How the IMF Broke Greece
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Fri 07, May 2010 @ 09:34
The International Journal of INCLUSIVE DEMOCRACY, Vol. 5, No. 4 / Vol. 6, No. 1 (Autumn 2009 / Winter 2010)
Greece: The implosion of the systemic crisis
TAKIS FOTOPOULOS
Greece has been again front-page news in the world press in the last few months. First, because of the new flare-up of riots in Athens in December 2009 caused by the alienated youth of the country marking the first anniversary of the police killing of a 15-year old student a year before ―when an unprecedented social explosion took place, which, as I tried to show a few months ago, [1] had not been seen again since the student uprising in the early seventies that eventually led to the fall of the military junta in 1974. However, this was only a pretext and the new flare-up should be seen, in fact, as part of a process indicating the flimsy foundations on which the post-war social and economic system has been built and, also, as an indication of the fact that the systemic crisis in Greece is continuously deepening. In this context, the recent Greek elections in October, which gave an overwhelming parliamentary majority to PASOK‘s social-liberals and was celebrated by the political and economic elites both in Greece and abroad, could be shown to be just a sideshow, mostly irrelevant to the underlying social processes going on, their only real interest being that they were indicative of the elites‘ plans for the future.
Second, because of the near bankruptcy of the Greek economy when it was revealed that it enjoyed the highest combination of public debt and budget deficit as a proportion to GDP among the Eurozone countries. This prompted the rating agencies to downgrade Greece as regards the degree of reliability in repaying its huge debts to foreign lenders, boosting the ―spreads‖ (i.e. the rate at which the Greek state could borrow compared to Germany) to a record level and creating a vicious circle as regards the financial reliability of the Greek elites, while giving at the same time the chance to the European elites to impose almost unbearable conditions on the Greek people, in order to continue lending the Greek elites ―perpetuating in the process the economic and political dependence of the country on them! The outcome, as usual in these cases, is that the Greek people and particularly the lower social strata would be called upon to pay the heavy price of further borrowing, (in terms of lower incomes and employment), so that the local and foreign elites could continue enjoying their huge income and wealth which they have accumulated.
In this article, I will examine, first, the political bankruptcy in connection to the October elections and recent events, and I will discuss next the present near economic bankruptcy in relation to the myth of ―green growth‖ promoted by the reformist Left and Greens and, after I consider the social crisis with reference to the systemic problem of immigration, I will continue on with the massive suppression of the December demonstrations, which confirmed the rise of social-fascism in Greece. Finally, I will examine the current attempt by the EU elites to transform Greece into an EU protectorate and I will propose an alternative solution that will aim to stop the Latin-Americanisation of Greece, and create the preconditions for a self-reliant economic democracy as an integral part of on an Inclusive Democracy.
Political bankruptcy, elections and parliamentary parties It is now clear that the decision to call a general election, just two years after the previous one, was very much enforced on the political elites by the local economic elites and the EU elites, in view of the social unrest that would inevitably have followed the introduction by a right-wing government of the radical reforms of ―structural adjustment‖ demanded by the EU and other international organizations (OECD, IMF etc.). Particularly so, as these reforms would inevitably have included drastic restrictions on public spending (health, social security, etc.), suppression of wages and pensions, further ―flexibility‖ of labour and so on, aiming at a drastic improvement of the competitiveness of the public and private sectors at the expense of the working people, in other words, aiming at the completion of the country‘s economic integration into neoliberal globalisation. Of course, whether the political and economic elites and the new government which expresses their interests will manage at the end to avoid an effective systemic (economic and political) bankruptcy is another story, which will be determined by the outcome of the social struggle, now reaching a critical turning point.
However, given the above plans of the European and local elites, it is not surprising that the overwhelming victory of the social-liberal PASOK party in the October general election was celebrated by the elites, locally and abroad. This is particularly so, after the December 2008 social explosion made clear the extent of the systemic crisis in Greece. It was at this particular point that the elites realised that the need for a self-declared ―socialist‖ government to take over, with the main aim to introduce the drastic ―reforms‖ mentioned above, was imperative.
PASOK ―today under the leadership of George Papandreou (offspring of the Papandreou dynasty of the centre―Left‖) was the ―perfect‖ choice for the elites, as this party has governed Greece, in turns with the Karamanlis dynasty of the centre-Right, during the entire post-junta period that followed the fall of the military dictatorship in 1974. In fact, these two dynasties, initially under the tutelage of the British and then of the US elite, and, lately, under that of the transnational elite, have been the main players of the Greek political scene for the entire post-war period, which began with the end of the Greek Civil War in the late 1940‘s. However, the very fact that PASOK managed to gain a comfortable parliamentary majority (thanks to an electoral system that blatantly favours the first party in number of votes), in reality, sowed winds which, most likely, will, soon, reap whirlwinds. This is because the bipartisan system in Greece is not based on any solid foundations. An indication of this is the fact that, while in Europe, neo-liberal parties alternate with social-liberal ones (which have, long ago, abandoned even the socialist rhetoric) on the basis of a clear agenda that summarises the demands of neo-liberal globalisation, in Greece, both parties, and especially the social-liberals, systematically hide their true identity! When therefore, the true identity of PASOK is being revealed today, following the harsh measures it is introducing to deal with the crisis, its electoral base is in fact being dismantled and the result may well be the future dissolution not just of PASOK but of the entire bipartisan system in Greece.
It is clear that the same, more or less policies, with perhaps small variations on the actual fiscal measures to be introduced, would have been adopted by whatever party was elected, given the main goal imposed by the European Monetary Union (EMU) on all member-states for the reduction of the public debt to meet the Maastricht Treaty criteria. The ―choice‖ given by the elites to the Greek people was clear: either to re-elect the previous governing party (New Democracy) with an explicit new mandate to implement the savage cuts in social spending suggested by the EU commission and international organisations, or to elect a party (PASOK) which was in fact deceiving the electorate that it could somehow avoid the suggested savage cuts ―in other words, a party that was, in fact, relying on its socialist name and its control of trade union bureaucracies to pass exactly the same policies! The method has been, after all, successfully tested for many years by the British Labour party, with the full support of the elites in Britain. It is therefore obvious that PASOK aspires to play exactly the same role now, with the full support of the local elites, which played a crucial role in its rise to power.
As for the New Democracy Party, it was apparently ―sacrificed‖ temporarily by the economic and political elites in the EU and Greece, on the expectation that a ―socialist‖ government could pass the same measures much easier, given its control of trade union leaderships. So, the only hope of its newly elected leadership for a return to power ―in case PASOK is finally dismantled following its present irreparable damage to its ―socialist‖ identity― is the ―nationalist‖ card that Samaras, the new leader elected after the resignation of Karamanlis, is in a good position to play, given his past conflict with
the party establishment on nationalist issues. Particularly so, as PASOK is even more obedient to the transnational elite than New Democracy on ―national‖ issues (Cyprus and Greek-Turkish relations, Macedonia, etc.). This, of course, is by no means surprising, given that Papandreou is well known as one of the most docile instruments of the transnational elite in the Greek political elite and Pangalos, his vice president, is a brazen adventurist who has shown in the past that he has no qualms to do any despicable act that his transnational bosses would ask him to do―as the Ocalan case[2] has clearly shown, when he played a leading role in trapping the Kurdish leader on behalf of the US and Turkish secret services and then effectively handed him over to his Turkish tormentors― just in order to satisfy his personal political ambitions.
As regards the parties of the Left, the Communist Party, although it is the only parliamentary party which has adopted a clear line against the participation of Greece in the institutions of the transnational elite in general and the EU in particular, yet, it has lost so far the unique opportunity that was created by the present deep crisis to raise the topical demand for an immediate break with the EU, beginning with an exit from the Eurozone. And this, despite the fact that today it is more than ever generally accepted that it was the integration of the country‘s economy into the internationalised market economy in general, and the EU in particular, which has led to the present disintegration of the country's production structure[3] and, consequently, to the current deterioration of the chronic economic crisis.
As far as the parties of the reformist Left is concerned, SYN, which belongs to the ―European Left‖ (a reformist coalition of European parties which are fully integrated within the EU institutions), is only critical of the Maastricht Treaty and its Stability Pact, while it adopts Greece‘s integration into the EU and the EMU. However, at this moment of crisis, it seems that the Left wing of SYN is in a process of rethinking its EU orientation and tending towards some sort of coalition with some ―radical left‖ components of SYRIZA (an umbrella organisation of reformist Left groups to which SYN itself belongs), but it is not yet clear at this moment of writing whether the new radical grouping will proceed beyond the usual reformist Left policy of just criticising the Stability Pact of the Maastricht Treaty, but not the EU as a whole, despite the fact that under conditions of neoliberal globalisation, i.e. of open and liberated markets, the EU itself is unviable unless it adopts the fiscal criteria of this Treaty. The same contradiction characterises some parts of the Left to the left of SYRIZA (mostly Trotskyites) which, also, do not raise the issue of a unilateral exit from the EU and set instead utopian demands for a panEuropean abolition of the Stability Pact ―something that with the present composition of the EU― is unthinkable to ever be agreed on by most of its members, apart perhaps from a few members in the European South (what markets call ―the PIGS‖ [!] i.e. Portugal, Italy/Ireland, Greece and Spain). Finally, the libertarian Left seems to be dominated by a socalled ―anti-authoritarian‖ tendency (AK), which is very close to the Znet empire (the US selfdeclared ―anarchist‖ movement of Chomsky, Albert, the late Zinn and others), well known for its reformist tendencies covered under ―anarchist‖ rhetoric.[4]
Lastly, the Greens propose a ―Green growth‖ kind of process, in the form of a ―green‖ capitalism, which has already become a big ―business‖ in the international scene and is promoted by the elites of every persuasion, clearly out of potential profit considerations rather than out of their concern about the imminent ecological threat. However, green capitalism, although useful in advanced capitalist countries like Germany where it might well give rise to extra production and employment in producing renewable energy apparatus (wind turbines, solar panels, etc.) or green products (e.g., green cars), in countries in the periphery of the Eurozone like Greece ―which do not have the required production structure and technology― it would simply increase further the level of imports and foreign debt, with some marginally positive results for consumers and the environment! Needless to add that the participation of several Green parties in European governments had hardly helped in restricting the impact of the continually deteriorating ecological crisis and that the only thing for which ―radical‖ crooks of the European Greens like Daniel Cohn-Bendit and Joschka Fischer are remembered for is their direct or indirect support to the criminal wars of the transnational elite for the imposition of the New World Order![5]
Given the above positions of political parties, it does not come as a surprise that, according to the latest Euro-barometer, 85% of Greek citizens do not trust political parties, while 67% do not trust the Parliament itself! Although, there was never any doubt that the client system in Greece (complemented by compulsory voting) would eventually ―work‖ in the last election as well ―as it actually did― yet, abstention from what ―passes as politics‖ seemed to be the only consistent choice with the Euro barometer‘s conclusions. And indeed, as we shall see next, abstention did play a prominent role in the Greek election results.
In fact, the election results demonstrated clearly the bankruptcy of the political system. Thus, the two parties, which have been running Greece for the past 35 years (i.e. the centre-left PASOK and the centre-right New Democracy Party) managed to attract only 30% and 23%, respectively, of registered voters. The reason is, of course, that the long-term growth of electoral absenteeism (expressed by abstention, and the casting of blank or invalid votes which is usually deliberate in Greece), was confirmed once more, as it has been amply shown by the fact that the rate of absenteeism in the above sense has grown by 14% between the 2004 and 2007 elections, and by an additional 11% between the elections in 2007 and 2009. As a result, this rate is now close to 32%, compared to about 20% for the entire period from mid 1970‘s until the beginning of the last decade! However, if in a clearly client political system such as the Greek one, the two establishment parties can just manage to attract only half of the registered voters, then, the political system is certainly in serious crisis!
Yet, the political crisis does not only concern the establishment parties, but also the traditional Left, parliamentary and extra-parliamentary, which has just managed to hit 13% of the votes, presenting even a small decrease of its power compared with the last parliamentary elections. This, at the very moment when the internationalised market economy in general was confronted with an unprecedented crisis like the present one, and the Greek economy in particular was facing an even worse crisis due to its distorted ―development‖![6] Of course, these results were not unlike similar trends in Europe as a whole. Thus, it is not only the social democratic parties which have been collapsing everywhere following their adoption of social-liberalism. The Green parties have passed through a similar crisis, after becoming everywhere a leading support of the system, mainly appealing to the middle classes that have basically solved their survival problems ―not surprisingly, the Greek Greens collected their highest number of votes in the luxury ―northern suburbs‖ of Athens. Besides, the Green parties have become for a long time the ―Left boot of the system‖,[7] as it is shown by their despicable stand of either directly supporting the wars of the transnational elite, or keeping ―equal distances‖ on crucial issues like Palestine, in return, of course, for the role of the ―legitimate‖ opposition to the system that the former anti-systemic Green movement is reduced to play today, the lavish subsidies to their party funds from the EU funds and the scandalous salaries of the members of European Parliament![8]
Economic bankruptcy and “green” development However, as I recently tried to show in this Journal, [9] the present international crisis is not only economic (namely, a crisis which is a symptom of the chronic crisis of the system of capitalist market economy), but also, political, ecological and social. In other words, it is a systemic multi-dimensional crisis. In Greece, the chronic economic crisis, which is expressed in the post-war period by the dismantling of the production structure that was brought to completion with the opening of its markets to the world market ―a pr
ocess that was accelerated by its integration into the EU at the beginning of the 1980s― has been accompanied by a corresponding chronic crisis of the political system. This crisis deteriorated with the outbreak of the current financial crisis and it became all too obvious by the social explosion of December 2008, [10] followed a few months later by the effective resignation of the New Democracy government at the end of the Summer 2009 and the ensuing general election at the beginning of October.
The effective dismantling of the productive structure inevitably led to the continuous growth of the external debt as well as of the public debt ―the latter reaching an explosive point in the eve of the elections. No wonder that the Governor of the Bank of Greece, representing the economic elite, waited for the victory of PASOK, the preferred party by the economic elite, to be announced, before revealing that the budget deficit exceeded 10% of the GDP (a figure to be revised upwards later to 12.5%) and describing the extent of the crisis in the public finances ―something that was well known to the political and economic elites before the elections. A crisis, which has resulted in Greece being formally placed initially under the European Commission‘s ―surveillance‖, with the aim to force the political elite to follow strict ―adjustment programs‖ in order to drastically reduce the budget deficit and that of the balance of payments. Of course, this does not imply anymore that, failing this, the fleets of foreign lenders will besiege Greek ports to supervise compliance with the conditions imposed ―as it did actually happen in the last major bankruptcy of the Greek state at the beginning of 20th century! Nowadays, the economic and political-military mechanisms that can ensure compliance with these conditions (which are based on social-liberal reforms aiming at squeezing the social insurance and public sectors, ―flexible‖ work, etc.) are already ―inside the walls‖. It was not accidental that one of the first acts of the new social-liberal government was to rename the Ministry of the National Economy to add ―competitiveness‖ in its title. The signal was that any direct or indirect economic activity (namely, almost every social function) must now be judged by the criteria of the market economy: from the mode of operation of the National Health Service and of public transport to that of the University. The obvious aim of the new social-liberal government, whose model is the American and British social-liberals (Obama and Blair/Brown, respectively) is for everything to become ―business‖, functioning according to market criteria. And of course, those who resist this process and take to the streets will have to face the ―Ministry for Citizen‘s Protection‖ (sic!), i.e. the renamed ―according to the US elites‘ standards of political correctness and the Orwellian criteria― former Ministry of Public Order, with all its noble armour (chemicals, plastic bullets ―if not real ones― etc.!).