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Michael Spourdalakis: Greek debt caused by tax evasion and lack of investment in real economy

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Toronto. Across Greece today: a general strike and protest in opposition to austerity measures having been passed and new ones about to be passed by the Greek government and Prime Minister Papandreou, austerity measures demanded by the European Union and international banks to deal with the Greek fiscal crisis. Now joining us from Athens and just in from a day of teargas is Michael Spourdalakis. He’s a professor of political sociology and director at the Laboratory of Political Communication and Media Information at the University of Athens. Thanks for joining us, Michael.

PROF. MICHAEL SPOURDALAKIS, UNIVERSITY OF ATHENS: From Athens. Hello. From the battlefield of Constitution Square, in fact.

JAY: Right. So tell us what it was like there today.

SPOURDALAKIS: There was hundreds of thousands of people participated in this mobilization today, a mobilization which reached its peak today after being on the streets and occupying key squares throughout the country, but primarily Constitution Square, downtown Athens, since 25 May. So a general strike was called by the main unions–.

JAY: How successful was the general strike?

SPOURDALAKIS: It was great. The participation, judging from the way the city looked today, it was a great success. Every shop was closed. Every bank was closed. And I mention those two fields, banks and shops, because usually the participation and similar mobilization of banks and of shopkeepers is not all that great.

JAY: Because usually it’s nonunionized workers that go out, not the nonunionized workers.

SPOURDALAKIS: Also the nonunionized workers, and also the new union workers, which do not belong to the main established federation of labor, usually precarious workers, new rank-and-file unions, all these participated in this mobilization, plus all the people who have been protesting for weeks now, every day, against the social consequences of the Stability Pact that the government, Papandreou’s government, signed last May [crosstalk]

JAY: What have been those consequences?

SPOURDALAKIS: Oh, the consequences are dreadful. It’s not only [incompr.] flexibility in labor relation, it’s not only that the security system has changed, has been drastically undermined, but we have a rise of unemployment to around 35 percent. And our standard of living, official measurements are talking about a decline of 20 percent.

JAY: What are some of the other examples of the measures? The goods and services tax is one. What else?

SPOURDALAKIS: First of all, well, there is going to be another decline in wages in the public sector, around another 20 percent. Last year it was between 18 and 20 percent. So there’s another one of 18 percent. Public expenditure is going to be cut. Let me give you a brief example from my field. The cutbacks budget for the University of Athens, not including salaries, was 40 million in 2009. It’s 22 today, for 2011. The rector of the university just last week said that we’re not going to survive beyond December. These are the cuts I’m talking about.

JAY: So what do you say to some of the editorials that are being written in Europe and North America, that the Greeks were living beyond their means, that they weren’t paying enough taxes, that they weren’t producing enough, that the workers had it too good? What’s your answer to that?

SPOURDALAKIS: That’s not quite true. Public expenditure in Greece is not higher than any other European country, than any other advanced capitalist country. It’s around 43 percent or so, I believe. But the state revenues–and these editorials are right–are very low. The reason is that there is a great tax evasion. That’s true. But also, the share of the produced wealth that went to labor, it was very, very, very small, and labor found refuge into borrowing money from the banks. And, of course, the standard of living in the last 20 years, as in every other advanced capitalist country, was risen. At the same time, productivity in various fields didn’t rise, because businesses did not invest. They got the money and they went into speculation, they took the money into offshores, and they got their money and went into luxurious consumption.

JAY: In this new set of measures, is there any effort now to have a serious tax increase on the elite?

SPOURDALAKIS: To do this, you have to have political will, which is not with us. All the measures so far, for the last, say, almost a year and a half, do not stimulate growth at all, and all the measures are for the banks, and they do not benefit either the small businesses or the professionals, which have been irrationally taxed nowadays, from very little taxation to irrationally taxed. Of course, the unemployed, of course, the laborers, but also even larger businesses are not benefiting, because the banks don’t give them any money.

JAY: Alright. Thanks very much for joining us, Michael.

End of Transcript

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Michael Spourdalakis is a professor of political sociology and the Director at the Laboratory of Political Communication and Media Information at the University of Athens. He is currently co-director of the Canadian Studies Center at the University of Athens, and is the editor of The Socialist Register in Greece.