Neo-liberal "solutions" worsen Greek plight

Submitted by Matthew on 1 June, 2011 - 10:04

The latest austerity measures by the Pasok government were fully expected.

This recipe for dealing with the Greek debt, under the guidance of the IMF and the European Union (EU), is the main cause of the problem. Called neoliberalism, it is a well-known failure. But every time the measures fail to give the expected result they insist on an even more harsh application of the same logic. It is like a doctor who insists on increasing the dose of a failing cure. It is torture without end for the Greek people!

The new austerity programme is 50 billion euros in cuts by 2015. According to the IMF and the government, the goal is to cut the debt by 7.5 % of GNP in 2011. The IMF and the EU’s representatives visit Athens every two to three months and if they are not satisfied by the decrease of the debt, they press for new austerity measures, blackmailing the government by threatening to withhold the next installment of the loan. In their last visit they told the Greek government that it should privatise almost everything. They also insisted on firing civil servants, but the government of Pasok refused.

Papandreou has now announced that ports, state banks, airports, the water company, electricity, the one state telephone company, the lottery company, and trains are going to be privatised as soon as possible.

Some of these concerns are profitable. For example, the state lottery company has annual profits of around 700 million euros and they are thinking of selling it for just two billion euros! Greek state companies are the best prey for the vultures of world capital.

New taxes on oil, food, drinks and cigarettes have been announced. But, of course, no new tax increases on the profits of the banks or the private companies. As Joseph Stiglitz put it in the Telegraph: “The longer restructuring is postponed, the more debt moves onto the books of the public, the more the banks are protected.”

Money is squeezed from the working and middle-class in the rest of Europe so that the banks who have made loans to Greece do not lose out. And none of the money that the Greek state takes from taxes, etc, is put into healthcare or education. The entire amount is given to paying the loan. Greek people have absolutely nothing to gain from the new loans.

Strikes take place every now and then but nothing changes, since the working class movement has no goal to overthrow the government. On 25 and 26 May a lot of people took to the streets, just as in Spain. No party or trade union organised these protests.

Ministers say they understand the harsh times that people are going through but that we have been forced to implement this policy. In a TV interview the Finance Minister Papakonstantinou said that if Greece had not taken the latest loans they would not have been able to pay the salaries and pensions of the civil servants. But this is only half of the truth! If the Greek state had refused to pay the debt there would be no problem paying salaries and pensions.

There are some conflicts within the government over privatisations but they are very mild. Papandreou says that his government is supported by the majority of the Greek people, but the latest poll showed that 80% of the Greek people oppose the government policy. No one beside the officials of the EU the IMF and Pasok is optimistic! Even the Financial Times thinks that default is unavoidable. Most Greek journalists do not question the general plan of the governmental policy, but only some of the measures taken.

The Greek state has already defaulted to its citizens. All those who work under contract for the government are being paid with at least two months delay. For example:

• There are teaching fellows in Greek universities paid 300 euros monthly, less than half the amount of the minimum wage which is 752 euros;

• The head doctor of an intensive care unit in an Athens hospital put an announcement on his door telling relatives of patients that they should buy bandages, gloves and other medical stuff themselves because the hospital has run out of them!

• Kenyan workers at the Greek embassy in Kenya have not been paid for six months and the embassy does not have money to pay the oil for its cars.

Marx said that “Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.”

I will add that when once it has sucked all the blood from labour it will suck even the marrow from its bones! This is what we are witnessing right now in Greece.

The authors are academics based in Greece.

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