New Internationalist

We are all Greeks

Posted by Vanessa Baird | 2
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Popular movements across Europe are stepping up and internationalizing their actions to create a united front against austerity.

The coming weeks will see simultaneous protests in several European countries on October 15 and when the G20 meet in Cannes on 3-4 November. A Europe-wide day of action is also being planned.

As Greeks strike and protest against savage job and pension cuts and refuse to pay emergency taxes, unions and civil society groups in other countries are also gearing up.

Woman protests austerity cuts in Greece

Photo by underclassrising.net under a CC Licence

Though each country has its different characteristics, all austerity programmes seem to have this in common: they are enabling a lasting transfer of wealth from public to private, from people to banks, from poor to rich.

‘We need to create a common mobilization, a common agenda,’ said German activist Max Banc, from the German branch of the finance pressure group Attac. He was speaking at a European Coalition of Resistance conference in London last weekend – attended by around 600 activists, trade unionists and academics from countries including Greece, Ireland, Germany, France, Belgium, Portugal and Spain.

Delegates challenged the ‘divide and rule’ stereotype of ‘prudent and hardworking Germans’ having to bail out ‘lazy and profligate Greeks’ – which has particular currency in Northern Europe.

‘There isn’t a division of the people of Europe,’ said Steffen Stierle of Attac, Germany. ‘The people of Europe are on one side, the banks and capital are on the other.’

It’s easy, if you listen to European politicians and the mainstream media, to form the impression that the ‘troika’ – the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) – are trying to save the Greek economy. Actually, their purpose is to recapitalize the European banks exposed to Greek debt and to protect the euro.

The bailouts they have arranged, not only squeeze the people. They are also likely to result in the dismemberment of Greece’s public assets, which will be sold off to the private sector, including, one can reasonably suppose, the banks and speculators who created the 2008 crisis that is at the root of today’s troubles.

However, there are signs of hope. The people’s ‘debt audit’ movement, started in Greece and Ireland, is gathering pace, with similar initiatives starting in France and Portugal. These ‘citizen auditors’ are investigating: Who took out the public debts? What was the money used for? And who is the money owed to?

‘People working in public bodies are coming to us, anonymously, with carrier bags full of information,’ said one of the movement’s founders, Georgos Mitralias.

The idea is to identify the debts that are illegitimate (or ‘odious’), in that they were improperly obtained or misused, and have them cancelled outright. Some would argue that might apply to most of the debt.

In Ireland, a similar movement in questioning Irish sovereign debt, the bulk of which came as a result of bailing out the banks to the tune of least 70 million euros ($94 million) in 2008. In December 2010 a loan of 58 million euros ($78 million) from the IMF and EU was contracted, not as bailout to Ireland but ‘to ensure that  Ireland would  pay back the money Irish banks owe to foreign institutions, with the bulk of bail-out money routed via Ireland for that purpose,’ according to Irish academic and activist Andy Storey. ‘The Irish people are being asked to repay a debt that was not of their making and from which they gained little or nothing – this is a prima facie case of illegitimate debt,’ he says.

Irish demo against the cuts, 2010

Photo by informatique under a CC Licence

Default is viewed by many as inevitable – both in Greece and Ireland.

A cartoon in the Greek Daily Ta Nea shows a figure being denied entry into a packed meeting of the ‘I won’t pay movement’. The figure being turned away is Evangelos Venizelos, the Greek finance minister, who protests: ‘But I’m not paying either. The coffers are empty.’

The Greek authorities are now trying to squeeze taxes out of people on the lowest incomes. Already 20-30 per cent is being shaved off old age pensions; 20 per cent salary cuts have become common, and 30 per cent of public sector workers are likely to lose their jobs. Value-added tax is now imposed on all food items, including 20 per cent on bread. But still the tax revenue is shrinking, partly due to a shrinking economy, rising unemployment, and the fact that state workers are tax payers.

While the tax-evading rich remain more-or-less untouched (shipping companies are still exempt), hunger wages are becoming common and the suicide rate has gone up by 41 per cent, according to recent article in the British medical journal The Lancet.

‘I would not mind paying the 1,300 euro ($1,754) one-off tax they want next month if I thought it was for the good of my country,’ says one young woman in Athens. ‘But where will the money go?’

Governments across the continent are hardly innocent parties. They have failed – and continue to fail – to regulate their banks and finance sectors. While in Greece, successive governments have failed to reform the seriously dysfunctional and unfair tax system.

And in recent times, a large question mark has arisen over the size of Greece’s sovereign debt itself and how it came to be measured.

In late September, two of the country’s leading statisticians told parliament that the upward revision of the 2009 deficit was artificially inflated to allow for tougher austerity, reports the Athens News.

Nikos Logothetis, former vice-president of the Hellenic Statistical Authority (Elstat) and Zoe Georganta, professor of applied informatics at Thessaloniki’s University of Macedonia, claim the deficit was inflated by arbitrarily and hastily including 17 public utilities into the government account. This was done under the orders of the new president of Ellstat, Andreas Georgiou, who between 1989 and 2010 worked for the IMF.

Zoe Georganta says: ‘The deficit was inflated to justify the harsh austerity measures imposed on Greece by the 110 billion euro [$148 billion] EU-IMF bailout package that was signed on 4 May 2010. Troika officials thereby sought to create the impression that Greece’s deficit was even higher than Ireland’s.’

She adds that the 2001 debt was repayable in 16 instalments of 400 million euros ($539 million), between 2004 and 2019. ‘There was no reason to charge the 2009 budget with this additional 5.4 billon euros [$7.2 billion] – the full net present value of the swap – instead of only 400 million euros.’

It makes a big difference.

Standing to gain from all this are the lenders, who can charge sky-high interest rates and the speculators and corporate vultures waiting for the dismemberment of Greece as the country is forced to sell off its public assets or even, it has been suggested, islands.

So what’s the answer? Few are willing to stick their necks out. But a Europe-wide progressive agenda might look like this: place the banks under democratic control and regulate them and the wider finance sector; raise taxes by closing tax loopholes and by raising taxes on the rich and corporations; renounce illegitimate debts and restructure or write-off others; and finally, remind governments and the EU that their first duty is to the people of Europe, not to its financial institutions.

In the case of Greece, economist Michael Burke of the Socialist Economist Bulletin argues that rather than bail out private creditors there should be a bailout for the Greek economy, so that it can be invested in, progressively, and growth can be restored. This should be financed by the core economies at no greater cost than that of bank bailouts. It makes no sense, he says, to make further payments to private creditors and so default of ‘restructuring’ is required, with existing holders to Greek bonds being obliged to take significant losses – or ‘haircuts’ in the lingo.

Who knows, some of them might have to forego their bonuses this year…

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