Éric Toussaint comments on election results, the various debt audit initiatives in Europe and the Third Memorandum that was signed by Alexis Tsipras.

Greece : “Ignoring the result of the referendum is an aggravating circumstance.”

21 October 2015 by Eric Toussaint , Fátima Fafatale

The conclusion of the last meeting of the Greek Debt Truth Committee, held from 22 to 25 September, is quite clear: the 3rd Memorandum signed by Alexis Tsipras is as illegitimate, illegal, odious and as unsustainable as the previous two. In an interview for Diagonal, Éric Toussaint, the scientific coordinator of the committee, declared, “ignoring the result of the referendum is an aggravating circumstance.” During this interview he examines the recent Greek elections, discusses the findings of the Committee and evaluates the debt audit processes that are appearing in several Spanish cities.

Diagonal: The last meeting of the Truth Committee on the Greek Public Debt was held from 22 to 25 September. What conclusions have been drawn?

Éric Toussaint: Very clear conclusions! The Committee, which met in the Hellenic Parliament from 22 to 25 September 2015, has found the new debt to be as illegitimate, illegal, odious and as unsustainable as its predecessors and for the same reasonsIllegitimacy, Illegality, Odiousness and Unsustainability of the August 2015 MoU and Loan Agreements. In fact, it is worse. The creditors have refused to recognise the ’no’ against their policies expressed by 62% of voters in the 5 July referendum, and chose to impose worse austerity measures. The people were well aware of the creditors’ threats, so not accepting the decision of the referendum is an aggravating circumstance – as much against the creditors as against the government majority. I say majority, but in fact six ministers and vice-ministers refused the 13 July agreement. It was thanks to three opposition parties (Potami, PASOK and New Democracy) that Tsipras was able to pass the agreement through the Hellenic Parliament.

D: Why do you think that Tsipras won the elections again on 20 September?

E.T.: Look at what happened! The memorandum had already been signed and pushed through Parliament on 13 August. This was the last of three stages. Having no other possibilities against the memorandum the people considered that Tsipras was the least of evils. If Potami, PASOK or New Democracy had won the election, the conditions of the third memorandum would have been implemented in all their cruelty, whereas Tsipras had promised he would seek ways of easing some of the most brutal measures.
The people did not want to waste their votes; even so, 800,000 voters who had chosen Syriza on 25 January abstained. The abstention rate was 43% and Syriza was down 300,000 votes. New Democracy lost 200,000 votes and Potami, the most pro-memorandum, was badly beaten: it lost half of its voters. Among the parties that supported the memorandum, PASOK was the least affected because it won back some of the voters who had voted for the new party created by George Papandreou in January but did not present any candidates in this election.

The abstention rate was 43% and Syriza was down 300,000 votes.

Popular Unity won 150,000 votes, far fewer than the polls suggested when 25 Syriza MPs originally left at the end of August to create the Popular Unity party. Of course the new party did not have sufficient time to develop, present and argue its proposals. I think people knew that the new party could not possibly win against SYRIZA. Many potential Popular Unity voters preferred to vote for SYRIZA.
The reasons are coherent and the explanation is clear. The Neo-Nazi party, Golden Dawn, did not increase its number of votes and in fact lost 20,000, thus limiting its losses but not able to claim a victory. It is important to note this because this party remains a real danger for Greece. Leaving non-voters aside, the Greeks, by re-electing Tsipras, clearly oppose austerity measures and are counting on him to find ways of cushioning the harsh effects of the 3rd Memorandum.
Most of the new measures have not yet been implemented. The population has not yet felt the new deterioration in their living conditions. This is why Tsipras called the election as quickly as was possible in order to get rid of the radical left and to have a new majority that would accept the 13 July capitulation.

Tsipras called the election as quickly as was possible in order to get rid of the radical left and to have a new majority that would accept the 13 July capitulation.

D: Who took part in the Debt Truth Committee’s meetings and what were their contributions?

E.T.: There was complete agreement among jurists— whether Greek or international— that the referendum was binding, since the questions were perfectly clear. Given that the 13 July agreement was harsher than the previous demands, there is an undeniable contradiction.
We have examined the bank bail-out that cost up to €48 billion between 2010 and July 2015. A large part of the debt is the result of this bail-out that has in no way improved the situation of the Greek banks. This is why the 3rd Memorandum includes €25 billion to recapitalise the banks again. Even so, we think that the Greek banks will remain insolvent because of the weight of the bad or non-collectable debts that they hold on their books. Households and businesses have been badly hit by the economic recession caused by the policies applied over the last five years and many may not be able to repay. We have warned the Greek people of the grave dangers that this situation holds for the future.

The 3rd Memorandum includes €25 billion to recapitalise the banks again.

Another important point that was highlighted in a three-page reportet |1| is that the Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

IMF : https://www.ecb.europa.eu/home/html/index.en.html
is still present and has become a foursome: the European Commission (EC), the European Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx
European Central Bank
The European Central Bank is a European institution based in Frankfurt, founded in 1998, to which the countries of the Eurozone have transferred their monetary powers. Its official role is to ensure price stability by combating inflation within that Zone. Its three decision-making organs (the Executive Board, the Governing Council and the General Council) are composed of governors of the central banks of the member states and/or recognized specialists. According to its statutes, it is politically ‘independent’ but it is directly influenced by the world of finance.

) and the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

have now been joined by the European Stability Mechanism ESM
European Stability Mechanism
The European Stability Mechanism is a European entity for managing the financial crisis in the Eurozone. In 2012, it replaced the European Financial Stability Facility and the European Financial Stabilisation Mechanism, which had been implemented in response to the public-debt crisis in the Eurozone. It concerns only EU member States that are part of the Eurozone. If there is a threat to the stability of the Eurozone, this European financial institution is supposed to grant financial ‘assistance’ (loans) to a country or countries in difficulty. There are strict conditions to this assistance.

(ESM). The policies enforced by these institutions make it impossible for the government to reach the assigned budgetary objectives. Creditors will use the fiscal deficit to urge further demands in the coming six months to a year. We have clearly exposed this to the Greek people.
Also, we have confirmed that we will continue in our task. It is public knowledge that no member of the Committee receives any remuneration. So we do not need the institutional support of the new president of the Hellenic Parliament. We will continue with our commitment to move forward with the audit of the debt. The former President of the Hellenic Parliament has been replaced by a pro-memorandum Minister, Nikos Voutsis, who is likely to dissolve the Committee. In this case we shall continue the work of auditing in a popular and democratic context with Zoe Konstantopoulou and the social movements, as had been the case between 2011 and April 2015.

D: Why did Varoufakis, who had confirmed his support for the work of the Committee, back out a few hours after Tsipras won the election?

E.T.: I think that the election results, pressure from members of the SYRIZA party, the threat of prosecution and the wish expressed by Potami, PASOK and New Democracy to accuse him of treason were the grounds for his decision not to appear before the Committee. It is very regrettable.

D: The former Deputy Minister of Defence, Costas Isychos, presented Greece’s nefarious defence policies to the Committee. Has Tsipras maintained these policies?

E.T.: On the 24 September, Costas Isychos, the former Deputy Minister of Defence, showed some very important files to the Committee and said he had to struggle with his Minister, Panos Kamenos, also President of the Independent Greeks party (ANEL), who insisted on maintaining excessive defence spending to cover NATO NATO
North Atlantic Treaty Organization
NATO ensures US military protection for the Europeans in case of aggression, but above all it gives the USA supremacy over the Western Bloc. Western European countries agreed to place their armed forces within a defence system under US command, and thus recognize the preponderance of the USA. NATO was founded in 1949 in Washington, but became less prominent after the end of the Cold War. In 2002, it had 19 members: Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the UK, the USA, to which were added Greece and Turkey in 1952, the Federal Republic of Germany in 1955 (replaced by Unified Germany in 1990), Spain in 1982, Hungary, Poland and the Czech Republic in 1999.
obligations. The same Defence Minister prolonged a military agreement with Israel that had the support of Tsipras. Apart from corruption, a large part of military spending is related to missions that NATO imposes on Greece because of its proximity to the Near and Middle East. This spending has nothing to do with the needs of peace and security for Greece; it is related to missions in other countries in the area such as Libya, Egypt, Syria, Iraq or Israel.

The Minister of Defence, Panos Kamenos, prolonged a military agreement with Israel that had the support of Tsipras.

D: Did the EU put pressure on its member countries to abstain in the UN vote on sovereign debt Sovereign debt Government debts or debts guaranteed by the government. ?

E.T.: The pressure is public and expressed through an official document. The EU has opposed the UN on the restructuring of sovereign debt. But the height of cynicism was to pressure Greece not to cast a favourable vote in this matter that would have been favourable to Greek interests. Germany and the UK voted against the resolution and so, in their own interests, did not follow the EU position.

D: Did the former Minister for Foreign Affairs, Nikos Kotzias, answer your question on the Greek abstention and what do you think of his response?

E.T.: The former President of the Hellenic Parliament denounced this attitude and the former Minister for Foreign Affairs, Nikos Kotzias, regretted the Greek vote. The UN representative for Greece who abstained was Yorgos Juliarakis; he is now an economic advisor to Tsakalotos, and is considered to be one of the best allies of the European creditors in the Tsipras government. Jeroen Dijsselbloem, the president of the Eurogroup, considers Juliarakis to be one of the best choices for minister along with Dragasakis and Tsakalotos, who are in the present Tsipras government. We received no reply to our question. The Debt Truth Committee denounces this attitude which highlights the level of Greek government submission to determined coercion.

D: You were invited by the UN to advise on the resolution concerning sovereign debt. Does it include the three points of your proposal? Will this resolution change anything?

E.T.: Clearly my suggestions were well received by all the delegations to the UNCTAD UNCTAD
United Nations Conference on Trade and Development
This was established in 1964, after pressure from the developing countries, to offset the GATT effects.

 |2| assembly in Geneva on 14 September, four days after the vote in the UN General Assembly. But frankly I don’t think that the principles that I proposed will be adopted, in spite of support from several countries. The first of the proposals is mentioned in a Human Rights Council resolution passed in 2012 but is not in the 10 September resolution. It deals with the necessity to organise debt audits with citizens’ participation. At the Geneva meeting on 14 September I proposed the following three principles:
a. an obligation to organise debt audits with citizens’ participation;
b. the sovereign right of a country to suspend payments if negotiations do not come to a satisfactory solution within a reasonable length of time and the right to suspend payments on the basis of a state of need;
c. a ban on transforming private debt into public debt.

D: The Truth Committee on the Greek Public Debt has mentioned citizens’ debt audit committees in several Spanish cities. What can we expect from them?

E.T.: I have high hopes, but it is going to be very complicated and frankly I’m concerned. There is a danger that people use up all their energy in municipal audits before being able to do an audit of Spanish State debt. The local council audits are essential, but it must be understood that they are only the first step. The fundamental battle to be won is at national level. Doing a local audit necessarily implies a confrontation with the national authorities who will threaten to intervene in local affairs. Those who start a local audit process must be prepared for this consequence. If it is limited to an intellectual exercise, there is a danger that people see it as no more than an exercise and not as a political act resulting in strong measures. In no way will the left-wing municipalities that start a citizens’ audit find any support for their task. The CADTM, as a European network, is available to help any councils and social movements who get involved in an audit

D: Are you afraid of disappointments similar to that of Tsipras in other countries?

E.T. I do not have the same concern with respect to councils that have already taken the decision to do audits. Manuela Carmena, “Kichi” and Ada Colau are people who were at the head of the Executive when they took the decision to do audits, whereas in the case of Greece the decision to do an audit was not taken by the Executive but by the President of the Hellenic Parliament who had counted on the support of Tsipras. But that support was merely verbal and did not materialise.
I am much more worried about the leaders of Podemos and other political organisations – I am not really sure of the opinions of Izquierda Unida – several of them supported the capitulation by Tsipras and continue to support it. This could have grave consequences for Spain.

Translated by Mike Krolikowski, Christine Pagnoulle and Vicki Briault.

The original interview, by Fatima Fafatale, was first published in Spanish in Diagonal on 05/10/2015.


|1| The Third Memorandum is Unsustainable just like the previous two

|2| United Nations Conference on Trade and Development


Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc. See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.



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