Greece, Like Strauss-Kahn's Maid, Resists IMF Rapists
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EIR Economics Greece, Like Strauss-Kahn’s Maid, Resists IMF Rapists by Dean Andromidas June 18—The great edifice of the Euro Empire appears looming default of Greece exposes the failure of the to be crumbling before the mass strike now sweeping EU110 billion bailout put together in 2010; in turn, a Greece. Hundreds of thousands of Greeks have taken to Greek default will immediately lead to the collapse the streets to demonstrate they can no longer tolerate the EU100 billion Irish bailout and the yet-to-be ap- brutalization for the sake of a mountain of unpayable proved EU85 billion Portuguese bailout. But the great- debt. The paralyzed Greek government is unable to im- est fear is a collapse of Spain, whose economy is larger plement the austerity plans required before yet another than all the others put together. Its national banking EU bailout can be implemented, to prop up the hope- system, led by the Inter-Alpha Group’s Banco lessly bankrupt euro financial system. Santander, and its regional savings banks, which are The Greek government’s own paralysis is mirrored buried under a mountain of worthless mortgage debt, 17 times over by the paralysis of the 17 nations that are hopelessly bankrupt. Since the banks of each of make up the Eurozone. After losing their bailout ring- these countries hold most of their respective nations’ leader, former International Monetary Fund director debt, a sovereign debt default will collapse the national Dominique Strauss-Kahn, they are unable to agree on a banking systems. policy to save the doomed Eurozone. While the Euro- The June 6 figures from the Bank for International gang squabbles over unworkable schemes ranging from Settlements (BIS) reveal that the banking systems of “voluntary haircuts” for private creditors to wet dreams France, Germany, and the U.K. will be hit hard when of a giant new bailout fund of EU1.5 trillion, the only Greece defaults, since French banks hold EU53 billion solution available is the restoration of a Glass-Steagall of Greek private and public debt, German banks hold standard in the United States, and its extension to EU39 billion, and British banks more than EU13 bil- Europe. lion. Fragile Portuguese banks hold more than EU10 bil- Fear of Contagion lion in Greek debt, the loss of which would could trig- It is not Greece that is bankrupt, but the euro system, ger a banking crisis there. France holds EU27 billion in that monster created by the City of London’s Inter- Portuguese debt, Germany EU36.5 billion, and Great Alpha Group of banks, which crashed along with the Britain more than EU24 billion. But it is Spain that is U.S. banking system in 2008 and was bailed out by the most threatened, with EU85 billion of Portuguese governments of the United States and Europe. The public and private debt. 12 Economics EIR June 24, 2011 Creative Commons/George Laoutaris European Commission With the arrest of IMF director Dominique Strauss-Kahn (above) last month for sexual assault, the troika of financial powers trying to squeeze more blood out of bankrupt Greece is in trouble. Greek Prime Minister Papandreou is trying follow the troika’s orders to impose more austerity, but the population is resisting, as seen in the photos at left. Creative Commons/George Laoutaris program of brutal austerity, in a desperate attempt to As for Spain’s own debt, this gets us into very big save themselves. The bailouts, including the EU110 numbers, with German banks holding EU181 billion, billion Greek bailout package and the EU750 billion French banks EU141 billion, British banks EU112 bil- European Financial Stability Fund, are a replay of the lion, and Dutch banks EU77 billion. Portuguese banks 1881 International Debt Commission that was imposed hold EU25 billion worth of Spanish debt. on Egypt by the “Great Powers,” which made it a “pro- One now has to include the European Central Bank tectorate” of the British Empire. itself, which holds EU49 billion of Greek sovereign Unlike that earlier Debt Commission, which at least debt, along with that of Portugal and Ireland, for a made the pretense of investing funds into projects inside total of nearly EU100 billion. On top of this, it has ex- Egypt—even if they were to benefit the imperial tended emergency short-term loans to the banking powers—today’s bailouts only suck money out of their systems of these countries, plus Spain, for a total of victims to pay their creditors. This is done through the nearly EU400 billion. Then there is the so-called “non- instrumentality known as the “Memorandum,” whereby standard” short-term lending to the Eurozone banking Greece, Ireland, and Portugal ceded sovereignty over system as whole, which runs into the hundreds of bil- their economies to the troika. lions. In the case of Greece, it first slashed the salaries of All these figures are little more than a guess at the the 750,000 public-sector workers by 20%; govern- real magnitude of the problem. The debt constitutes a ment pensions were cut by 15%, and the age of retire- giant financial balloon of derivatives of all shapes and ment was increased. Various taxes were increased, and sizes. cuts were made to social benefits, education, and the health-care system. These cuts have devastated the Crushing Greece living standards of Greece, which was already among Like the usurers of the Babylonian Empire, the the poorer nations in the European Union. In this first “troika” of the European Union, European Central phase, the economy shrank by 5.5%; unemployment Bank, and International Monetary Fund has devised a increased by 40% over the last year and has now June 24, 2011 EIR Economics 13 reached 16.2%, with youth unemployment no People of all walks of life less than 42%. For the are joining the Greek first time since World War demonstrations, correctly II, impoverished Greeks fearing that they have no can be seen picking future under the present through garbage cans. system. The police have used tear gas, stun Even though the deficit Creative Commons/George Laoutaris grenades, and batons to was cut by 5 percentage repress demonstrators—but points, this was not recently even retired police deemed sufficient by the and soldiers have been joining the demonstrators. troika’s team, which reviews the prog- ress of the Memo- randum each quar- ter. The troika’s June quarterly review de- termined that not only was the Mem- orandum not work- ing, but that Greece will need a new bailout. Thus a new Creative Commons/George Laoutaris Creative Commons/George Laoutaris Memorandum was drafted, demanding even more cuts; it now While Greece began has to be passed by the Greek Parliament. The this process a year ago, new four-year program includes additional with a debt-to-GDP cuts of EU6.4 billion this year and EU30 bil- ratio of 110%, the ratio lion by 2015, elimination of 150,000 jobs in now stands at 165%! the 750,000-person public sector by 2015, a The troika does not see freeze on pension costs, an additional EU4 this as a problem, be- billion cut in social benefits over the next four cause it has identified years, a EU3 billion cut in social welfare, plus EU300 billion of public increases in the value added tax, property assets, including Greek taxes, and a “solidarity tax” on all those earn- islands, which can be ing over EU8,000 annually. Among the draco- sold off. nian labor “reforms,” salaries of 18- to 25- year-olds will by cut by 20%, to below the The ‘Indignants’ of minimum wage. Syntagma Then, EU50 billion will be raised by priva- On May 25, a few tization of state assets, to be overseen by an days after IMF director agency whose decisions will be irreversible Creative Commons/George Laoutaris Strauss-Kahn was ar- and which will include “observers” nominated rested on charges of by the Eurozone states. attempting to rape a hotel chambermaid, another of These draconian measures will be taken out of the his victims began to resist: the people of Greece. hands of Greek elected officials, and turned over to the Taking up the challenged posed to them by “Los In- European Commission and IMF technocrats, who will dignados” (the Indignants) protesters in Spain, thou- supervise tax collection as well as the “reforms.” sands of Greek youth took to the squares of the major 14 Economics EIR June 24, 2011 cities of Greece, especially Syntagma Square in Papandreou’s Dead Government Walking Athens, where the Parliament is located. Thus, the The self-organization of the Greek population in its mass-strike movement was born, calling itself the protest against the brutal policies forced upon it con- Indignants of Syntagma (in Athens) and the Move- trasts sharply with the disarray of the Greek political ment of the Indignants (nationally). class and the European political leaders who are forcing Tens of thousands have gathered every night since this policy on Greece. May 25, including a 500,000-person demonstration on On June 15, in the face of 100,000 demonstrators June 5. Their banners read: “Poverty is the worst vio- who surrounded the Parliament and a 24-hour general lence,” “Bread, education, liberty: We want our life, we strike by the trade union federation, Greek Prime Min- want our happiness, we want our dignity, so out with ister George Papandreou took a series of desperate po- the thieves and out with the IMF,” “The European litical maneuvers to save his government long enough Union does not solve the problem, it is the problem,” to pass the revised EU Memorandum through Parlia- and “The maid resisted, so will we.” On June 11, the ment.