Greece: the frontline in the battle against austerity

In July 2011 I posted on this blog about how 'The Greeks MUST default on 'their' debt'. Getting on for 12 months later that default is looking increasingly likely. The Greeks are being sacrificed for the sake of the Eurozone and the banks. The crucial point is that the bailouts were never intended to help the Greek people. The purpose of the bailouts is to save banks, Greek, German and French banks, NOT the Greek people. The pain the Greeks are suffering is to save bust institutions which made bad lending decisions. Once again, banks are too 'big to fail' but people lose their jobs and go hungry and homeless, or lack access to medicine - that is OK, apparently.

This is appalling and inhuman, and what it tells us is about the kind of economy we live in, an economy where people come a long way second to money, and financial institutions. It also tells us a lot about the EU, and what kind of institution it has become. Angela Merkel had the nerve to talk about Solidarity with Greece. But what is happening is the exact opposite of solidarity. The Greeks are being screwed. It is the Germans who have benefited from years of having a weak currency, the Euro, which has helped them to export. This has been at the expense of Greece and other southern European countries.

In the aftermath of the recent Greek election, now that the parties have failed to form a coalition, the screws are being turned on the Greek people once again. Threatening noises have been made in Germany and elsewhere. There is a clear attempt to bully the Greeks into voting for a coalition in June which will implement to terms of the bailout which have been imposed on Greece. This has come about largely due to the resistance of the SYRIZA coalition which came second in the recent election. Quite rightly, SYRIZA have insisted that the terms of the bailout must be renegotiated because they recognise that the debt can never be repaid on these terms and the Greek economy is being destroyed. Its well worth reading the letter that Alex Tsipras, leader of SYRIZA, sent to Manuel Barroso, President of the European Comission. It is perfectly level headed and points out that the terms of the bailout have to be re-negotiated.

SYRIZA: fighting austerity

So where does that leave us? Another election, in which SYRIZA is expected to gain even more of the Greek vote. And we are today being told that if SYRIZA win Greece will have to leave the Euro. So much for solidarity! The tragedy is that 70% of Greeks still want to remain in the Euro. I can only assume they would feel that it would be a national humiliation to leave. But what could be more humiliating than the position they now find themselves in? A default and a return to the Drachma would be hard. Banks would go bust and close. But the outcome, the longer term would be that Greeks could regain their self-respect, and a much larger measure of sovereignty than they have now. It would be a chance to re-build their economy and it has been done before, most recently in Argentina.

You can be sure that the Eurocrats are shoring up the EU economy as best they can, to protect themselves against a default. What they should be doing is helping the Greeks out of the mess both they and the leaders of Greece have created. Whatever happens, and make no mistake a Greek default could have serious ramifications for the world economy, the EU has been severely damaged by this debacle, which leaves a very nasty taste in the mouth.