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Greece needs a real cancellation of a big part of its debt
by Eric Toussaint , Christina Vasilaki
2 February 2015

Eric Toussaint interviewed by Christina Vasilaki of SYRIZA’s radio stoKokkino

Christina Vasilaki : Which is the EU Regulation that Syriza’s demand for an audit of debt could be based on?

Eric Toussaint : In May 2013 the European Parliament and the European Commission adopted a Regulation requiring all countries who sign a Memorandum of Agreement–as in the present case of Greece, Ireland, Portugal, and Cyprus. Article 7 of this Regulation says that governments will carry out a comprehensive audit of the debt contracted by the country and to identify possible irregularities. So, Paragraph 9 of this Article of the Regulation allows a government headed by SYRIZA to create, immediately, such a commission in implementation of the Regulation.

CV : What can be revealed by this audit?

ET : For me it’s very clear that the debt contracted by Greece with the Troika, which represents 80% of the Greek debt now, is clearly illegitimate because the Troika has imposed policies on Greece which have destroyed part of the economy of Greece and destroyed the social rights and the economic rights of the population.

CV : Do you believe that it’s necessary to write off part of the Greek debt? And what would be the result for access to the international markets in the long term?

ET : As you know we have had more than 600 restructurings of debt since 1950. A lot of countries have suspended payment of the debt, and in the case of Greece, if Greece succeeds in imposing a large cancellation of its debt, which is totally possible, I think there is no real problem, after several years, (for Greece) to go back to the market if Greece needs it. But also you could imagine some alternative way of financing Greek development – fiscal reform (), reducing the taxes paid by the poor and increasing the taxes paid by the richest 1% of the population and big private enterprises could allow the government to raise sufficient money to not be obliged to go to the market and contract new debt.

CV : Could the extension of the maturity of the loan and the reduction of the interest rates be an alternative solution?

ET : Greece needs a real cancellation of a big part of its debt. And for the other part of the debt which will not be cancelled, abolished, a reduction of the interest rates and an extension of the maturity of payment is necessary, I suppose, too. But it’s not an alternative to the cancellation. It’s complementary to cancellation. You need both things.

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Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

Christina Vasilaki