The austerity measures announced by the Greek Government, dictated though by the IMF and the EU, attack the basic rights of the Greek working people.
We are going through the initial phase of a crisis, the most severe crisis since the Great Depression, a crisis rooted in the very nature of capitalism as a system.
After a harsh wave of job cuts, in Europe the focus of the crisis is now on the public sector and social welfare system. The financial markets that have been rescued thanks to financial support by the states are now demanding massive cuts in public expenditure. This amounts to a class attempt to shift the costs of the crisis from those who precipitated it – above all, the banks – to working people – not just those employed in the public sector but also all those who benefit from the public services.
The demands for austerity and public sector ‘restructure’ are the clearest sign that neo-liberalism, although has been intellectually discredited by the crisis, continues to dominate policy-making.
Greece is one of several European economies that are particularly vulnerable, partly because of a buildup of debt during the boom, partly because they find it hard to compete with richer economies particularly Germany and France, the giants of the eurozone. Under pressure from the financial markets, the European Commission, and the German government, the government of George Papandreou has torn up its election promises and announced severe cuts on the income of the working people.
The austerity plan announced on 2nd May is a disaster for the Greek population: for workers in the private as well as the public sector, retired people and the unemployed, i.e. those deprived of a job.
Here are some of the measures it involves:
• Freezing of wages and retirement pensions in the public sector for five years;
• Suppression of the equivalent of two months of wages for civil servants;
• The main VAT rate has moved up to 23 % after 19 and 21%;
• The other VAT rates have also increased (5 to 5.5% and 10 to 11%);
• Taxes on fuel, spirits and tobacco have been raised by 10% for the second time within a month;
• Early retirements (related to stressful work) are prohibited under 60 years of age;
• The legal age for women’s retirement will be raised from 60 to 65 years by 2013;
• The legal age for men’s retirement will depend on life expectancy;
• 40 full years at work (instead of 35, outside study periods and unemployment) will be required to be entitled to a full retirement pension;
• This pension will be calculated on the worker’s average salary over the years instead of the last salary (which means a net curtailing of 45 to 60%)
• The government will reduce its operating expenditures by 1.5 billion Euros (which means less money for education and health care);
• Public investments will also be reduced by 1.5 billion Euros;
• A new minimum salary for youth and long-term unemployed is set up (i.e. the equivalent of the ‘CPE’ that Trade Unions and young people rejected in France). This amounts to 360 Euros a month instead of the 700 Euros of the previous period (a nearly 40% decrease)
• Transports, energy and post office services will be opened to privatization. Olympic Airways has already been privatized and the privatization of the National Railway has been already announced;
• flexibility of workers will be increased and Layoffs (without compensation) will become easier;
These measures are a declaration of war against the forces of labour in Greece. It is the biggest attack against workers’ rights for many decades. The Papandreou government, the bankers, the IMF and the EU want to impose a condition of social barbarism.
With these measures, small craftsmen and traders will be faced with bankruptcy. Unemployment will explode, and the purchasing power of lower and middle classes will plummet. Inequalities will increase and basic human rights (access to water, energy, health care, education…) are under threat for the more deprived portion of the population.
According to the accounts of the Greek Treasury civil servants and workers declare higher incomes than such professions as medical doctors, chemists, lawyers and bank managers! Almost all corporations (including shipowners, take note that the shipowners chamber is based in London) declare their profits in countries with a more favourable tax system (such as Cyprus) or hide them in tax havens.
The Orthodox Church still benefits from exorbitant tax cuts on its movable and immovable property, while military expenditures in Greece amount to 3.1% of the GDP (the highest in Europe). In the PASOK-EU-IMF austerity plan the profits of the corporations remain intact.
The various governments that have succeeded each other over the past 30 years in Greece bear a heavy part of responsibility in the increasing public debts. Tax policies in favour of more affluent households and corporations have significantly reduced budget revenues and increased public deficits, which has led the State to go into more debts.
Those who organized the crisis are spared while the people must pay the bill.
How European Banks make money on the Greek people.
Since Greece is part of the euro zone, it can neither devalue its currency nor play on interest rates. Its debt cannot be restructured either, since European financial institutions hold 2/3 of it.
The European banks will borrow from the European Central Bank (ECB) at a 1% rate in order to make loans to the their governments (against interests). Countries in the euro zone will lend on an individual basis some 100 to 135 billion Euros over 3 years to Greece at a rate of 5% (45 billion in 2010). Rich countries and banks will thus make money on the Greek people.
Christine Lagarde, French minister of finance, forecasts a profit of 150 million Euros a year. This will increase the public debt of the Greek state so that it will be impossible to pay back its creditors!
The Greek crisis is an illustration of the danger represented by the IMF, the EU and the financial markets.
Rightly blamed for its disastrous structural adjustment programs, the IMF resurfaces in the euro zone after wrecking the economy of several Eastern European countries for two years (eg. Hungary). It uses the same methods as before, still adapted to the same partners: financial markets and Transnational Corporations. Today like yesterday its true nature is highlighted. The EU and its Commission too have reasserted their paradigms in the service of the European Capital. The European Central Bank does not serve the peoples of Europe but banks and financial institutions. After precipitating the Greek crisis, the financial markets try to derive even larger profits. The PASOK government, the European Union and the IMF provide them with a golden opportunity.
Resistance and Solidarity
Fortunately Greece has a bright history of social resistance running back to the 1970s. Following on from the youth revolt of December 2008, the Greek workers’ movement has responded to the government’s cuts packages with a wave of strikes and demonstrations.
The magnificent demo on the day of the general strike of May 5th drew more than 500,000 people with a high militant spirit wishing to enter the Parliament to halt the voting of the austerity plan.
Despite the tragic event of the day (the suffocation of 3 bank employees by gases caused by a petrol bomb thrown by advocates of blind violence, an act that does not withstand any sort of ethical or political criticism) that caused skepticism in the whole spectrum of the left, the militant spirit of the Greek workers movement is still high.
Anger is growing and mass strikes and demonstrations are offering signs of the workers’ resistance. The Left is facing a challenge of historical proportions.
ANTARSYA insists on the need for an escalation of struggles, with general and sectoral strikes and mass rallies that will challenge the attack by the government, the IMF and the EU, defend workers’ rights and demand that capitalists and not workers pay for the crisis. We will keep on fighting with all our forces.
At the same time we promote a program of measures that can lift the economy out of the crisis on the basis of giving priority to people’s needs rather than profits and imposing democratic control over the market. We need to stand for an anti capitalist answer: our life, our health, our jobs before profits.
• All cuts in domestic public expenditure to be halted or reversed: stop pensions ‘reform’; health and education are not for sale;
• A guaranteed right to work and a program of public investment in green jobs – public transport, renewable energy industries, and adapting private and public buildings to reduce carbon dioxide emissions;
• For a public banking service and financial system under public control!
• No scapegoating of immigrants and refugees: legalize them!
• No to military expenditure: Withdrawal of troops from Iraq and Afghanistan, drastic cuts in military spending, and the dissolution of NATO
Greek workers need the solidarity of socialists, trade unionists, and anti-capitalists everywhere. Greece is simply the first European country to have been targeted by the financial markets, but they have plenty of others in their sights, first of all, Spain and Portugal.
Everywhere in Greece as in other European countries solidarity through mobilization must become more manifest.
We rejoice at the first declarations of solidarity and the first support mobilizations in front of Greek embassies. We must go further!
The whole European social movement must stand next to the Greek people! European populations can only win from a common protest!
A victory for Greek workers will strengthen resistance to the cuts elsewhere.
We think that the initiative of organizations of the anticapitalist Left in Europe to express their solidarity with the Greek labour movement is crucial.
It is time for a coordinated international answer to the attempt by capitalists, the EU and the IMF to impose the cost of crisis upon workers. The forces of the Anticapitalist Left of Europe must stand up to the challenge. With confidence in the potential of collective struggle and workers’ militancy, we can defeat the forces of capital and open up the way for the anticapitalist alternative.
Now is the time for the forces of the Anticapitalist Left to coordinate their actions and insist on the possibility for an anticapitalist answer to the crisis. What is needed is a set of concrete political goals that represent a clear break with bourgeois politics, offers the possibility to change the balance of forces in favour of the working class and open the way for radical social change, a new socialist future.