Greek voters rejected a financing plan that would have provided funds for the debt-ridden country in exchange for austerity measures such as pension cuts. Sixty-one percent voted against the plan while 38.7% voted yes.
"Austerity programs over the last five years pushed a third of the Greek population under the poverty line," said Eric LeCompte, executive director of the religious development organization Jubilee USA. "The Greek people voted in large numbers for debt relief."
Greece and its lenders will now need further negotiations to reach a financing agreement. European leaders meet this week to discuss next steps. Greece owes 0 billion in total debt. It missed a 1.5 billion euro payment to the International Monetary Fund (IMF) on June 30. Approximately 7 billion euros in payments are due in July. The IMF stated in a report this week that any new agreement between Greece and its lenders should include debt relief.
"Greece is the most heavily indebted country in Europe," LeCompte noted. "I agree with the International Monetary Fund that Greece needs serious debt relief and needs to extend other debt payments into the future."
Greece implemented austerity measures as part of emergency financing agreements with the European Union, the IMF and the European Central Bank in 2010 and 2012. The new financing plan Greek voters rejected included pension cuts and other austerity provisions.
"Austerity in exchange for financing doesn't work. It's like treating an injured person with beatings," LeCompte stated. "Unless we establish a global bankruptcy process for countries, we'll continue to see more situations like Greece around the world."
Read the IMF's paper, Greece: Preliminary Draft Debt Sustainability Analysis.
Jubilee USA Network is an alliance of more than 75 US organizations and 400 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than 0 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org
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