Texto publicado a 18 de Junho pelo ministro grego das finanças, Yanis Varoufakis, no seu blog
http://yanisvaroufakis.eu/author/yanisv/ - Vale a pena ler
Greece’s Proposals to End the Crisis: My intervention
at today’s Eurogroup
Posted on June
18, 2015 by yanisv
The
only antidote to propaganda and malicious ‘leaks’ is transparency. After so
much disinformation on my presentation at the Eurogroup of the Greek
government’s position, the only response is to post the precise words uttered
within. Read them and judge for yourselves whether the Greek government’s
proposals constitute a basis for agreement.
Colleagues,
Five
months ago, in my very first Eurogroup intervention, I put it to you that the
new Greek government faced a dual task:
We had
to earn a precious currency without depleting an important capital good.
The
precious currency we had to earn was a sense of trust,
here, amongst our European partners and within the institutions. To mint that
precious currency would necessitate a meaningful reform package and a credible
fiscal consolidation plan.
As
for the important capital we could not afford to
deplete, that was the trust of the Greek people who would have to swing behind
any agreed reform program that will end the Greek crisis. The prerequisite for
that capital not to be depleted was, and remains, one: tangible hope that the
agreement we bring back with us to Athens:
§ is
the last to be hammered out under conditions of crisis;
§ comprises
a reform package which ends the 6-year-long uninterrupted recession;
§ does
not hit the poor savagely like the previous reforms did;
§ renders
our debt sustainable thus creating genuine prospects of Greece’s return to the
money markets, ending our undignified reliance on our partners to repay the
loans we have received from them.
Five
months have gone by, the end of the road is nigh, but this finely balancing act
has failed to materialise. Yes, at the Brussels Group we have come close. How
close? On the fiscal side the positions are truly close, especially for 2015.
For 2016 the remaining gap amounts to 0.5% of GDP. We have proposed parametric
measures of 2% versus the 2.5% that the institutions insist upon. This 0.5% gap
we propose to bridge over by administrative measures. It would be, I submit to
you, a major error to allow such a minuscule difference to cause massive damage
to the Eurozone’s integrity. Convergence had also been achieved on a wide range
of issues.
Nevertheless,
I will not deny that our proposals have not instilled in you the trust that you
need. And, at the same time, the institutions’ proposals that Mr Juncker
conveyed to PM Tsipras cannot engender the hope that our citizens need. Thus,
we have come close to an impasse.
At
this, the 11th hour, stage of the negotiations, before
uncontrollable events take over, we have a moral duty, let alone a political
and an economic one, to overcome this impasse. This is no time for
recriminations and accusations. European citizens will hold collectively
responsible all those of us who failed to strike a viable solution.
Even
if some, misguided by rumours that a Greek exit may not be so terrible or that
it may even benefit the rest of the Eurozone, are resigned to such an event, it
is an event that will unleash destructive powers no one can tame. Citizens from
all over Europe will target not the institutions but their elected finance
ministers, their Prime Ministers and Presidents. After all, they elected us to
promote Europe’s shared prosperity and to avoid pitfalls that may harm Europe.
Our
political mandate is to find an honourable, workable compromise. Is it so
difficult to do so? We do not think so. A few days ago Olivier Blanchard, the
IMF’s Chief Economist published a piece entitled ‘Greece: A Credible Deal Will
Require Difficult Decisions by All Sides.’ He is right, the three operative
words being ‘by all sides’. Dr Blanchard added that: “At the core of the
negotiations is a simple question. How much of an adjustment has to be made by
Greece, how much has to be made by its official creditors?”
That
Greece needs to adjust there is no doubt. The question, however, is not how
much adjustment Greece needs to make. It is, rather, what kind of adjustment.
If by ‘adjustment’ we mean fiscal consolidation, wage and pension cuts, and tax
rate increases, it is clear we have done more of that than any other country in
peacetime.
§ The
public sector’s structural, or cyclically adjusted, fiscal deficit turned into
a surplus on the back of a ‘world record beating’ 20% adjustment
§ Wages fell by 37%
§ Pensions
were reduced by up to 48%
§ State employment diminished by 30%
§ Consumer
spending was curtailed by 33%
§ Even
the nation’s chronic current account deficit dropped by 16%.
No
one can say that Greece has not adjusted to its new, post-2008, circumstances.
But what we can say is that gigantic adjustment, whether necessary or not, has
produced more problems than it solved:
§ Aggregate
real GDP fell by 27% while nominal GDP continued to fall quarter-in-quarter-out
for 18 quarters non-stop to this day
§ Unemployment skyrocketed to 27%
§ Undeclared labour reached 34%
§ Banks
are labouring under non-performing loans that exceed 40% in value
§ Public
debt has exceeded 180% of GDP
§ Young
well-qualified people are abandoning Greece in droves
§ Poverty,
hunger and energy deprivation have registered increases usually associated with
a state at war
§ Investment
in productive capacity has evaporated.
So,
the first part of Dr Blanchard’s question “how much of an adjustment has to be
made by Greece?” needs to be answered: Greece needs a great deal of adjustment.
But not of the same kind that we have had in the past. We need more reforms not more cutbacks. For instance,
§ We
need to adjust to a new culture of paying taxes, not to higher VAT rates that
strengthen the incentive to cheat and drive law-abiding citizens into greater
poverty
§ We
need to make the pension system sustainable by eradicating unpaid labour,
minimising early retirements, eliminating pension fund fraud, boosting employment
– not by eradicating the solidarity tranche from the lowest of the low of
pensions, as the institutions have demanded, thus pushing the poorest of the
poor into greater poverty and conjuring up massive popular hostility against
another set of so called reforms
In
our proposals to the institutions we have offered:
§ An
extensive (but optimised) privatisation agenda spanning the period 2015-2025
§ The
creation of a fully independent Tax and Customs Authority (under the aegis and
supervision of Parliament)
§ A
Fiscal Council that oversees the state budget
§ A
short-term program for limiting foreclosures and managing non-performing loans
§ Judicial
and civil procedure code reforms
§ Liberalising
several product markets and services (with protections for middle class values
and professions that are part and parcel of society’s fabric)
§ Elimination of many nuisance charges
§ Public
administration reforms (introducing proper staff evaluation systems, reducing
non-wage costs, modernising and unifying public sector payrolls).
In
addition to these reforms the Greek Authorities have engaged the Organisation
of Economic Cooperation and Development (OECD) to help Athens design, implement
and monitor a second series of reforms. Yesterday I met with the OECD’s
Secretary General Mr Angel Gurria and his team to announce this joint reform
agenda, complete with a specific roadmap:
§ A
major Anti-corruption Drive and relevant institutions to support it –
especially in the area of procurement
§ Liberalising
the construction sector, including the market and standards of construction
materials
§ Wholesale trade liberalisation
§ Media
– electronic and press code of practice
§ One-Stop
Business Centres that eradicate the bureaucratic impediments to doing business
in Greece
§ Pension
System Reform – where the emphasis is on a proper, long-term, actuarial study,
the phasing out of early retirements, the reduction in the operating costs of
the pensions funds, pension fund consolidation – rather than mere pension cuts.
Yes,
colleagues, Greeks need to adjust further. We desperately need deep reforms.
But, I urge you to take seriously under consideration this important difference
between:
§ reforms
that attack parasitic, rent-seeking behaviour or inefficiencies, and
§ parametric
changes that jack up tax rates and reduce benefits to the weakest.
We
need a lot more of the real reforms and a lot less of the parametric type.
Much
has been said and written about our ‘backtracking’ on labour market reform and
our determination to re-introduce protection for waged workers through
collective bargaining agreements. Is this some left-wing fixation of ours that
jeopardises efficiency? No, colleagues, it is not. Take for example the plight
of young workers in several chain stores who get fired as they approach their
24th birthday so that the employer hires younger
workers in their place to avoid paying them the normal minimum wage which is
lower for employees under the age of 24. Or take the case of employees who are
hired part time for 300 euros a month, made to work full time and threatened
with dismissal if they complain. Without collective bargaining, these abuses
abound with ill effects on competition (as decent employers compete at a
disadvantage with unscrupulous ones) but also with ill effects on pension funds
and public revenues. Does anyone seriously think that the introduction of
well-thought out collective bargaining, in collaboration with the ILO and the
OECD, constitutes ‘reform reversal’, an example of ‘backtracking’?
Turning
briefly to pensions again, much has been made of the fact that pensions account
for more than they did in the past; as much as 16% of GDP. But consider this:
Pensions have shrunk by 40% and the number of pensioners is stable. So,
expenditure on pensions has fallen, not risen. That 16% of GDP is due not to
spending more on pensions but, instead, to the dramatic drop in GDP which
brought with it a similarly dramatic reduction in contributions due to the fall
in employment and the rise of undeclared labour.
Our
alleged backtracking on ‘pension reforms’ is that we have suspended the further
reduction in pensions that have already lost 40% of their value when the prices
of the goods and services that pensioners need, e.g. pharmaceuticals, have
hardly moved. Consider this relatively unknown fact: Around 1 million families
survive today on the meagre pension of a grandfather or a grandmother as the
rest of the family members are unemployed in a country where only 9% of the
unemployed receive any unemployment benefit. Cutting that one, solitary pension
is tantamount to turning a family into the streets.
This
is why we keep telling the institutions that, yes, we need pension reform but,
no, you cannot just lob off 1% of GDP from pensions without causing massive,
fresh misery and a fresh recessionary round as this 1.8 billion multiplied by a
large fiscal multiplier (up to 1.5) is withdrawn from the circular flow of
income. If large pensions still existed, whose curtailment would make a fiscal
difference, we would do it. But the distribution of pensions is so compressed
that savings of such a magnitude would have to eat into the pensions of the
poorest. It is for this reason, I suppose, that the institutions are asking us
to eliminate the solidarity pensions supplement to the poorest of the poor. And
it is for this reason that we counter-propose proper reforms: a drastic
reduction, almost elimination, of early retirements, consolidation of pension
funds and interventions in the labour market that reduce undeclared labour.
Structural
reforms promote growth potential. But mere cutbacks in an economy like Greece’s
promote recession. Greece must adjust by introducing genuine reforms. But at
the same time, going back to Dr Blanchard’s answer, the institutions need to
adjust their definition of growth-enhancing reforms – to acknowledge that
parametric cuts and tax hikes are not reforms and that, at least in the case of
Greece, they have undermined growth.
Colleagues
have remarked in the past, and may do so again, that our pensions are too high
compared to their older people and that it is unacceptable for the Greek
government to expect them to foot our pension bill. Let me be clear on this: We
are never going to ask you to subsidise our state, our wages, our pensions, our
public expenditure. The Greek state lives within its means. Over the past five
months we have even managed, despite zero market access and zero disbursements,
to repay our creditors. We intend to keep doing so.
I
understand that there are concerns that our government may slip into a primary
deficit again and that this is the reason the institutions are pressing us to
accept large VAT rises and large pension cuts. While it is our view that the
announcement of a viable agreement will suffice to boost economic activity sufficiently
to produce a healthy primary surplus, I understand perfectly well that our
creditors and partners may have cause to be sceptical to want safeguards; an
insurance policy against our government’s possible slide into profligacy. This
is what lies behind Dr Blanchard’s call for the Greek government to offer
“truly credible measures.” So here comes an idea. A “truly credible measure”.
Instead
of arguing over half a percentage point of measures (or on whether these tax
measures will have to all of the parametric type or not), how about a deeper,
more comprehensive, permanent reform? An automated hard deficit brake that is
legislated and monitored by the independent Fiscal Council we and the
institutions have already agreed upon. The Fiscal Council would monitor the
state budget’s execution on a weekly basis, issue warnings if a minimum primary
surplus target looks like being violated and, at some point, trigger automated
across the board, horizontal, reductions in all outlays in order to prevent the
slide below the pre-agreed threshold. That way a failsafe system is in place
that ensures the solvency of the Greek state while the Greek government retains
the policy space it needs in order to remain sovereign and able to govern
within a democratic context. Consider this to be a firm proposal that our
government will implement immediately after an agreement.
Given
that our government will never again need to borrow from your taxpayers or from
the taxpayers standing behind the IMF, there is no sense in a debate between
member-states that compete on whose pensioners are poorer, instigating a
race-to-the-bottom. Instead, the debate moves on to debt repayments. How large
should our primary surpluses be? Does anyone seriously believe that the growth
rate is independent of the primary target set? The IMF understands fully that
the two numbers are linked endogenously and that this is the reason why
Greece’s public debt must be looked at at once.
Our
large debt overhang should be thought of as a large unfunded tax liability. While it is true that the
EFSF and GLF slices of our debt are long-dated and the interest rate is not
large, the Greek state’s unfunded tax liability,
our debt, features a lumpy component that impedes investment and recovery
today. I am referring here to the 27 billion of SMP bonds still held by the
ECB. This is a short-dated unfunded liability that potential investors in
Greece take a look at it and turn back because they can see the funding gap
this part of the debt creates instantly and because they recognise that this
lump of 27 billion on the ECB books stop Greece from taking advantage of the
ECB’s quantitative easing at the very moment when this program is unfolding and
is reaching its maximum capacity to come to the aid of countries buffeted by deflation.
It is a cruel irony that the country most afflicted by deflation is the one
that is excluded from the ECB’s anti-deflation remedy. And it is excluded
because of this 27 billion lump.
Our
proposal on this front is simple, efficient and mutually beneficial. We propose
no new monies, not one fresh euro, for our state. Imagine the following
three-part agreement to be announced in the next few days:
Part 1: Deep
reforms, including the automated hard deficit brake that I mentioned.
Part
2: A rationalisation of Greece’s debt repayment schedule
along the following lines. First, to effect an SMP
BUY-BACK Greece acquires a new loan from the ESM, then
purchases the SMP bonds back from the ECB and retires them. To underpin this
loan, we agree that the deep reform agenda is the common conditionality for
successfully completing the current program and for
securing the new ESM arrangement that comes into operation immediately
afterwards and runs concurrently with the continuing IMF program until the end
of March 2016. Short-term funding relies on the outstanding disbursement from
the current program and medium to long term funding is completed by the return
of the SMP profits, coming up to 9 billion out of the 27 remaining billions,
which go into an escrow account to be used in order to meet Greece’s repayments
to the IMF.
Part 3: An
investment program for kick-starting the Greek economy funded by the Juncker
Plan, the European Investment Bank – with which we are in talks already – the
EBRD and other partners who will be invited to participate also in conjunction
with our privatization program and the establishment of a development bank that
aims at developing, reforming and collateralizing public assets, including real
estate.
Does
anyone truly doubt that this three-part announcement would dramatically change
the mood, inspire Greeks to work hard on hope of a better future, invite
investors to a country whose asset prices have fallen so dramatically, and give
confidence to Europeans that Europe can, even at the 11th hour, do the right thing?
Colleagues,
at this juncture it is dangerously easy to think that nothing can be done. Let
us not fall prey to this state of mind. We can forge a good agreement. Our
government is standing by, with ideas and with the determination to cultivate
the two forms of trust necessary to end the Greek drama: Your trust in us and
the trust of our people in Europe’s capacity to produce policies that work for,
and not against, them.
