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This morning Greek trade unions, academics and politicians issued a call to set up a Public Commission to examine their debts. It’s the first ever call for a Debt Audit in Europe. Supported by over 200 prominent Greek and international figures, it is a concrete proposal for how Greek people might begin to retake control of their economy.


Greece, like other peripheral European countries such as Ireland and Portugal, is unable to compete with its richer neighbours. Its integration into the Euro means it has no control over interest rates or exchange rates. To keep going – just like people across the US and Western Europe who are trying to get by in societies experiencing sharply rising inequality – the economy borrows. In borrowing, it makes Western European banks and investors a lot of money. French, German and British banks have lent the Greek public and private sectors €80 billion; one-third of Greece’s national income.

When the good times dry up and the banks find that they’ve lent a lot of money that can’t be repaid, the EU and IMF step in with new loans to ensure the banks do get repaid via a ‘bail-out’ package to the distressed country. Heaven forbid the banks or other lenders should take the pain. Sharp austerity packages mean the poorest shoulder the burden of their economy’s ‘adjustment’.

Indeed that’s exactly what Bank of England Governor Mervyn King said about the UK economy earlier this week: “The price of this financial crisis is being borne by people who absolutely did not cause it. Now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has." In Greece, the case is even stronger – and people are even more angry.

That’s why a broad range of civil society actors has now called for this debt to be looked into – so ordinary people have an opportunity to properly understand where the debt came from. The call, signed by Noam Chomsky, Tony Benn, Ken Loach and many economists, politicians and academics says “the Greek people have been kept in the dark regarding the composition and terms of public debt. The lack of information represents a fundamental failure of the democratic process. The people who are called upon to bear the costs of EU programmes have a democratic right to receive full information on public debt.”

Such an audit would throw up some interesting questions regarding the legality (banks may have been lending in contravention of public debt rules), legitimacy (debts may have been hidden off-balance-sheet) and morality (those least responsible are now paying the highest price for that lending) of European debts.

The idea of a Debt Audit is inspired by movements in highly indebted developing countries. In 2007, President Correa of Ecuador established a Debt Audit Commission claiming his most important debt was to the people of Ecuador. In 2008, the Commission reported that Ecuador’s debts had caused “incalculable damage” to the people and environment of that country.


more entries on the audit via tag compil_GrDptAud2011

Greece’s People Start To Reclaim Their Economy | Naomi Klein - 2011-03-03

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