It is now all-but inevitable that Greece will be driven to default. Far from curing her economic woes, the May 2010 bail-out accelerated rather than retarded her descent into the abyss, with her economy contracting violently and her unpayable national debt now nudging 160 percent of her gross domestic product (GDP). As a result, 6.6 percent of her GDP is swallowed up at once by the interest payments, set at a rate way above that at which the EU and IMF are themselves able to borrow.
The additional austerity package that Greece’s ruling social-democratic PASOK party steamrollered through parliament on 28 June includes public spending cuts of €6.5bn in this year alone, set to reach a total of €28bn by 2015. To achieve this will require further massive privatisation, deregulation and casualisation, along with cuts in wages, pensions, benefits and jobs, tax hikes and a scandalous fire sale of €50bn worth of national assets, including Greece’s lucrative seaports and airports.
Sooner than forgo July’s dole payment of €12bn from the IMF, the Greek bourgeoisie has achieved cross-party consensus on the need to sell out their country and wage class war against the proletariat. In the light of the craven retreat of the PASOK ‘left’, it is now abundantly clear that all that stands in the way of this assault is the organised resistance of the working class.
Resistance breaks through social-democratic constraints
The resistance of the Greek proletariat continues to be an inspiration to workers everywhere. The sequence of general strikes (over 20 in two years), marches and direct action, repeatedly besieging the parliament in Athens, has grown from strength to strength, drawing from the social-democratic government of PASOK ever more unbridled attempts to crush dissent by force.
The day before parliament was to rubber stamp the EU/IMF austerity package, the communist-led popular front PAME rallied forces for the 48-hour strike planned for the morrow, hanging their banners from the Acropolis and organising rallies in dozens of cities.
Over the next two days, many hundreds of thousands of workers downed tools. In Thessaloniki, PAME blocked all seven entrances to the industrial part of the city and choked off production, whilst near Athens the port of Piraeus was successfully shut down by militants from amongst the engineers, electricians and cooks, in the teeth of opposition from strike-breakers in the PASOK-corrupted seamen’s federation.
A similar threat to class solidarity was successfully seen off when PASOK-influenced transport union bosses were forced to retreat from their original plan to prevent workers getting to Syntagma Square by imposing a blanket stoppage of city buses.
Telling evidence of the political lessons being learned by Greek workers about the treacherous role of social democracy was the omnipresence of PAME banners across the 65 cities in which mass demonstrations were organised, coupled with the near-total absence of banners from unions still enslaved by social democracy. The message to which workers are responding with such enthusiasm is simple and clear: it is no longer a question of trying to block this or that particular austerity measure; it is now a question of the proletariat advancing into conflict with capitalist exploitation as a whole.
Bailing out the banks
When the media talk about ‘bailing out’ Greece, what they really mean is bailing out the banks in Germany and France that lent money to successive Greek governments on the anticipation of juicy interest payments. The dodgier the Greek economy seemed, the higher the rates of interest that could be demanded by the lenders: the higher the risk of default, the higher the interest rates that could be sucked out of the Greek economy.
What drove banks into such a high-risk strategy? The same thing that has driven every other speculative adventure in the last thirty years: the relative diminution in the number of alternative profitable avenues of investment in the field of actual production.
Capital must expand to survive. Where this cannot be achieved through the direct exploitation of living labour and the creation of new value, then footloose capital has to dive into whatever speculative venture presents itself, be it dotcom bubbles, subprime mortgages, carehome empires or credit-default swaps.
Such ventures show us the true essence of capitalism in its dotage: non-productive, parasitical, moribund. It is not to be wondered at that the bonus-hungry bankers sitting astride the hog’s back should reflect this essence in their own persons. After all, Karl Marx teaches us that the capitalist cannot but act as capital personified.
So the German and French bankers did what they had to do, driving Greece closer to the edge all the time by demanding ever more extortionate returns on their loans. This economic gamble necessarily had to base itself on the political assumption that a Eurozone member, even a ‘peripheral’ one, was too big to be allowed to fail. The working assumption had to be that when the Greek exchequer ran dry, the EU would feel obliged to pump in more funds to enable the bankers’ vampirism to continue unabated.
Thieves fall out
However, the federal aspirations of European imperialism are political aspirations, not stable economic realities. In order to compete globally with its imperialist rivals in the US and Japan, Germany and France saw mutual advantage in setting up the EU. But it took a war of independence and a revolutionary war to forge the United States of America as an indivisible economic and political home territory, and then two world wars to assert and consolidate its pre-eminence amongst nations. The birth of a nation is not affected by the stroke of a pen in Brussels.
Contrary to the nightmares besetting UKIP little Britishers, the would-be federalism of the EU is strictly finite. Like the ‘special relationship’ between Britain and the US, it evaporates like the morning dew the moment that the overriding imperialist interests of the key players cease to converge.
German as well as French bankers stand to make huge losses through an outright Greek default, so for the moment Berlin is playing a begrudging role in setting up another bail-out. But Merkel’s resistance to this policy, preferring to see weaker economies go hang and let the strong carve for themselves, is a sign of things to come. The collapse of the Berlin Wall brought, not European harmony, but the re-emergence of conflicting agendas, with a bourgeois Germany no longer bashful about asserting its own imperialist interests.
Letting Greece and other ‘peripherals’ into the club made sense so long as this provided new markets to absorb surplus production from the metropolitan centres, markets which could be geed up by the infusion of loan capital. This combination of export revenues and interest payments served the interests of the Eurozone’s more advanced capitalist economies. Now that this policy has hastened the Greek descent into pauperism, however, the ‘peripherals’ have suddenly worn out their welcome.
Loss of national sovereignty
Like Ireland, Greece has lost her national sovereignty. This applies not only to her economic direction, but to every aspect of her national independence and dignity, as witnessed by the disgraceful ban slapped on the humanitarian aid convoy due to sail from Greece to Gaza at the end of May.
This confirms a pattern which has already seen craven support from Athens for the wars against Afghanistan and Libya. To see all this as simply a case of national sovereignty succumbing to EU federalism would miss the point. Formally, it is a troika of the EU, the IMF and the ECB that has usurped that sovereignty. In substance, it is the most aggressive and domineering imperialist interests that are trampling Greek sovereignty under foot, in whatever institutional guise.
It should also be understood that the Greek bourgeoisie, ably represented by the social-democratic PASOK party, is itself in active league with imperialism, content to sacrifice Greek independence in exchange for international assistance in quelling the proletariat in revolt and saving its own parasitic skin.
The fact is that there is no corner of world imperialism that is not destabilised by the ‘Greek’ debt crisis. Whilst it is German and French bankers that are Greece’s biggest creditors, US and British bankers are not off the hook either, given their effective role as guarantors for Greek debt through their involvement in the credit default swaps (CDS) market. From the imperialist crisis, there is truly no hiding place.