Rejection of Eurozone Conditions Is the Best Option for the Greek People

Adnan Al-Daini

Eurozone finance ministers have endorsed a record
110-billion-euro bailout for Greece. The aid package
requires that Athens implement tough austerity mea-
sures. But Athen's plans for painful wage & pension
cuts have already triggered widespread protest there.

A classic instability in engineering systems occurs when disturbances to a system are magnified, rather than damped out, leading to its destruction. 

As Greece, Italy Portugal… etc. struggle to pay the interest on loans these banks were happy to push on to them not that long ago, they are being asked to pay more interest. It thus deepens their difficulties, and when combined with severe austerity measures, bankruptcy becomes inevitable. It thus mirrors the instability in engineering systems.  I believe Greece should declare bankruptcy, leave the Eurozone, and start building a sustainable economic model distinct from the existing corrupt capitalism that is serving the 1%ers and blighting the lives of the 99% in the U.S., UK and other Eurozone countries.  Yes, this will deliver a shock to the system, but it could hardly be any worse than the present draconian austerity measures demanded by the IMF, ECB and European politicians. The humiliation of Greece by foreign politicians and unelected bodies, dictating what Greece must do regardless of what harm it causes its people, must be too much to bear in a country that gave the world the concept of democracy. Institutions and governments are demanding that Greece privatize its energy sector utilities, airports, marinas…etc. This hasty privatization programme, demanded by external governments and institutions, prompted Stefanos Manos, a former national economy minister in a centre-right Greek government to say (Guardian, 1 August 2011):

"With timetables being so pressing, I worry that the whole process is very ill-prepared. If there is not enough transparency we may end up like Russia, where only a cast of oligarchs end up benefiting."

I have news for Mr. Manos. The privatization of utilities in Britain has not been a great success either.  It has faithfully served global corporations and the super rich, with many of the poor now having to make a choice between heating and eating.

Yiannis Panagopoulos, president of the Confederation of Greek Workers, the country's biggest labour grouping, said:

"In a buyer's market our biggest concern is that this entire process will only serve to benefit the forces of capitalism and do nothing to create development."

"We will strongly oppose the sale of any sector in which the government has a strategic interest … there will be huge resistance if it tries to sell the electricity company, the water board, our post office or ports, sectors that are vital to developing this country."

An economic model based on the creation of a mountain of debt is not sustainable, and the sooner we move away from an orthodoxy where usury forms the basis of any economic activity the better.  The creation of debt has been a very profitable business, and the creation of money by banks through “fractional-reserve banking” is a major contributor to this model.

A submission to the Independent Commission on Banking by the Christian Council for Monetary Justice (CCMJ) describes the debt fuelled economy thus:

“A figure of £120 million per day has been reported for the current cost of [British] Government borrowing. This is equivalent to £44 billion per year. In terms of a typical UK gilt, the 4¼% Treasury Gilt 2055, this could arise from debt amounting to £1000 billion or about £15,000 per head of the UK population. This indebtedness and the amount of annual interest are central to the current Government proposals for cutting spending and making the general public bear the costs.  These proposals are expected by the Christian Council for Monetary Justice and others to make life ever more difficult for the vulnerable and under-privileged.

Credit card interest is an important way in which card issuers, major banks in particular, generate revenue or profit. Credit card debt, particularly for those making minimum monthly repayments, increases at a prodigious rate and has become a principal cause of personal financial distress. Last year (in March 2009) the total amount of UK consumer credit, leaving out mortgages, was reported as £150 billion (three times higher than a decade before), of which about £65 billion was owed on 67 million issued credit cards. Credit card APR has in the past averaged 15% so that un-repaid debt more than doubled in amount every 5 years because interest is compounded. This indicates that over the next decade un-repaid debt may become as much as four times higher.”

It lays the blame for this mountain of debt on fractional-reserve banking:

“…Fractional-reserve banking has also given astonishing power to the operators of the banks and in the opinion of the Christian Council for Monetary Justice been at the heart of successive financial and economic setbacks caused by an inherent instability. This instability appears as an inevitable outcome of a system that creates from nothing vast sums of money (alongside a corresponding debt - the money cancelled and returning to nothing as the debt is repaid) but makes no provision for (large) amounts of money needed for interest payments. Where interest payments can be met from growth the system is sustainable but apparently not otherwise, causing asset inflation to become a principal source. With the current demands for interest payments just for consumer credit, as discussed above, sustainability remains out of reach.”

This is where the mantra for growth comes from. As a consequence of this mad dash for growth at any cost, we are depleting the resources of this planet at an alarming rate, particularly in western countries, where the consumption of resources by the average American is 15 times that of the average Indian.  The analogy is that of a family devouring the walls and the roof of their house to buy video games and cosmetics. What of  future generations? What legacy are we leaving them?  In addition to burdening them with debt as they come to adulthood, we are also bequeathing to them a degraded environment that threatens their very survival.  What a selfish lot we are!

Greece has been my holiday destination for the last 15 years; I love the country and its charming friendly people.  I say to the Greek people: You have been treated shabbily by the rest of Europe. You have a beautiful country and proud history; leave the madness of the Eurozone. Take your destiny in your own hands and build an economy on the skills and expertise of your people, with a strong democratic oversight.  The Eurozone is run by oligarchs and financiers who know the price of everything but the value of nothing.  You could do so much better than this vicious form of capitalism that enslaves the 99% for the benefit of the 1%.

Dr Adnan Al-Daini took early retirement in 2005 as a principal lecturer in Mechanical Engineering at a British University. His PhD in Mechanical Engineering is from Birmingham University, UK. He has published numerous applied scientific research papers covering heat transfer, fluid flow and energy utilization in many industrial applications. He is a British citizen born in Iraq. Since retirement he has devoted his time and energy to building bridges and understanding between minority communities, particularly the Muslim community and the wider community in the South West of England. He was Chair of Devon Racial Equality Council between 2007/8. Adnan is a contributing writer for the Huffington Post.

Photo/Caption: Deutsche Welle


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