The Real Reasons Behind the Crisis in Greece
Alexis Tsipras, head of Syriza Party and Prime Minister of Greece, who was elected for being opposed to austerity measures being dictated to the Greek people by the troika (European Union, European Central Bank and International Monetary Fund) and who put the issue to a referendum, which people of Greece rejected by a big margin, capitulated to the demands of the troika on Monday and betrayed his people in complete disregard for their wishes and for any semblance of democracy and will of the majority.
Let’s get one thing straight about what’s taking place in Greece: what’s happening is not that the Greeks are lazy or don’t work hard or long enough or that they live too lavishly or that they don’t pay taxes. What’s happening in fact has nothing to do with the Greek people and everything to do with greedy European, especially German and French, banks. What’s happening is in fact no different from how imperialism operates through its neoliberal policies and facilitated and enforced by the International Monetary Fund (IMF) and World Bank in other countries that are open to imperialist rule and influence.
The creation of the Euro zone which was touted as having the noble goal of bringing the people of the Continent closer together is ironically creating a rift and hostility between the German and Greek peoples. Germans are being fed lies and utter nonsense about Greeks borrowing from Germans and not paying back, putting the blame for the crisis on the Greek people where it doesn’t belong by any measure, standard or logic. While Germany is being depicted by its bourgeoisie as the donor nation which keeps loaning to keep the Greek government afloat and the Greek people fed, the truth is just the opposite. The beneficiaries of the bailout programs offered by the troika is none other than private banks, especially of Germany, who profit and get richer from every deal. The victims, at every step of the way and first and foremost is the Greek working class and secondly German tax payers should Greece default on the loans.
Let’s hear it from a mainstream Western publication. Mark Blyth writes on July 7, in Foreign Affairs, in an article titled: “Why Greece Isn’t to Blame for the Crisis”:
“The troika program for Greece succeeded in stopping the bond market bank run—keeping the Greeks in [Eorozone] and the yields down—at the cost of making a quarter of Greeks unemployed and destroying nearly a third of the country’s GDP”. “…the bailouts weren’t for Greece at all. They were bailouts-on-the-quiet for Europe’s big banks, and taxpayers in core countries are now being stuck with the bill” if Greeks don’t pay.
“… Greece was thus a mere conduit for a bailout. It was not a recipient in any significant way, despite what is constantly repeated in the media. Of the roughly 230 billion euro disbursed to Greece, it is estimated that only 27 billion went toward keeping the Greek state running. Indeed, by 2013 Greece was running a surplus and did not need such financing. Accordingly, 65 percent of the loans to Greece went straight through Greece to core banks for interest payments, maturing debt, and for domestic bank recapitalization demanded by the lenders. By another accounting, 90 percent of the ’loans to Greece’ bypassed Greece entirely”.
“…after Mario Draghi took over from Jean Claude Trichet at the ECB in late 2011, Draghi dumped around 1.2 trillion euro of public money into the European banking system to bring down yields in the Long Term Refinancing Operations (LTROs). Bond yields went down and bond prices soon went up. This delighted bondholders, who got to sell their now LTRO-boosted bonds back to the governments that had just bailed them out. In March 2012, the Greek government, under the auspices of the troika [meaning dictated by the troika], launched a buy-back scheme that bought out creditors…As former Bundesbank Chief Karl Otto Pöhl admitted, the whole shebang “was about protecting German banks, but especially the French banks, from debt write-offs.”
“Think about it this way. If 230 billion euro had been given to Greece, it would have amounted to just under 21,000 euros per person. Given such largess, it would have been impossible to generate a 25 percent unemployment rate among adults, over 50 percent unemployment among youth, a sharp increase in elderly poverty, and a near collapse of the banking system—even with the troika’s austerity package in place”.
“We’ve never understood Greece because we have refused to see the crisis for what it was—a continuation of a series of bailouts for the financial sector that started in 2008 and that rumbles on today. It’s so much easier to blame the Greeks and then be surprised when they refuse to play along with the script”.
Is it any surprise then that we read in the news that the Greek government has agreed to sell off 50 Billion Euro’s worth of “valuable Greek assets”? What assets you might ask? Not private assets, but public assets that belong to the Greek people, including possibly even historical and architectural sites and even islands to private investors! Under the terms of its first bailout in 2010, Greece agreed to privatize around 50 billion euros in property and infrastructure as a way of raising money for its creditors, meaning too-big-to-fail banks that engaged in risky practices and made bad loans and must now be compensated by the Greek working class. Greece will have to place its assets in a specially created fund for sale “under the supervision of the relevant European Institutions,” according to the text of the bailout agreement published on Monday.
Time Magazine reported on Monday: “Greece May Have to Sell Islands and [historical] Ruins Under Its Bailout Deal”. “It’s an affront,” says Georgios Daremas, a strategist and adviser to the Greek Ministry of Labor, Social Security and Social Solidarity. “It’s basically saying sell the memory of your ancestors, sell your history just so we can get something commercial for it,” he told TIME Magazine on Monday. “Those in insolvency have to sell everything they have to pay their creditors,” Josef Schlarmann, a member of German Chancellor Angela Merkel’s political party, said at the time of the 2010 bailout program.
This isn’t the first time we’re seeing a debtor nation being offered a bailout program in return for an austerity regime that cuts social spending, fires workers and raises taxes for creditors. A prime example is Argentina where just as it has done in Greece, in 2001, “it turned a recession into depression, making the debt even more unsustainable”, as reported by Huffington Post, “In both cases, the policies were demanded as a condition for assistance. In both countries unemployment and poverty soared, and GDP plummeted as a result of the bailout program. Indeed, there is even a striking similarity in the magnitude of the fall in GDP and the increase in the unemployment rate.”
One has to wonder: maybe the creation of the Euro zone was not for noble purposes after all. Capitalism is not capable of doing anything noble. Capitalists will commoditize, package and sell their mothers if they know there is a buyer. Could the purpose not have been to make the less developed nations more directly and seamlessly available for exploitation and dependent on giant international corporations of German, French and other developed nations, allowing them and especially multinational banks to get rich off the people of the less industrialized nations, locking them into borrowing and paying interests and allowing the foreign corporations to take over public assets like ports, shipyards, lands, buildings, as well as making them politically subservient and dependent? Isn’t that what US imperialism does when it dictates its “trade agreements” onto less developed nations, which lead to more impoverishment of the workers in those countries while pushing down the wages of their own workers?
The German and French working people, as well as workers everywhere must stand in solidarity with the people of Greece who are being economically blackmailed and forced to accept lower standard of living, more widespread poverty, more unemployment and lower wages with less social benefits for the benefit of greedy multinational banks. People of Europe must stand together in opposition to such draconian and predatory policies regardless of which nation’s working class is being targeted. Their strength is in their unity.