Giving debt relief to Greece makes economic and moral sense

published at the Guardian

Monday 2 February 2015 19.33 GMT
Many economists now agree that debt relief is a necessity for economic recovery in Greece. But debt is not just a financial issue, it is also a moral one. Both lenders and borrowers are responsible for creating debts. The ancient concept of a “jubilee” recognises that sometimes debts need to be cancelled when they are causing poverty and increasing inequality. In Greece, child poverty has almost doubled in the past six years, and half of young people are unemployed.

Meanwhile, the Jubilee Debt Campaign has calculated that 90% of the loans from the IMF, EU and ECB to Greece have actually been used to bailout European banks. It is immoral for all the costs of this ongoing crisis to be borne by the people of Greece, rather than those who lent money recklessly in the first place. Reducing the burden by cancelling some of its debts will give Greece a much-needed chance at recovery and help bring hope back to Europe.
Rowan Williams Master, Magdalene College, Cambridge, Cllr Rabnawaz Akbar Secretary, Manchester Council of Mosques, Rabbi Larry Tabick Shir Hayim/Hampstead Reform Jewish Community, Canon Dr Paul Oestreicher, Rev Professor Michael H Taylor, Rev Philip Taylor Superintendent minister, Methodist Borders Mission Circuit, Rev Stuart Davison Regional minister team leader, South Eastern Baptist Association, Jeffrey Newman Emeritus rabbi, Finchley Reform Synagogue, Rev Sue Woolley District minister, Midland Unitarian Association, Jonathan Bartley Co-director, Ekklesia, Simon Barrow Co-director, Ekklesia, Rev Chris Densham Lead minister, Dereham Baptist Church, Rev James Ramsay Vicar, St Barnabas Church, Manor Park, Stuart Murray Williams Chair, Mennonite Trust, Rev Dr Ruth Gouldbourne Co-minister, Bloomsbury Central Baptist Church, Rev Neil Douglas Minister, Calvary Baptist Church, John Sheldon Warwick Quaker Meeting, Rev Dr Brian Haymes, Rev John Churcher, Rev Chich Hewitt, Rev Stephen Dando, Rev Andrew Dawson, Rev Roger Taylor, Rev Gwynne Brindley, Rev Simon Copley

• At last, a major German political figure, Joschka Fischer, has acknowledged the obvious: that the austerity movement is in serious trouble in the eurozone (After the Greek vote Germany’s austerity policy is in tatters, 31 January). Angela Merkel and Wolfgang Schäuble, Germany’s finance minister, along with most of the German policy elite and public opinion, do not accept that their austerity policy is in tatters. Most EU officials and most government officials of eurozone countries officially reject any suggestion of a debt restructuring for Greece. Germany and the EU need to change their tune, or Greece may default on its debt. Unfortunately, the most likely outcome of this strategy is chaos, since a default would certainly lead to Greece exiting the euro. It would be unwise of Germany to underestimate the possible or likely contagion in the financial markets that would result from a Greek exit.

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Continuing pressure for ever more austerity demanded in return for external assistance will raise political opposition against adjustment policies in the troubled countries themselves. There is no chance whatsoever of Greece repaying its debts. Only the creditor nations of the north refuse to acknowledge this reality. The current set-up is completely unsustainable. There is no reason why Europe cannot recognise this unsustainable setup and make the necessary adjustments. Otherwise, the most likely winners will be populist anti-euro and anti-EU parties who want to put an end to the euro construct and eventually the EU as a whole.
Professor John Ryan
St Edmund’s College, Cambridge

• In addition to the clear evidence that the imposed austerity has failed, as Joschka Fischer points out, there is another matter that should be in the forefront of Angela Merkel’s mind at this time. History informs us that when the powerful impose harsh conditions, there is a corresponding increase in publicly expressed racism and violence.

This is well illustrated by the punishment in financial terms of Germany by Europe after the 1914-18 war. It was this enforced impoverishment that gave rise in part if not mostly to the popularity of National Socialism and the Nazi party. This is only one of many available examples, likely to include the governments maintaining empire-building and colonial enterprises over the previous centuries.

Racism is present to a greater or lesser degree in all of us. We need to look no further than the generalisations regularly applied to national characteristics in both conversation and literature.

Whatever our views, when the majority of us feel relatively secure, the depths of our racist tendencies remain very much part of the background, more in the nature of irritations that rarely lead to physical violence. But, when we feel insecure and fearful, and have to compete with others for scarce resources, including employment, it is very much in the foreground and historically has consistently given rise to physical violence against those actually or perceived to be wielding the power – as it is doing in Europe during the present financial crisis.
Robert Sherman
Leeds

• Lacking in so much political debate has been a sense of history. So I applaud Owen Jones’s reminder that defeated Germany in 1953 benefited from debt relief (Stop Merkel the bully – or let the forces of austerity win, 29 January). The German taskmasters dominating the EU speak from a position of economic strength today very much because the allies wrote off the entire German public debt notched up by the Nazis (670% of its GDP), and this help was augmented by Germany’s share of aid under the Marshall plan – $1,448m between 1948 and 1951. This relief laid the grounds for the German postwar economic miracle, the Wirtschaftswunder, whose heirs are Merkel and her colleagues. Unlike Germany, Greece never received proper reparations for the devastation inflicted on it by the Nazis, and its share of Marshall plan aid was small ($376m). With that perspective, it behoves us to agree Syriza’s demands for a substantial write-off of Greece’s debts and/or at least easier terms of repayment.
Benedict Birnberg
London

• The reality that Syriza is in alliance with an unpleasantly rightwing party in order to be in government in Greece may be excused by the realities of the electoral system there (Editorial, 2 February), but it hardly suggests that media hype that they are a party of the “far left” is correct. However, news that Syriza’s finance minister, Yanis Varoufakis, is seeking the support of George Osborne on a debt deal (Report, 2 February) is surely an act of unforgivable folly.
Keith Flett
London

• Your unusually muddled editorial called for “romantic” nationalism to be replaced by “sober” patriotism, whatever that means. The kind of nationalism that is destroying stability and economic security in the countries of Europe is the one enforced by the neoliberal policies at the heart of the EU’s Treaty of Rome and subsequent treaties. These prioritise open borders, export-fetishism and the call for constant structural reforms, ie sacrificing social and environmental conditions, all to achieve the truly absurd goal of “competitiveness”. The continuation of this policy of transcontinental economic warfare is exactly what the German and Brussels establishment is trying to force on Europe with its cruel austerity blitzkrieg. It is utterly illogical. Not everyone can win at the export game. The kind of “sober” patriotism and nationalism that Europe requires is one that concentrates on the protection and rebuilding of national economies. What it must not do is to continue to accept the beggar-your-neighbour approach inherent in the mantra of export-led growth and competitiveness.
Colin Hines
Twickenham, Middlesex

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