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How much is Greece’s debt?

The Greek bail-out programme began in 2010 when Greece’s debt had hit €310 billion, or 133% of Greece’s Gross Domestic Product (GDP). Today the Greek government is still in €317 billion of debt. 78% of the debt is owed to the ‘Troika’ of the IMF, European Union and European Central Bank.

What has happened in the bailout?

The bailouts have been primarily for the European financial sector. Less than 10% of the bailout money reached the people of Greece, with 90% of the loans being used to bail out the European financial actors that had over-exposed themselves to Greek government debt, including European banks, hedge funds, pension funds, and other investors.

What has been the impact of the Greek debt crisis and bailout conditions?

The ongoing debt crisis and austerity conditions imposed on Greece in return for bailout loans have devastated the Greek economy and society. Austerity has pushed through huge cuts in public sector wages, jobs, pensions and basic services like healthcare. Millions of Greeks have been forced into poverty as a result of the crisis, with solidarity networks stepping in to meet their basic needs. Unemployment in Greece is over 25%, with almost two-in-three young people out of work.

What is the Greek Debt Truth Commission?

The President of the Greek Parliament Zoe Konstantopoulou recently launched the Truth Commission on Public Debt. The Commission, comprised of debt specialists from around the world, is auditing Greece’s debt with the purpose of identifying how much of it is actually legal, legitimate, and sustainable.

Has there been a European debt conference before?

The proposal for a debt conference is based on the ‘London conference’ which agreed debt cancellation for Germany in 1953. The 1953 conference agreed to cancel 50% of Germany’s debt to governments, people and institutions outside the country, and the payments on the remainder were made conditional on Germany earning the revenue from the rest of the world to pay the debt. Greece was one of the countries which took part in the debt cancellation.

Are debt crises common?

The frequency of debt crises has dramatically increased since governments relaxed the rules that govern the global financial system in the 1970s. Between 1941 and 1970, governments defaulted on their debts six times. Between 1971 and 2004, this grew to 129 times.

Debt crises in the 1980s and 1990s, and austerity conditions imposed through bailout loans from the IMF and World Bank caused two or more ‘lost decades of development’ in the global South. Between 1980 and 1990 the number of people living in poverty in Latin America increased from 144 million to 211 million. In Africa, the number of people living in extreme poverty (on less than $1.25 a day) increased from 205 million in 1981 to 330 million by 1993.

Does debt cancellation work?

Following global campaigning, $130 billion of debt has been cancelled for 36 countries, mainly in sub-Saharan Africa, through the Heavily Indebted Poor Countries initiative. This has saved billions of dollars every year, and led to millions more people having access to healthcare and education. However, not all countries that needed debt relief could benefit from the creditor-designed HIPC Initiative, and it came with cumbersome conditions attached. That’s one reason why we need fair new UN rules to deal with debt crises promptly and fairly. A UN Committee to create such rules was set up in early 2015, but the EU and USA have been boycotting the sessions so far.

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Protesting over Greek debt

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