Economy

Why Greek Debt Is Also An Environmental Time Bomb

Kozani's coal mine in northern Greece
Kozani's coal mine in northern Greece
Stefano Balbi*

Greeks are used to making history, and they're at it again. What will last month's election victory of Alexis Tsipras and his anti-austerity Syriza party mean for the future beyond Greece? And more specifically, could it mark a turning point for the urgent global issue of environmental change?

A not-so-subtle fil rouge exists between economic and ecological debts. Too long blinded by the paradigm of economic growth, modern society has failed to see this connection. But now, the situation in Greece may be able to help a wider public reconnect the dots.

The changing global environmental situation is not only about climate change â€" currently a dead-end debate. A crucial study on planetary boundaries from the Stockholm Resilience Centre has demonstrated how economies have led societies to cross several other critical environmental thresholds: for example, biodiversity losses and nitrogen pollution. Others, fast approaching, include ocean acidification, land conversion to cropland, water consumption and phosphorus pollution.

If dimensions such as ozone depletion, thanks to a working international environmental treaty, are under control, others are not yet fully quantified, and don't look good. This is the case with the concentration of aerosols in the atmosphere and with toxic substances (such as plastic) in the environment. Any of these boundaries, once crossed, imply abrupt changes in Earth-system processes, changes that could put our civilization as we know it at risk.

Why are human economies crossing these boundaries? In a nutshell, economies need to consume environmental resources to grow. Even though some neoliberal economic research is attempting to prove that growth can be decoupled from natural resource consumption through innovation, nobody has offered any empirical data to prove it. The reason is simple: They can't. As Joseph Stiglitz famously said, "The invisible hand simply doesn't exist." If it existed, it would be giving us the middle finger by now. We have to face the fact that "green growth" is another fancy buzzword, coined to perpetuate the neoliberal agenda.

Our technology is indeed improving efficiency and therefore reducing some key natural resources consumption. However, we are also increasing our absolute consumption with the help of such factors as programmed obsolescence and population growth.

Why does every government need to pursue economic growth, at any cost and with no end in sight? Even in countries where a solid state is clearly physiological, strategies were devised to keep the dictatorship of growth alive. For example, European countries such as Italy, Spain and Britain recently included prostitution and illegal drugs in their national accounts for the first time, in order to meet "international standards" for measuring economic performance.

Coal mine in Kozani, northern Greece â€" Photo: Francesco Anselmi/Contrasto

The reasons why countries succumb to the dictatorship of growth vary, but two stand out, and they both relate to public spending. First, growth is a substitute for income equality. As long as a country's economy is growing, there's hope for a widespread rise in wealth and thus no need for a fair distribution of resources. Public expense doesn't need to be high because public services can be supplied by the private sector and high levels of inequality are tolerated by the population. Secondly, growth makes sovereign debt sustainable. As long as a country's economy is growing, that country demonstrates it can pay back its creditors. So a country with a strong welfare state, which needs to borrow money to keep the public services functioning, is obliged to keep growing; otherwise public expenses need to be cut â€" or it could become what we can call a debt slave.

The making of a debt slave

How is debt slavery created? Here's a simplified storyline. First, an economy starts growing too slowly. This will eventually happen to any economy according to the basic laws of physics, but fluctuations happen due to unpredictable economic or geopolitical factors. At that point, the amount of national debt, and who owns it, become crucial. If debt is very high compared to the national balance, and mainly owned by international players, the situation becomes dangerous: debt, initially created to finance a welfare state, becomes an unbearable burden. Organizations such as the World Bank and International Monetary Fund start to point fingers at inefficiencies, corruption and unnecessary government expenses.

I'm not arguing that corruption doesn't exist, or that government efficiency shouldn't be improved. I'm saying that this argument is the hook for debt slavery.

At that point, a government can play the devaluation card by injecting money in the market at the cost of inflation, but it will probably be forced to dismantle the welfare state and sell its pieces to the private sector. Then the financial market, led by globalized investment banks whose aim is skyrocketing interest rates, jump on the prey.

Now the sovereign debt has a very bad outlook, interest rates have increased considerably and the country's debt is even more expensive than before. There's no way for the government to calm down the creditors, because they know that it would be impossible to pay back all the debt, even by selling all public assets. The country is at the mercy of international creditors, fully debt-enslaved. Any government in such a situation would sign any agreement with the international financial institutions just to survive.

Common refrain

This short tale may sound familiar to most readers in their fifties. Ask Bruce Cockburn why he wrote this expand=1] song during the 1980s. In those times there were still social movements asking for the debt cancellation of African countries. Nowadays, while Western creditors have not yet given up on Africa, most of the continent is basically being "land-grabbed" by China.

The novelty here is simply that the debt has traveled northward. The European PIIGS (Portugal, Italy, Ireland, Greece, Spain) countries have all been under financial pressures since the 2008 economic crisis, but Greece is the true guinea pig of the so-called Troika, having lost any monetary or economic sovereignty. The consequences are well known, and include the rise of radical right and left parties. To different extents this has been happening in most of the southern European countries. The resulting parties incarnate the bottom-up expansion of a movement of self-protection of the southern European people, especially from the disappearing middle classes.

In Kozani, northern Greece â€" Photo: Francesco Anselmi/Contrasto

Last month, the left-wing Syriza party won the Greek election under the mandate of renegotiating the sovereign debt. Similar situations are growing in Spain (Podemos) and Italy (Five Star Movement). Surprising many, Greek Prime Minister Alexis Tsipras appointed a well-prepared Finance Minister Yanis Varoufakis, to implement the economic plan the party ran with. One of his first proposals â€" swapping the debt held by its Eurozone creditors for bonds with payments linked to economic growth â€" can be the first move for cracking the debt-enslaving mechanism. Although most neoliberal economic analysts won't agree, if the Greeks continue standing boldly as they are doing, this option could become the only viable way to avoid breaking the European (monetary) Union. This is a cost that nobody â€" and especially the European Central Bank, as shown by Mario Draghi's latest actions â€" is willing to pay. Furthermore, many mainstream economists â€" such as the 18 who recently wrote a letter to the Financial Times â€" are likely to accept the idea, on the basis that it could supply a powerful incentive to pursue pro-growth policies.

On the contrary, any scientist who has understood the work of Nicholas Georgescu-Roegen knows very well that growth is no longer the path to improve society. Growth is actually responsible for the global environmental changes that we are experiencing. The only way to stop it is to escape from the labyrinth of debt. The "Greek job" is truly an elegant way to unveil this perverse mechanism.

There is a chance â€" a small one â€" that a new Trojan horse will succeed in scratching the surface of a (neoliberal) wall built on the dictatorship of debt, the speculations of financial markets on the nations, the pursuit of growth at all costs and the indiscriminate consumption of natural resources.

*Stefano Balbi is a researcher at the Basque Centre For Climate Change (BC3). The views expressed here are his own and do not represent the views of the BC3

Francesco Anselmi is a photographer with the Contrasto photo agency

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Green

Ecological Angst In India, A Mining Dumpsite As Neighbor

Local villagers in western India have been forced to live with a mining waste site on the edge of town. What happens when you wake up one day and the giant mound of industrial waste has imploded?

The mining dumpsite is situated just outside of the Badi village in the coastal state of Gujarat

Sukanya Shantha

BADI — Last week, when the men and women from the Bharwad community in this small village in western India stepped out for their daily work to herd livestock, they were greeted with a strange sight.

The 20-meter-high small hill that had formed at the open-cast mining dumpsite had suddenly sunk. Unsure of the reason behind the sudden caving-in, they immediately informed other villagers. In no time, word had traveled far, even drawing the attention of environment specialists and activists from outside town.

This mining dumpsite situated less than 500 meters outside of the Badi village in the coastal state of Gujarat has been a matter of serious concern ever since the Gujarat Power Corporation Limited began lignite mining work here in early 2017. The power plant is run by the Power Gujarat State Electricity Corporation Limited, which was previously known as the Bhavnagar Energy Company Ltd.

Vasudev Gohil, a 43-year-old resident of Badi village says that though the dumping site is technically situated outside the village, locals must pass the area on a daily basis.


"We are constantly on tenterhooks and looking for danger signs," he says. Indeed, their state of alert is how the sudden change in the shape of the dumpsite was noticed in the first place.

Can you trust environmental officials?

For someone visiting the place for the first time, the changes may not stand out. "But we have lived all our lives here, we know every little detail of this village. And when a 150-meter-long stretch cave-in by over 25-30 feet, the change can't be overlooked," Gohil adds.

This is not the first time that the dumpsite has worried local residents. Last November, a large part of the flattened part of the dumpsite had developed deep cracks and several flat areas had suddenly got elevated. While the officials had attributed this significant elevation to the high pressure of water in the upper strata of soil in the region, environment experts had pointed to seismic activities. The change is evident even today, nearly a year since it happened.

It could have sunk because of the rain.

After the recent incident, when the villagers raised an alarm and sent a written complaint to the regional Gujarat Pollution Control Board, an official visit to the site was arranged, along with the district administration and the mining department.

The regional pollution board officer Bhavnagar, A.G. Oza, insists the changes "aren't worrisome" and attributes it to the weather.

"The area received heavy rain this time. It is possible that the soil could have sunk in because of the rain," he tells The Wire. The Board, he says, along with the mining department, is now trying to assess if the caving-in had any impact on the ground surface.

"We visited the site as soon as a complaint was made. Samples have already been sent to the laboratory and we will have a clear idea only once the reports are made available," Oza adds.

Women from the Surkha village have to travel several kilometers to find potable water

Sukanya Shantha/The Wire

A questionable claim

That the dumpsite had sunk in was noticeable for at least three days between October 1 and 3, but Rohit Prajapati of an environmental watchdog group Paryavaran Suraksha Samiti, noted that it was not the first time.

"This is the third time in four years that something so strange is happening. It is a disaster in the making and the authorities ought to examine the root cause of the problem," Prajapati says, adding that the department has repeatedly failed to properly address the issue.

He also contests the GPCB's claim that excess rain could lead to something so drastic. "Then why was similar impact not seen on other dumping sites in the region? One cannot arrive at conclusions for geological changes without a deeper study of them," he says. "It can have deadly implications."

Living in pollution

The villagers have also accused the GPCB of overlooking their complaint of water pollution which has rendered a large part of the land, most importantly, the gauchar or grazing land, useless.

"In the absence of a wall or a barrier, the pollutant has freely mixed with the water bodies here and has slowly started polluting both our soil and water," complains 23- year-old Nikul Kantharia.

He says ever since the mining project took off in the region, he, like most other villagers has been forced to take his livestock farther away to graze. "Nothing grows on the grazing land anymore and the grass closer to the dumpsite makes our cattle ill," Kantharia claims.

The mining work should have been stopped long ago

Prajapati and Bharat Jambucha, a well-known environmental activist and proponent of organic farming from the region, both point to blatant violations of environmental laws in the execution of mining work, with at least 12 violations cited by local officials. "But nothing happened after that. Mining work has continued without any hassles," Jambucha says. Among some glaring violations include the absence of a boundary wall around the dumping site and proper disposal of mining effluents.

The mining work has also continued without a most basic requirement – effluent treatment plant and sewage treatment plant at the mining site, Prajapati points out. "The mining work should have been stopped long ago. And the company should have been levied a heavy fine. But no such thing happened," he adds.

In some villages, the groundwater level has depleted over the past few years and villagers attribute it to the mining project. Women from Surkha village travel several kilometers outside for potable water. "This is new. Until five years ago, we had some water in the village and did not have to lug water every day," says Shilaben Kantharia.

The mine has affected the landscape around the villages

Sukanya Shantha/The Wire

Resisting lignite mining

The lignite mining project has a long history of resistance. Agricultural land, along with grazing land were acquired from the cluster of 12 adjoining villages in the coastal Ghogha taluka between 1994 and 1997. The locals estimate that villagers here lost anything between 40-100% of their land to the project. "We were paid a standard Rs 40,000 per bigha," Narendra, a local photographer, says.

The money, Narendra says, felt decent in 1994 but for those who had been dependent on this land, the years to come proved very challenging. "Several villagers have now taken a small patch of land in the neighboring villages on lease and are cultivating cotton and groundnut there," Narendra says.

They were dependent on others' land for work.

Bharat Jambucha says things get further complicated for the communities which were historically landless. "Most families belonging to the Dalit or other marginalized populations in the region never owned any land. They were dependent on others' land for work. Once villagers lost their land to the project, the landless were pushed out of the village," he adds. His organization, Prakrutik Kheti Juth, has been at the forefront, fighting for the rights of the villages affected in the lignite mining project.

In 2017, when the mining project finally took off, villagers from across 12 villages protested. The demonstration was disrupted after police used force and beat many protesters. More than 350 of them were booked for rioting.

The villagers, however, did not give up. Protests and hunger strikes have continued from time to time. A few villagers even sent a letter to the President of India threatening that they would commit suicide if the government did not return their land.

"We let them have our land for over 20 years," says Gohil.

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