Peter G. Prontzos: Why Greeks are standing up to international financial bullying
Once again, democracy has been crushed in the very land where it was born.
Despite unprecedented opposition by the vast majority (70 to 80 percent) of the population, the Greek parliament surrendered its national sovereignty by giving in to the harsh and unjust demands of the "Troika”—the International Monetary Fund, the European Central Bank, and the European Commission.
While the situation is complex, one point is clear: the great majority of Greeks were not responsible for the enormous debt that had built up over the last decade. Part of the responsibility rests with the political and economic elites within Greece, who run the country as if it were their own personal fiefdom. The selfish pursuit of power and profit mattered more than the well-being of the Greek people.
The decision to join the E.U. and to adopt the Euro, while bringing some benefits, also caused severe inflation and made Greece less economically competitive. It surrendered much of the control of the economy to the European Central Bank.
The global recession that began in the United States in 2008 hammered Greece, causing unemployment and driving up the debt.
In addition, Greece has been burdened for years by a flood of refugees from the Middle East (especially Iraq and Afghanistan), Africa, and even South Asia. In 2010 alone, 150,000 illegally entered the country.
The result of such factors was the creation of what Noam Chomsky terms, “odious debt”—that is, debt which is imposed on the people of a country even though they were not responsible for it, and for which they received little benefit.
When Greece needed to borrow money as a result of these problems, investors such as banks, insurance companies, and other financial institutions saw a chance to make a profit and happily gave loans, regardless of the risk. They assumed that if the country ran into economic difficulty, European governments and the Troika would force Greeks to pay, regardless of the hardships on the population.
After all, when the debt crisis hit Latin America in the 1980s, and the “Asian meltdown” occurred in 1997, Washington and the IMF imposed draconian measures on those countries in order to insure that the speculators got their money, no matter the human cost.
The “structural adjustments” demanded then are much the same as are being imposed on Greece now: higher taxes on working people, severe cuts to public services, pensions, and the social-safety net, and up to 30 percent reduction in pay to some workers.
Public assets will be sold to private—usually foreign—interests.
The New York Times noted that the Troika is insisting that Greece sell off $72 billion worth of the country—including nothing less than “the ports of Piraeus and Thessaloniki; prime Mediterranean real estate; the national lottery; Greek Telecom; the postal bank and the national railway system".
The money raised will be used to pay the foreign speculators and banks, at the cost of the further impoverishment of the Greek people. Like vampires, these global investors are sucking the life’s blood out of Greece.
But that is exactly what they are designed to do. In his insightful 2004 book The Corporation: The Pathological Pursuit of Profit and Power UBC Law professor Joel Bakan observes: "The corporation’s legally defined mandate is to pursue, relentlessly and without exception, its own self-interest, regardless of the often harmful consequences it might cause to others." Exactly.
In fact, these drastic measures will only worsen the crisis and cause the Greek economy to contract even further, just as the first round of cuts did. (Greece’s gross domestic product dropped 4.4 percent in 2010, unemployment almost doubled to 17 percent).
Nobel Prize-winning economist Paul Krugman points out that, “demands for even more austerity are counterproductive.”
Even Marshall Auerback, a portfolio strategist at hedge fund Madison Street Partners, agrees, writing in a recent note: "There is no relief in sight as the EU elites continue to grind the nation into the modern day equivalent of a debtors’ jail. They seem to be incapable of understanding that if you savagely cut government spending while private spending is going backwards and the external sector is not picking up the tab then the economy will tank."
It will be impossible, then, for Greeks to pay this “odious debt”. Greece will be forced to default, potentially dragging down European banks and hurting both the European and world economies. North America will not be spared.
It must be remembered that there are viable alternatives to increasing the suffering in Greece. After all, the Greek economy is only about three percent of the European Union. Some form of debt reduction (through default) and restructuring, combined with an economic stimulus, along with reforms to the Greek government, would help the economy recover without imposing even more suffering.
Getting the rich to actually pay their taxes would be one popular option. Billions of dollars could be collected if wealthy Greeks just paid what they are legally obliged to do. That money could then be used to avoid pay cuts, and put into pensions and infrastructure projects to create jobs, and so on.
The crisis in Greece must be seen in a global context for another reason. People in the United States, Spain, Ireland, Italy, Britain, and many other countries are being given the same message: your well-being must be sacrificed in the name of “austerity”.
(As I write, 750,000 public sector workers in the U.K. are on strike over proposed pension cuts, which would force them to make higher contributions now, but have a lower income upon retirement—which will be delayed).
Here in Canada, the push for “austerity”—i.e. transferring even more wealth from workers to the rich—can be dated back to the Mulroney Conservatives, and continued over a decade by the Liberal governments of Jean Chrétien and Paul Martin.
Now that the Conservatives have a majority in Parliament, the gloves are off. We are told that “the market” requires that taxes be cut even more for the wealthy, while public servants—such as postal workers—had better capitulate to their employers or the government will legislate them back to work at even lower salaries than they were originally offered.
Both national and transnational economic elites want an ever-greater share of wealth, even if it means that poverty and inequality are increasing for the majority.
As Warren Buffet has correctly observed: "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
There is, however, an increasing resistance in Canada and around the world to this latest form of class warfare. Greeks have been inspired by the actions of the Spanish, Egyptians, and many others, and they will not stop now.
In 1940, when Mussolini demanded that Greece surrender or face invasion, the Greek response was a single word: “No” (“Oxi”). When Mussolini’s troops attacked, the Greeks inflicted the first military defeat ever on the Axis powers.
Today, faced with a different form of attack on their country, Greeks are responding with the same defiance as their grandparents, symbolized by banners in Syntagma Square in Athens, which read, “Oxi”.
Once again, Greeks are saying: “No”.
Peter G. Prontzos teaches political science at Langara College.
Jun 30, 2011 at 7:55pm
Sweeden looks pretty good right about now.
Jun 30, 2011 at 9:13pm
The left can try and frame the discussion any way it likes but the simple fact is that for too long, too many Greeks have received the benefit of a lifestyle that they weren't able to afford. At some point, the bills become due and payable. Other economies in trouble are guilty of the same unwillingness to moderate their lifestyle to their worth and productivity.
Jun 30, 2011 at 10:01pm
Is the health and welfare of a man made substance called money really worth the sacrifices money expects people to pay? It is one of the few things on Earth that is completely under human control. We could just zero the books across the planet. Oh, wait, can't do that, it could cause money to loose money. And, the circle of sacrifice continues....
Parents were Greek
Jun 30, 2011 at 11:00pm
With all due respect, Greece is trouble because there are too many slackers who want something for nothing: pay fucking tax and quit screwiing the system.
Jul 1, 2011 at 12:36am
This is an excellent article....the 'wall street system' of bubble creation, de-regulation, complex derivative, and excessive leverage had taken over european banks in the past 25 years...after the 2008 crash, one would have expected some changes! Yet nothing has happened and the same 'medicine' is being prescribed yet again. There have been no reforms of banking, and these vampire banks have again put a gun to the heads of ordinary people: pay up, or else the financial system collapses. They, who caused the problems through their reckless behaviour, have taken no responsibility and lost not a cent (or a euro). It's business as usual, their profits are again up, and their upper management makes billions in just bonuses, while imposing poverty on ordinary people who did nothing to cause this mess. This is class warfare at its most blatant and I don't know why the German and other European left are also not out on the streets supporting the Greek protesters.
Jul 1, 2011 at 12:43am
Is this the same IMF that hosts Dominique Strauss-Kahn in a $3,000 per night hotel suite?
Jul 1, 2011 at 12:36pm
The Greeks can look to Argentina for inspiration on throwing off the IMF yoke.
$3000 a night aside Dominique Strauss-Kahn had been widely expected to seek the Socialist nomination for President of France in 2012] and was considered an early favorite.
Now it looks like charges will be dropped as the case falls apart. Lesson neoFascist's play hardball!!!
Remember the body rub parlour leak that was our own neoFascist's way of reminding Smilin Jack our used car salesman of the left of his deal with the Devil himself ole Brimstone the Harp to concentrate his attack ads on the oh so stunned Iggy. He hadn't been doing his part until then.
The deal was a Harper majority in exchange for a new house at Stornaway for Smilin' Jack who didn't seem to care about the immense suffering a neoFascist majority would bring.
Jul 2, 2011 at 8:32am
What has happened in Greece is exactly what is happening here in Canada. Wait and we will see investment laws relaxed so the elite and the Banks can recklessly invest then ask the government for a bailout. Of course if the taxpayers won't then the elite and Banks will threaten to leave or reduce investment in Canada.
I say we get rid of Conservative governments no matter what clothes they wear and what they call themselves. They are the true traitors of this country and should be dealt with as severly as possible. We have to gain control of our Banks.
Once we have completed that we must look at other monitary systems and a barter system so the concentration of wealth and power can never occur again.
Greeks in denial
Jul 2, 2011 at 2:12pm
Greeks are blaming everyone but themselves. Look, Japanese and Germans have a good work ethic and don't beg for money while they sit around drinking Ooohzo. Wake up wankers.
To Greeks in denial
Jul 2, 2011 at 8:20pm
Where have the Greeks begged for money you ignorant racist twit.
All statistics show that Greeks works as much as others. Only articles
writing myths and people with your prejudice disagree.