by V N Gelis
Furthermore, economic developments in late November made even more urgent for the local elites the need to implement drastic economic ―reforms‖. Thus, a speculative attack against sovereign bonds (namely, bonds issued by the Greek state to borrow from commercial banks which buy them) led the economy on the brink of bankruptcy and to a new intervention of the European elites to ―save‖ it, imposing of course their own conditions. Naturally, these developments did not —nor could they— lead, anyway, to the formal bankruptcy of the Greek state. It would obviously be unthinkable for a member of the EMU to declare bankruptcy, not only on account of the possible serious damage to the Eurozone‘s ―prestige‖, but also because it would potentially put at risk the stability of Euro itself. Especially, when other countries of the periphery/semiperiphery in the EU face similar problems—mainly, the PIGS. However, the price to be paid, particularly by the lower income strata (workers, employees, under-employed, unemployed and pensioners) in the coming years, will be very heavy indeed (see last section).
But, how did Greece come to the brink of bankruptcy? Initially, it should be noted that this has been a cumulative process rather than a sudden development. In fact, the economic and political elites led the economy to the brink of bankruptcy, with their acts and omissions, throughout the postwar period. In other words, today‘s effective (though not formal) bankruptcy is clearly a systemic problem, which is not only related to the current global crisis and the policies of the New Democracy party, as the professional politicians of PASOK claim, ―forgetting‖ the crucial role of their own party in the creation and enhancement of the cumulative process that led Greece to its present situation!
In fact, both the external debt and the public debt began exploding immediately after joining the EEC in the 1980s, which coincided with the rise of PASOK to power [11]. Thus, the external debt was mainly created because of the fact that the economic and political elites left the entire development process virtually to the market forces, creating the paradox of a ―consumer society without a production basis‖. The inevitable result was that Greece got used to consume much more than what it produced and, correspondingly, exported goods and services of a value that represented a small fraction of the value of those imported. At the same time, the public debt also exploded, because PASOK, under its founder (the father of the present PM) attempted in the 1980s, as soon as they took over, to combine the consumer society being created with a rudimentary welfare state. But the latter was supposed to be created not through a redistribution of income, which as a socialist party espoused (i.e., by taxing heavily the tax evasive privileged social strata to which many of its supporters belonged), but through heavy borrowing. This, through the growing payments for debt servicing, led to a vicious circle of debt accumulation. As a result, the public debt as a percentage of GDP increased more than five times within just six years, from about 8% of GDP in 1979 to over 42% in 1985 and, correspondingly, the total external debt (public and private) quadrupled within the same period from 13% of GDP to 50% [12]. Inevitably, government spending rose from an average 28.8% of GDP in the 1970s, to 41.1% in the 1980s[13], and over one third of this increase in spending was due to the huge increase in service payments on government debt, which more than tripled as a percentage of GDP.[14] Since the 1980s both the public debt and the external debt have increased three times, and, according to the Deutsche Bank, the public debt is today about 135% of GDP while the external debt has reached the 150% mark![15] Thus, even according to the conservative calculations of the new Budget, a quarter of the total public revenue will be used for interest payments. That is, over 5% of GDP (which is more than double the rate of the 1980s) will be spent on interest, so that the Greek elites can continue to borrow further!
This does not, of course, mean that these loans benefited production, since they were merely used for consumption purposes, as is evidenced by the fact that during the same period the effective dismantling of the manufacturing and agricultural sectors was also completed, as it is indicated by the growing trade deficit, as a result of our accession to the EEC and later the entry to the EMU, which made even less competitive the Greek exports. For example, it is estimated that from the beginning of the decade to date the Euro has become dearer by 20%. [16] Nor did these loans benefit the public, and especially the lower income strata that, mainly, bear the burden of these debts, given that indirect taxes hurt disproportionately these social strata, despite the fact that they are the only ones who dutifully pay their taxes.
Thus, public spending on education and health, as a proportion of GDP, in 1988, after seven years of ―socialist‖ government, was only half of that in the European countries of OECD.[17] Today, it is still 66% of that in the EU ―although in the meantime Greek public debt has quadrupled![18] Furthermore, even official data show a highly skewed income distribution, with the 20% of the poorest receiving today less than 7% of income, while 20% of the richest receive almost 42% and Greece showing a significantly higher degree of inequality than the EU average.[19] Furthermore, as I will show in the last section, the latest barbarous measures imposed on the Greek people by the EU and Greek elites are bound to further deteriorate a very unequal distribution.
In the midst of the worst deterioration in the chronic Greek economic crisis on record, PASOK, followed by the reformist Left (SYN) and the mainstream Greens propose the panacea of ―green growth‖. However, assuming green growth is feasible in countries at the level of development of Greece, it would still be undesirable as a means of creating income and employment, let alone as a means to deal with the worsening ecological crisis, for the following reasons:
• First, because no ―tidying up‖ of public spending (an old Thatcherite slogan implying savage public spending cuts) and ―cracking down on tax evasion‖ (a permanent slogan of the Greek elite) would be adequate to finance such a growth. As the public assets still available for privatisation are rapidly running out, following the selling out of the nation‘s silverware by previous governments, it is obvious that the only way for funding such a policy is either further borrowing or foreign investment. However, the former would not only directly contravene the Maastricht stability criteria (which have already been dramatically violated by Greece), but it would also inevitably lead to a further downgrading of the country‘s ratings by the credit agencies ―a development that would surely lead to more onerous borrowing terms in the future, further enhancing the vicious circle of debt. And the chances of the latter are even smaller now than they used to be, given the deep recession to which Greece has been condemned by the latest EMU measures,
• Second, because any attempt by the Greek ruling elite to minimise the effects of the crisis through some sort of ―green‘ growth‖ ―instead of the favoured austerity by the EU elite for member-countries heavily indebted like Greece— is impossible, unless it represents the consensus of the elites controlling EMU. Moreover, it is not accidental that the only countries that have attempted a similar policy to deal with the present crisis, US and UK, have their own currency. This means that only at EMU level could similar policies be implemented and not by member countries on their own, given the potential impact of such ―Keynesian‖ policies on the stability of the common currency. It is also highly indicative that out of the two countries mentioned above which followed such policies, only the US has not experienced problems with the stability of its currency, simply because Chinese investors still have confidence in the dollar. Britain, on the other hand, saw the value of Sterling collapsing since the last year or so, as a result of the huge rise in its public debt. No wonder, its political elite is presently forced to adopt savage cuts in public investment, and
• Finally, because ―green growth‖ mainly benef its the countries which can produce green products (cars, appliances, etc.) and equipment for the creation of renewable energy (wind turbines, solar panels, wave power, etc.), so as to benefit both directly (from additional production) and indirectly (from cheaper consumption, etc.). That is why th
e elites in countries like Germany (with the strong support of the Greens) fight for green growth, i.e. not only because they consider it as a good tool to overcome the ecological crisis, but also, because it is big ―business‖. However, countries in the periphery of EMU, like Greece, which import almost everything, not only are they not going to expand income and employment by adopting a green growth process, but, also they will help to the further deterioration of the structural problems of the Greek economy and, in particular, of the balance of payments and the foreign debt. In other words, the only benefit for Greece from green growth would, mainly, be on the side of consumption (lower energy cost) and only indirectly on the side of production, (e.g. because of the creation of some jobs in the trade of green products, the installation and maintenance of wind turbines, solar panels, etc.).
Social crisis and the systemic problem of immigration To this political and economic bankruptcy, one has to add the worsening social crisis, as manifested by the ―old‖ problems of the expansion of drug abuse[20] and crime, as well as the new growing problem created by the massive influx of immigrants (another clearly systemic problem).
Thus, the new ―socialist‖ government, not only, as we saw above, is already taking the worst economic measures against the lower social strata in living memory, but it also continues and expands further the state repression of the last government. This repression is not only manifested against the ―usual suspects‖, that is, the young (mostly unemployed) people, who are baptized ―hooligans‖ by the ―energetic‖ Minister for the ―protection‖ of civilians (who has received US training on policing methods!) and the current ―wretched‖ of the system, the immigrants. As from its early days, the new government, walking on the steps of the previous one [21], began using brutal force against ―unruly‖ workers and citizens who dared to protest against the atrocities of the police and the related racist pogroms.
Prosecutions against immigrants are not, of course, a new phenomenon. In the EU, only in 2008, there were 146,337 arrests of immigrants (that constitute 24.5% of total arrests!), representing an increase of 65% compared with 2006.[22] The mass arrests in Greece followed the announcement of draconian legislation in July last year, which included dramatically extending the amount of time undocumented migrants can be detained. And, despite widespread protests from Greeks and migrant groups over the prospect of ―migrant concentration camps‖ being created, the conservative government has also floated the idea of detaining ―illegals‖ in disused military facilities. [23] It is therefore clear that, as Simone Troller points out, ―other EU member states are all too willing to look the other way as Greece performs their dirty work of keeping migrants out.‖[24] No wonder, therefore, that the UN High Commission for Refugees inspectors described as unacceptable the conditions of detention of immigrants, stressing, for example, that more than 850 people, among whom 200 were unaccompanied children, mostly from Afghanistan, were detained under appalling conditions in Pagani of Lesbos. Nor is it, of course, accidental that ―Greece's notorious asylum process has the lowest acceptance rate in Europe. Of the 20,000 applicants last year, asylum was accorded to only 379‖.[25]
However, the question is what really changed since the beginning of the decade, when the elites in Europe and in Greece turned a blind eye to the massive —legal or illegal― influx of immigrants from the periphery (Asia, Africa, etc.) and semi-periphery (Eastern Europe)? In fact, what has, mainly, changed is the deterioration of the chronic economic crisis, which has led to the present explosion of unemployment in Western Europe ―at an enormous political cost to the elites― that endangers the system itself. In Greece, in particular, the economic crisis had begun deteriorating earlier, when, following the 2004 Olympics, the country was left with an even bigger debt than before while the construction explosion, which was based on cheap immigrant labour, rapidly subsided.
A crucial role on the ups and downs of immigration is played by the opening and liberalisation of markets in the present era of neoliberal globalisation, which has led to a huge concentration of economic power, income and wealth to economic elites and the privileged social strata. However, while the liberalisation of the markets for commodities, capital and labour (―flexible‖ labour relationships) was complete, that was not also the case as regards the opening of these markets. The opening of the labour market has always been controlled by the transnational elite, so that the inflow of cheap labour in the North could be regulated, in accordance with the needs of the economic elites and the economic conjuncture.
The economic and political advantages to the elites from immigration are obvious. Not only does cheap immigrant labour reduce the cost of production and directly improves productivity and competitiveness, but it also plays a role in depressing real wages of local labour, leading indirectly to a parallel expansion of competitiveness. From the political and cultural perspective, immigration is the modern form of the historically tried out policy of ―divide and rule‖, through which the elites usually perpetuated their dominance. Thus, foreign workers are blamed by the yellow press and TV channels as the source of the present multidimensional crisis, with problems such as unemployment, the explosion of crime, the crisis of the welfare state (imposed by neoliberal globalisation through cutting up social spending for the sake of competitiveness) as well as cultural homogenisation (another byproduct of globalisation) ―all attributable to immigrants. In this way, the real culprits of the multidimensional crisis (the economic and political elites and the privileged social strata) [26] are exonerated from responsibility, while the lower social and economic strata are persuaded to see the social ―enemy‖ in the usually even poorer immigrants! A growing culture of xenophobia[27] is cultivated directly or indirectly by the elites, which, in several European countries, becomes even nastier when it is combined with Islamophobia, like the one promoted by Geert Wilders in Holland, whose neo-fascist Freedom Party did tremendously well in the March local elections ―a fact which positions him well for the general election, with his Party now being forecast to emerge as the first or second largest in parliament.[28] No wonder that Britain, which last year banned his entry into the country, this year changed its mind and allowed him to give a lecture in Parliament about the ―terrorism‖ that Islamism represents!
Of course, all this does not mean that mass immigration is not a problem for workers. However, in reality, this is a systemic problem which is produced and reproduced by the very system of the capitalist market economy and its dynamics. Thus, the dynamics created by the opening and liberalisation of markets, in the context of the present economic globalisation, led to the deindustrialisation of the ―North‖ and the corresponding creation of some economic bubbles of the ―South‖ (China, India and the rest). The combined effect of the mass inflow of capital to the bubbles of the South ―which have been transformed into the assembly lines of transnational corporations from the North― and of the reverse inflow of cheap commodities and labour to the North, not only led to the massive expansion of long term unemployment and poverty in the North and to the dismantling of local economic self-reliance in the South, but it also played a crucial role in the world financial crisis[29] which has now been transformed into a debt crisis. At the same time, political globalisation, namely the need for full integration of the whole of the world (and particularly the crucial energy-rich Middle East) into the internationalised market economy, led to the criminal wars of the transnational elite in Afghanistan, Iraq, etc., which have added huge ―armies‖ of political refugees to the millions of economic refugees.
The move of PASOK from social-liberalism to social-fascism The newly elected social-liberal government attempted, initially, through a massive communications campaign, decisively helped by the media (most of which are sympathetic to PASOK, whereas state TV and radio play a clear propaganda role in favour of the government and the Prime Minister personally), to create a favourable image of a revamped party, which was determined to break with the past and create a new prosperous Greece r
id of old practices (massive tax evasion, corruption, etc.). In this framework, the government attempted first to create a false impression of redistributing income. False, because with one hand it was making some petty extra payments to lower income groups in the form of a lump sum allowance, while with the other it was increasing indirect taxes which primarily hit the same social strata! Particularly so, as it left the relatively low direct taxes on income (personal and corporate) untouched ―a recipe that surely leads to further deterioration of an already highly unequal distribution of income.
At the same time, the government engaged in a massive media ―transparency‖ campaign, of a kind very reminiscent of ―mirrors for the cannibals‖! Thus, Papandreou, assuming the role of a supreme ruler who wants to be ―close to his people,‖ was almost daily seen on TV visiting numerous state services to see for himself whether they serve well his ―subjects‖ and issue corresponding ―directives‖ to the civil servants involved, or, functioning as a kind of mini-US President, he was seen presiding over ―open,‖ clearly staged, Cabinet meetings, which were highlighted for hours live by state television, and where ministers were seen reading ready-made insubstantial speeches (enriched with diagrams, etc.). The show clearly aimed to create the image of transparency, when, of course, it is well known that real decisions are not even taken by the Cabinet, but by the think tank around the PM and his close family!