/article/2163.madam-chancellor-change-your-policy-before-it-is-too-late.html

Madam Chancellor,

Europe is in a bad condition. All over Europe it is the hard-working people with ordinary wages who pay most taxes while the rich people duck away. Many wage-earners are not able to live off their job income. Also in Germany. After a life of hard work, often enough, a miserable pension looms. The wealth of millionaires, however, has reached new peaks. In all of Europe the states are highly indebted because they have taken over the losses of irresponsible bankers and speculators. Greece´s debt is particularly high. Here, a corrupt political class together with Greek oligarchs and the international banks has shamelessly accumulated wealth for years and years. Since the introduction of the Euro especially, the party was on. Many small and medium-sized enterprises on the other hand were swept from the market by the new currency which was way too hard for Greece.

In the year 2010 Greece was bankrupt. It was clear already then that it would not be able to repay its debt. Yet despite that, Madam Chancellor, in 2010 you set the course for Germany and the other Euro countries to accept the liability for the Greek debt. By so doing you protected banks and hedge funds from losses in the billions. For the European tax payer who was never asked, however, this decision was a fatal error. It was clear from the beginning that a high amount of our money would be lost. Together with other parliamentarians of the Left I pointed this out to you in the Bundestag. You would not listen to it.

In the meantime Germany has more than 60 billion Euros at stake in Greece. Ever more credits were handed out in order to enable Greece to pay old debts – only because you, Madam Chancellor, did not want to acknowledge your mistake. That way the illusion of Greek solvency was upheld. In an enterprise this would be called delaying bankruptcy. The credits were given on conditions that led Greece even deeper into the crisis. The small people suffered, the Greek oligarchs became even richer. Today production in Greece is 25 per cent less as compared to 2010. There are no investments, the young generation has no perspective. Even though the Greek state has cut its expenses by almost a quarter which is more than any other European country has done, the debt has not shrunk. It is higher than it ever was. Still, Madam Chancellor, before the Greek referendum you wanted to spend another 15 billion Euro of European taxpayers´ money to have Athens pay for old debt. By taking on a new debt. The only condition you had was to oblige the Greek government to continue with the policy of the last years. The taxpayers in Germany, too, can be grateful to the Greek people that this proposal was swept from the table by their sovereign "No".

It is time to come clean with the people. Stop burning more and more taxpayers´ money in order to disguise that a major part of the money we have already spent is gone. One day the truth will come out. The later it is the more expensive it is going to be for all of us.

Greece does not need a new "aid package" only in order to pay off old debt with new debt. Greece needs a haircut. It must be relieved, at least for three to five years, from the pressure to pay interest and repayment which it cannot shoulder by its own means anyway. Greece also does not need more social cuts but investments and a hefty levy on wealth at the expense of its oligarchs. What is necessary is an unbundling of the Greek economy in which today roundabout 800 immensely rich family clans hold solid monopolies and dictate the prices. Those are the reforms that would set the country on track, and not more pension cuts, VAT increase and privatizations.

You ought to remember: also the German reconstruction became possible by means of a generous debt haircut. After the Second World War Germany was granted a reduction of two thirds of its old debt. Only that way the economic miracle could have a full start. At that time we were indebted also to the Greeks, a debt that was never repaid. Madam Chancellor, change your policy. Before it is too late.

Sahra Wagenknecht

[fasttense]

1. It seems that the banksters have such a strangle hold on the EU

That they will squeeze the Greek poor and middle class until they all flee the country or are dead.

[DetlefK]

2. What was the alternative?

Let Greece go bankrupt and let it tank the Euro?

Expel Greece from the Euro and force it to have it's own currency? A currency Greece could not back up with realworld-value?

And aren't the anti-monopoly laws of Greece a greek responsibility? Does Sahra Wagenknecht want Angela Merkel to mess with the deepest levels of greek domestic policies?

And there were geopolitical reasons for a haircut for Germany after WWII. What are the geopolitical reasons for and against a haircut for Greece?



-------------------------------

As usual for this party, too much idealism and not enough pragmatism.

[BillZBubb]

3. Thank you for the conservative, neoliberal perspective.

[DetlefK]

4. Do you support her proposal to let Greece go bankrupt, the Euro be damned?

Also: If you know that you will get a debt-haircut, no matter what you do and without even having to demand it (because there's precedence with Greece), how would this influence your decisions on making debt?




Outrage is cheap. Ideas are hard. What are yours?

[magical thyme]

5. debt relief, as was recommended by the IMF in 2010

And there were geopolitical reasons for a haircut for Germany after WWII. What are the geopolitical reasons for and against a haircut for Greece?

How about not turning private bank losses into public debt in the first place? The IMF austerity programs have been wonderful for the 1% and disastrous for the 99%.

How about ensuring successful recoveries for *all* of the PIIGS (which are still at high risk)? And restructuring the Euro so that it supports *all* the members, not just one or two?

Found a wonderful article yesterday, can't find it now, about how successful the the German relief program was, versus how every IMF bailout has left failed states and permanent recession.


What are the advantages of turning Greece into a failed state?

[ljm2002]

6. Did you read this part?

"Even though the Greek state has cut its expenses by almost a quarter which is more than any other European country has done, the debt has not shrunk. It is higher than it ever was. Still, Madam Chancellor, before the Greek referendum you wanted to spend another 15 billion Euro of European taxpayers´ money to have Athens pay for old debt. By taking on a new debt. The only condition you had was to oblige the Greek government to continue with the policy of the last years."

These are facts. Greece has cut its expenses, per the previous austerity regime that was a condition of the original loans. But in spite of that (or more accurately, because of that, since tax revenues have gone down) -- the debt is now higher than it was when the loan was given. And now the Troika wants to impose more of the same: have Greece borrow more, in order to be able to pay off some of the previous loans -- as long as they indulge in even more austerity -- which, if the past is any indication, will just sink them further into debt, i.e. it will just be delaying the inevitable default and cause more misery along the way.

When a person or a country is bankrupt, it's bankrupt. It cannot realistically meet its obligations. In those situations it is normal to write down the debt. You act as though such a thing is unheard-of, but you are wrong. Saying that would take down the Euro is silly. Greece is a very very small sliver of the European economy. The real fear, of course, is their version of the Domino Theory: i.e., if Greece is allowed to default, then other countries like Spain and Portugal will soon follow.

It was a corrupt conservative government, in cahoots with Goldman Sachs, that got Greece into this mess. One might even think that government did it on purpose, knowing that Greece would be put in an untenable position and have to sell off its assets to private companies -- exactly what is being forced now.