'Let Greece breathe,' Australian economists say

Issue 
Final election rally for SYRIZA, the radical left party favoured to win the January 25 elections on a platform of renegotiating

Forty Australian economists have issued a statement prior to the Greek national elections on January 25 to condemn the debt recovery program imposed on the nation as unsustainable.

The wide ranging list includes nine professors of economics, among them Professor John Hewson from the Australian National University (former federal leader of the Australian Liberal Party).

The economists have also criticised the austerity program imposed on Greece -- by the "Troika" of the European Union, European Central Bank and International Monetary Fund -- as a failure and are calling for a more sustainable economic pathway. They have called on any future Greek government to get serious in dealing with public financial management problems including the issue of corruption.

“Even though it is widely understood among economists that the Greek austerity program has been a disaster, the Troika is continuing to impose demands which make the Greek economy ever weaker, crushing the livelihoods of most of its people,” said Dr George Argyrous of the University of New South Wales.

“Now the Greek people finally have a chance to speak for themselves about the austerity program it is vital that their democratic voice is respected and that Europe and the global community enter into a new, more respectful relationship with the Greek people,” said Argyrous.

Emeritus Professor Frank Stilwell of the University of Sydney said: “We believe that after the January 25 elections there must be a rapid change of direction so that unpayable Greek public debt is cancelled and a policy for restoration of living standards, social rights and economic growth is strongly supported.”

The statement is an initiative of the Australia–Greece Solidarity Campaign and titled “Let Greece Breathe”.

Campaign coordinator Adam Rorris said the aim was to demonstrate the strong Australian support for the Greek people in their current crisis.

“Australia must use its voice in the IMF and through other diplomatic means to make it clear that it does not support the imposition of sovereign debt programs which are unviable in terms of recovery and lead to great hardship for ordinary people on the street,” said Rorris.

“We want the Australian government to respect the democratic voice of the Greek people, provide direct support in any difficult circumstances following the January 25 election and to urge other governments in the international community to help resolve the European debt crisis,” said Rorris.

Statement signed by economists

We, the undersigned economists:

Note:

* the historical evidence demonstrating the futility and dangers of imposing unsustainable debt and repayment conditions on debtor countries, and
* the negative impact of austerity policies on weakening economies and the particularly severe effects that flow on to the poorest households.

Call upon the Troika (EU, ECB and IMF) to negotiate in good faith with the Greek government so that:

* there is a cancellation of a large part of the debt, and
there are new terms of payment that support the rebuilding of a sustainable economy, and
* this settlement commences a new EU wide policy framework favouring pro-growth rather than deflationary policies.

Call upon the Greek government to:

* abandon the austerity program that is crushing economic activity and adopt a more expansive fiscal policy setting, targeting immediate relief from poverty and stimulating further domestic demand,
* launch a fully independent investigation into the historic and systemic failure of the Greek public financial management processes (including any evidence of corruption) that led to the accumulation of debt, the disguising of the size and nature of the debt and the inefficient/ineffective use of public funds, and
* consider the establishment of a judicial body or alternative mechanism that is independent of government and charged with a future responsibility of investigating corruption from the highest to lowest levels of government.

Call upon other national governments to exercise their vote within official sector finance agencies and pursue other diplomatic activities that will support:

* a cancellation of a large part of the Greek sovereign debt, and
new terms of payment for the rebuilding of a sustainable Greek national economy.

[Reprinted from Australia-Greece Solidarity Campaign. See the full list of economists endorsing the statement here.]

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