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40 Australian economists urge debt forgiveness for Greece

Forty Australian economists issued a statement prior to the Greek national elections on January 25 claiming that the debt recovery program is unsustainable. They criticize the austerity program imposed by the Troika of the Europen Commission  (EC), European Central Bank (ECB) and the International Monetary Fund (IMF) as a “failure”. They call on the future Greek government to get serious in dealing with public administration, especially corruption.

“Even though it is widely understood among economists that the Greek austerity program has been a disaster, the Troika is continuing to impose demands which make the Greek economy ever weaker, crushing the livelihoods of most of its people,” said Dr. George Argyrous of New South Wales University. The list of Australian economists includes nine professors of economics, including Professor John Hewson from Australian National University (former federal leader of the conservative Australian Liberal Party).

Statement signed by economists

We, the undersigned economists:


* the historical evidence demonstrating the futility and dangers of imposing unsustainable debt and repayment conditions on debtor countries, and
* the negative impact of austerity policies on weakening economies and the particularly severe effects that flow on to the poorest households.

Call upon the Troika (EU, ECB and IMF) to negotiate in good faith with the Greek government so that:

* there is a cancellation of a large part of the debt, and there are new terms of payment that support the rebuilding of a sustainable economy, and
* this settlement commences a new EU wide policy framework favouring pro-growth rather than deflationary policies.

Call upon the Greek government to:

* abandon the austerity program that is crushing economic activity and adopt a more expansive fiscal policy setting, targeting immediate relief from poverty and stimulating further domestic demand,
* launch a fully independent investigation into the historic and systemic failure of the Greek public financial management processes (including any evidence of corruption) that led to the accumulation of debt, the disguising of the size and nature of the debt and the inefficient/ineffective use of public funds, and
* consider the establishment of a judicial body or alternative mechanism that is independent of government and charged with a future responsibility of investigating corruption from the highest to lowest levels of government.

Call upon other national governments to exercise their vote within official sector finance agencies and pursue other diplomatic activities that will support:

* a cancellation of a large part of the Greek sovereign debt, and
new terms of payment for the rebuilding of a sustainable Greek national economy.

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