Greece: ‘We won't pay for their crisis’

Stuart Munckton
Green Left Weekly #836

The proposed “bail-out” of the Greek economy by the International Monetary Fund (IMF) and European Union (EU) has set off a huge struggle with worldwide implications.

On May 5, as Greek parliament debated the IMF-EU package, half a million people took over the streets of Athens as part of a nation-wide general strike. It was Greece’s largest demonstration in 30 years.

Police brutally attacked the protests, firing tear gas that “transformed Athens into a huge gas chamber”, as a May 5 statement by the Communist Organisation of Greece put it. Predictably, some anarchist youth fought back with molotov cocktails, providing the pretext for further assaults on the crowd.


Outside the office of Marfin Bank in Athens, a molotov cocktail thrown by an unknown person set the building alight. Three bank workers died in the blaze.

The Greek PASOK government tried to exploit the deaths to diffuse the protests, but the anger was too great.

The bank workers’ union released a statement that, while condemning the burning of the bank, placed the blame for the deaths at the feet of the government, police and bank managers (who not only had failed to provide basic fire safety for the building, but threatened workers who wished to go home with the sack). The union called bank workers out on strike.

Protesters marched again in huge numbers on May 6, as the Greek parliament voted to adopt the austerity package. It is clear the union movement will continue to resist its implementation, and further strikes and confrontations are inevitable.

Behind the footage of street fighting and interviews with nervous financial analysts lies a struggle around the key question: who will pay for the global economic crisis — working people or the bankers and capitalists who caused it?

Rarely mentioned in the media is the role of Goldman Sachs in recent years in helping the Greek government (behind the backs of the Greek people now being punished) to hide its real national debt levels by using the sort of dodgy financial practices that helped set off the 2008 financial meltdown.

Also, while Greece’s fiscal deficit is well over EU limits, so are other European nations. Greece’s deficit is a similar percentage of GDP (about 11%) as the US’s. Like so much of the international financial system, the “Greek crisis” has little connection to the real world, but has been manufactured at the gambling tables of high finance.

A May 6 British Morning Star editorial explained: “The latest episode in the Greek crisis was precipitated by yet another capitalist edifice, the ratings agency structure that downgraded Greek debt to junk status — those same ratings agencies that gave AAA ratings to billions of dollars of residential mortgage-backed securities which precipitated the near collapse of the world economy.”

In other words, financial institutions, with a bad track record, declare they are not confident the Greek economy is not in crisis and this lack of confidence causes a crisis in the Greek economy.

You begin to understand why the Greek workers are so unwilling to “take one for the team” when that is how the game is played.

The more powerful European nations are seeking to shift the burden for the crisis onto the weaker ones — starting with Greece.

If the austerity measures are successfully implemented in Greece, workers in other European countries (such as Portugal and Spain) will be the next to have the gun put to their temple.

Understanding this, there have been protests and statements of solidarity with the Greek people fighting the austerity measures by left-wing groups across Europe.

Below, is a slightly abridged May 5 statement by the Committee of the Abolition of Third World Debt (CADTM) international. It has been translated by Christine Pignolle and is reprinted from Links International Journal of Socialist Renewal, Links International Journal of Socialist Renewal.

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Support to the Greek people’s resistance to the dictatorship of creditors!

The new austerity plan, released on May 2 is a disaster for the Greek population: for workers in the private as well as public sector, retired people, or the unemployed. It involves:
• Freezing of wages and retirement pensions in the public sector for five years;
• Suppression of the equivalent of two months of wages for civil servants;
• The main goods and services tax rate to rise to 23%;
• Taxes on fuel, spirits and tobacco have been raised by 10% for the second time within a month;
• Early retirements are prohibited for those under 60;
• The legal age for women’s retirement will be raised from 60 to 65 by 2013;
• The legal age for men’s retirement will depend on life expectancy;
• Forty full years at work (up from 37) will be required to be entitled to a full retirement pension;
• The government will reduce its operating expenditures by €1.5 billion (which means less money for education and health care);
• Public investments will also be reduced by €1.5 billion;
• A new minimum salary for youth and long-term unemployed is set up (the equivalent of the “CPE” rejected by the people of France).

Some measures the financial markets will benefit from include:
• Transport, energy and some services will be opened to privatisation;
• The financial sector will benefit from a fund set up with the help of the EU and the IMF;
• Flexibility of work will be increased;
• Layoffs will become easier;
• The Greek economy is now controlled by the IMF.

Since Greece is part of the euro zone, it can neither devalue its currency nor play on interest rates. Its debt cannot be restructured either since European financial institutions hold two-thirds of it.

These same banks will further borrow from the European Central Bank (ECB) at a 1% rate in order to make loans to governments. Euro zone countries will lend on an individual basis to Greece at a rate of 5%.

Rich countries and banks will thus make money off the Greek people. This will increase the public debt of the Greek state so that it can pay back its speculating creditors!

The Greek crisis is an illustration of the danger represented by the IMF, EU and financial markets.

Rightly disparaged for its disastrous structural adjustment programs, the IMF resurfaces in the euro zone after wrecking the economy of several Eastern European countries in the past two years. It uses the same methods as before, adapted to the same partners: financial markets and transnational corporations.

The EU and ECB do not serve the peoples of Europe, but banks and financial institutions. After precipitating the Greek crisis via rating agencies paid by major US banks, the financial markets try to make even larger profits from their speculative strategies.

The PASOK government, the European Union and the IMF provide them with a golden opportunity.

Behind the financial industry we find manufacturing, trading and services transnational companies.

This financial industry is part of a greater whole. This unbridled speculation that chokes deprived populations has only been possible for two major reasons: successive deregulation of financial markets since the 1980s and the choice made by the management of large companies to “invest” their profits in speculation instead of production and employment.

Over 25 years, wage earners’ respective share of gross domestic product in developed countries has diminished by an average of about 10%. This trend is the main cause of the economic and financial crisis we experience today.

Successive Greek governments, like others in the developed world, also bear a heavy part of responsibility in the increasing public debts. Tax policies favourable to the rich and corporations have significantly reduced budget revenues and increased public deficits, leading states to gather more debt.

Those who organised the crisis are spared while the people must pay the bill.

In the PASOK-EU-IMF austerity plan imposed on the Greek people, there is no measure whatsoever to counter corporate tax evasion. The so-called solutions set forward by PASOK, the EU and the IMF push Greece towards an ever-deeper crisis.

A minimal recession has already been predicted for 2010. Small craftspeople and traders as well as small companies will be faced with bankruptcy. Unemployment will explode, and the purchasing power of lower-and middle-classes will plummet.

Inequalities will increase and basic human rights (access to water, energy, health care, education) are under threat for the more deprived portion of the population.

The Greek people’s anger is ours too. CADTM fully supports all protests against the austerity plan.

Alternative solutions are possible!

• The repayment of Greece’s public debt must be immediately suspended and a public audit must be organised to determine whether it is legitimate.
• Cancellation measures must be taken and the financial return on the debt must be taxed at the maximum income tax rate.
• Tax measures must be taken immediately to restore tax justice and fight tax evasion.

Almost all Greek corporations declare their benefits in countries with a more favourable tax system (such as Cyprus) or hide them in tax havens. The Orthodox Church still benefits from exorbitant tax cuts on its movable and immovable property.

There is money in Greece, but not where the austerity plan wants to find it!

CADTM declares its solidarity with the Greek people. Solidarity demonstrations are needed throughout Europe. Greece is under attack today, but tomorrow it will be Portugal, Ireland or Spain, and the day after maybe all the euro zone will be affected — including its “richer” countries.

We rejoice at the first protests that have occurred outside Greek embassies. We must go further!

The whole European social movement must stand next to the Greek people! European populations can only win from a common protest!