Investigative reporter and bestselling author Greg Palast discusses with Truthout the results of his investigation into the actions of so-called vulture funds and their role in the destruction of the Greek economy. He also examines the eurozone and alternative examples of economic development available.
Michael Nevradakis: In light of the upcoming elections, Greece at the present time has unemployment that has surpassed 27 percent, youth unemployment at around 60 percent, hundreds of thousands of Greeks who have migrated abroad, a social state in shambles, and a government in the process of selling off key state industries, public lands and utilities. What is your take on the current economic situation in Greece?
Greg Palast: Well, it’s fascinating, because if you read the Western press, Greece is now a “success story.” By success meaning you’re paying off your creditors; your stock market has recovered and the bond market has recovered somewhat. So as far as most of the press is concerned, everything is fine in Greece. The fact that people are unemployed, that people are still losing their homes and livelihoods, doesn’t mean much to the press, because all that matters is the stock market and your creditors.
I’ve been investigating the causes of Greece’s collapse; it’s a crime scene; it’s not something that was a matter of Greeks living beyond their means or being lazy, olive pit-spewing slackers, as the Germans would have it. In fact, I actually looked it up: The average Greek worker works 400 hours more a year than the average German worker. It’s a hard-working nation. In fact, I think Greeks are harder on themselves than even the Germans are. It’s a hard-working nation, a successful nation, and what happened was your economy was stolen from you.
Continuing this narrative of Greece being a so-called success story: After so many years of IMF and troika involvement in Greece, there are many who still maintain that Greece has no other choice but to continue along this path. You’ve done a lot of investigating into what entities such as the IMF and the World Bank have done elsewhere, in Latin America and in Asia. What has been the impact of IMF involvement and austerity policies in these other regions?
Well, as my fellow economists Paul Krugman and Joe Stiglitz have noted, the austerity programs are like medieval bloodletting. If you’re sick, they would drain the blood from you, and if you didn’t get better, they would say “oh, the problem is that we didn’t drain enough blood” and they would bleed you some more. That’s how austerity works.
No one has yet beaten Keynes’ formula, which is that when there’s no demand for products, your economy is going to fall apart. Rebuilding demand is the opposite of austerity. This is when you need to borrow; this is when you need to go into deficit. This is when you need to devalue your currency so you can once again export. But you are chained like a prison sentence to the Deutsche mark, which is called the euro right now. You are forced to accept Germany’s currency, which makes Greece and its economy overpriced.
So the way that your economy is balanced is by reducing wages rather than by reducing the value of your currency, and that’s disastrous in many ways, because it’s a death spiral. The fact that money is being sliced out of your gut to pay off bondholders – to me that is not a sign of health, that is not a sign of recovery: that’s a sign of jackals and vultures chewing at the national economic corpse.