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Andrej Hunko's speech at the Athens conference on debt and austerity

[Deutsche Version]

Dear Friends,

First of all, I would like to express my gratitude for being given the opportunity to speak to you at this most interesting conference. Public debate on how to deal with the debt crisis is valuable and necessary. There should be more conferences on this issue, since such debate is needed on a pan-European level. That this conference should take place in Greece is particularly fitting: Greece is the very cradle of democracy, and democracy means that the people have a say in decisions that affect their lives – and thus the people should decide who will bear the costs of the crisis.

Incidentally, Iceland is another country in which democracy took root very early; it has the oldest continuously existing parliament in the world. The economic crisis had a particularly severe impact on Iceland because neo-liberalism and deregulation of financial markets in the 1990s and in the first decade of this century were especially extensive there. Iceland is also the only European country so far to have held two referendums on whether the debts of a private bank, in this case the Icesave Bank, should be assumed by the public – and its citizens voted “no” both times. This is a message of symbolic value for other European nations, too: The brunt of the crisis should not be borne by those who have the least responsibility for causing it.

As a member of the German Bundestag's Committee on the Affairs of the European Union, the role I have speaking to you here today is a bit like reporting from the “belly of the beast”. I well remember sitting in a meeting of the Committee one year ago discussing the draconian austerity package imposed on Greece as part of the so-called aid package. And I am also well aware that it was the German government that advocated the social programme cuts and privatisation measures tied to the EU-IMF package most adamantly on the EU level. When we reached this point on the agenda, the government parliamentary groups closed the session to the public and the Greek ambassador was obliged to leave. She called me up afterwards to ask what we had discussed and I apologised for the stance of the German government, and I would like to repeat that apology here to you all today.

The so-called Greece Package and the euro rescue fund are not the aid packages they are always painted as; they are actually life buoys of lead. They are aid packages for the financial markets but not for the people, not in Greece, nor in Ireland, nor in Portugal. In the Left Party parliamentary group, we all voted against these packages – not because we didn’t want to help these countries but because we are opposed to the conditions tied to them, namely social programme cuts, pressure for more privatisation and austerity programmes. These are not only antidemocratic and socially unjust, they also make no sense economically, and it was clear they would lead to the situation we are now facing: The crisis has intensified and the chances of finding a solution under these conditions are growing ever slimmer.

Dear Friends, I would also like to address another issue here today: The so-called Greece Package has been accompanied in Germany by an intolerable anti-Greek campaign, especially in the tabloids. The cheap propaganda about the supposedly “lazy Greeks” that “we Germans” have to bail out now has become deeply ingrained in the minds of a wide section of the public. These basest xenophobic and nationalistic sentiments have been whipped up to distract attention from the actual reasons for the crisis, and I regret to say that these efforts have been partly successful. And, as we can see from the most recent elections in Finland, such propaganda prepares the ground for right-wing populist parties to flourish – yet another reason to take a closer look at what caused the crisis.

I would now like to briefly address some of the causes of the euro crisis:

  1. A major factor behind the crisis is the great current-account imbalance between the different national economies. Germany runs a huge current-account surplus, as the German economy is heavily export-oriented. This might make Germany world champion in exports, but only at the price of wage dumping within the country itself. Germany does not have a legal minimum wage, and Germany is the only country in the EU where real wages have dropped by around five percent over the last 12 years. This is putting great pressure on the weaker national economies in the euro area, a situation that will endanger the internal cohesion of the EU over the long term. It is insupportable that the German government refuses to accept economic redress of these imbalances.

  2. A redistribution of wealth from bottom to top is taking place throughout Europe. This is sapping the purchasing power of the masses on the one hand, and on the other it is creating enormous piles of money that is disconnected from the real economy and generating a spree of speculation. Some of this capital is being used to speculate against individual countries, for example Greece.

  3. Privatisation and the deregulation of financial markets have depleted state coffers, not only in Greece, but in Germany, as well. The balance of power between the public budgets and democratically elected governments on the one hand and the financial markets on the other has shifted drastically in favour of the financial markets. It is insufferable to watch EU governments making far-reaching decisions based purely on fear of the reactions of the financial markets.

The so-called “solutions” that have so far been proposed by the European Council will only serve to further entrench the problem. They want to give us more of the same medicine that caused the crisis in the first place: more “competitiveness”, more privatisation, no regulation of the financial markets. The EU and the IMF want Greece to cut spending by an additional 20 billion euros and privatise 50 billion euros worth of state assets. One almost gets the impression that those neo-liberals in Germany who called for Greece to sell off its islands actually meant their cynical appeals seriously.

What we really need to do is tackle the roots of the crisis and rein in the financial markets and the inordinate power they have amassed. That means regulation of financial markets with measures such as a tax on financial transactions, monitoring of capital flows, public rating agencies and enabling the ECB to issue direct loans to states. It also entails taking steps to even out the economic imbalances within the EU, especially with measures aimed at those countries with a large current-account surplus. And finally, it also means looking at the possibility of giving “haircuts” with the aim of making marauding speculators and others who have profited from the crisis pay, rather than taking money from workers’ pension funds.

Finally, we will not be able to take the steps we need to take within the current framework of the EU’s basic treaties as defined in the Lisbon Treaty. These treaties were produced in the time before the crisis, when neo-liberalism reigned supreme, and are not suited to dealing with the crisis. We need to completely revise the treaties in order to create a Europe that is more socially just, ecologically sustainable and peaceful. We have two options: Either we create more social justice in Europe – or we will ultimately see Europe fail.