Crisis exposes harsh capitalist rule of Europe

By John Catalinotto

Nov 9, 2011

Greece, a country of 11 million people in southeastern Europe, has become the epicenter of the world capitalist economic crisis that first appeared in the U.S. with the 2008 financial near-meltdown. While the Greek workers continued their heroic resistance in the streets, imperialist leaders and bankers have made it clear that they prefer complete control of the Greek political process rather than allow even a sham democracy in Athens.

For one week, Greek political events made the front page of the corporate dailies in both the news and business sections. The imperialist banks’ attempt to squeeze payments on usurious loans from the Greek workers forced a reorganization of Greek’s capitalist government. By the evening of Nov. 6, the unpopular Prime Minister Andreas Papandreou had stepped down.

Greek youth battle police over austerity measures, October 2011.

Papandreou’s PASOK party and its rival right-wing New Democracy Party agreed to form a “grand coalition” government that would implement an austerity program on behalf of Greek, European and U.S. big capital. No new prime minister had been named. The next leader will undoubtedly receive more confidence from the imperialist bankers than from the Greek people.

Behind the crisis

The corporate media in the U.S. and Western Europe have misrepresented the Greek crisis as caused by lazy Greek workers and wild government spending on social services. Nothing could be further from the truth.

Greece’s inability to pay its sovereign debt stems from the worldwide capitalist downturn that threw the Greek economy into recession. This was exacerbated by extravagant government spending on the Greek military, demanded for its role in NATO, and the failure of the major Greek businesses of shipping and banking to pay taxes.

The imperialist banks, mainly in Germany and France — but these banks also include capital from U.S. investors — were more than willing to buy Greek government bonds — as long as the interest rates were high, sometimes four times as high as on loans offered in Germany. They expected a bailout from the European Union if Greece failed to pay for these usurious loans, whose interest obligations alone were 8.9 percent of the national budget.

With the Greek economy tumbling, the banks pressured Europe’s political leaders — such as Angela Merkel of Germany and Nicolas Sarkozy of France — to force the Greek government to impose austerity to squeeze the debt payments out of the Greek workers. The austerity includes laying off government workers, cutting social programs, raising property taxes and privatizing the remaining nationalized property in Greece, including historic sites like the Parthenon.

What turns the local, Greek situation into a world crisis is that if Greece were to refuse the austerity program and stop debt payments, this could provoke a similar crisis in Italy, whose economy is seven times as large as Greece’s. It could put the entire eurozone at risk of a financial crisis and a new European recession, which would reduce economic growth worldwide.

For the Greek working class, how strong the euro is as a world currency is not as important as what job they have, what they have to eat, what shelter, and what schools and hospitals are available. Prior austerity programs have already closed, in 2011, some 1,054 schools, more than 50 hospitals and dozens of university departments, while unemployment has risen rapidly to nearly 17 percent.

A new austerity program would provoke a deeper recession and increase all those numbers.

Papandreou’s maneuver with the referendum

Papandreou first made an agreement on Oct. 27 with the European imperialists for a new austerity plan in return for new loans and a partial debt writedown. This unpopular move made his political future bleak.

In a maneuver aimed at saving his political career, Papandreou then declared that Greece would hold a popular referendum on the European plan. He was gambling on waging a campaign to frighten most Greeks into backing the program for fear of leaving the eurozone.

But Europe’s big banks wanted no part of Papandreou’s gamble. Forget democracy when it comes to big money. Like questions of war and peace, questions of financial stability are not what the imperialist ruling class — in the U.S. as well as in Western Europe — will put to a popular vote, even when they dominate the propaganda machine.

On the eve of the G-20 summit in Cannes, France, on Nov. 3-4, Sarkozy and Merkel raised a howl. Like other leaders of smaller predatory gangs, they made an offer that neither Papandreou nor PASOK’s conservative rivals in New Democracy could refuse. New Democracy and PASOK had to form a joint regime to assure that Greece backs the agreement. Forget any consultation with the Greek people.

The Greek capitalist regime intends to impose the austerity plan and pass a budget in the next few months and then, with this already in place, hold new parliamentary elections in February 2012.

Greek workers still fighting

While the Greek working class has no representation in the new government, they still have the streets and the power to withhold their labor. There have been a half dozen general strikes in the last year alone, and dozens of other major mass actions as the Greek workers continue their heroic struggle against the big capitalists of Greece, Europe and world imperialism. Another one is set for Nov. 10 to continue protesting the new program.

At a rally outside Parliament on Nov. 4, Aleka Papariga, general secretary of the Communist Party of Greece (KKE), said, “The KKE calls on the people to struggle for the people’s ownership over the concentrated means of production in industry, for the socialization of land, of the big businesses in agriculture and the concentrated trade sector.”

Papariga called for “disengagement from the EU and cancellation of the debt with people’s power.” (solidnet.org,
Nov. 7)