Greece fights back

2 February 2015 by Sushovan Dhar


With the build-up of the sovereign debt crisis in Europe, the political pundits and financial honchos, not to mention the ruling elites, preached to us about the virtues of “austerity.” Wolfgang Schäuble, the German finance minister, was audacious in preaching austerity as the sole panacea for the Eurozone-evil.

Herr Schäuble and his likes lecturing the European people, including the Greeks, wanted the plebeians to comply with the diktat of the Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

(the EU, the European Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

, and the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
) – in order to be “rescued” from the awful financial disorder that their elites have put them in.

Syriza victory

However, four years on, the Greeks decided to be disobedient pupils. And, the coalition of radical leftists, Syriza, won the elections on an anti-austerity program. This victory clearly manifests the popular rejection of the so-called austerity policies imposed by the Troika and faithfully enforced by successive Greek regimes, whether of right or “left,” since 2008.

The Troika’s prescriptions, called the Memorandums, reminds us of the odious “structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

programs,” earlier imposed on the Southern countries trapped under piles of foreign debt. These prescriptions were nothing but reducing public welfare spending, remotion of subsidies for the poor, privatisation of state-owned firms, and regressive taxes on working people and the poor.

Alexis Tsipras led Syriza to win 149 seats in the 300-seat Greek parliament with a 36.3% share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of the vote. Only two short of an absolute majority. In order to form a government, he decided to collaborate with ANEL (Independent Greeks), the populist right-wing party which has 13 seats. While the latter is certainly a lesser evil compared to others, it is nevertheless an evil. It is deplorable to see the sectarian attitude of KKE, the Greek Communist Party, which won 15 seats but refusing unity in struggle and ruling out any support to Syriza.

The ravage and destruction

Syriza’s anti-austerity & anti-bailout program found a spirited audience in an otherwise visibly tired and depleted landscape. Greece’s GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
has dropped by 25% since 2009; the household income by around 35% with unemployment trebling to 26%.

Severe spending cuts and towering joblessness have compelled 3.1 million people (a third of the Greek population) to lose their health insurance and other social securities. This population is drowned below the poverty line with 18% incapable of buying food.

History is replete with terrible incidences of social collapse due to wars and armed invasions. In recent times, the prime examples are Iraq, Afghanistan, Sierra Leone, Mozambique, the Democratic Republic of Congo, Sudan, and Syria.

However, the Greeks were compelled to endure almost an unthinkable measure of privation “peacefully.” The economy plummeted in such a manner that the Greek economy is 30% smaller than what it was six years ago.

In social terms, this shattered millions of lives and a whole generation of youth who grew prematurely old, deprived of any chance at a stable and assured life. According to various studies, close to 25% of the population live under dire poverty with another 35% on the brink of being pauperised.

Wages have consistently fallen by 5% per annum 2009. During a survey, some 47% of Greeks reported that they were unable to afford necessary treatment. A 33% cut in education spending between 2009 and 2013 left the public education system ravaged. Not content with that the ruling class has scheduled to cut another 14% by 2016.

Thousands of teachers are jobless and the classrooms are overcrowded with students. The first world had no parallels of such situation since the Great Depression of the 30s.

Therefore, the huge popular jubilation witnessed in the streets and neighbourhoods of Athens or Thessaloníki and throughout the country, manifests the triumph of those people who had suffered immensely due to government policies and were immiserated.

The threat

With the official dissolution of the Hellenic Parliament on December 31, 2014, the formal announcement of a month-long election campaign was made. Instantly, both European and international “masters” launched a systematic campaign filled with hatred, lies, and threats to force the masses away from voting for Syriza.

President of the European Commission Jean-Claude Juncker, German Chancellor Angela Merkel, French President François Hollande, Italian PM Matteo Renzi, “austerity theorist” Wolfgang Schäuble and their lackeys, all raised their voice in unison against the enfant terrible.

Backed by the mainstream European media, these “leaders” were hoping to stage a media-coup and brutally poison the minds of the Greek public. However, this public was already exhausted to witness their land turning into a mess of social ruin due to the inhumane and barbarous austerity policies that these leaders have imposed through the infamous Troika.

The debt that Greece is expected to pay is equivalent to 175% of its GDP. It is abominably an insufferable onus for the Greek people. This illegitimate, illegal, and odious debt Odious Debt According to the doctrine, for a debt to be odious it must meet two conditions:
1) It must have been contracted against the interests of the Nation, or against the interests of the People, or against the interests of the State.
2) Creditors cannot prove they they were unaware of how the borrowed money would be used.

We must underline that according to the doctrine of odious debt, the nature of the borrowing regime or government does not signify, since what matters is what the debt is used for. If a democratic government gets into debt against the interests of its population, the contracted debt can be called odious if it also meets the second condition. Consequently, contrary to a misleading version of the doctrine, odious debt is not only about dictatorial regimes.

(See Éric Toussaint, The Doctrine of Odious Debt : from Alexander Sack to the CADTM).

The father of the odious debt doctrine, Alexander Nahum Sack, clearly says that odious debts can be contracted by any regular government. Sack considers that a debt that is regularly incurred by a regular government can be branded as odious if the two above-mentioned conditions are met.
He adds, “once these two points are established, the burden of proof that the funds were used for the general or special needs of the State and were not of an odious character, would be upon the creditors.”

Sack defines a regular government as follows: “By a regular government is to be understood the supreme power that effectively exists within the limits of a given territory. Whether that government be monarchical (absolute or limited) or republican; whether it functions by “the grace of God” or “the will of the people”; whether it express “the will of the people” or not, of all the people or only of some; whether it be legally established or not, etc., none of that is relevant to the problem we are concerned with.”

So clearly for Sack, all regular governments, whether despotic or democratic, in one guise or another, can incur odious debts.
that the Greeks are burdened with is surely not their debt.

Isn’t it surprising to see that the election in such a small country of less than 12 million people could create such palpitations for ministries in Berlin, Paris, or Rome, and at the EU headquarters in Brussels. The crusade against the “dangers” of the radical-left in Greece was designed to coerce the Greeks into renouncing their right to change.

This smear campaign was also aimed at influencing European public opinion to frown upon Syriza in order to arrest the spread the “contagion” across the continent, in an eventual victory of the radical-left.

Possible consequences

The winds of change might spread across Spain this autumn, with the anti-austerity bloc Podemos winning the election. The possibility of the Cyprus, Portugal, and Slovenia citizens considering displacing calamitous ultra-conservative parties by left-wing formations can’t be ruled out as well.

European ruling elites and their benefactors, the private capital and the corporates, are not oblivious to the fact that the majority of common Europeans despise the policies that have been enforced in the past few years, and might decide to vote for change.

The Syriza victory implies a strong warning to the mainstream parties, either conservative or “socialist,” increasing their anxiety that the contamination could spread to Spain and then elsewhere.

In the end, the Greeks rejected the threats and provided a fitting reply. The victory of Syriza is certainly a manifestation of the mass outrage against austerity. Rooted in previous traditions of popular resistance, this indignation has produced waves of outbursts and struggles since 2008. The election results are an essential rejection of the cardinal policies flaunted for handling by the EU and Germany under the pretext of handling the Eurozone crisis.

It would also be after four decades that neither the centre-left Pasok, nor the right-wing New Democracy remain at the helm of Greek affairs. One would expect that the Hellenic republic leaves behind the nightmares of the catastrophic austerity, fear, and authoritarianism. The five years of humiliation and suffering are enough! The Greek people deserve our support and all-out solidarity while they try to embark on a new journey.

The sounds of jubilation from Athens are loud enough to spread around the planet. Are our leaders listening? The Modis, the Hasinas, the Sharifs, and their counterparts in the region?


Other articles in English by Sushovan Dhar (55)

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