Part 5 of the interview “History of the CADTM’s anti-debt Policies”

Why Alexis Tsipras Buried Suspension of Payment and the Debt Audit Well Before the 2015 elections

6 October 2016 by Eric Toussaint , Stathis Kouvelakis , Benjamin Lemoine

Introduction by Stathis Kouvelakis

A thorough examination of the causes of the capitulation of Greece’s government in July 2015 and the signing of a third Memorandum of Understanding reveals one of the principal lines of division of the period – a division that is not simply a matter of historical events but is directly political in nature.

It is clear that such a disaster cannot be explained in terms of psychology, nor simply of the errors made, nor solely in terms of individuals – even though the enormous personal responsibilities of those who have taken a leading role in the process cannot be absolved.

We are publishing this interview in five parts:

Eric Toussaint’s account is a precious contribution to this vitally important critical re-examination. The Greek public came to know Toussaint when he was asked to serve as scientific coordinator of the Greek Debt Truth Commission, formed in April 2015 under the auspices of the then Speaker of the Greek Parliament, Zoë Konstantopoulou.

Eric Toussaint is a veteran of several decades of work and militant action in the area of public debt, and before his work in Greece he had taken part in the citizen debt audits in several countries in Latin America (Ecuador, Paraguay, Brazil) and Asia (East Timor) as well as within such organisations as the African Union.

That rich international experience naturally put him in an excellent position not only to contribute to the investigation into the causes of Greece’s being led into the claws of the European and international “debtocracy” [1], but also to evaluate the political strategies the protagonists of the current Greek tragedy have chosen to follow regarding this vital question.

And that is precisely where his analysis takes on its full importance. From his particular position, that of a “foreign” participant who nevertheless, from the start, found himself in the front lines of the battle that took place around the Greek crisis, Toussaint acquired first-hand knowledge of the way in which Syriza, the political grouping that quickly became the principal protagonist in the events that followed, dealt with the issue of debt.

What he reveals in the text that follows – excerpted from a series of interviews that need to be read in their entirety – is how Alexis Tsipras and his close collaborators took the wrong path concerning precisely this fundamental issue. Starting from the position of demanding cancellation of the illegitimate debt and the conducting of a citizen audit, Syriza’s leaders ended up accepting “consensual” solutions, all of them unachievable and oblivious of the lessons taught by History. Their model became the London Agreement of 1953, by which, in the midst of the Cold War, the winners of the Second World War cancelled the majority of Germany’s debt, since the country needed to be reconstructed (and re-armed) at an accelerated pace. But that erroneous path was not embarked on at the point where Syriza won the elections, in January 2015, but well in advance of that date – to be precise, on the day following the elections in Spring 2012, when the coalition became the leading opposition force and its leaders took on autonomy vis-à-vis the collective bodies of their parties and began to function, de facto, as a “shadow cabinet” pending the actual exercise of governmental functions.

Eric Toussaint is very clear as to why that erroneous path was followed. As he stresses in this interview, “the hub around Tsipras (I do not mean Syriza’s political office, since the politburo members were not involved with the key decisions, just as the central committee members were kept at arm’s length) including Yannis Dragasakis (the current deputy prime minister who played a key role) took the decisive stand in the crucial moments: ‘Confrontation with the great Greek capital, the Greek bankers and the ship-owners must be avoided at any cost.’ The interests of the latter two are absolutely interlinked. Likewise, the hub considered it necessary to avoid confrontation with the European institutions.

As we know, the commitment not to break from the euro and the EU, whatever the cost, and absolute submission to the framework established by 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.
were also an integral part of the choices that were made.

Eric Toussaint, in order to conserve the possibility of intervening as effectively as possible in his own field, which is public debt, very prudently avoided getting involved in the debate over the euro at that point. Today, as he stresses in the continuation of this interview, he considers exiting the euro a necessary step for European periphery countries who want to reverse the policy of austerity and throw off the chains of the debtocracy.

This relative distance he puts between himself and the confrontation around the question of the euro, which was central to the divisions within Syriza at the time, gives his account even more weight. It demonstrates that the abandonment of Syriza’s initial position of “no sacrifices for the euro,” which came about exactly at the same moment – that is, on the day after the twofold elections in 2012 –, was neither a tactical movement nor the result of a simple obsession with Europe, even if that was indeed undeniably true of a large percentage of the leaders, but also of Syriza’s rank and file.

The oaths of allegiance to the euro and the obsessive rejection of any alternative plan should the negotiations fail were nothing more than the other facet of a strategic choice to avoid confrontation, either with the internal bourgeoisie or with Europe’s dominant classes and the political mechanisms of their domination – that is to say, the European Union and its Annexes (the ECB ECB
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.
, the Financial Stability Facility, etc.)

It is precisely that choice, which of course was never publicly presented as such at the time, that determined the intangible framework within which the Syriza government evolved between January and July 2015 – with the exception of the July referendum, which in such a context could only be one last convulsion before capitulation.

The outcome of this sequence of events is familiar, and its consequences are being felt day after day by the Greek people, but also by all the forces of the “Leftist Left” in Europe (and beyond), in whose eyes, in the space of a few months, Greece metamorphosed from a beacon of hope to a bleeding wound.

In the wake of such a historic defeat, it is essential that the right lessons be learned from it before any new departure can take place.

Throughout these years, Eric Toussaint has shown himself to be an active participant and an invaluable supporter of the struggle of the Greek people.

Today, in giving us his account of those events, he shows that his contribution and the struggle itself are continuing and will continue until justice is done [2].

 Part 5 of the interview “History of the CADTM’s anti-debt Policies”

How did the notion of auditing public debt come to gain support in Greece? What supporting forces could you count on and how did you come in touch with the proponents of the demand for a Greek debt audit?

The CADTM has worked at the levels of both Europe and Greece. In an attempt to launch a joint European anti-austerity movement uniting the social and political forces, the CADTM had convened a European meeting in Brussels on September 29, 2010 on the occasion of a European demonstration called for by the European Trade Union Confederation (ETUC). [3]

Before that, Moisis Litsis, Sonia and Giorgos Mitralias [4] took the initiative and established an anti-debt Committee, which is a member of the CADTM International network, at the beginning of July 2010 in Athens. Giorgos Mitralias translated the citizen audit manual published by the CADTM International network and the publishing house Alexandria brought out a Greek edition in 2011.

The CADTM’s views began to be recognised in Greece starting from 2010. Several interviews were published in the Greek print media. For example, the Greek magazine Epikaira published a long interview of myself with Leonidas Vatikiotis [5], journalist and a very active far-left political activist. There I explained the causes behind the explosion of the public debt and how the Ecuadorian experience could be a source of inspiration for Greece in terms of an audit commission and the suspension of debt payments. In the concluding part I was asked “What should Greece do?“and I answered:”An Audit Commission involving prestigious and experienced people should be formed immediately. My advice is clear: Open the books of account! Examine all state contracts– ranging from the biggest, such as those of the recent Olympic Games, to the smallest! Proceed in the utmost transparency and in the presence of trade unions and citizens’ associations and discover which part of the debt resulted from corruption, and is therefore illegal and odious as per the international terminology. Denounce it! [6]

Economist Costas Lapavitsas [7] also wrote several articles actively defending the need to establish an audit committee. Those were widely circulated in Greece. In one of them he wrote: "The international audit commission could serve as a catalyst and contribute to the transparency that is needed. Such an international commission, made up of experts in auditing public finances, economists, labour organisers and representatives of social movements, will have to be totally independent of political parties. It will have to have support from many organisations, which will make it possible to mobilise very broad social strata. This is how the popular participation necessary to deal with the question of the debt will begin to become a reality”. [8] (Translation: CADTM)

On January 9, 2011, the Greek daily Ethnos tis Kyriakis, third in terms of circulation at that time, interviewed me. It was published as: “It is not logical to repay debts that are illegitimate. The people of Europe also should audit their creditors [9]. The daily explained: “The Committee’s work in Ecuador has recently been mentioned in the Greek Parliament by Sofia Sakorafa”.

In fact, in December 2010, the MP Sofia Sakorafa said in a speech in the Greek Parliament that a Debt Audit Commission, inspired by the Ecuadorian example, was necessary. The parliament was then dominated by PASOK and New Democracy who had no interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. in elucidating the debt, and her proposal was rejected. Nevertheless, people other than professional politicians kept on fighting the battle. The Greek debt audit committee (ELE) was launched in March 2011. This stemmed from major efforts to bring together people who barely knew each other even a few weeks earlier. The gravity of the Greek crisis catalysed this creative process. While preparing to launch this committee, Costas Lapavitsas issued an international appeal, supported by the CADTM. It had wide-ranging response.

Costas Lapavitsas consulted me for the content of the international appeal to support the committee’s formation. I made some amendments. After that, we started seeking support from people likely to help us spread the word and also enhance the credibility of the initiative. I undertook to collect the maximum possible number of signatures from international personalities supporting the establishment of the audit committee. I had known many of them for years, such as Noam Chomsky (USA) with whom I had been in touch on the debt issue since 1998, Jean Ziegler (Switzerland) who was then a UN Special Rapporteur on the Right to Food, Tariq Ali (UK), and many economists.

Did you find it easy to find support?

In my quest for collecting signatures I was refused only once, by the North American economist James Galbraith. I had been conversing with him for several years during conferences on financial globalization. Later, I found a partial explanation for the refusal. James Galbraith confirmed in his book Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe published in 2016 that he had supported George Papandreou, Prime Minister of the Greek Government who introduced the first memorandum in May 2010. James Galbraith criticized the memorandum but accepted Papandreou’s false narrative of the crisis as mentioned in Galbraith’s introduction to his book. [10]

The second reason why Galbraith did not sign the appeal was Yanis Varoufakis’s advice to him. Varoufakis had publicly explained in 2011 why he refused to endorse the call for the Audit Committee’s formation. He says that Galbraith had contacted him, asking if he should sign this appeal and he advised Galbraith not to. Yannis Varoufakis’ refusal accounts for his indifference towards the Truth Commission on the Greek debt when he became finance minister in the first government of Alexis Tsipras in 2015. [11]

In a long public letter published in spring 2011, Yanis Varoufakis justified his refusal to support the creation of the Citizen Debt Audit Committee (ELE in Greek). He wrote that if Greece defaulted, it would have to leave the euro zone following which it would abruptly end up in the Neolithic age (sic!). Varoufakis also explained that the people who had taken this initiative were nice and well-meaning and that in principle he supported the audit but, in Greece’s current circumstances the audit was not appropriate. [12]

The documentary Debtocracy aired from April 2011 championed the proposal for a citizens’ debt audit and the need to cancel the illegitimate and odious part of the debt. [13] Aris Chatzistefanou and Katerina Kitidi, who directed this documentary in collaboration with Leonidas Vatikiotis, called on me about the contents from the beginning of February 2011. They took my suggestion to film a part of the documentary in Dakar on the occasion of the World Social Forum held there from February 6-11, 2011. The film was completed in record time and was circulated on the internet. During spring 2011, more than 1.5 million people in Greece downloaded it in 6 weeks. It was a significant number for a population of 10 million, but no TV station broadcast it at that time.

The international conference supporting the citizens’ audit of Greek debt was held in Athens in May 2011 and it was a resounding success, with the attendance of nearly 3,000 people during 3 days. The CADTM was one of the organizations convening that conference. I coordinated the first panel discussion where the prominent participants were Nadia Valavani [14] (who later became the Deputy Minister of Finance in the Tsipras Government) and Leonidas Vatikiotis. The CADTM helped the Greek organizers and the other non-Greek movements towards convincing a significant number of European organizations to support the conference and to collectively adopt a declaration upholding its essence (see box below).

Declaration from the Athens Conference on Debt and Austerity

We, representatives of movements and activists from across the world, met in Athens to discuss the lessons of previous international economic crises, to challenge illegitimate debt and mobilise for its cancellation, to offer our solidarity to the European people struggling against unjust austerity programmes imposed by governments, the EU 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.
, exemplified by the “Memoranda of Understanding”, as well as to formulate a plan of economic action which meets the needs of people instead of serving a tiny social elite.

Many countries in the developing world have lived in debt crisis since the 1970s. After bouts of reckless lending by international finance, some of the poorest people in the world faced cuts in income and social provision when the IMF imposed sharp austerity policies in return for bailing out banks and financiers. These policies were unjust and did not facilitate recovery. Instead, they increased the dependency of indebted countries on the power of financial markets, making governments less accountable to their people. Only when a handful of countries demanded their rights and stood up to the imposition of austerity, to the bailing out of financiers, and to the crushing burden of debt did it become possible to recover, at least for a short while. This is what happened in Argentina in 2001. Other countries can benefit from its experience, including Egypt, Tunisia and the entire Arab world now fighting for democracy and confronting odious debts of dictatorial regimes.

Today, in the wake of the international economic crisis, peripheral countries of the EU face a deep debt crisis. They have been pushed into it by the operations of the global financial system but also by the institutional framework and the economic policies of the EU which systematically favour the interests of capital. The Growth and Stability Pact has put pressure on labour across the eurozone, while 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.

has supported the interests of large banks. The EU has been split into a powerful core and a weak periphery. The accumulated debts of the periphery are a result of the gap with the core but also of deepening inequality between the very rich and the rest of society. Workers and the unemployed, small farmers, small and medium businesses, are now forced to carry the burden of these debts even though they have not benefited from them.

Austerity and privatisation measures will squeeze the poorest in society most heavily, while those that created the crisis will be bailed out. The Pact for the Euro will exacerbate pressure on labour. The rich and big business will also continue to dodge taxes which could be used to build a fairer society. If these measures go unchallenged, they will have an immense impact on Europe, drastically changing the balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. of power in favour of capital and against labour for many years.

The attempt to make working people and the poor bear the costs of the crisis, while the very rich escape, will be opposed by those in the firing line. The people of Greece, Ireland and Portugal, but also Poland, Hungary, Slovenia and elsewhere in Central and Eastern Europe, challenge the austerity policies of the EU and the IMF, oppose international financial power, and reject the slavery of debt. We call on people across the world to show solidarity with movements in these countries struggling against debt and the pernicious policies it brings in its wake.

Specifically, we call for support for:

  • The democratic auditing of debts as a concrete step towards debt justice. Debt audits which involve civil society and the labour movement, such as the Citizens debt audit in Brazil, allow people to establish which parts of public debt are illegal, illegitimate, odious, or simply unsustainable. They offer to working people the knowledge and authority necessary to refuse to pay illegitimate debt. They also encourage democratic accountability and transparency across the administration of the public sector. We express solidarity with debt audits in Greece and Ireland and stand ready to assist in practical terms.

  • Sovereign and democratic responses to the debt crisis. Governments must be bound primarily by their people, not by the unaccountable institutions of the EU, or by the IMF. The people of countries such as Greece must decide which policies will improve their chances of recovery and meet their social needs. Sovereign states retain the power to impose a moratorium of payments if debt is crushing the livelihood of working people. The experience of Ecuador in 2008-9 and of Iceland in 2010-11 shows that it is possible to have radical and sovereign responses to debt, even including cancellation of its illegitimate part. Even UN resolutions legalise the cessation of payments in a state of necessity.

  • Economic restructuring and redistribution, not debt. The domination of neoliberal policies and the power of international finance have led to low growth, rising inequality, and major crises as well as eroding democratic processes. It is imperative that economies are put on a different footing through transitional programmes that include capital controls, severe regulation and even public ownership over banks, industrial policy that pivots on public investment, public control over strategic sectors of the economy, and respect for the environment. The first aim should be to protect and expand employment. It is also vital that countries should adopt far-reaching redistributive policies. The tax base should become broader and more progressive by taxing capital and the rich, thus allowing for the mobilisation of domestic resources as an alternative to debt. Redistribution should also include the restoration of public provision in health, education, transport and pensions as well as reversing the downward pressure on wages and salaries.

These are the first steps towards meeting the needs and aspirations of working people, while shifting the balance of power away from large capital and financial institutions. They would allow people across Europe, and more broadly across the world, to exercise better control over their livelihoods, their lives, and the political process. They would also offer hope to the young generation across Europe which currently faces a bleak future of scarce jobs, low wages and lack of prospects. For these reasons, supporting the fight against debt in Greece, Ireland, Portugal and other countries of Europe is in the interests of working people everywhere.

Athens, May, 8, 2011

Signed by the following:-

Initiative for the Greek Audit Commission
European Network on Debt and Development
The Committee for the Abolition of Third World Debt (CADTM)
The Bretton Woods Project, UK
Research on Money and Finance, UK
Debt and Development Coalition Ireland
Afri - Action from Ireland
WEED - World Economy Environment Development, Germany
Jubilee Debt Campaign, UK
Observatorio de la Deuda en la Globalización, Spain


Was the initiative of the citizen debt audit successful and did Syriza take notice?

The ELE committee established in Greece had a tremendous impact thanks to the Greek version of the Indignados movement in 2011. In June-July, hundreds of thousands occupied public squares in cities not only in big cities like Athens and Thessaloniki but also in many medium-sized towns. The Committee members who set up stalls in busy squares, especially in the Syntagma Square, received an impressive response. The campaign has had a positive effect on Syriza despite the reluctance of some of its leaders.

The audit was central to Syriza’s manifesto during the two rounds of elections in May-June 2012. In its 2012 manifesto, Syriza proposed a “suspension of debt payment during the ongoing work of an international debt audit commission, since the economy is yet to recover.” It meant that the suspension could last for long.

This approach shows that Syriza’s political evolution was positive between 2009 and the elections in May-June 2012. It was not a foregone conclusion. I remember very well that Synaspismos, the main political current within Syriza, had invited me to a large conference. Alexis Tsipras led this current. The conference was held in early March 2011 when the Citizen Audit Committee for the Greek debt (ELE) was born in the circumstances that I have just summarized.

A few words about the conference. It took place in Athens in early March 2011. Synaspismos (the main component of Syriza) and the Party of the European Left had invited me as speaker. Alexis Tsipras, Yanis Varoufakis, Oskar Lafontaine (one of the founders of the Left Party, Germany), Pierre Laurent (leader of the Communist Party and the Party of the European Left), Mariana Mortagua from the Left Bloc in Portugal, Euclid Tsakalotos (who became finance minister after Yanis Varoufakis resigned), Yannis Dragazakis (deputy prime minister in the first and second Tsipras governments), myself, and several other guests delivered speeches during this conference.

My presentation focused on the causes of the crisis, and the vital importance of a drastic debt reduction through cancellation following a debt audit with citizens’ participation. [15] Yanis Varoufakis presented what he called a modest proposal. Four years later, in February 2015, he proposed the same during the first phase of negotiations with the creditors.

There were 600 to 700 participants and the Nikos Poulanzas Institute published several speeches including those of Tsipras, Varoufakis, and myself in a book in English. It was called The Political Economy of Public Debt and Austerity in the EU. [16]

The response to my speeches startled me. One of the organizers, who led the Nikos Poulantzas Institute, said that he was surprised to hear me plead for the cancellation of the illegitimate or odious Greek debt when I was invited to present the experience of the debt audit. This shocking reaction clearly indicated to me that at least a significant section of Syriza rejected or at least did not take for granted the proposal to suspend and / or abolish the debt. This was confirmed later.

During this conference I had in-depth discussions with Costas Isychos, Syriza’s foreign-affairs spokesman at that time (he later became deputy Defence Minister in the first Tsipras government, and now belongs to Popular Unity) and several union leaders who were also members of Syriza.

I noticed that they agreed with the CADTM on the need for a unilateral act of suspending debt payment and for a debt audit.

Whereas SYRIZA had obtained 4% of the vote in the 2009 elections, in May 2012 it garnered 16%, then 26.5% one month later in the June 2012 elections - just two points below New Democracy, the major party of the Right. SYRIZA had thus become the second-ranking party in Greece. Between the two rounds of the election, Tsipras put forward five concrete proposals for beginning negotiations with the parties opposed to 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.

(except Golden Dawn which was excluded, though also opposed to the Memorandum of Understanding):

  1. Abolition of all anti-social measures (including the reductions of wages and retirement pensions);
  2. Abolition of all measures that reduced workers’ rights as regards protection and negotiation;
  3. Immediate abolition of parliamentary immunity and reform of the election system;
  4. An audit of the Greek banks;
  5. The forming of an international debt audit committee combined with suspension of repayment of the debt until the end of the committee’s work.

The commitment to conduct a debt audit and default gradually disappeared from the discourse of Alexis Tsipras and the other SYRIZA leaders [17]. This all happened unobtrusively and the fifth measure proposed by Tsipras in May 2012 (see above) was replaced by the proposal to hold a European conference to reduce Greece’s debt.

Do you think that Alexis Tsipras’ shift after the electoral success of May-June 2012 was moderate?

Alexis Tsipras and Eric Toussaint in October 2012 at the Syriza Youth Festival, Athens

In October 2012, during an interview with Tsipras, my suspicion that he was backing down were confirmed. Two days earlier, the Wall Street Journal had published the secret notes of an IMF meeting of May 9, 2010. It was clear that a dozen IMF directors (comprising 24 members) had opposed the Memorandum since it implied a bailout plan for the French and German banks, not Greece. I told Tsipras and his economic adviser: “That is a solid reason for you to go against the IMF. If the IMF evidently knew that its programme would fail and the debt would not be sustainable, there is enough evidence for us to wage war against the illegitimacy and illegality of the debt”. Tsipras replied, “But listen ... the IMF keeps its distance from the European Commission”. I could well understand that he was envisaging IMF as a possible ally of Syriza in case the latter formed a government. The next day, October 6, 2012, Tsipras and I spoke publicly in front of 3,000 people in the first Syriza youth festival. I realized that he did not appreciate my emphasis on the need for a radical outlook on a European scale [18].

Evidently, the Greek experience was extraordinary, though it eventually floundered. How do you explain it?

The Greek capitulation is also a capitulation to the dominant financial interests in the debt-system. This experience reshaped Greek politics in an unprecedented way. It also led the small circle of advisors and elected representatives surrounding Alexis Tsipras to make policy changes. My hypothesis is clear: the hub around Tsipras (I do not mean Syriza’s political office, since the politburo members were not involved with the key decisions, just as the central committee members were kept at arm’s length) including Yannis Dragasakis (the current deputy prime minister who played a key role) took the decisive stand in the crucial moments: “Confrontation with the great Greek capital, the Greek bankers and the ship-owners must be avoided at any cost.” The interests of the latter two are absolutely interlinked. Likewise, the hub considered it necessary to avoid confrontation with the European institutions. A series of renunciations followed: “In order to avoid confrontation with those two enemies we must provide guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). to the Greek bankers and tell them that in case of Syriza forming a government their interests will not be affected. Therefore, neither nationalization nor any binding measures against banks”. It was necessary to stall the audit and the suspension of payments so that any confrontation with the EU could be avoided. It was also promised that a Syriza government would respect the budgetary discipline as demanded by the European authorities. This is why Syriza stated in its Thessaloniki agenda (presented for the elections of January 25, 2015) that the anti-austerity measures would be counterbalanced by tax revenues which conform to the budget for 2015 made by the previous government. The core around Tsipras and Dragasakis reasoned as follows: “If the bankers are left untouched and if we respect the budgetary discipline demanded by Brussels, they will let us form a government and we will be able to govern."

Is it possible to elucidate the composition of that hub around Tsipras, and its evolution? How do you view the audit issue?

Before Syriza’s electoral victory I had two important one-on-ones with Alexis Tsipras. First, in October 2012 as I stated above [19]. Alexis Tsipras was accompanied by John Milios who was then his special adviser on economic issues. John Milios was not in favour of the debt audit and suspension of payment. From end 2014, Tsipras kept him at a distance, for political reasons although he held very moderate views. The other economic adviser whose choices were accepted by the core of team Tsipras was none other than Yannis Dragasakis, a very influential figure. He was deputy prime minister in the first Tsipras government. He still holds the same post and handles the economic policies. Dragasakis had long been connected to bankers. Also, he had been a member of the board of a medium-sized commercial bank. Somehow he is the conduit between Tsipras and the bankers. Syriza is a new organization and therefore its leaders are not firmly rooted in the State spheres- unlike, for example, the French Socialist Party, whose history is linked to the Republic and to the management of state affairs. In that sense, the profile of the new economic adviser, close to Tsipras, is at odds. While in 2012-2013, none of the Syriza leaders had held any State office before, the only one to have been a minister once, for a few months in 1989, was ... Dragasakis [20]. Dragasakis was part of a coalition government between the right-wing New Democracy and the Communist Party (KKE). He was clearly against the debt audit and a payment suspension.

 A new “London Conference”? The hope for international cooperation versus “unilateral sovereign action”

How can Syriza’s abandonment of its radical orientation be explained? How did opinions on the debt issue differ?

Alexis Tsipras wanted to convene a major international conference on debt reduction in Athens in March 2014. This was one of his planned initiatives. Urged by Sofia Sakorafa, Syriza MP since 2012, Tsipras met me again in October 2013 and asked me to help with the preparations for such a conference by convincing a number of international personalities to accept the invitation. I had compiled a list of participants and I discussed it with Alexis Tsipras, Sofia Sakorafa, Kostas Bitsanis (Sofia’s husband) and Dimitri Vitsas, general secretary of Syriza at that time. I proposed to invite the following personalities to the conference: Rafael Correa, Diego Borja (former director of Ecuador’s Central Bank), Joseph Stiglitz, James Galbraith, Noam Chomsky, Susan George, David Graeber, Naomi Klein, as well as the members of Ecuador’s debt audit commission. The latter had worked with me in 2007 and 2008. I noticed that Rafael Correa, from my list, did not interest him at all. On the contrary, he wanted the former president of Brazil, Lula, and the president of Argentina, Cristina Fernandez. Ecuador was too radical for him, and of course he wanted Joseph Stiglitz and James Galbraith, which was justified. But his plan was not to launch an audit committee; it was to convene the various member countries of the EU at a European conference on debt, similar to the London Agreement of 1953, where the winners of World War II considerably reduced West Germany’s debt [21]. I told him that it would never happen. As the leader of Syriza, it was perfectly legitimate for him to propose that plan A, but it was absurd to think that Draghi, Hollande, Merkel, and Rajoy would agree. I told him that he needed a plan B which would include an audit committee. I also declared it to the Greek media. Here is an excerpt from an interview with me that the Daily Editors, near Syriza, published in October 2014. The journalist asked me what I thought of the European Debt Conference proposed by Alexis Tsipras, based on the London conference of 1953, and I said, “Although this request is legitimate… will not be possible to bring the governments of the main European economies and the EU institutions to the table on this agenda. The experience of the last ten years has shown that unilateral sovereign acts can get results. The creditors that reclaim the payment of an illegitimate debt and impose violent measures that attack fundamental human rights, including economic and social rights, must be refused. I think that Greece has strong arguments for forming a government that would have popular support for working in this direction. Such a popular leftist government could establish a debt audit committee that would include a large popular democratic participation. This audit committee would unilaterally suspend repayments and finally repudiate the part of the debt that it identifies as illegal and/or odious”. [22]

Finally, Alexis Tsipras asked me collaborate with him and Pierre Laurent (president of the Party of the European Left at that time) towards preparing for a European conference where Debt would be one of the issues. It was to be held in March 2014 in Athens. This never materialised because during a meeting held in December 2013 in Madrid, the Party of the European Left had decided to hold a conference in Brussels, instead of Athens, during spring 2014. This Brussels conference had very little impact. Alexis Tsipras, Pierre Laurent, and Gabi Zimmer (member of Die Linke, Germany, and President of the parliamentary group GUE / NGL in the European parliament) were present among others. I participated as speaker in a panel along with Euclid Tsakalotos, who would become Finance Minister for Alexis Tsipras from July 2015 [23]. I realised straightaway that he did not at all support a plan B on debt, banking, and taxation. Euclid Tsakalotos’ plan was to negotiate with the European institutions at all costs in order to obtain a reduction of austerity without resorting to default and audit of debt. During this conference I again argued for a plan B including debt audit and suspension of debt payment.

So, the discussion on the need for a plan B did not start in 2015: it clearly goes back to 2013-2014. The leadership hub around Tsipras decided to exclude the groundwork of plan B and has stuck to plan A, which is an impracticable one.

End of Part 5. Part 6 deals with the work of the Truth Commission for the Greek debt, the Tsipras government’s capitulation, and international perspectives concerning the struggle against illegitimate debts.

Translated by Suchandra de Sarkar in collaboration with Christine Pagnoulle


[1See the documentary by Aris Chatzistefanou, Debtocracy, in which Eric Toussaint’s analysis plays a central role.

[2This introduction was translated from the Greek by Marie-Laure Veilhan and from French by CADTM.

[3See Minutes of the meeting held on 29 September 2010 For a European coordination of struggle against the debt and austerity plans ! here and

[4See (in French). It is based on a Greek website:

[5Five years later, Leonidas Vatikiotis would be part of the Truth Commission on Greek debt.

[7In January 2015, Costas Lapavitsas was elected from Syriza to the Greek parliament. After the capitulation he helped found the Popular Unity. His biography is available here:

[8Article published by the daily Eleftherotypia on December 5, 2010. See: (in French)

[9In 2011, the centre-left Ethnos tis Kyriakis was the third Greek daily in terms of circulation (100,000 copies). The interview was originally published in Greek on January 9, 2011, For an English translation see:

[10James K. Galbraith, Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe, Yale University Press, 2016.
See this excerpt from the introduction: "When George Papandreou became prime minister in October 2009, I was invited to visit, advice and (especially) give him my moral support. I had a limited role to play during those meetings. Papandreou had campaigned for promoting a programme of social protection and economic growth, soon to be thwarted by the crisis of the financial system and debt. Starting from May, 2010, he was forced to accept an austerity plan in return for a massive loan. This was in order to prevent the Hellenic banking system (thoroughly vulnerable from its investments in the public debt as the State had gone insolvent) from collapsing.”(p. 17 of the French version. Translation : CADTM)

The narrative of this last sentence does not correspond to reality. The Hellenic banking system was not threatened with collapse due to its exposure to Greek public debt, and the Greek State had not gone insolvent. The Greek banks were mainly threatened by the bubble burst in private credit which they produced in collusion with French, German and Dutch banks. Had the Greek banks collapsed, it would have implied immense losses for the French, German and Dutch banks. The so-called bailout plan envisaged by Papandreou, the European authorities, and the IMF was aimed at minimizing heavy losses for the French, German, Dutch and Greek banks. Instead of implementing the choice made by Papandreou, the European authorities, and the IMF, the losses should have been imposed on the foreign banks, the financial sector socialized and the Greek public debt drastically reduced. That said, despite my criticism of Galbraith’s narrative for the events of 2010, I recommend reading this book because it contains highly interesting information.

[11In a book published in 2016, Y. Varoufakis does not at all mention the Truth Commission on the Greek Public Debt. He also does not mention the action of Zoe Konstantopoulou, the President of the Greek Parliament. And The Weak Suffer What They Must?: Europe, Austerity and the Threat to Global Stability by Yanis Varoufakis, published by The Bodley Head, London, 2016.

[12See ΣχόλιαΓιάνης Βαρουφάκης Debtocracy: Γιατί δεν συνυπέγραψα (in Greek) , published April 11, 2011. In this long letter, Varoufakis also gave his critical opinion on the documentary Debtocracy.

[13Concerning Debtocracy, see: “Debt: The Greeks and Debtocracy”,, published 18 March 2012. This documentary particularly features interviews with Yanis Varoufakis, Costas Lapavitsas and myself.

[14Nadia Valavani, is a respected Greek politician, mainly known for her courageous action in the resistance to the Colonels’ dictatorship, for example the movement at the Athens Polytechnic Institute in 1973, severely repressed by the army.

[15See the slideshow of my presentation here:
See my main proposals in this presentation here: Eric Toussaint. Eight key proposals for another Europe, published on April 17, 2011.

[16Elena Papadopoulou and Gabriel Sakellaridis (eds.), The Political Economy of Public Debt and Austerity in the EU, Athens, Nissos Publications 2012, 290 p., ISBN : 9-789609-535465. It will be useful to reproduce the contents of this interesting book as the names of the key players from Syriza appear there.

Table of Contents:-

Elena Papadopoulou and Gabriel Sakellaridis: Introduction. (Gabriel Sakellaridis was the Syriza spokesperson in the Greek parliament in 2015. He resigned in December 2015 due to his disagreement with the implementation of the third memorandum. He is no longer a member of Syriza)

Section 1 - Understanding the European Debt Crisis in a Global Perspective

George Stathakis: The World Public Debt Crisis. (George Stathakis is the present Finance Minister in the second-term Tsipras government. He was part of Syriza’s right wing and was totally opposed to the Greek debt audit. End-2015 , the press reported that he had not declared € 1.8 million and 38 properties to the tax authorities)

Brigitte Unger: Causes of the Debt Crisis: Greek Problem or Systemic Problem?

Euclid Tsakalotos: Crisis, Inequality and Capitalist Legitimacy (E. Tsakalotos is the Finance Minister since July, 2015).

Dimitris Sotiropoulos: Thoughts on the On-going European Debt Crisis: A New Theoretical and Political Perspective.

Section 2 - The Management of the Debt Crisis by the EU and the European Elites

Marica Frangakis: From Banking Crisis to Austerity in the EU - The Need for Solidarity.
Jan Toporowski: Government Bonds and European Debt Markets.
Riccardo Bellofiore: The Postman Always Rings Twice: The Euro Crisis inside the Global Crisis.

Section 3 - Facets of the Social and Political Consequences of the Crisis in Europe
Maria Karamessini: Global Economic Crisis and the European Union - Implications, Policies and Challenges.
Giovanna Vertova: Women on the Verge of a Nervous Breakdown: The Gender Impact of the Crisis.
Elisabeth Gauthier: The Rule of the Markets: Democracy in Shambles.

Section 4 - The PIGS as (Scape)Goats
Portugal - Marianna Mortagua
Ireland - Daniel Finn
Greece - Eric Toussaint
Spain - Javier Navascues
Hungary - Tamas Morva

Section 5 - Overcoming the Crisis: The Imperative of Alternative Proposals
Yiannis Dragasakis: A Radical Solution only through a Common Left European Strategy.
(Y. Dragasakis has been the Deputy Prime Minister in both the first and second Tsipras governments)
Kunibert Raffer: Insolvency Protection and Fairness for Greece: Implementing the Raffer Proposal.
Pedro Páez Pérez: A Latin-American Perspective on Austerity Policies, Debt and the New Financial Architecture.
Nicos Chountis: The Debt Crisis and the Alternative Strategies of the Left.
(N. Chountis was the former Alternate Minister for European Affairs in the first Tsipras government. Tsipras ousted him for his refusal to capitulate. Since September 2015 he has been the Popular Unity’s MEP).
Yanis Varoufakis: A Modest Proposal for Overcoming the Euro Crisis. (Y. Varoufakis was the Finance Minister from January-July 2015)

Section 6 - The Crucial Role of the European Left - Political Interventions
Alexis Tsipras: A European Solution for a European Problem: The Debt Crisis as a Social Crisis
Pierre Laurent: People Should Not Pay for the Crisis of Capitalism

The book is freely available in PDF format here:

[17I have explained this in detail in my article Greece: Why Capitulate? Another Way Is Possible (text version of the video of the same name with explanatory notes and references)

[18See Eric Toussaint: “The Greek people are currently at the epicenter of the capitalism crisis.”

[19I was with Aris Vasilopoulos, an activist of Kokkino which is a current within Syriza, and Yiorgos Mitralias, the in-charge of the Committee against Debt.

[20Read Stathis Kouvelakis’ opinion on Dragasakis and his overview of Syriza in the New Left Review January-February 2016 Also read Antonis Ntavanelos’s summing-up here (in French)

[22See Eric Toussaint: “Alexis Tsipras is right to call for an international conference on debt”

[23Eucide Tsakalotos was Professor of Economics in the UK in 2014. He replaced Varoufakis as the Finance Minister from July 2015. He still holds this position in the second-term government of Tsipras.

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 Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), 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, etc.
See his bibliography:
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. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

Other articles in English by Eric Toussaint (639)

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Stathis Kouvelakis

teaches political theory at King’s College London. He formerly served on the central committee of Syriza and is now a member of Popular Unity.

Other articles in English by Stathis Kouvelakis (12)

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Benjamin Lemoine

is a CNRS researcher at the Institut de Recherche Interdisciplinaire en Sciences Sociales and currently a member of the Institute for Advanced Study at Princeton. He Tweets @benjlemoine.

Other articles in English by Benjamin Lemoine (8)



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