Socialism and the Greek debt crisis

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Socialism and the Greek debt crisis
18 February 2010

Greece has become a test case for draconian attacks on the living
standards of broad sections of the population throughout Europe. The
massive holes that the economic crisis and bank rescue packages have
ripped in the budgets of the EU member states are now to be filled at
the expense of the working class.

At their February 16 meeting, the EU finance ministers virtually
disenfranchised the Greek government and placed the country’s budget
under EU scrutiny. Such treatement of a member state has never
occurred before in the history of the European Union. Every
transaction of the Athens government will now be meticulously examined
in Brussels, every vote in the national parliament closely monitored.
The non-elected officials of the Brussels Commission and the European
Central Bank (ECB) are taking control of an entire country, dictating
their conditions to its government and parliament.

In just four weeks, the Greek government must present a first report
on the success of its austerity measures to the EU and the ECB. If
they are judged inadequate, the 15 other states belonging to the
eurozone may invoke a qualified majority vote to force Greece to adopt
further austerity measures. Under discussion are an increase of the
regressive Value Added Tax (VAT) and additional spending cuts, among
other things.

The cuts are being driven by the interests of the powerful financial
institutions that determine the policies of the EU, as well as
Europe’s largest economy, Germany. While most EU members wanted to
give the Greek government time to implement the austerity measures it
had already adopted, Germany, Austria and Sweden were insisting on the
immediate tightening up of spending cuts. The state secretary in the
German Finance Ministry, Jörg Asmussen, cited the examples of Latvia
and Ireland, where public sector pay has been reduced by 20 and 15
percent, resepctively.

The measures are aimed at drastically cutting the living standards of
broad layers of the population. According to the head of the German
Ifo Institute, Hans-Werner Sinn, “The Greeks have become accustomed to
the good life.” Now they need “to be prescribed a course of thrift:
however difficult it is for the Greeks, they have to lower real
wages.” And this, even though the national average wage is only half
as high as in Germany, while prices are almost the same.

The austerity measures being dictated to Athens express fudamental
changes in the relationship between states in the European Union. For
a long time, Germany was regarded as Europe’s “paymaster,” because it
paid relatively large sums into the EU budget to compensate for
regional differences. These served to expand and strengthen the EU,
and the German economy, in turn, benefited the most. The corruption of
the Greek elite, which now serves as a pretext for imposing brutal
attacks on the working class, was tacitly condoned by Brussels and
Berlin because it allowed the big corporations and banks to take over
the Greek market.

But now Berlin is no longer willing to play the role of “paymaster.”
The Merkel government has opposed any proposal to help the Greek
government financially. The German media is full of propaganda about
the Greek crisis being “home-made,” because the Greeks had been
“living beyond their means.” For the German bourgeoisie, the issue is
not so much the Greek debt, but the principle that the crisis should
be paid for by the working class. This is true not only for Greece but
for workers throughout Europe and in Germany itself, where the Merkel
government is preparing a merciless austerity programme.

The aggressive actions of Germany are also exacerbating the conflicts
within the EU and threaten to blow up the European institutions.

In their attacks on the living standards of broad sections of the
population, the EU can rely on the Social Democrats. In Spain and
Portugal, social democratic goverments are pushing through massive
cuts. In Greece, the PASOK government of Giorgos Papandreou owed its
election victory last year to the massive discontent with the
conservative government of Kostas Karamanlis and to numerous populist
promises. Once in office, Papandreou dropped his campaign promises and
presented an austerity programme that includes dramatic cuts in the
living standards of the working class—incluing job cuts, wage cuts, a
higher retirement age and many similar measures.

Papandreou and his finance minister George Papaconstantinou have
travelled throughout Europe to convince bankers and government
representatives that they will enforce the programme against all
opposition. Nevertheless, it does not go far enough for EU
Commissioner Olli Rehn. “In mid-March, Greece will have to propose
additional measures in order to achieve the reduction targets this
year,” he said.

While the EU is relying on Papandreou, he is relying on the unions to
enforce the attacks against the working class. Resistance is growing
against austerity measures. On February 9 and 10, public sector
workers went on strike, and a one-day general strike is planned for
February 24. However, the unions are limiting the protests to isolated
actions. They see their task as letting off steam in order to keep the
resistance under control and to ensure that the government does not
get into serious trouble.

They are supported by many supposedly “left” organizations—from the
KKE (Communist Party of Greece) and the SYRIZA coalition, to numerous
smaller groups. What unites all these parties is their purely
opportunist and nationalist orientation. They either orbit around
PASOK or seek to put it under pressure.

But there is no national solution to the Greek crisis. The EU has
presented the country with a dire ultimatum: either it keeps the euro
and accepts the austerity measures dictated by Brussels, or it leaves
the eurozone, which would most likely lead to the collapse of the
Greek currency.

The austerity measures dictated by the EU place fierce class conflict
on the agenda throughout Europe. Fewer and fewer people are willing to
accept drastic cuts, while the financial elite enrich themselves
uncontrollably.

The working class needs an international political strategy. Greek
workers must turn to the European working class, who in turn must
support Greek workers in their struggle against the austerity measures
being imposed by Athens and Brussels.

The attacks of the EU cannot be stopped by national protests and
pressure on national governments. They require a political offensive
by the European working class, aimed at the socialist reorganization
of society. It is not the profits of the financial and industrial
corporations—which determine the policies of Brussels—but the social
needs of society that must form the basis of economic life. The
European Union of the banks and corporations must be replaced by the
United Socialist States of Europe.

Peter Schwarz

http://wsws.org/articles/2010/feb2010/pers-f18.shtml

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