Issue link: https://maltatoday.uberflip.com/i/453115
maltatoday, WEDNESDAY, 28 JANUARY 2015 8 News Debt obligation vs humanitarian crisis – Malta's take on Syriza's triumph TIM DIACONO THE left-wing Syriza party stormed to a Greek electoral victory last week, spurred by its call for an end to austerity programmes and for a renegotiation of its €240 billion bailout. While Syriza, led by Alexis Tsipras, claim that Greece cannot pay back the full extent of its debt to the Troika (the EU, the Europe- an Central Bank and the International Mon- etary Fund), the EU Commission has warned them that debt write-off is not an option. It has therefore raised the spectre of Greece defaulting on its debts and becoming the first European country to leave the eurozone. Malta has a vested interest in the Syriza di- lemma, given that Greece owes Malta some €50.4 million as bilateral loans and €137.7 million as guarantees to the European Fi- nancial Stability Facility. Maltese politicians from both major par- ties appear to have taken the side of the Eu- ropean Commission. "There are two sides to this debate," Prime Minister Joseph Muscat told MaltaToday. "The new Greek administration is saying that the repayment programme is not sus- tainable; on the other hand, member states forked out taxpayers' money to help Greece and we will keep on insisting to have our money back." "Being elected on a promise to end aus- terity measures is the easy part but deliv- ering electoral promises is another matter altogether," shadow finance minister Mario de Marco said. "Let us not forget that Mal- tese taxpayers have also chipped in to help Greece in its bailout. "My first duty is towards Maltese taxpay- ers and as such, I would not support a new deal for Greece that increases the burden on Maltese taxpayers." MEP Roberta Metsola said that "during the electoral campaign, we have seen a number of promises made by Syriza that would, frankly speaking, be impossible to implement. "I expect Tsipras and his ministers to tone down the rhetoric in government. As the EPP Group Chairman has said, we cannot expect Maltese and other EU taxpayers to simply pick up Syriza's bills." Syriza triumph 'uncovers Europe's neoliberal problems' According to EU expert Prof. Roderick Pace, Syriza's victory has exposed the prob- lems of Europe's neoliberal policies. "According to neoliberal policies, having an uncontrolled free market and getting the 'market fundamentals' right can solve any- thing," said Pace, director of the University's Institute for European Studies. "In reality, it has led to fundamental cleavages in society, with the wealthiest 1% getting richer and the poor people getting poorer. I believe that Syriza's victory will hasten Europe's search for an alternative approach to austerity. "On the one hand, governments should be responsible for paying back their debts, but on the other hand, one must look at the so- cial aspect too. The Greek man in the street has been badly served by their government's policies for many years – pensions have been cut, youth unemployment exceeds 50%. "I'm an advocate of the free market, but I believe that the state must regulate it, particularly in its fight against corrup- tion, waste, bank secrecy and tax eva- sion. It must fight poverty and ex- clusion. After all, the current trend will negatively impact neoliberalism itself, which functions most effec- tively in a stable society with low levels of poverty," Pace said. "The eurozone gives Greece stabil- ity and I don't believe it will leave it," he added. "The euro has never been the problem. The problem is that po- litical elites haven't been able to live up to the euro's demands – that of keeping their houses in check in order to achieve good governance." Sociologist Michael Briguglio de- scribed the results as a "victory for a social Greece and a social Europe. "Some people say that Greece should pay its debts but Syriza are claiming that austerity policies have led to a humanitar- ian crisis in Greece," Briguglio said. "A lot now depends on the results of ne- gotiations between Syriza and the Troika, which will hopefully circle around find- ing ways through which Greece can re- main in the Eurozone. "I think they'll remain in the Eurozone; it's in every- one's interest that they do. How- ever, both sides must be ready to c o m p r o - mise." Is a 'Grexit' possible? Metsola played down fears that Syriza's victory could spell a Grexit from the Eu- rozone. "The EU and Greece must continue on the path of close cooperation and stabil- ity in Greece and the rest of the eurozone," she said. Economist Gordon Cordina was simi- larly cautious. "To exit the eurozone, the Greek econo- my would effectively need to exit the EU, which would be a more far-reaching shock to the economy," he said. "I believe that there are more reasonable courses of ac- tion – including a further restructuring of debt, to lengthen repayment periods, and a substantial investment programme by lender economies in productive projects within Greece, so as to assist the eco- nomic recovery from which the debt can be repaid." Economist Karm Farrugia said that "all things considered, a Grexit will be the best possible solution for the eurozone. Of course it's sad that austerity hit Greece so badly but other European countries forked out billions to bail them out. "The EU had bailed out Ireland as well, but their management was good and, while they suffered for a while, they managed to recuperate. Greece has a long-term prob- lem – basically, their administration of the economy leaves a lot to be desired." Joseph Muscat: The new Greek administration is saying that the repayment programme is not sustainable; on the other hand, member states forked out taxpayers' money to help Greece and we will keep on insisting to have our money back Roderick Pace: I believe that Syriza's victory will hasten Europe's search for an alternative approach to austerity Mario de Marco: Being elected on a promise to end austerity measures is the easy part, delivering electoral promises is another matter altogether Gordon Cordina: To exit the eurozone, the Greek economy would effectively need to exit the EU MEP Roberta Metsola: During the electoral campaign, we have seen a number of promises made by Syriza that would, frankly speaking, be impossible to implement Michael Briguglio: I think they'll remain in the eurozone Karm Farrugia: Of course it's sad that austerity hit Greece so badly but other European countries forked out billions to bail them out