THE SOVEREIGN DEBT crisis that befell Southern European countries in the wake of the private debt crisis that triggered the collapse of the American financial system in 2008 threw a harsh light on the functioning of contemporary monetary institutions. After more than two centuries of denial, since Jeremy Bentham hammered the final nails into the coffin of early modern usury laws and dispelled the last remnants of religious taboo on money lending, debt started being seen again as a moral and political phenomenon. For the modern credit industry to rise, debt had to be depoliticised. Now, the suffering of indebted nations, forced as they have been to make every sacrifice in the name of debt repayment, made plain the political nature of credit. Disguised as a mere economic arrangement between self-interested actors, the relationship between lenders and borrowers turned out to be an asymmetrical, unforgiving and exploitative power relation.

The sheer brutality of such a political entanglement could be observed in the particular case of Greece, and in the relentless silencing by creditors and their lackeys of any demand for relief. Debt, it seems, functioned as some kind of categorical imperative, foreclosing all possible alternatives. Expressing her doubts regarding the restructuring of the Greek debt, for instance, the former International Monetary Fund (IMF) chairwoman, Christine Lagarde, thus declared: ‘A debt is a debt, and it is a contract.’ The tautological nature of her assertion only served as a reminder of the powerlessness of debtor countries. Democracy, in these lands, was effectively shut down, as the tragic fate of the SYRIZA government and of the thunderous result of the Oxi referendum showed. Echoing Lagarde's comments, the then European Commission president, Jean-Claude Juncker, indeed proclaimed the utter inanity of popular will, assuring that there could be ‘no democratic choice against the European treaties’. Not only were debtors tied to an absolutely binding ‘contract’, they also bore politically unshakeable fetters.

In this context, it has been argued that the plight of Greece, in particular, was the direct result of its being a member of the eurozone.