Greek workers rise up

A protestor gestures to police near the parliament building in the center of athens on may 5 2010For days now Greek workers have shown their contempt and anger at the austerity measures their government is imposing to meet EU and IMF requirements that it cut its public debt. In the words of the Prime Minister George Papandreou, Greece is ‘on the brink of an abyss.’ The Greek working class is telling the world that it will not pay for the country’s financial crisis. Its actions are showing the way for others: soon Spain and Portugal will also have to implement severe cuts in state spending and the revolt may spread to these countries as well.

On 27 April Greece almost defaulted on its debt as its public deficit rose to 13.6% of GDP, far higher than previously declared. Credit rating agencies downgraded its debt to ‘junk’ status, making it impossible for the Greek government to get further credit through the normal international markets to finance its debt as well as unable to get insurance against default. Papandreou was forced to ask the EU and IMF to activate a loan negotiated in April. On 2 May they agreed a bail out of 110bn Euros.

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Greece: Economy on the brink of collapse / FRFI 214 Apr / May 2010

FRFI 214 April / May 2010

On 11 March, over 60,000 demonstrators in Athens marched in protest against the crippling austerity measures imposed by the social democratic PASOK government. Along with the demonstration in the capital, there were at least 68 other protests around the country, many breaking out into clashes with the police. Coinciding with the protests was a 24-hour general strike, the second that week, which brought the country to a standstill. The only public transport working was the rail system that operated for a few hours to allow workers to take part in the demonstrations. News broadcasts were also suspended as crucial media workers walked off the job. Strikers and protesters banged drums and chanted slogans such as ‘no sacrifice for plutocracy’ and ‘real jobs, higher pay’. People draped banners from apartment buildings reading: ‘No more sacrifices, war against war’ (The Guardian 11 March). The Greek people have made it clear that they will not quietly submit to this onslaught by the ruling class.

The Greek government is attempting to clear the country’s 300bn euro (£259bn) debt through savage cuts to public services. Pressure to implement such cuts has come from the EU, headed by Germany and France. During February and March this year, Greek Prime Minister George Papandreou attended several meetings with German Chancellor Angela Merkel and French President Nicolas Sarkozy to discuss the possibility of an EU bailout for Greece. Sarkozy highlighted the importance of supporting the Greek government: ‘If we created the euro, we cannot let a country fall that is in the euro zone. Otherwise, there was no point in creating the euro…we must support Greece because they are making an effort, or else there will be no more euro.’

On 25 March France and Germany reached a deal on a bail-out loan which would consist mainly of European money but also money from the IMF. To date the Greek government has resisted borrowing, fearful that to do so would worsen Greece’s already tattered credit rating and cause further political instability for the government. Germany in particular has been keen to strengthen the role of the European Central Bank as a means to directly intervene within a country’s economy. Merkel, opting for this open neo-liberal model, made it clear that if Greece does not take the money, it will have to be cold and clinical in its implementation of austerity measures. There has been a high degree of German chauvinism in relation to Greece, expressed most crudely in the suggestion in the German press that Greece sell off some of its islands and the Acropolis to help finance its debt! At least, unlike British imperialism, they offered to pay.

Debt everywhere

Greece cannot be allowed to default on its debt because to do so could set a precedent in Europe, undermining both the euro and the European imperialist project (see FRFI 213). Greece has been highlighted in the media for its economic irresponsibility but its situation is not so very different from that of many other European countries. For example, though Greece’s deficit stands at 13%, Ireland stands at 11.5%, Spain 11.4%, Portugal 9.3% – all well above the euro zone’s target of 3%. As for Britain, its public deficit is heading towards 13% in 2010. So why are Greece’s problems gaining so much attention? Firstly, Greece had a history of defaulting on sovereign debt before joining Europe, a history that European imperialism does not wish to see repeated. Secondly the Greek people have a history of protesting against austerity measures, a history that is being repeated now.

Speculators create reality

Trade is soaring in one of the most speculative forms of derivatives; credit default swaps (CDS), which played a key role in driving Bear Stearns, Lehman Brothers and American International Group (AIG) into bankruptcy. A CDS is an insurance-type contract that permits banks and hedge funds to place bets on whether or not a company, or even a country, will default on it debts. The unregulated nature of CDS trading is such that speculators have an incentive to push companies or countries toward bankruptcy. According to one analyst, ‘It’s like buying fire insurance on your neighbour’s house – you create an incentive to burn down the house.’

Smelling blood in the air, banks and hedge funds have rounded on Greece like vultures around a decaying corpse. Financial institutions have essentially ‘bet’ on worsening economic woes for Greece, including the possibility that the country will default on its debt. The effect of such activities is to further aggravate Greece’s crisis – so much so that the cost of insuring Greece’s debt has more than doubled in a year from $35bn to $85bn. This has infuriated Papandreou, who has attempted to ban the speculative actions of hedge funds in Greece and called on the US to ‘crack down on speculators’ during a meeting with President Obama on 9 March. Merkel also complained that hedge funds should ‘not be allowed to speculate against states’.

Greece’s debt is also a big problem for the tentative British economic recovery, as Britain ‘owns a fifth of Greek bonds; if Greece defaults, the write-offs will impact on our banking system as severely as any other in Europe’ (Will Hutton, The Observer 14 February 2010).

Demonstrations continue

The meddling and pressure imposed by imperialist countries will not stop strikes and demonstrations in the coming weeks and months as the Greek people continue to revolt. What is essential for the development of a movement is for the Greek Communist Party (KKE) and the main unions to clearly split from Papandreou’s PASOK government and in turn to ally themselves to the radicalised and angry youth who have organised huge demonstrations in recent years.

Andrew Alexander

Greek austerity measures spark resistance / FRFI 213 Feb / Mar 2010

FRFI 213 February / March 2010

Greece is in the midst of its worst economic crisis since the end of the Second World War. In the post-war period, the US Marshall Plan brought Greece, then reeling from the impact of civil war and famine, under the economic management of imperialist countries and destroyed the Greek revolutionary movement. Now imperialism is once again determined to maintain control over Greece as it is wracked by economic and political crisis.

Trouble in Euroland

The Greek economy is broke; public debt is expected to rise this year to over 120% of GDP while the annual budget deficit stands at 12.7% of GDP. Unemployment is 7.7% and looks set to rise. The situation is aggravated by Greece’s membership of the euro. Poor EU countries such as Greece struggle to maintain a currency that is levelled with much wealthier, imperialist countries like France and Germany. Some economic analysts suggest that Greece and other weak states could be expelled from the eurozone, but in reality European imperialism will not allow Greece to leave the euro. To do this would seriously undermine the EU.

Furthermore, Greece is of strategic importance, a gateway to Turkey, which is due to join the EU, and hence to the Middle East. In an epoch of increasing imperialist rivalry the EU understands that if it is to expand its borders, markets and influence it must maintain the current ‘union’. However, neither will Greece be allowed to default on its debt.

Austerity breeds resistance

Greece is under pressure from the EU to introduce huge spending cuts. But such austerity measures will fuel the demonstrations and strikes that have characterised Greece over the past two years. In December 2009, the social-democratic PASOK party led by George Papandreou won the election with a pledge to return the country to economic health without penalising the poor. Papandreou then immediately reneged on his election promise by committing to reduce the annual budget deficit to under 3% in three years.

Greece’s history of resistance makes it potentially a weak link for European imperialism. During the 1960s, a revolutionary movement against the monarchy led to a right-wing coup and military junta in 1967, supported by Europe and the US. Several thousand communists and militants were exiled. But in the early 1970s, organised working class resistance led to the removal of the junta and the formation of the modern Greek republic. European imperialism then worked with Andreas Papandreou (founder of PASOK and father of George Papandreou) to integrate Greece into the EU in 1981. Since then there have been intermittent but prolonged demonstrations against austerity measures, but a combination of police brutality and opportunism within the movement have held back real political developments. During the December elections, a series of strikes shut down schools, hospitals and airports in 60 cities and towns across the country. The protests were organised by the PAME trade union organisation, which is affiliated to the Greek Communist Party (KKE), but the country’s two biggest unions refused to support the strike. And PAME and the KKE, who are tied to the opportunist politics of PASOK, in turn failed to support demonstrations by angry students and youth against unemployment and poverty. However, as the economic crisis intensifies, the history of the Greek working class suggests that they will continue to organise to resist.

Andrew Alexander

Greece: Greek protesters lead the way for Europe FRFI 207 Feb / Mar 2009

FRFI 207 February / March 2009

Protests continue following the uprising that consumed the country in December 2008, triggered by the murder of a 15-year-old boy, Alexandros Grigoropoulos, who was shot dead by police in Athens on 6 December. Riots then quickly spread to Thessaloniki, Greece’s second largest city, to the northern cities of Komotini and Ioannina, to Crete and other islands and towns. The two police officers involved in the shooting were arrested on 8 December and Prime Minister Costas Karamanlis, of the conservative New Democracy (ND) party wrote to the boy’s parents expressing his profound sorrow in a desperate and failed attempt to stop the dissent from spreading.

The majority of those demonstrating were students and school pupils who expressed their sadness and anger about his death but it quickly became clear that behind the protests lay widespread discontent with intolerable social and political conditions. Greece is being buffeted hard by the economic global crisis. Around a quarter of under 20-year-olds in Greece are unemployed and live below the poverty level. For university graduates the rate of unemployment is 28%. Having studied for years many are then forced to take poorly-paid work. The shooting was the spark that lit the tinderbox and the rioting in Greece was the first mass action in Europe against the current capitalist crisis.

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