News:
The BBC reported on 12th May, 2015, that the Greek debt crisis “has become desperate” and likened Greece’s debt repayment problems as “a knife to the throat”. The report described how Greece made the latest debt repayment of €750 million to the International Monetary Fund (IMF) by “using a buffer account held at the IMF itself” in the face of such an extreme cash flow problem that the government also had to beg for money from “local governments and other public bodies”!
Comment:
It is thought that Greece paid €650 million of its €750 million debt payment to the IMF from a restricted IMF account, which truly demonstrates the desperation that the media has described. It is like someone stealing from you to pay you back for a debt owed! This liquidity crisis is expected to continue for the next few weeks as more debt repayment dates become due, and negotiations for the final installment of €240 billion in aid to Greece from the EU aid program. This installment is worth 320 times more than the cost of the latest debt installment, which helps to explain why Greece would use such desperate means to pay, which also included the non-payment of most government suppliers since January as well as the withholding of employment payments.
In addition to begging for money, at home and abroad, Greece has suffered other humiliations stemming from its present weakness. For example, despite having fought for several years to reclaim Greek heritage artifacts, The Guardian has now reported that “Greece drops option of legal action in British Museum Parthenon marbles row”. With Greece now dependent upon the mercy of its creditors to prevent bankruptcy, its national pride is being sacrificed. Other stories are also appearing in the press that expose diplomatic pressures being placed upon Greece to compromise on previous commitments top its national development.
With Greece sinking into irretrievable debt, those who lent it money will have an increasingly free hand to take advantage of Greek weakness in the manner of a pack of wolves closing in on an exhausted animal. Such is capitalism.
Capitalism promises the growth of money and national prosperity through an interest-based economy, but while the capitalist defenders shed no tears for the winners and losers amongst people, what will happen to the world economy when entire countries or even continents collapse into bankruptcy casts fear into their hearts? The dangers to the European and world economy are so great that Greece’s creditors have continued financing Greece’s bad debts for many years, but the coming weeks will put Greece and her European creditors to a great test of nerves.
Written for the Central Media Office of Hizb ut Tahrir by
Dr. Abdullah Robin