Cancel Greek debt, Jeremy Corbyn urges PM

The Labour leadership contender Jeremy Corbyn is among 19 Labour MPs who have called on David Cameron to take steps with other European leaders to cancel Greece’s debt as a “signal to the banks and financiers that we won’t keep bailing them out for reckless lending”.

A letter, published in the Guardian, was also signed by the Trades Union Congress and Unite general secretaries and MPs including Diane Abbott, who is standing for the party’s nomination to be London mayor, Michael Meacher and John McDonnell.

“We call on David Cameron to support the organisation of a European conference to agree debt cancellation for Greece and other countries that need it, informed by debt audits and funded by recovering money from the banks and financial speculators who were the real beneficiaries of bailouts,” the letter reads.

“We believe there must be an end to the enforcing of austerity policies that are causing injustice and poverty in Europe and across the world,” it says. “We urge the creation of UN rules to deal with government debt crises promptly, fairly and with respect for human rights, and to signal to the banks and financiers that we won’t keep bailing them out for reckless lending.”

Corbyn, the MP for Islington North and a key figure on the left of the Labour party, is vying with Andy Burnham, Yvette Cooper and Liz Kendall to become the party’s leader. Bookmakers say he is the least likely to win the contest, but he has said he is running to ensure the anti-austerity argument is heard.

Corbyn, who opposed the decision to go to war in Iraq, has defied his party’s whip 284 times since 2005.

“There is an escalating crisis of Greek society,” he said. “There is no sane solution to the situation in Greece that involves repaying this debt. The only sensible way forward is to cancel the Greek debt – or at least substantial swaths of it – and for the international community to support Greece’s democratically elected government to rebuild its society and its economy.“I ask my fellow Labour leadership candidates to echo this call to the prime minister, and for him to heed this call. It is in our own interests to do so.”

The Green MP Caroline Lucas, also a signatory, will attend an event in Trafalgar Square on Monday evening organised by the Greece Solidarity Campaign to call for an end to imposed austerity in Greece.

“Austerity in Greece has been a profound failure, in both human and economic terms. Poverty and unemployment have skyrocketed while government debt as a proportion of GDP has grown by over 40%,” said Lucas.

“It’s time that European governments think again about how to tackle the crisis in Greece. A first step, which I’m urging David Cameron to support, is to bring together a European debt conference based on what happened in 1953 to help Germany’s economy recover after the war.”

Lucas said Greece’s social fabric could not take more public sector spending cuts before it was torn apart. “It’s time for Europe’s leaders, including David Cameron, to stand up for democracy and back a credible solution to Greece’s dire problems,” she said.

The Greek government announced on Sunday night that it would be forced to close the country’s banks after the European Central Bank (ECB) froze the liquidity lifeline that has kept them afloat during a six-month run on deposits.

On Friday, Greece’s prime minister, Alexis Tsipras, called a snap referendum on the last offer tabled by the country’s creditors before the negotiations broke down. The referendum will take place on Sunday.