Greece’s
former finance minister Yanis Varoufakis has accused European leaders
of allowing oligarchs to maintain their stranglehold on Greek society
while punishing ordinary people in a line-by-line critique of the
country’s €86bn (£61bn) bailout deal.
Varoufakis
said the Greek parliament had pushed through an agreement with
international creditors that would allow oligarchs, who dominate
sections of the economy, to generate huge profits and continue to
avoid paying taxes.
The
outspoken economist published an annotated version of the deal
memorandum on his website on Monday, arguing throughout the 62-page
document that most of the measures imposed on Greece would make the
country’s dire economic situation worse.
His first
insertion makes clear his dismay at the dramatic events of last
month, when the Greek prime minister, Alexis Tsipras, was forced to
accept stringent terms for a new bailout amid calls from Germany for
Greece’s temporary exit from the eurozone. Varoufakis, who resigned
from his post in June, said: “This MoU [memorandum of
understanding] was prepared to reflect the Greek government’s
humiliating capitulation of 12 July, under threat of Grexit put to
Tsipras by the Euro summit.”
Folllowing
the July summit, Athens agreed a three-year memorandum of
understanding last week that will release €86bn of funds, much of
it to repay debts related to two previous rescue deals. In exchange,
Athens will implement wide-ranging reforms including changes to the
state pension system and selling off government assets.
But
Varoufakis said a reform programme overseen by the troika of lenders
– the European commission, the International Monetary Fund and the
European Central Bank – would only enslave ordinary workers and
families by imposing tough welfare cuts while letting foreign
companies grab domestic assets cheaply through privatisations. He
said billionaire business owners in Greece would also escape
scrutiny.
In the
memorandum it says: “Fiscal constraints have imposed hard choices,
and it is therefore important that the burden of adjustment is borne
by all parts of society and taking into account the ability to pay.
Priority has been placed on actions to tackle tax evasion.”
In answer,
Varoufakis said: “As long as it is not committed by the oligarchs
in full support of the troika through their multifarious activities.”
The
memorandum goes on to say: “The authorities plan to benefit from
available technical assistance from international organisations on
measures to provide access to health care for all (including the
uninsured).”
To which
Varoufakis responds: “ie using advice of well paid foreign
‘technocrats’ as a substitute for funding, nurses, doctors and
equipment”.
The deal
memo also refers to rolling out a “basic social safety net” in
the form of a guaranteed minimum income (GMI]. That provision “would
be great, except that not one fresh euro will be made available for
the GMI program whose funding will be siphoned off existing benefits
provided by the Greek state, e.g. child benefit,” says Varoufakis.
As finance
minister, Varoufakis opposed any deal with Brussels that he believed
would consolidate the strategy of the previous five years of
bailouts. He argued that combining financial aid with severe cuts to
state spending was the main reason why Greek unemployment had soared
to more than a quarter of the working population and shrunk the
economy by 25%.
Varoufakis
was succeeded at the finance ministry by his colleague Euclid
Tsakalotos who went on to negotiate the current agreement.
Last week,
after the memorandum passed into Greek law, Tsakalotos said the deal
would take Greece forward and create a more stable financial system.
Varoufakis
said the deal was flawed in many ways as he picked his way through
the memorandum. For instance, property taxes based on out-of-date and
inflated values would hit ordinary households; that a reliance on
expensive advisers and consultants would deny the health service
vital cash; and a reduction in investment funding by Brussels would
stifle the recovery.
He said the
troika had wrecked the pension system, which remains anessential
economic prop for many households. Warning that removing state
subsidies from pensions would create a vicious circle, he said: “The
pension cuts necessary will be so large that aggregate demand in
Greece will fall again so much that employment will suffer further
thus hitting again the pension funds.”
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