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EIR Seminar in Frankfurt, April 29, 2015

Greece, the European Union and the BRICS

by Leonidas Chrysanthopoulos, former Secretary General of the Organization of the Black Sea Economic Cooperation, former Greek diplomat and Ambassador

Mr. Chrysanthopoulos submitted the following contribution to the EIR seminar, which took place in Frankfurt on April 29, 2015, on the theme “Creating a new credit system for economic development worldwide”.

Three were the reasons that made Prime Minister Konstantinos Karamanlis push for the accession of Greece to the EEC in 1975, as it was then called. The first was to consolidate democracy in a country that had just come out of a catastrophic seven year military dictatorship. It should be recalled that the then democratic EEC had countered the dictatorship with every means possible and particularly by freezing the Association Agreement it had with Greece and the Financial Protocol. NATO, on the other hand, had supported the Junta. The second reason was to protect Greece against Turkey that had invaded Cyprus in 1974 and the third was to advance the economic development of the country.

When Greece joined the EEC in 1981, it had a dynamic industry with a yearly rate of development of 7.4%, a dynamic agriculture and self-sufficiency in most products with 24,2% of the population working in this sector. Unemployment was then around 3 to 4%.Afterthe accession, Greece was obliged to limit its steel production since there was an overproduction of it in the EEC and to dismantle its nascent automobile industry. Greece reduced its olive oil production to help reduce the olive oil lakes existing in the EEC, and thus restructured its agriculture, reducing the percentage of population actively employed in that sector to 10%. And for many years, by the purchase of military hardware, Greece kept the French and German workers employed in the arms industries of their countries. From 2005 to 2010, Greece was the first importer of arms from Germany, purchasing 15% of its total production and the third largest customer of France. In 2010, Greece spent 1 billion euros on arm purchases from France and Germany.

The social budget was reduced by 1.8 billion within the austerity measures program. Of course, EU funds helped the development of Greece and many important infrastructure products were done with EU co-financing. As such we have the Venizelos Airport, the Athens Ringroad, the Egnatia Highway and the Athens Metro. Agriculture was also assisted, often through subsidies paid for reducing agricultural means and productions rather than increasing them, even though it remains unclear how much funding actually reached its objective.

* * *

On January 1, 2002 Greece joined the Eurozone, and after only a few years, the problems started that resulted in today’s situation.

Let us examine now the EU economic crisis that started as a result of the global financial crisis of 2008. The Greek government was persuaded to sign a Loan Agreement in May 2010. The idea was that it could - through austerity measures - reduce the public debt which in 2009 was 129% of the GNP, or 299 billion euros in absolute numbers. The promised results forecasted by experts and the predicted recovery as a result of these measures, first announced in 2009, did not take place. De facto, we are still waiting for it. After two memoranda and admittedly mistaken policies from the EU, the IMF and the Greek governments, Greece is on the verge of disaster with an increased debt of 175% of the GNP or 321 billion euros in 2013. Today it is around 180% of the GNP.

One of the reasons for the failure of these measures was that the human factor was not taken into consideration and as a result Greece is facing today a social disaster without precedence. Instead of enhanced investment, recovery and growth, the economy has significantly decreased GDP (reduction of 12.7% in 2012), factories, industries, shops have closed down almost on a daily basis. Those countries and companies who have invested are ignoring all workers' rights of the EU or making their profits outside of Greece due to tax-haven-arrangements through e.g. the Netherlands like the gold mining company Eldorado. And, in spite of the fact that the “institutions” had acknowledged their mistakes, they continue to insist on the implementation of the same ineffective policies that are destroying a member-state of the EU. Fortunately, the new Greek Government that came out from the elections of January 25, is refusing to implement measures that are ineffective and disastrous for the country.

But it is not only that the measures are erroneous, they also have violated human rights in Greece as well as the Lisbon Treaty. On December 18,the International Federation of Human Rights (FIDH) and the Hellenic League for Human Rights published a report entitled Downgrading rights: the cost of austerity in Greece, in which the legal responsibility and accountability of the Greek governments, the EU, its member-states and the IMF for violating human rights in Greece, are explained. The responsibility of these four actors is shared on the grounds that they jointly designed, negotiated, funded and implemented the two “economic assistance programs” which are the source of the violations.

Greece, as the sovereign state of the territory on which austerity measures were implemented, holds primary responsibility for failing to uphold its obligations to respect, protect and fulfill the human rights of all under its jurisdiction.

EU Member-states that took part in the negotiation, conclusion and financing of the adjustment programs were obliged to help Greece fulfill its obligations concerning the respect of human rights. They should have abstained from any action limiting the ability of Greece to respect its international obligations on human rights.

The European Union, being an Organization that enjoys a legal personality distinct from that of its members, should also be held accountable, since its accountability and responsibility are derived from EU primary law, as reflected in the founding instruments of the Union, as well as from customary rules of international law, on the responsibility of international organizations and universal human rights standards, that the EU has pledged to uphold and respect. By allowing its institutions and bodies, (Commission and the ECB) to be placed at the disposal of a group of States, seeking to incite Greece to adopt policies that will forseeably violate its human rights obligations, the EU has violated its obligations under article 2,3(1), (5) and 6 of the Treaty on the European Union.

The IMF is a specialized agency of the UN and as such should respect article 55 of the UN Charter, which includes universal respect for, and observance of human rights and fundamental freedoms for all.

It should be mentioned here that German activists have filed a lawsuit at the International Criminal Court of the Hague (OTP CR 345/12) against unknown people for damage done to the health of the Greek people.

But what went wrong with the EU, why is it destroying its Member-States and peoples? Personally, I think it has to do with the “expertisms” that have infiltrated governmental bodies. Lobbyism and “Big Companyism” have gained a power far exceeding what it was in the early days of the European Idea, when the EU was functioning in a satisfactory way with Ministers dealing themselves with the issues pertaining to the Budget, Agriculture as well as other technical issues without the presence of “experts”. They locked themselves in consultations until the wee hours of the morning, often even stopping the clock, and resolved the problems in direct dialogue. And of course, the basic priority was that any solution had to benefit the people, in contrast to what is happening today where new contracts and agreements are planned in which companies, big industrial players and global financial conglomerate get granted almost unlimited power (TTIP).

The EU gradually fell under the control of lobbyists and bureaucrats. Negative effects were created by the constant celebratory statements of European Councils that created erroneous impressions by announcing after each Summit that all problems of the EU were even better resolved than before. However, what failed the most was the 2000 Lisbon Strategy, that had as an aim to make the EU the most competitive and dynamic economy of the world by 2010 with better and more work positions and social cohesion. Look at the 27 nations today, those they call PIIGs, and the others whose letter are to be added shortly. There is not a single nation within the EU which is not suffering from increased unemployment, decreased social welfare, increased taxes and costs and decreased effective incomes as compared to the year 2000. In the meantime, it has reached a point where nowhere in the EU can a family be maintained on one income, which was the standard in all European nations in the beginning days of the EEC.

* * *

The EU could have played an important role in maintaining global balance. Unfortunately, it has left this role to the USA, Russia and China. And it seems, the USA is following a policy of confrontation vis-à-vis the other two countries that may endanger humanity. An answer to this may be the BRICs initiative. This is an initiative of Brazil, Russia, India, China and South Africa to pursue a policy of economic development for the benefit of humanity. To that end they have created a Development Bank to invest billions in necessary development projects.

China recently initiated the Asian Infrastructure Bank (AIIB), joined by over 20 Asian nations as founding members and has set up a Silk Road Development Fund. China has also proposed within BRICS the creation of a Free Trade Area of Asia and the Pacific (FTAAP).The incorporation of the Shanghai Cooperation Organization to the BRICS initiative could create a formidable power, which, if remaining out of the control of the bankers and big companies’ lobbyists, could lead to a point where humanity indeed has a chance to reach global peace and end poverty through common human economic development. So, what is desperately needed is the cooperation of the USA and of the sovereign nations of Europe with the BRICS countries and their initiatives. Some European countries, to the annoyance of the USA, have already signed up. Hopefully this was done with an open mind and without a second agenda.

To quote the declaration launched by the Schiller Institute of which I am a signatory: "Only such an approach would restore the United States and Europe to their original purpose as expressed in the European Renaissance and the American Revolution."

* * *

Because of Greece's special relationships with China and Russia, Athens can play an important role within the BRICS initiative and also to cool down US aggressiveness towards these two nations.

Greece and Russia have always shared a special relationship. Not only because both countries are of the orthodox faith. There have been many occasions where Greeks and Russians have cooperated, worked together and helped each other. The first prime minister of a free Greece back in 1830, Ioannis Capodistrias, was Foreign Minister of Russia, before he took the helm of a just-freed Greece. General Orlof, sent by Catherine the Great, came to help the Greeks of the Peloponese to rise against the Turkish yoke. It may not have been successful at the time, but it gave the Greeks the courage to start it again in 1821.

That the most famous export good of Russia, caviar, has become exportable is thanks to Varvakis who discovered how to preserve it so shipment could be possible. Greeks have settled at the coastal area of what is Russia today since Jason was travelling with the Argo, and as Greeks, we can proudly say that we certainly have contributed to the Russian culture. This is some common ground that cannot just simply be discussed away or disappear due to some current differences in political views. These connections have lasted over the time and will continue to last. The visit earlier this month of the Greek Prime Minister to Moscow and the results it achieved are also due to this special relationship.

With China, Greece shares the fact that both are ancient developed civilizations. Greece as well as China travelled in ancient times and helped to shape the cultures of the globe as they are today. The Chinese show a great respect to civilizations that existed in parallel with them, like the Greek one. Already this fact makes both of our nations respect each other thus facilitating cooperation on every level.

* * *

While criticizing the EU for the damage that it is doing to itself and to its members, the following solutions are proposed for Greece, the EU and for humanity:

- Greece: The new Government of Greece, has started negotiations with the lenders on a new basis, meaning that it will no longer adopt measures hurting the people and that it will no longer receive orders from the lenders. If the EU continues to ask for measures that are unacceptable to Greece, then a clash might happen that may have destructive consequences for Europe.

We propose the following: The denunciation of the Loan Facility Agreement of May 2010, signed between Greece and the Member-States of the Eurozone, on the basis of articles 48-52 of the Vienna Convention concerning the Law of Treaties. These articles anticipate the invalidity of a Treaty if there was an error, fraud, coercion of a representative of a State etc. Greece will at the same time request compensation from the EU for the damage done to the country, which according to conservative estimates is about the amount of the so-called debt. The compensation claim will be based on article 41.3 of the Charter of Fundamental Rights of the EU, that is incorporated in the Lisbon Treaty.

The cessation of payments with the denunciation of the Loan Agreement and the compensation that will be given in time to the country, will allow Greece to repair the damages done and instigate development. It will also withdraw, within a one-year period from the Eurozone, in order to implement beneficial economic policies that it cannot under Eurozone rules. The Unified Popular Front (EPAM) a political party not in parliament yet, supports this policy. And in case of an impasse in the ongoing negotiations with the lenders, there is a possibility that the present government might be forced to follow such an approach.

-The EU: The transformation of the EU into an efficient organization having as sole priority the safeguard of the interests of the people and not of the bankers is imperative. A new constitutional document must replace the violated Lisbon Treaty. The new document must be drafted by movements of citizens of Member-States who will submit their proposals to a European Assembly composed of representatives of these movements.

-Humanity: The deletion of the global debt which is about 600 trillion USD, will allow humanity to restart on a new and healthy basis. There exist many examples in history of debt deletion: From the ancient Greek Sisahtheia to the Jubilee of ancient Hebrew Communities, where every 50 years the debts were cancelled. Even during the 70’s, the developed countries of the West deleted the debt of the non-aligned movement, thus allowing the economic boom of Yugoslavia. The BRICS movement can promote this while the decision must be taken by the G-20. Humanity as a whole will benefit because it will be able to restart on sound and healthy principles.

In order to implement the previously mentioned proposals, it is necessary to have politicians with imagination, vision and courage, politicians who care about progress of humanity and put a stop to the greed and grabbing of Banks, Financial Institutions and Companies. Such politicians do not exist today. It is the task of us, the voters, the people, the political and unpolitical movements, to create them.

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