We analyze multiscale Galerkin methods for strongly elliptic boundary integral equations of order zero on closed surfaces in $R^3$. Piecewise polynomial, discontinuous multiwavelet bases of any polynomial degree are constructed explicitly. We show that optimal convergence rates in the boundary energy norm and in certain negative norms can be achieved with "compressed" stiffness matrices containing $O(N({\log N})^2)$ nonvanishing entries ...