We in the Asian Peoples Movement on Debt and Development stand in solidarity with the Greek people as they struggle against the harsh loan conditions recently imposed by the European Union in exchange for a new debt deal.

The EU’s decision, pushed largely by Germany, came in the wake of the Greek people’s resounding referendum vote of “no!” to more austerity measures that in the past further exacerbated their poverty and deprivation and plunged them deeper in the abyss of debt. Widely scored as ruthless and vindictive, the new conditions consist of even more stringent measures that include additional VAT hikes, pension cuts, liberalization of the labor market, swift, far-reaching legislative changes and a massive selloff of valuable Greek assets amounting to $55 billion.

Two previous loan injections brought relief indeed – not to Greece, but to the European Central Bank, the International Monetary Fund, the vulture funds and bondholders and other financial institutions. Offered as “bailouts” for the Greek people, they bailed out instead the very entities whose actions caused this crisis, from irresponsibly and aggressively peddling loans, to imposing onerous and enslaving loan conditionalities.

The Greek crisis highlights the myths cultivated by international financial institutions and northern governments of relying on debts to fund economic development –myths that we, developing countries know only too well from the years of disastrous structural adjustment programs and policy impositions that lead to deepening poverty and inequality, the fragmentation of our societies, the erosion of our domestic economies and the destruction of our environment and natural resources. They are myths that elite-led governments have imbibed, as seen in policies liberalizing trade, deregulating finance and privatizing public facilities from education and health to water and energy.

Loan payments continue to be claimed from South countries, even as this “debt” has been paid for many times over through decades of debt-servicing. In addition, we are made to pay for illegitimate debts – those incurred upon the behest of politically powerful elites, and/or contracted without public consultation or compliance with legal and fiduciary requirements, and/or are tainted with fraud or corruption, and/or used to finance projects and policies that were of no benefit to people and even damaging to communities and the environment.

The Greek crisis also exposes in very blatant ways of the responsibility and culpability of lenders and creditors in creating and perpetuating indebtedness among borrowing nations. Lenders and creditors are guilty of pushing loans to promote their interests and not those of the borrowing country. We should condemn creditors for:

  • Predatory lending – when creditors take advantage of fiscal problems of countries and lend with usurious interest rates and onerous terms
  • Supply driven lending – when creditors push loans and loan-financed projects to countries who are not actively looking to borrow or implement these projects
  • Pushing loans with conditionalities that are in the interest of the lenders and not the borrowers
  • Pushing governments to provide guarantees to loans and liabilities of private corporations and private investors
  • providing loans even as they are aware and in many cases active parties to the use of these funds harmful projects and policies

The Greek crisis is also the crisis of debt-burdened countries and peoples everywhere. It cannot be resolved with the punishing measures imposed by the EU, which have shown only concern for the interests of bankers and wealthy individuals, and a blatant disregard for internationally recognized principles of human rights and social justice.

We are one with the Greek people in demanding comprehensive participatory and regular audit of all debts claimed from Greece and the immediate cancellation and repudiation all illegitimate debts.

Asian Peoples Movement on Debt and Development

July 14, 2015