Syriza right not to bail out reckless bankers, says Jubilee Debt Campaign

By staff writers
January 26, 2015

Syriza is right to be demanding cancellation of the debt which comes from bailing out European banks, says the Jubilee Debt Campaign.

The message was relayed last night on social media as news came through that the anti-austerity party, made up of dissidents against neoliberal policies from a wide cross section of society, had won a majority of seats in the Greek parliamentary elections.

Analysis of International Monetary Fund (IMF figures), released by the Jubilee Debt Campaign last week, shows that almost all of the money lent by the IMF, European governments and the European Central Bank to Greece has been used to pay off reckless lenders, with less than 10 per cent of it actually reaching the Greek people.

Since 2010, the IMF, European governments and the European Central Bank have lent €252 billion to Greece. Over the same period, €232.9 billion has been spent on debt payments, bailing out Greek banks and paying ‘sweeteners’ to speculators to get them to accept the 2012 debt restructuring. This means less than 10 per cent of the money has been used for anything else.

In 2010, virtually all Greek government debt was owed to private entities such as banks. Today 78 per cent is owed to the public sector, primarily people in other Eurozone countries, but also throughout the world through the IMF’s loans.

Tim Jones, economist at the Jubilee Debt Campaign, commented: “European and Greek banks have been bailed out, whilst a debt has been left with the Greek people. This is the same unjust response to a financial crisis as happened across much of the developing world in the 1980s and 1990s.

"Debt needs to be cancelled, and we need a new process for dealing with debt crises so that lenders do not continue to be bailed out, leaving the cost with the public, and incentivising more reckless lending and turmoil.”

Syriza, who are going to be about four seats short of an overall majority, are proposing a conference to agree cancellation of debt to reduce it to a fair level.

This is along the lines of the London conference in 1953, which agreed to cancel half of Germany’s debt, and make repayments on the other half contingent on Germany making enough money from trade with the rest of the world to be able to pay them.

The combination of the crashing of the economy and the bailout loans means Greek government debt has grown from 133 per cent of GDP in 2010 to 174 per cent today.

Ekklesia is a supporter of the Jubilee Debt Campaign

* Anti-austerity Syriza coalition achieves historic win in Greece:

* Key facts from JDC about the Greek debt (*.PDF Adobe Acrobat document):

* How Europe cancelled Germany's debt in 1953 (JDC):

* Jubilee Debt Campaign:


Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.