Wed Mar 27, 2024
March 27, 2024

The Greek crisis and the European Union

 

The reduction of Greece’s international credit rating last December was the sign for the liberation of a great speculative wave that let Greece in a state of shock and untied panic all over European Union (EU). 

The problem is that Greece must refinance its debt of 54 billion euros in 2010 and, without cash, the concern over Athens’ ability to accomplish it raised. At the beginning of 2009, Ireland was ready to default on its soaring national debt pile, although they achieved finally to avoid it. Now it is Greece’s turn, but this time they were unable to contain the crisis and the rescue has been made inevitable. So, Greece has opened, 11 years after the implementation of the euro, the first great crisis in the Eurozone and occupied centre stage in the profound crisis that disrupts EU.

Greece lives the abrupt end of a phase of growth leaned on a huge public and private debt and on European loans. A phase on which the most favored have been the German, French and British banks that financed the debts, and the big German (and French) multinationals that seized the Greek market, at the cost of creating an enormous commercial deficit (higher than 10% of his GDP). These companies took advantage of the development of telephonic and energetic sectors of the country and monopolized the renewal of the fleets of taxis and trams, making use of generalized bribes, as in the case of the German Siemens. During this time, the Greek economy has been strongly denationalized, with the telephone company OTE controlled by Deutsche Telecom, the privatization of the national airlines and even the harbors have been sold to the Chinese company Cosco. The Greek bankers and big businessmen gathered enthusiastically to a party that aggravated social inequality in a European state where it was already largely accentuated (80 big ship-owners possess an assets equivalent to all the Greek GDP).

But with the explosion of the world financial crisis everything fell trough, leaving the country unarmed before the European financial capital, while the pillars of the Greek economy – tourism, ships industry and construction – collapsed and Greek banks (whose debts were lowered by rating agencies to the “junk bond” category) were – furthermore, caught in affairs with the Eastern Bloc countries – on the verge of the ruin.

Greece has sunk deeper into recession. In 2009 the GDP decreased 2% resulting in a budget deficit of 12.8%, which raised the Greek public debt to 115% of the GDP (the forecast is 125% in 2010). The interest payment represents already 15% of government revenues and 60% of this debt is grabbed by German, French and British banks, which are creditors of a total debt equivalent to two times the Greek GDP. The recognized unemployment is 10% and it moves forward by leaps and bounds.

The reaction of the European Union

The Greek crisis has placed EU in a limit situation. When Hungary, Rumania or Latvia (members of EU but not of the Eurozone) were about to suspend their debt payments, EU ordered the “rescue” to the International Monetary Fund (IMF), with whom EU worked straight in “adjustment plans” that are pushing these countries to devastation. But Greece is a country of the Eurozone and the delivery of a “rescue” to the IMF would represent not only an enormous discredit to EU, but the intromission of US (through the IMF) in the control of the European Central Bank (ECB) and European public finances.

The German capital (whose banks are the most threatened by a Greek default) knows it is bound to intervene, and that it will do it, what’s more, jumping rules imposed by itself that forbid EU countries and the ECB to “rescue” an associate country in bankruptcy, except for “natural disasters or circumstances that escape to the control of the States”. But they have imposed some draconian conditions for the bailout: it will be granted only if Greece fulfills a brutal adjustment program enforced by EU and if the control of its economy is delivered to EU. It’s worth of note the scandal made by the media due to the fake of Greek accounts (orchestrated by the North American bank Goldman Sachs, in exchange for pocketing 300 million euros), when they were perfectly aware about the facts and when there were many countries, including Germany and France, which turned to the “creative accounting” in the moment they needed to have access to the euro.

The Greek shock plan

The “socialist” government of Yorgos Papandreu who, just a couple of months ago, promised to increase the civil servants' lower wages, turned now into the viceroy of German and French capitalism. The shock plan imposed by EU, and embraced by the Greek Government, represents a brutal impoverishment of the country and is going to cause the sinking of the Greek economy in a profound depression.

The key factor of the plan is a reduction of 4% of the budget deficit in 2010, aiming to arrive at a deficit of 2.8% of the GDP in 2012. To achieve it, Papandreu announced the decrease of wages of the public sector by 5 to 20%, or even more in the case of teachers. And a reduction of staff, through the substitution of only two civil servants for every 10 who retires. To appreciate the dimension of this measure it should be kept in mind that the public sector represents 20% of the Greek labor force. 

The Government also yearns to increase the retirement average age from the current 60 years old to 63 and to rise the women's pension age from 60 to 65 years old. There is likewise a huge reduction of social subsidies and brutal cuts of public hospitals budget. Public investments have been mutilated and even the military expenditure was reduced. Papandreu has hiked taxes on housing, fuel, tobacco and alcohol, a general increase of the income tax and the rise of the VAT from 19% to 20%, while a fiscal amnesty and the reductions of tax to businessmen is declared. Measures are completed by the privatization of the Greek public assets that still can be privatized.  

Jürgen Stark, chief economist of the ECB, has expressed it with brutality: “This is the absolute minimum that has to be implemented now, and more will become necessary in light of the significant worsening of the situation”. 

An ultimatum has been put to Greece: or you accept our “rescue” conditions or you will be expelled from the Eurozone. The EU “adjustment plan” means to devastate the country and to bleed it in benefit of the financial capital. Its exit from the Eurozone, within capitalism and the recognition of the debt, would equally means the same ruin, but in a tougher way, like Argentine: through an enormous devaluation, a debt increased by the devaluation itself, the suspension of payment, the country's sudden impoverishment, an accelerated economic retreat and a great imported inflation.

Greece is turned into a protectorate

The Greek crisis has crudely shown that EU is ruled only by Germany and France, that EU is, first and foremost, an instrument of the German and French financial capital and that this has turned Greece into an economic protectorate, in which all economic measures are imposed and controlled from the outside by the two main European powers. The submission of a proud people like the Greek reached a humiliation climax when, on the same day that Papandreu interviewed with Sarkozy, where he demonstrated all his vassalage, the purchase by Greece of 20 German Eurofighters and six French frigates was announced.

But the Greek vassalage isn’t accidental. Far from being an isolated case, it paves the path to EU periphery. Actually, the so spoken “European economic governance” is just that.

The crisis of the European Union

The EU has a fundamental insoluble problem, that is, unlike US, it is not (nor will ever be) a single State, with a single government and budget and common rules. It is, on the other hand, an imperialist block of States, dominated by its two main imperialisms, Germany and France (rivals themselves), in which second and third grade imperialisms are grouped, with other countries, like those from Eastern, that are economic semi colonies of the big European powers, in particular of Germany.

The creation of the Monetary Union didn’t happen on the base of an unified State, but on the foundation of the straight financial authority of the German-French capitalism, through the ECB, over a set of tremendously disparate countries, that gave up to issue currency and to have their own monetary policy. This allowed a powerful expansion and the strengthening of German and French capitalisms, which made good use of the “boom years” period to spread and assure their commercial and industrial domination on the European market. But now, with the crisis, the tables are turned: the enormous loans made by German and French banks are in danger and the export markets for theirs multinationals are weakened.

Actually, the problem is not Greece, which represents only 2.7% of the EU economy. Wolfgang Münchau, associated director of the Financial Times, in a recent article (Why Spain worries me more than Greece), says: “It could happen that Germany shows reluctance to rescue Greece for all kind of reasons, but it will do. But it is not conceivable that Germany can rescue Spain. Germany and France together cannot rescue Spain. Spain is too big”. And the problem is not related only to Spain, because its default would drag Portugal, Italy, Ireland or Belgium itself. The infection could mean the collapse of the euro, the Eurozone and EU itself and it would open a crisis of an unknown extension.

The sharp crisis of the European periphery is happening, besides, in the middle of a depressive wave that fully affects all the central imperialisms of Europe. Germany’s GDP dropped 4.9% in 2009 and France’s, 2.2%. In the cases of Italy and Great Britain, the reduction reached 4.8%. For this year, it’s foreseen a rachitic growth (“growth” with increasing unemployment), on which hangs – they warn – the danger of a “relapse”, as a result of the end of governmental bailout. The public debt of Germany, France and Great Britain will reach or overcome 80% of their GDP in 2010. Not to talk about Italy (or Ireland), whose debt will reach 120%, such as Greece, with the burden of the interests becoming more and more unbearable. The emission of public debt debentures intended for 2010 by France, Germany and Italy are enormous, in the order of 25% of their GDP.

Support the workers and the Greek people, breaking with EU, raise the workers and the people of Europe

The Greek crisis becomes a formal statement of social war of the great European capital and places Europe in a new situation. An effective rescue will need a frontal attack to the labor class' conquests, including those from central countries, and to impoverish and subject to vassalage the periphery countries, such as Greece. Its ultimate objective is to impose us decades of decay.

Situations like Latvia, member of the EU, jointly “rescued” by IMF and EU, show us up to what degree their pretensions can go: The economy of Latvia, subjected to a “strategic program of internal devaluation”, has contracted more than 25% (18.3% in 2009) in just two years, equivalent to the destruction of a country as a result of war or a natural disaster of huge proportions.

A part of the left advocates the “democratization” of EU and demands the establishment of a “social and ecological policy”. This could seem a “realistic” program, but it is actually a reactionary utopia. EU is an instrument of the great European capital against European workers and against peoples of the world, an antidemocratic engine that does not admit any kind of reform. And, although it is not shared by the majority of the left, the period opened in Europe is going to compel workers to the revolutionary way again. It will be impossible to face the brutal capitalist offensive, and to ensure the real European unit, without taking measures to expropriate capital and without uniting in an Europe of the workers and the people.

The hard reality is that Greece workers can confront the catastrophic situation that threats them only by fighting for the no recognition of the debt that drowns their country, breaking with EU and adopting drastic measures as the expropriation of the bankers, the nationalization of strategic companies under worker control, the sliding scale of work hours, so that everyone can work, and the establishment of the monopoly of foreign trade. And being fully conscious that their problems will not have an isolated solution, but with the support of the European working class towards the Socialist United States of Europe.

We are in the beginning of a great long-range offensive. But it will not result easy for the great capital because of the combativeness of the Greek working class and the people, put at the head of the European struggle after two general strikes on February 10th and 24th. And, unlike the last passive year and a half, there are evidences that the resistance mobilizations are taking a sustainable impulse, expressed in the strikes in Italy (Sardinia, Fiat-Sicily), of the employees of British Airways and Lufthansa or of the Total refineries workers in France, or in the change that seems to sign up in Spain.

It is in the course of this long and complicated stage, now opened, that we can build a new revolutionary leadership, so necessary to the liberation of the European proletariat.

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