Like Sri Lanka, Greece too declared default on €1.6 billion debt to IMF. It was the same year US-India sponsored regime change took place in Sri Lanka. Greece’s default came exactly 15 years after joining the Eurozone. Both Greece & Sri Lanka had one thing in common – both guilty of systematic tax evasion which was a key component in their default.
In 2015 the Greeks voted to reject debt restructuring. The Greeks were told its best to be bankrupt & start again with help of IMF of course, is this some sort of new template being forced upon nations? Was Sri Lanka the next victim in 2022? They called it “hair cut” and eventually who ends up getting this “hair cut” let’s just say it’s certainly not the rich. They have the audacity to even say “it’s the only way out”! The welfare states are the targets. Obviously, the aim is to use “bankruptcy” and erase welfare. Its happening in Argentina, Spain, Venezuela, Portugal. Their governments hold partial fault too. Failure to tax the rich and giving mostly the rich incentives and concessions is one of the key reasons, though not discussed as much. The scenario is no different in Sri Lanka.
The self-claimed saviors IMF & World Bank have been on the game for decades but exactly what country have they advised to economic stability without bringing down the quality of life of the middle class & ordinary? This question is never properly answered. What good is a bailout or debt restructuring if it is going to leave people in worse conditions. The Greeks found out they were saddled with even more long term debt that their generation couldn’t pay back. Greek debt is some $350billion. Their population is half of Sri Lanka. Even a miracle is a miracle. Greece was overtaxed – Sri Lankans are going through same. Greece’s companies couldn’t cope up with the taxes and began closing down – same is happening to Sri Lanka. But segments of both governments & IMF as well as their international ‘friend’ network thinks everything is honky dory and they use their ‘friend’ channels to manipulate the media into telling people everything is honky dory. However, both Greece & Sri Lanka’s pensioners found out their pensions were one of the first targets. How come there is little or no recovery of the defaults by the rich given that they have been privy to incentives and tax concessions of the state.
To be in the Eurozone, Greece had to apply structural adjustments to comply with the 1992 Maastrich Treaty which meant Greece required to limit government deficits to 3% of GDP & public debt to 60% of GDP. Both Sri Lanka & Greece suffer lack of revenue – much of this is due to systematic tax evasion, under reporting income & over reporting debt payments. This was a social problem that Greece & Sri Lanka suffered. Loans end up covering the ground realities, as governments get into the habit of taking loans delaying addressing the core problem and with each government the situation worsened for both nations.
Notice the role of the US in both nations. In 2010, US rating agencies gave Greece its lowest grade precipitating bailout that came with conditions by pro-US IMF. Sri Lanka is going through exactly what Greece experienced. The conditions on Greek budget reforms created a vicious cycle of recession increasing unemployment, closure of SMEs, increased social problems, impact on health of citizens including large numbers of suicides. Exactly what Sri Lanka is now experiencing.
The social, economic & political conditions in both Greece & Sri Lanka are unusually similar. While Greece too has 2 prominent political parties that tussle power between themselves, Sri Lanka also does the same even after jump overs. Amidst this both nations experienced a “rock star” image where an abnormal boost of publicity was given to Greece’s Alexis Tsipras of SYRIZA (a coalition of the radical left). The same boost is being given to JVP-NPPs Anura Kumara Dissanayake who is suddenly going on world tours to western states & India (pretending to be from radical left)
Tsipras’s coalition in 2009 received only 4.6% of the vote, while in 2010 JVP supported DNA received 5.49% of the vote. In 2012, SYRIZA party received 26.9% of the vote while JVP (which played a key role in the US-India regime change) received just 4.87% though the number of voters had risen to 543,944.SYRIZA emerged in 1968 after restructuring the Greek communist movement. JVP was created in 1965.
The most important aspect of the remainder of this article is to understand where the Greeks went wrong & why and prevent Sri Lankans from doing the exact same mistake. In their anger against the two main political parties (PASOK & New Democracy) in Greece, where people held the two parties responsible for Greece’s bankrupt status, they sought revenge by voting for a radical left who eventually turned out to be worse than the centre right neoliberal parties. The economic crisis was the reason for the rise of SYRIZA and the JVP. Another common factor between SYRIZA and JVP-NPP is their attempt to hide their “left” identity – the world tours by JVP-NPP leader to Canada, Australia, US and UK proves this from Sri Lanka’s perspective too. Ultimately SYRIZA did not deliver to the left or the right – JVP & NPP will do the exact same if voted to power.
When SYRIZA came to power the first victims were the very people who supported SYRIZA to power. It is going to be no different in the case of JVP-NPP as well.
Within days of coming to power SYRIZA targeted the working class, the retirees, increased health charges, cut social benefits to schools and worst of all unleashed the police against all those who protested. These are tell-tale signs of what to expect from the JVP-NPP too.
What Sri Lanka and Greece have common is that debt in both nations are a product of over 30 years of budget deficits, poor management, lack of political will and vision. Another common factor was the opinion of the citizens in both Greece & Sri Lanka that their 2 main political parties had failed. In wanting to seek revenge against the 2 political parties at the election, the Greek people voted for SYRIZA nevertheless the Greeks found out too late that the party they voted to power was not politically savvy, had no strategy or alliances in Greece or even internationally. Adding to the situation was that the party was filled with internal conflicts and rifts with different opinions merging causing more problems than they could fathom. In such a scenario, to hold on to power, the common trait is to agree to any painful compromises and for a party that remained 30% radicalized this created more rifts within. With disagreements surfacing, it should be clearer how the situation would mirror in Sri Lanka. JVP is identical to SYRIZA both in its ways and radicalism and the common trait is that they lack a vision and governmental culture. The citizens realized too late. SYRIZA was given 31% in 2019 which reduced to 20% in 2023 – results that showed SYRIZA had disappointed Greece & Greeks in just 4 years in power.
If Europe’s and America’s social democracy is falling apart as can be seen happening presently, it is high time Asia, Africa and the other continents wake up to ground realities instead of tagging to the failed tail & taking their nations along the same path. Nation’s need to discover their own national economic development model, not cut & paste from others.
ඉඟුරු දී මිරිස් ගත්තාවාගේ – has been our historical blunder
Shenali D Waduge