Euro-bosses try to make workers pay for Greece’s debt crisis
By
G. Dunkel
Published Feb 22, 2010 8:38 PM
The elected leaders of the 16 countries of the euro zone gathered in Brussels,
Belgium, on Feb. 11 and said they would work to prevent Greece from defaulting
on its debt. By Feb. 14, they made it clear that their intention is not so much
to bail out the Greek government but to pressure it into making a direct attack
on the Greek working class.
Banner in Athens reads, ‘We’re not paying’ for the debt.
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The European big bourgeoisie gathered in Brussels to prevent any possible
collapse of the euro, and to assure that the cost of the debt crisis was placed
on the shoulders of the workers — in Greece and in the rest of the euro
zone.
European Union President Herman Van Rompuy said, “We call on the Greek
government to implement all these [austerity] measures in a rigorous and
determined manner to effectively reduce the budgetary deficit by 4 percent in
2010.” (CNN World, Feb. 14)
At a televised cabinet meeting on Feb. 12, Greek Prime Minister George
Papandreou criticized the plan to “help” Greece as
“timid” and late. The plan is supposedly designed to help Greece
pay off the big European banks that hold its debt and get new loans. Greece has
a debt of 53 billion euros, now equivalent to about $71 billion, coming due
this year.
Along with the dominant U.S. dollar and the Japanese yen, the euro is one of
the world’s major currencies. The euro zone consists of the 16 countries
in the EU that use the euro as their currency. The big capitalists and bankers
of Western Europe created the EU and the euro zone so they could strengthen the
hand of European capital against the European working class and the oppressed
nations of their former colonies.
Germany, France, Italy and Spain are the countries in the euro zone with the
biggest economies. Greece is also a member, but one of the poorest. Besides
Greece, Portugal, Ireland, Spain and even Italy face a sovereign-debt crisis,
that is, the inability to pay debt service on their sovereign debt. A sovereign
debt is one contracted by selling bonds the government issues, especially in a
currency other than the one the government can print, such as a Greek
government debt in U.S. dollar- or euro-based bonds.
Shares in euro zone banks had slumped as the sovereign-debt crisis developed,
with Greek banks falling by more than 50 percent.
Greek workers refuse to submit
The day before the Feb. 11 Brussels meeting, 500,000 Greek civil servants went
out on a one-day strike. In Greece, civil servants include teachers, doctors,
air traffic controllers, and many other workers who keep the country running. A
major slogan of the workers on strike was, “It’s not us who should
have to pay for this crisis.” (l’Humanité, Feb. 10).
Maria Ioakimidou, a middle-aged social worker at an Athens hospital said,
“After 20 years on the job I only earn 1,300 euros [a month] and now the
government wants to steal from me. The big guys who stole in the past [through
corruption] should be paying,” she added, referring to Greece’s
rich elite. (Financial Times, Feb. 11)
On Feb. 11, Athens’ taxi drivers — a major part of that capital
city’s transportation system — struck for a day over high fuel
prices. Meanwhile, Greek farmers strengthened their blockades of roads along
the border with Bulgaria to express their continuing outrage at the government.
They have been blockading on and off for a month.
Before the Brussels meeting, Papandreou’s government had announced an
austerity program that includes freezing civil servants’ salaries and
cutting bonuses and stipends. It includes raising the average retirement age by
two years to 63 and hiking taxes. For every five civil servants who retire, the
government is going to hire only one replacement. This means speedup for the
remaining workers.
The Greek workers, with Communist leadership in the PAME labor confederation,
have a well-deserved reputation for combative responses to attacks on their
living standards. Europe’s big capitalists also fear that a successful
mass movement in Greece could inspire similar struggles in Portugal and in
Spain, Italy or Ireland, where similar “reforms” are in the
works.
Sovereign debt and German tutelage
Since the Greek government no longer controls Greece’s money supply
— it uses the euro, not a national currency — it can’t
devalue its way out of this economic crisis. Devaluing currency is the
traditional cure for a government in financial distress. The Greek regime,
however, plans instead to drive living standards for its workers down so far
that it creates an “internal devaluation.”
It appears likely that the European Central Bank or EU commissioners, with
technical assistance from the International Monetary Fund, will have monitors
or examiners in every department and major office of the Greek government to
make sure that the budget guidelines that Papandreou’s government
promulgated, under intense pressure, are followed.
The ECB is already asking for even more intense austerity. Germany is the
dominant financial power in the euro zone and its bankers will have the most
influence with the “monitors.”
Athens is on a very short leash, since there is to be a mid-March interim
progress report, a further one in mid-May, and quarterly updates
thereafter.
Both industrial production and retail sales have been falling since the middle
of 2007 (Financial Times, Feb. 6), so it is very unlikely that Greece is going
to be able to export its way out of the crisis.
Articles copyright 1995-2012 Workers World.
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