Greece faces national bankruptcy. It could slide out of the Euro-zone in the coming days. Then a cash check will be needed in any case. But even if the country manages to stay in for now as part of a compromise agreement the threat of bankruptcy remains.
The troika, both old and new, is responsible for the destruction caused in this EU-country. This troika in reality consists of the International Monetary Fund IMF and the EU as the representatives of European big business and the Berlin government. In the months between June and September alone Greece has to pay the creditors more than the maximum amount it can expect to get (13,1 billion Euro) – even if the full tranche of agreed credits is paid out by the creditors (7,5 billion Euro). During the last few weeks those responsible in Athens ordered the last remaining Euros to be scraped together – even out of a disaster relief fund. The media reacted with indignation: “Accounts plundered” (Sueddeutsche Zeitung from Mai 13th). Who is plundering whom? The drastic measures in Greece come about because IMF, EU and the Berlin government have plundered the country for the last five years. Because these three have been strengthening their stranglehold since the end of January 2015. And because they cloud our senses with their screams for the alleged necessity of “austerity” whilst they are at it.
Since 2010 strict austerity policies have been forced on Greece. “Austeritas” is usually translated to mean “severity” – but also as “drastic treatment”. This sounds like Swabian housewife. But in Latin this word also means: the dark, sinister being. This is closer to the mark. A dark, sinister policy of cuts is being enforced on the backs of the poor, the unemployed and average wage earners. This way real wages and pensions have been shrunk by 30 per cent since 2009, state expenditure has been reduced by 40 per cent and the number of public sector employees has been drastically reduced from 952.000 to 573.900 – also a reduction of just about 40 per cent. Unemployment has increased by more than 25 per cent to three times its previous level. Youth unemployment forced up by more than 60 per cent. Even if we leave aside moral and social aspects one thing is clear: This economic policy creates dark, sinister results for the whole economy. Mrs. Aikaterini Savvaidou, the “general secretary for public income” – put into office by Samaras by the way – makes the point: “I urgently need more staff to collect taxes. Especially: tax inspectors!” What an absurd result of “austeritas”: Insufficient tax income.
But does this form of economic policy create progress elsewhere? Do the social and humanitarian sacrifices at least lead to a more balanced budget? In reality Greek debt has risen since 2010 – despite haircut and so called rescue packages. They have risen drastically especially as the share of Greek GDP. From a 110 percent share of GDP before the crisis to around 180 per cent. What a sinister result of “austeritas” – continuously growing debt!
Maybe Greece is the exception? Aren’t there all these shining examples periphery countries “who made it”, about whom it is said Ireland (Spain, Portugal, Cyprus etc.) is “not Greece!” In these countries, say IMF, EU and the Berlin government, it can be seen: Austerity works! The results look like this: Before the austerity treatment Ireland had a debt quota of 43 per cent – 2014 it was 110 per cent. In Spain this decisive indicator climbed from 53 to 100 per cent. And in Portugal from 84 to 130 per cent! Even within the whole economic Eurozone the debt level is rising since the adoption of the austerity line. Generally contagious debt is a very dark result of austerity.
But why, one can ask, is the recipe austeritas being used if it – apart from catastrophic social results – also brings with it wide scale drawbacks for the whole economy? As it happens the drawbacks in the periphery and for the people in these regions turn into advantages elsewhere. To only name three: (1) The balance of payments deficits of the periphery countries mentioned above has been more than 500 billion Euro since 2009. Mainly number three of the true troika profits from this: The German balance of payments increased by 1000 billion Euro since 2009. (2) The financial sector is blossoming because of the accumulation of debt in the periphery. Example: Greece. Since 2009 the country received officially new loans worth 227 billion Euro whilst paying off 194 billion for interest and repayment. Since 1991 Greece paid debt repayment and interest worth 664 billion Euro to financial institutions – double the amount of the whole debt mountain. Mainly the IMF, number one in the true troika, profits from this as the representative of the international finance sector. (3) Austerity policies lead to a drastic lowering of labour costs (or employees income) throughout the EU. Wages are shrinking locally. Cheap, highly educated workers (doctors! Engineers!) are being “exported” from the periphery to booming centres. The shrinking wage level in the periphery is felt across the board as wage dumping. Which is where those forming number two of the real troika profit from: These are big business and the banks in the whole EU.
The austeritas recipe only serves speculation, profiteering from interests and the maximisation of profits. It poisons Europe – socially, morally and throughout society. Solidarity with the people of Greece also means defending social and democratic standards throughout Europe.