Greek workers pay for Europe’s capitalist bail-out

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4 Socialist Action june 2010 Workers in Greece have launched repeated general strikes against the attempt by Europe’s rulers to make them pay the price of the country’s economic crisis, and have inspired workers throughout the continent—indeed, the world—facing similar attacks.

The price to be paid in return for the almost $1 trillion package worked out by the European Commission and the International Monetary Fund to “save” Greece is draconian cuts in wages, pensions, jobs, and services.

Harvard historian Niall Ferguson made no bones about the motivation behind the “rescue”: “This bailout wasn’t done to help the Greeks; it was done to help the French and German banks.”

A Federal Reserve official told Congress that Europe’s debt problems could cause a “significant external shock” to the U.S. economy and stall the supposed global recovery. Joining the bandwagon of those using the crisis as proof of the need for cutbacks at home, he said the experience of debt-stricken European countries is a reminder that “every country with sustained budget deficits and rising debt—including the U.S.— needs to act in a timely manner to put in place a credible program for sustainable fiscal policies.”

Mainstream media were full of charts showing the debts and trading deficits of Greece with bigger Southern European countries (Italy, Spain, Portugal), which in turn are in even greater debt to the biggest economies on the continent, France and Germany. And U.S. banks hold nearly $200 billion in the bank debt of Spain, the country now in the sights of the world’s bankers.

But even those calling for austerity acknowledge it will halt or reverse the alleged recovery from the Great Recession.

Some have challenged the supposed “fact” dictating austerity imposed on Greece: the country’s alleged outsized deficit. Socialist Project author Ingo Schmidt pointed out that “public deficits between 12% and 13% of GDP in Britain and the U.S. are bad, they say, but not so bad that the austerity measures they consider appropriate can’t be left to Number 10 Downing Street and the White House. But countries in southern Europe are labeled spendthrifts, and their deficits called a threat to private investments in government bonds and loans.” Schmidt added that the spending vency, “lead to further economic collapse.”

Spiegel Online said the world financial crisis has entered a new phase: “Today, the world is no longer threatened by the debts of banks but by the debts of governments, including debts which were run up rescuing banks just a year ago. … Can a crisis based on debt be solved with even more debt?”

David Wessel, in the Canadian leftist journal The Bullet, also pointed to the recessionary impact of the rescue: “Can the world economy grow if everyone is trying simultaneously to cut government deficits and export more to pay the bills?” The last phrase is particularly telling, as few mainstream commentators trace the events back to the (continued on page 5)

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... Greek protests mark new high in radicalization Socialist Action june 2010 5 (continued from page 1: “Greek protests mark a new high in mass radicalization”) vealed that financial companies conspired with state governments to conceal the real extent of the budget shortfalls. The actual size of the Greek deficit was only publicly disclosed last October.

The Greek section’s statement noted: “The alleged sudden realization by the Brussels bureaucracy of how ‘unreliable’ the official statistical data on the deficit were—that is, 12.7 percent of the GNP instead of the 4 percent the then government of Nea Dimokratia [the right-wing bourgeois party]—together with the relatively high overall public debt (123 percent of the GNP) gave the rating agencies the pretext to lower the country’s credit rating.

“Of course, neither the extent of the [Greek] deficit nor of the state budget were higher than in other developed countries. In England the deficit was 13.1 percent, in Spain 11.4 percent, in France 8.7 percent. In Japan, the public debt amounts to 197 percent of GNP, in Italy 127 percent of GNP. And this to say nothing of the fact that Greece’s total debt is insignificant in relation to that of the major countries.”

The austerity package was imposed by the Brussels Commission of the European Union, in effect by Germany, the powerhouse of the European economy, which accounts for 27 percent of the European Union GNP by itself.

That situation exposed the basic contradiction of the European Union and its common currency, the euro. There is a huge unevenness between the economies of northern and southern Europe, and by joining the eurozone, poor countries like Greece in effect abandoned control of their fiscal policy. They cannot devalue their currencies to increase exports, as they would have in the past. In the language of the Bible, they have become “unequally yoked.”

The statement of the Greek section noted: “The absence of a federated or united bourgeois European state that could direct public finances in a centralized way led to a sharpening of the inter-European capitalist contractions that arise from uneven development.

“This sharpening of the contradictions in the conditions of the crisis led to a further draining and depression of the weaker economies. The confusion and the panicky reaction of ‘every man for himself’ dominates at least in the short run in the enterprises and the command centers of the European governments.

“The ambitious long-range European perspectives, such as the boastful declarations about the vision of a united Europe with a king of bourgeois parliamentary institutions, seem to have vanished in thin air. Building a united European federal state has run up against the structure of the EU itself, in which no united bourgeoisie with a strong consciousness of its common interests exists.”

An immediate effect of the crisis triggered by the Greek financial distress has been a drastic decline in confidence in the euro and a precipitous fall in its exchange value. The perspective of the euro rivaling the dollar as an international reserve currency is being seriously compromised. And the German head of government, Angela Merkel, has raised the alarm that if the euro falls, the European Union will also.

As a weak state, Greece has a long history of being dictated to by the larger European states. In its very origins as an independent state, an unpopular monarchy with a German royal family was imposed on it. Greece only managed to throw off the oppressive monarchy when it forced out the dictatorship of the colonels in the early 1970s.

At the time, the present ruling party, PASOK (Pan-Hellenic Socialist Movement) was able to take office on a wave of radical nationalism, marginalizing the powerful and entrenched Greek Communist Party. The country’s leading daily, Eletherotypia, has recently contrasted the great hopes that the first PASOK government inspired with its deep discrediting now as the government party that is implementing the austerity package imposed by the EU.

In this respect, there is an analogy with Latin America. When the Latin American military dictatorships gave way to parliamentary rule in the 1980s, there were similar hopes, which were soon dissipated by the right-wing economic offensive conducted by the so-called democratic governments. In Greece, as in Latin America, neoliberal recipes dominated in the post-dictatorial period, which have now been discredited in the eyes of the masses.

The Greek Communist Party is the heir of a cycle of civil wars following World War II, in which it had the support of the majority of working people but was betrayed by the Moscow leadership that it looked to, as well as by its own leaders who followed Moscow’s line. It continues to be stronger relatively than any other Communist Party in Europe and has followed a line more to the left, at least verbally, than the others.

In the present situation, it has been trying to capture a radicalization that raises the possibility of a renewal of socialist aspirations among the masses. And on this basis, it is putting forward (continued from page 4)

underlying crisis of profitability tied to global excess production capacity, which manifests itself in heightened trade tensions.

After the rescue was announced, The Financial Times stated, “It has belatedly dawned on Spaniards that the Iberian peninsula, not Greece, is the main target of the financial ‘bazooka’

unveiled by the European Union and the International Monetary Fund.” Almost immediately, Spain’s social democratic Prime Minister José Zapatero announced his own drastic attacks on Spanish workers, despite an official unemployment rate already over a perspective of a renewal of the world Communist movement as the representative of a radicalization in response to the worldwide crisis of capitalism. This stance was publicized in the international press by pictures of Communist Party members holding up signs in the shadow of the Acropolis calling on the peoples of Europe to “rise up.”

An article in the May 23 issue of Rizospastis, the CP paper, declares: “Today in the conditions of a counterrevolution, in a series of countries, the question is posed of building Marxist-Leninist Communist Parties from scratch, in others, their reorganization with a revolutionary orientation. In all countries, the necessity remains of building Communist Parties.

“Conditions are riper than ever for building independent organizations of Communists, for the existence of parties of parties of a new type, the expression of a renewal of revolutionary theory with the working class, which will base itself on the working class, the vanguard force of society, which will express its interests, focused on its historical mission.”

In the May 22 issue of Rizospastis, a CP representative declared, “either the monopolies lose or the people lose;

20%. This didn’t stop the IMF from issuing on May 24 what The Wall Street Journal called an “unusually blunt warning” that Spain must radically overhaul its labor laws, slash government pensions, and take other harsh measures.

Meanwhile, Germany’s ruling class, the main beneficiary of the “rescue” of Greece, is using the occasion to demand new austerity from its own working class. And the head of the Bank of England told the newly elected Tory-Liberal Democrat coalition government that there could be no delay in implementing a deficit-reduction program.

Obama’s top budget official sang the Louisa Gouliamaki /AFP / Getty Images (Above) Athens mass march, May 5.

(Left) Pro-Communist Party workers at Athens rally on May 6.

there is no intermediate solution.” The statements continued the old Stalinist references to “monopoly capitalism” (as opposed to capitalism in general) and suggested the old appeals to Greek nationalism. But in most cases, “victory of the people” was linked to socialism, and alliances with capitalist parties were rejected.

Despite its left stance and language, the Greek Communist Party has a heritage of bureaucracy and sectarianism, as well as the allegiance of an important part of the working class. The actual effect of its left positioning will have to be watched closely. But regardless of the real role played by the Greek CP, its raising the banner of revolutionary Marxism is undoubtedly an indication of the depth of the crisis and the dynamism of the radicalization it has produced in Greece.

In France, the mass demonstrations of May and June 1968 spontaneously raised the symbols and perspectives of socialism. After the illusions faded about the commitment of the CP to socialism, mass protests no longer spontaneously expressed socialist aspirations and tended to become apolitical.

The fact that the Greek CP is now raising the perspective of a renewal of revolutionary Marxism on an international scale may well express a new stage of radicalization in Europe and promote a further radicalization, over and above the concrete actions of the Communist Party.

Of course, the CP will mislead the masses and lead to new betrayals. But the radicalization could also help open the way for the rise of a new revolutionary leadership free from the bureaucratic degeneration of the Greek CP and its allies in other Stalinist formations, and which will offer genuine leadership to a working class in struggle. n same song, calling for action to cut the deficit or “wind up facing the sorts of choices that Greece now faces.”

Statements by the Fourth International over the decades as successive stages of European unification have been attempted have shown that such efforts were designed to reinforce the dominance of the more developed countries while ratcheting down to a lower common level the living standards of the continent’s workers.

The FI has called, in opposition to the bosses’ Europe, for continent-wide mobilizations to raise all workers’ pay, benefits, and rights, paid for at the bosses’ expense—and ultimately for a United Socialist States of Europe. n

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Eduardo Quintana / Socialist Action