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Tragedy of Greece is a lesson to all
by Jeremy Corbyn
17 February 2012

Greece has been under pressure since 2008, as its debt ratio broke eurozone rules. Cuts were enforced, ratings agencies downgraded the country’s status, interest rates on bonds went up, more cuts were made to pay the debts, bigger debts accrued as interest rates were ratcheted up again, followed by more cuts. And so the tragic story goes on.

There are a couple of narratives behind this

Unemployment is rising very fast, youth unemployment breaks all records and the cuts in benefits, wages, pensions and supplies to services like hospitals and schools mean the poorest and most vulnerable people suffer the most.
None of those who sweep the streets of Athens, serve in restaurants, teach in schools or work in hospitals caused the issue, but are all paying a price.
For the ordinary people of Greece it is equivalent to workers in a factory who, after a lifetime of toil, find their factory being denuded of workers, jobs and all security, while endless people in sharp suits with laptops demand more cuts and more payments to themselves for helping the company destroy itself.
The initial assertion that Greece was over the fabled debt-to-GDP ratio in 2010 started the round of cuts, followed by the first European loan of €110 billion.
Later in 2010 it received a second loan of €109bn. The next loan is subject to the government making further €350 million round of cuts.

Aside from the brutality of this, two questions emerge

With the massively increased interest rates Greece pays for short-term bonds, who is benefiting and who is paying the price?
Democracy has been cast aside. After winning the election less than two years ago, the Pasok government argued it had to implement the demands of the European Central Bank (ECB) to stay in the euro.
It made massive cuts despite some party MPs defecting and massive street protests.
George Papandreou, a tragic figure of Shakespearean proportions, finally threw in the towel after the ECB said it needed a new government.
Greek Prime Minister Lucas Papademos was chosen by the “independent” ECB.
Although he did succeed in getting Parliament to agree yet another round of austerity in the last week while Athens rioted and burned outside, this apparently is not enough for the sharp-suited financial inspectors.
It must be obvious to them that the whole policy is counter-productive to any human needs. And while they quibble over the details of the cuts, they now question all the rights of the whole country.
The financiers are asking for written guarantees from all parties ahead of the elections, that they will continue the austerity packages or the money will not come.
The next logical step is a written guarantee by every candidate to only obey the ECB and not the wishes of the people who are voting for them.
Greece has become a laboratory for the economic orthodoxy of a currency that has no national controlling political process.
During the fevered debates on the Maastricht Treaty, it was the left which pointed out that the euro would impose a straitjacket of monetarist orthodoxy on the poorest people and their economies and that its enforcement would be by an unaccountable central bank.

While what is happening in Greece is tragic beyond measure, it is not new

The brutality of IMF debt terms to African and Latin American economies from the 1980s onward denied the opportunities for many of the poorest to develop in those continents, and paved the way for privatisation and the cheap sale of their precious minerals.
Further back in time, the US invaded Haiti to collect debts for its bankers, impoverishing a proud people who had fought for their independence from France.

Capitalism, debts and loans have a brutal side to them

The people of Greece can only protest and call for solidarity. All their services are being decimated, their young people suffering in ill-equipped schools and loss of job opportunities. National assets, publicly owned services and state land are all being sold to multinational companies in the name of “restructuring.”
Greece is a warning to the other most indebted euro economies, Spain, Portugal and Ireland, but also a lesson in what the banking arm of capitalism can and does do.
The left in Europe needs to think very fast. There are hardly any left-of-centre governments and those that have implemented the diktats of the ECB have paid a heavy price - ask Pasok supporters.
The way back for the left is not to please the bankers but to control the juggernaut of the finance system of Europe.
The ECB has brutally enforced its banking stability measures and has no obligation or requirement to maintain welfare, health and vital public services or employment.
A socialist alternative is needed to put the needs of people ahead of the banks - and it needs to be developed across Europe.
The tragedy of Greece is not a one-off but a warning and a lesson.


Jeremy Corbyn is Labour MP for Islington North.

Jeremy Corbyn