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Greece financial mess “nothing new”

uel biotech desk

Greece financial mess “nothing new”

Greece may be embroiled in financial crisis – but that’s nothing new, according to a UEL academic.

In a radio interview, Professor Vassilis Fouskas said Greece had never been solvent in its entire history and has long had problems managing its debt. He believes Greece has already run out of money.

Professor Fouskas, Head of the Centre for the Study of States, Markets and People (STAMP) at UEL, was speaking on Russia’s Sputnik Radio about the financial crisis in Greece.

“The new government in Greece has realised that creditors will not back down from the previous bail-out agreements, and the only leverage the current government has is the support of its people,” said Professor Fouskas.

“Unless there are new loans from Europe or alternatively the European Central Bank allows Greek banks to buy more Greek debt, Greece has no option but to default, and ultimately have a referendum about its future.”

Professor Fouskas, who is the co-author of Greece, Financialisation and the EU – The Political Economy of Debt and Destruction, said that if Greece left the European Union, it would definitely have a knock-on effect.

“If, a couple of years down the road proves that Greece recovers, then other countries will say, ‘hang on, Greece is doing well outside the Eurozone, why do we have to suffer all this austerity?’” said Professor Fouskas.

Part of the current problem is that Greece is not being given a clear plan of what is going to happen in the future.

According to Professor Fouskas, the so-called troika of institutions -- the European Central Bank, the International Monetary Fund and the EU – wanted to see that, by 2020, Greece’s austerity plan  would see the economy fully recover and the debt fall to 118% of the GDP. Yet this is not happening. The debt was 117% in 2010/11 and now, after five years of austerity, it is 170%

“Clearly this austerity programme that Greece was asked to deliver to its people has failed to produce any type of growth in Greece to generate jobs and unemployment is almost at 26/27 %,” said Professor Fouskas. “There is a massive humanitarian crisis in Greece. The hospitals cannot cope with emergencies, there are soup kitchens around major urban centres. This is unacceptable in a European country. The minimum wage is 420 Euros per month. This is a Bosnian wage.”

Notes to Editors

The University of East London (UEL) is a global learning community with students from over 120 countries world-wide. Our vision is to achieve recognition, both nationally and internationally, as a successful and inclusive regional university proud of its diversity, committed to new modes of learning which focus on students and enhance their employability, and renowned for our contribution to social, cultural and economic development, especially through our research and scholarship. We have a strong track-record in widening participation and working with industry.