Ozlem Onaran on Greece and its creditors
Professor Ozlem Onaran is a member of the Truth Committee on Public Debt set up by the President of the Hellenic Parliament, Zoe Konstantopoulou. The Committee has launched its Preliminary Report on 17-18 June in Athens. Ozlem Onaran has published an article in Social Europe on the recent report and the public hearings of the Truth Committee on Public Debt in Greece, its implications for the current negotiations, and why Europe needs a Debt Conference.
Professor Ozlem Onaran says “Whether there is a deal between Greece and its creditors or not, there are inconvenient facts about the increase in the public debt in Greece since 2010. The wage and pension cuts and fiscal consolidation led to lower GDP, tax losses, and higher public debt. Our estimates show that the fall in the wage share alone has led to a loss in GDP by 4.5%, and a 7.80% point increase in the public debt/GDP ratio. The fall in wages alone explains more than a quarter (27%) of the rise in the public debt/GDP ratio in this period. The conditionalities of the memoranda have not only been counterproductive in terms of its aims regarding debt sustainability, but also engineered a humanitarian crisis. This concerns not just the people of Greece but also Europe. Europe needs a debt conference. The people of Europe have the right to learn that their taxes were used to bail out banks. The people in Ireland, Portugal, Spain, and Latvia need to see the truth that their governments imposed on them similarly wrong austerity measures. It is time that we have a clear discussion about what the debt means, and what are the options outside this straightjacket. Greece needs policies to achieve decent jobs with decent wages for both women and men, structural change, sustainable development and a caring society for both the young and the elderly. Solutions to these problems are incompatible with payment of the debt and austerity policies likely to be attached to further agreements.”
The report has used input from previous research by Professor Ozlem Onaran as well as a PhD student, Thomas Obst, and Dr Maria Nikolaidi, also from from Greenwich.