Jail the bankers !

Instead of bailing out banks and imposing austerity, Iceland jailed their reckless bankers. Our servile press rarely mentions how Iceland turned its economy around – without imposing austerity. 


Greece might do likewise – except that their reckless bankers are mainly German and French owned and the EU ‘rescue package’ is to recapitalise these banks.

{You can read a fuller account of what happened in Iceland here. It does contain inaccuracies – see comments – but gets nearer to the truth than most accounts.}


Austerity, Greece and us

OXIThe purpose of “Austerity” is to help the rich to rob the poor. Although packaged as “fiscal probity” to fool us (and Labour leadership candidates – three already having succumbed), that’s what it’s really all about.

I have written about “Austerity” in seven previous posts (q.v. the Austerity tag) and don’t propose to repeat myself. But the Greek “debt crisis”  has demonstrated that the monied classes of Europe all employ similar arguments so, in this new post, I will highlight some additional issues and provide three useful links.

My first (The Greek No Vote Marks a Victory for Humanity) makes the point that we have common cause with the people of Greece. Their experience demonstrates that austerity does not reduce national debt. The Greek economy has shrunk to such a degree that even the IMF  concedes that it is now impossible for Greece to pay off these historical debts.

So what happened to the bail-out money? About 90% was used to recapitalise private banks (mainly French and German) – the same people whose reckless speculation created the crisis. A mere 10% has assisted those suffering from job losses, pay and pension cuts. Austerity in Greece has been a cloak for transferring money from the poor to the already rich. This is why the “No” vote was so decisive.

All significant strands of left-wing opinion (socialists both within and outside the Labour Party, Greens and Plaid Cymru) favour debt relief or debt restructuring and, throughout Europe, more and more pressure is being exerted in this direction. Why is this said to be impossible? There are two aspects – ‘historical’ and ‘political’.

Historically, many nations have experienced comparable debt levels – including, notably, Germany. There are at least three ways in which historic debts have been eliminated – inflation, investment and debt relief. All these options are currently being denied to Greece.

This is well argued in a recent (4th July) interview with Die Zeit, by the  economist, Thomas Pikett. (The link is – “Germany has never repaid its debts“)  He argues for a “traditional” approach to deal with Greek debt – in other words, Greece should do the same as Germany and Britain did in the past.

Politically, I challenge the assumption that it is unthinkable for Greece to default – private companies do this all the time and continue to trade with the blessing of the monied classes. We all know of companies that default on their debts and then, with a different name but with the same directors and owners continue to trade.

As a committed socialist I believe “limited liability” is immoral and despicable in all circumstances and should be made illegal. But for those happy with companies that do this, why shouldn’t similar leniency be shown to a government (especially if it has no blame for the actions of its predecessor – as in Greece today).

The obvious difference is, of course, that private enterprise is allowed leniency – whereas national debt is treated as an excuse to reduce welfare spending. Simon Jenkins, in an article in The Guardian on 8th July, argues that for Greece, the worst option would be to stay in the Eurozone – in effect, it needs a planned default.

As in Britain, the Greek national debt was caused by the irresponsibility and greed of the private sector (now being bailed out by the state) whilst the EU/troika demands that the government balances its books by imposing austerity.

This is one of the ways the richest 1% have accumulated wealth at the expense of the remaining 99% – and now own 50% of the world’s total wealth.

The whole process – and the capitalist system – stinks.


I don’t claim special insight into Greek politics – merely a strong emotional attachment. This dates back to the war (1939-45) – when Tony and Betty Ambatielou lodged with us in Cardiff. After the war, when Tony was under sentence of death and Betty led the international campaign for his release, all of our family was both politically and emotionally involved.

Later, during the military dictatorship, we helped several of the refugees and my personal emotional attachment became stronger. So I’ve followed every twist and turn in Greek politics for 70+ years and, naturally, was overjoyed by the rise of Syriza.

Syriza is not responsible for what previous governments did – the blame for the deficit rests squarely with the ultra-rich and their allies in Europe. The recent EU/troika ‘bailouts’ have been paid to the very people that caused the problem whilst, in contrast, the EU/troika insists that ordinary Greek people suffer through reduced pensions and other impositions.

So I was delighted to read this open letter from leading Trade Unionists, left-wing Labour MPs (naturally including Jeremy Corbyn), Plaid Cymru and SNP MPs and, naturally, Caroline Lucas. I have only one thing to add.

As Caroline has pointed out in a separate statement, in 1953 the wartime allies agreed to write off most of Germany’s historic debts, facilitating Germany’s economic recovery. It is ironic that the present German government is so resolutely opposed to Greece being given similar dispensation.  

We call on David Cameron to support the organisation of a European conference to agree debt cancellation for Greece and other countries that need it, informed by debt audits and funded by recovering money from the banks and financial speculators who were the real beneficiaries of bailouts. We believe there must be an end to the enforcing of austerity policies that are causing injustice and poverty in Europe and across the world. We urge the creation of UN rules to deal with government debt crises promptly, fairly and with respect for human rights, and to signal to the banks and financiers that we won’t keep bailing them out for reckless lending.
Frances O’Grady General secretary, TUC
Len McCluskey General secretary, Unite the Union
Paul Kenny General secretary, GMB
Manuel Cortes General secretary, TSSA
Sarah-Jayne Clifton Director, Jubilee Debt Campaign
Paul Mackney Chair, Greece Solidarity Campaign
Nick Dearden Global Justice Now
Owen Epsley War on Want
James Meadway New Economics Foundation
Ann Pettifor Prime Economics
Diane Abbott MP   Dave Anderson MP   Richard Burgon MP   Jeremy Corbyn MP   Jonathan Edwards MP   Roger Godsiff MP   Harry Harpham MP   Carolyn Harris MP   George Kerevan MP   Ian Lavery MP   Clive Lewis MP   Rebecca Long-Bailey MP   Caroline Lucas MP   John McDonnell MP   Liz Mcinnes MP   Rachael Maskell MP   Michael Meacher MP   Grahame Morris MP   Kate Osamor MP   Liz Saville-Roberts MP   Cat Smith MP   Chris Stephens MP   Jo Stevens MP   Catherine West MP   Hywel Williams MP