The EU is determined to crush Greece and enforce austerity

I intended to write this post prior to the Greek referendum but so much has happened recently I hadn't the chance to do it. The referendum result on Sunday was a stunning 61% for No or OXI. A massive rejection of austerity and an outcome which reverberated around Europe, and gave hope to all those who believe in democracy, and believe that democracy should determine how a society and economy should be run, trumping all other interests.

Before the referendum Caroline Lucas said at a Greece solidarity rally in London:

“Austerity isn’t only socially destructive, as we know – it is economically deluded as well. Greece’s government debt to GDP ratio hasn’t gone down as austerity was imposed, it has increased”

Of course she was right. The Troika's bailout and programme of so-called economic reforms, which entail cuts in pensions and worker's salaries, are intended to make the poorest pay for the economic ills of Greece and protect those who caused the global economic crash which opened the door to austerity in the first place  - the banks. In fact the bailout was never intended to help the Greek people but to protect French and German banks which lent recklessly to a corrupt Greek establishment so that they could buy German weapons and goods.

The Greek people voted OXI (no) in the referendum on the humiliating Eurozone offer

Greeks were threatened openly by the Eurocrats in the run up to the referendum, they were told that the financial taps would be turned off by the ECB and they would be ejected from the Euro. Now, in the aftermath of the referendum, it seems clear that unless Syriza accept humiliating conditions no better than those rejected by the Greek electorate, the threats will be carried out. The EU Goliath is determined to crush the Greek David to ensure that no other Eurozone country has the  temerity to even think that democracy can prevail against the interests of creditors. This is a foolish and short-sighted approach which has the potential to cause real and lasting damage both to the Eurozone and the EU itself.

The Syriza government is between a rock and a hard place but there is only one way out - default and a return to a Greek currency. In fact they should have already set up a parallel currency to the Euro to allow taxes to be paid and the economy to function. Their immediate problem is not solvency but liquidity. This is a very hard road but in the longer term it it offers dignity and hope to the Greek nation. The alternative is decades of debt-slavery in the Eurozone.

Greece can lead the fightback against austerity in Europe

Today Greeks go to the polls to vote in one of the most important elections in the country's history. After seven years of grinding austerity imposed by the 'Troika', it looks like Greeks could be about to vote in Syriza, an alliance of radical leftists, who have pledged to write off some of Greece's debt and set the country on a new path. Of course, the media have played this up into some kind of showdown between the leader of Syriza, Alexis Tsipras, and the European Union, in which Greece will almost inevitably have to exit the Eurozone.

But exit, or Grexit as the media love to call it, is not inevitable. Given the suffering the Greeks have had to endure with unemployment hitting a high of 28%, 50% youth unemployment and wages falling 12% year on year, it wouldn't be surprising if the Greeks wanted to leave the Eurozone and go back to the Drachma - but they don't. And why should they? They are as much a part of the Eurozone as any other country and still remember having had a currency that was almost worthless.

In simple terms the Greeks are being portrayed as the feckless ne'er-do-wells who are being bankrolled by the industrious, hardworking Germans but this is a false picture. Entry into the Euro for Greece was political not economic, and the Euro was always bound to create problems for the Greek economy. Couple that with a corrupt government and reckless lending by German and French banks - so that Greece could buy German goods - and its not easy to see that Germany did very nicely out of this Euro-arrangement at the expense of the Greeks. All that has now been conveniently forgotten. Thus I heard on The World This Weekend today a half-baked analysis of Greek 'wrongdoing' - essentially Greek bad, German good - as the BBC lined up pundits to criticise Greece and Syriza. With reporting on this level we might as well be living in the Soviet Union.

Its as well to remember that after the Second World War the Germans were mired in debt and struggling economically just as the Greeks are now, that is until 1953 when the London Debt Agreement was reached and half of Germany's debts were written off. This is often credited with starting the 'economic miracle' which transformed the German economy with output doubling between 1953 and 1963.

We know that austerity in Europe is designed to protect banks from going under at the expense of the people. These are the same banks that contributed to the global economic crash of 2008. Its absolutely unacceptable that people should be made to pay for the epic failures of financial capitalism. We need a programme of Green quantitative easing in Europe for investment in energy efficiency, renewables and public transport, getting millions back into meaningful work. That, not debt-driven austerity, must be the future. Here's looking forward to a Syriza majority government and the start of the historic fightback against austerity.

The European Union is becoming the enemy of the European people

The European Union is becoming the enemy of the European people - it gives me no pleasure to post this, but it is essential that I do so because it is the truth. Like many people of my generation I had high hopes for the EU. I voted for the UK to join in a referendum in 1974. I didn't buy the 'common market' guff I was being sold at the time by the corporate propaganda machine of the Tory press. I was voting for the 'ideal' and by that I mean a peaceful, war-avoiding Europe, united in a common and progressive purpose. 

In those days a progressive purpose was a realistic project, that a social Europe would be a prosperous, sharing society in which everyone would benefit from the kind of economic and social progress that still seemed inevitable at the time. How things have turned sour since then! Although most Europeans have held fast to that concept of progress, the politicians and capitalists had other ideas. By the 1970's profits were falling and as the EU expanded, so did the influence of the 'free' market neoliberals who were determined to ensure that the EU became a neoliberal corporate club, dedicated to the interests of the rich, at the expense of the rest of us.

And so now we find ourselves at the end of the European dream, living in a union dedicated to destroying the living standards of workers down to third world levels. The exemplar for this is the treatment of the Greeks, by the so-called Troika, who have been beggared  because of a crisis not of their own making. That the hypocrites who lead the EU such as Merkel (and of late Sarkozy) have claimed that this is "solidarity" only serves to emphasise the hypocrisy and mendacity of the Eurocracy . The Greeks have been betrayed and crushed by their own ruling class, with the co-operation of the Eurocratic/capitalist alliance which is a the heart of darkness of the EU.The bailout was only ever intended to protect European banks at the expense of the Greek people.

Munch's The Scream sums up the fate of the Greeks at the hands of the EU

The primary instrument of our betrayal is the the Lisbon Treaty, a neoliberal charter, which enshrines the supremacy of the 'free' market above the needs and democratic rights of the European people. Until this charter is consigned to the dustbin of history where it belongs, there can be no solidarity, freedom or progress within the EU. We need to fight to overcome not only the democratic deficit in the EU but to free Europeans from the economic slavery of neoliberalism. 

Having said all that, its essential that we reject the anti-EU rhetoric churned out by the likes of UKIP, and the right of the Tory party. The only reason for their euroscepticism is because they want to destroy what remains of EU environmental and employment legislation so that they can can screw UK workers even harder than they are being screwed at the moment. Of course, its ironic that this kind of euroscepticism is popular, and that people's discontent in the UK with the EU has been manipulated by the capitalist media to benefit  the likes of UKIP who think that the neoliberalism of the EU doesn't go far enough. Don't be fooled! We don't need to leave the EU but we do need to change it for the benefit of the European people.

Zombie capitalism

Ever since the crash of 2008, when Lehman Bros. bank went under, politicians in the EU and USA have been battling to restore the status quo, which is often described as 'business as usual'. But it wasn't the collapse of Lehman's which brought the capitalist economy to its knees, it was the accumulation of a huge bubble of toxic debt in the world banking system. Rather than a crash, it has been more of a slow motion collapse, as the house of cards comes down.

The banking bailouts which followed, where governments injected capital into a bust banking system, was supposed to solve the problem, but it hasn't and it never could have done because the debt is still there, it hasn't just disappeared. In the shorter term the debt problem has become a sovereign debt crisis which is threatening to break up the Eurozone. European banks have been propped up by short term loans from the ECB, and this still hasn't solved the problem, but what if it can't, what if there is simply too much debt for the system to pay off?

I have blogged before about how I suspected that there were lots of insolvent banks which were hiding their insolvency with the collusion of governments. For any other kind of business this activity would be illegal, but as we have seen, there is one law for the banks and another for everyone else. Now the Telegraph has revealed the state of hidden debts in the UK banking system. The article, by Liam Halligan, shows that UK banks are sitting on £40 billion of undeclared losses, and that is just what we now know about.

Britain's banking black hole

My guess is that taxpayers patience is exhausted. Are we really going to be expected to bailout a bust system yet again? Not a chance in my view. The reality is that there can be no return to 'business as usual'. Neoliberal capitalism, through privatisation and deregulation, has broken the world economic system. The emperor has no clothes. There isn't going to be a recovery, not in the short to medium term, probably not ever. In a recent post I explained why I thought capitalism had reached the end of the road. In essence falling profits have lead to a class-war attack on the 99%, cannibalisation of the public sector, mass unemployment and an unsustainable property and financial bubble. Now there is nowhere left to go. We urgently need a radical alternative economic strategy which has to involve the state taking responsibility for control of the economy, nationalisation of the banks, a Green New Deal, and a move to a low carbon economy. The alternative could just be a collapse into the kind of barbarism we saw in the 1930s. Oh, and don't forget the fact that we have to deal with climate change, and we saw a graphic illustration of that in the UK this weekend.

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.

Yes to a referendum on the EU!

According to Paul Cotterill on the Liberal Conspiracy blog Caroline Lucas, the leader of the Green Party,  has outflanked Labour on the issue of a referendum on the EU. He is right. Outflanking a gauche and leaden-footed Labour leadership isn't difficult these days. Labour is completely hamstrung by its New Labour legacy, and because of its complicity in privatisation and austerity it is incapable of challenging the most dangerously reactionary government in a century.

Caroline said: "I support a referendum on our membership of the EU because I am pro-democracy, not because I'm anti-EU - and because I want to see a radical reform of the way Europe operates. The EU has the potential to spread peace and make our economies more sustainable, and to promote democracy and human rights, at home and throughout the world. But it must urgently change direction, away from an obsessive focus on competition and free trade and towards placing genuine co-operation and environmental sustainability at its heart."

Caroline has called this exactly right. We need to challenge the lack of democratic accountability and neoliberalism of the EU. Most people don't want us to leave, but this is a Europe of austerity, dominated by the ECB. The way the Greeks and Irish have been humiliated is appalling, and all to bail out French and German banks. That is unacceptable. We need start a movement to liberate the EU from the dead hand of neoliberal failure, and make sure that the Green Party is at the forefront of that movement.