How the IMF Broke Greece

by V N Gelis

  Slovenia, Croatia, and finally, Bosnia fought bloody civil wars

  WESTERN HELP The austerity measures had laid the basis for the recolonization of the Balkans. Whether that required the breakup of Yugoslavia was subject to debate among the Western powers, with Germany leading the push for secession and the U.S., fearful of opening a nationalist pandora's box, originally arguing for Yugoslavia's preservation. Following Franjo Tudjman's and the rightist Democratic Union's decisive victory in Croatia in May 1990, German Foreign Minister Hans Dietrich Genscher, in almost daily contacts with his counterpart in Zagreb, gave his go-ahead for Croatian secession. Germany did not passively support secession; it "forced the pace of international diplomacy" and pressured its Western allies to recognize Slovenia and Croatia. Germany sought a free hand among its allies "to pursue economic dominance in the whole of Mitteleuropa."

  Washington, on the other hand, favored "a loose unity while encouraging democratic development . . . [Secretary of State] Baker told Tudjman and [Slovenia's President] Milan Kucan that the United States would not encourage or support unilateral secession . . . but if they had to leave, he urged them to leave by a negotiated agreement."

  Instead, Slovenia, Croatia, and finally, Bosnia fought bloody civil wars against "rump" Yugoslavia (Serbia and Montenegro) or Serbian nationalists or both. But now, the U.S. has belatedly taken an active diplomatic role in Bosnia, strengthened its relations with Croatia, and Macedonia, and positioned itself to play a leading role in the region's economic and political future.

  Yugoslavia's foreign debt has been carefully divided among the successor republics, which are now strangled in making separate arrangements

  THE POST-WAR REGIME Western creditors have now turned their attention to Yugoslavia's successor states. As with the demise of Yugoslavia, the economic aspects of post-war reconstruction remain largely unheralded, but the prospects for rebuilding the newly independent republics appear bleak. Yugoslavia's foreign debt has been carefully divided and allocated to the successor republics, which are now strangled in separate debt rescheduling and structural adjustment agreements. The consensus among donors and international agencies is that past macroeconomic reforms adopted under IMF advice had not quite met their goal and further shock therapy is required to restore "economic health" in Yugoslavia's successor states. Croatia and Macedonia have followed the IMF's direction. Both have agreed to loan packages -- to pay off their shares of the Yugoslav debt -which require a consolidation of the process begun with Ante Markovic's bankruptcy program. The too familiar pattern of plant closings, induced bank failures, and impoverishment continues apace.

  And global capital applauds. Despite an emerging crisis in social welfare and the decimation of his economy, Macedonian Finance Minister Ljube Trpevski proudly informed the press that "the World Bank and the IMF place Macedonia among the most successful countries in regard to current transition reforms."

  The head of the IMF mission to Macedonia, Paul Thomsen, agreed. He avowed that "the results of the stabilization program were impressive" and gave particular credit to "the efficient wages policy" adopted by the Skopje government. Still, his negotiators added, even more budget cutting will be necessary‘

  .

  But Western intervention is making its most serious inroads on national sovereignty in Bosnia. The neo-colonial administration imposed by the Dayton accords, supported by NATO's firepower, ensures that Bosnia's future will be determined in Washington, Bonn, and Brussels -- not Sarajevo.

  "Substantial" petroleum fields also lie in the Serb-held part of Croatia

  RECONSTRUCTION COLONIAL STYLE If Bosnia is ever to emerge from the ravages of war and neocolonialism, massive reconstruction will be essential. But judging by recent Balkan history, Western assistance is more likely to drag Bosnia into the Third World rather than lift it to parity with its European neighbors. The Bosnian government estimates that reconstruction costs will reach $47 billion. Western donors have pledged $3 billion in reconstruction loans, yet only $518 million dollars have so far been granted. Part of this money is tagged to finance some of the local civilian costs of IFOR's military deployment and part to repay international creditors.

  Fresh loans will pay back old debt. The Central Bank of the Netherlands has generously provided "bridge financing" of $37 million to allow Bosnia to pay its arrears with the IMF, without which the IMF will not lend it fresh money. But in a cruel and absurd paradox, the sought-after loans from the IMF's newly created "Emergency Window" for "post-conflict countries" will not be used for post-war reconstruction. Instead, they will repay the Dutch Central Bank, which had coughed up the money to settle IMF arrears in the first place. Debt piles up, and little new money goes for rebuilding Bosnia's war-torn economy.

  While rebuilding is sacrificed on the altar of debt repayment, Western governments and corporations show greater interest in gaining access to strategic natural resources. With the discovery of energy reserves in the region, the partition of Bosnia between the Federation of Bosnia-Herzegovina and the Bosnian-Serb Republika Srpska under the Dayton accords has taken on new strategic importance. Documents in the hands of Croatia and the Bosnian Serbs indicate that coal and oil deposits have been identified on the eastern slope of the Dinarides Thrust, retaken from rebel Krajina Serbs by the US-backed Croatian army in the final offensives before the Dayton accords. Bosnian officials report that Chicago-based Amoco was among several foreign firms that subsequently initiated exploratory surveys in Bosnia.

  "Substantial" petroleum fields also lie in the Serb-held part of Croatia just across the Sava river from Tuzla, the headquarters for the U.S. military zone. Exploration operations went on during the war, but the World Bank and the multinationals which conducted the operations kept local governments in the dark, presumably to prevent them from acting to grab potentially valuable areas.

  With their attention devoted to debt repayment and potential energy bonanzas, the Western powers have shown little interest in rectifying the crimes committed under the rubric of ethnic cleansing. The 70,000 NATO troops on hand to "enforce the peace" will accordingly devote their efforts to administering the partition of Bosnia in accordance with Western economic interests rather than restoring the status quo ante.

  While local leaders and Western interests share the spoils of the former Yugoslav economy, they have entrenched socio-ethnic divisions in the very structure of partition. This permanent fragmentation of Yugoslavia along ethnic lines serves to thwart a united resistance of Yugoslavs of all ethnic origins against the recolonization of their homeland.

  But what's new? As one observer caustically noted, all of the leaders of Yugoslavia's successor states have worked closely with the West: "All the current leaders of the former Yugoslav republics were Communist Party functionaires and each in turn vied to meet the demands of the World Bank and the International Monetary Fund, the better to qualify for investment loans and substantial perks for the leadership."

  A world of shuttered factories, jobless workers, and gutted social programs Western-backed neo-liberal macroeconomic restructuring helped destroy Yugoslavia. Yet, since the onset of war in 1991, the global media has carefully overlooked or denied its central role. Instead, it has joined the chorus singing praises of the free market as the basis for rebuilding a war-shattered economy. The social and political impact of economic restructuring in Yugoslavia has been carefully erased from our collective understanding. Opinion-makers instead dogmatically present cultural, ethnic, and religious divisions as the sole cause of the crisis. In reality, they are the consequence of a much deeper process of economic and political fracturing. This false consciousness not only masks the truth, it also prevents us from acknowledging precise historical occurrences.

  Ultimately it distorts the true sources of social conflict. When applied to the former Yugoslavia, it obscures the historical foundations of South Slavic unity, solidarity and identity. But this false consciousness lives worldwide, where the only possible world is one of shutter
ed factories, jobless workers, and gutted social programs, and "bitter economic medicine" is the only prescription.

  At stake in the Balkans are the lives of millions of people. Macroeconomic reform there has destroyed livelihoods and made a joke of the right to work. It has put basic needs such as food and shelter beyond the reach of many. It has degraded culture and national identity. In the name of global capital, borders have been redrawn, legal codes rewritten, industries destroyed, financial and banking systems dismantled, social programs eliminated. No alternative to global capital, be it market socialism or "national" capitalism, will be allowed to exist.

  But what happened to Yugoslavia -- and now continues in its weak successor states -- should resonate beyond the Balkans. Yugoslavia is a mirror for similar economic restructuring programs in not only the developing world but also in the US, Canada and Western Europe. The Yugoslav reforms are the cruel reflection of a destructive economic model pushed to the extreme.

  By Way of an ….Epilogue

  The articles which were included in this book were written essentially from May 2010-till July 2011 i.e. the first phase of the rapacious IMF measures. Since then we have had another couple of General Strikes, schools have opened for the first time since 1974 without the Government printing textbooks alongside school children collapsing in class without having eaten and there have been many strikes in almost as many sections of workers as before, due to the proposed cuts in wages (around 30% for public sector employees) and the newly proposed property tax which will range from a few hundred to a few thousand Euros annually alongside the abolition of all nationally agreed collective wage agreements. In other words a return to an era of open direct slavery, a new barbarism in an era with the technological advancements we have we could less work, but work for all.

  The sold out union barons, the political parties of the fake Left, continue their disunited campaign of controlled resistance. In the demonstrations and strikes of June only a small unorganised minority called for the people to occupy Parliament and remain in Sindagma Sq., but the vast majority were still unconscious of the period we are living through. They weren‘t as yet willing to rebel to overthrow the political system despite the dynamic of the slogans. Most people as yet believed that the start of the IMF measures would eventually give way to a new economic upturn or the measures would eventually be put on hold and possibly work by stabilising the situation.

  The supranational economic elite having knowledge the impasse they are in, due to the economic crisis and the measures they are taking and what their effect will be, are trying to forestall an insurrection by taking pre-emptive measures on a multitude of fronts. They have experience in being able to provoke pre-emptive rebellions that they can then put down, they can provoke resistance to see how to combat it by preparing their personnel and as such some of the events of the last 16 months contain all of these features from the provocation-murder of the bank workers, to the local insurrection in Keratea and the mass media sponsored surrounding of Parliament from all sides. Frequent media referrals to an army intervention also play the role of instilling fear in the protestors.

  The secret state organised the calling of the Greek Indignants to the squares, but hundreds of thousands of course came out of their own free will. What did the state achieve with this?

  Three elements:

  1. Solidifying the hardline sections of the riot police to confront people in a manner akin to previous eras as the demonstrators started out initially in a jovial manner way back in May and by the end of June, both sides had hardened their stance significantly.As a riot copper said in a lull in the fighting ‗as yet you don‘t have the balls or courage to do us and we as yet don‘t have the same to send you all underground‘…

  2. They organised all the known state provocateurs in the bottom half of the square to be ready at any moment in time to create provocations with the police so they can attack the mass disorganised peaceful crowds in order to instill fear in society as a whole.

  3. The provisionally depressed the masses by endless speeches and not organisation to create self-defence units and prepare for the riot police attacks with something more than plastic water bottles and gas masks. The top end of the square– the most militant – didn‘t break out of its sloganeering and organise itself to take leadership of the whole square and thus let the bottom end of the square – where the fake left globalists dominate– to run the show.

  One must take into account the above when having read this book, as the state is a player in events in more ways than one can imagine and what appears to be happening, may not indeed be happening at all. That does not imply that they are totally in control. They are trying their best, but they will lose control and they are playing with fire. Necessity is the mother of invention and the Greek nation will find the means and ways to survive. It has to, otherwise it will be erased from it‘s 5,000 year history. This is a small contribution to all those who are working for that goal.

  VN Gelis Postscript:

  Special thanks to DK Lawrence who helped in the editing of the book and without whom this would have proven much harder in producing than it was.

  Political Parties:

  PASOK-Pan-Hellenic Socialist Movement led by Papandreou New Democracy led by Samaras KKE led by Papariga Laos led by Karatzaferis Sinaspismos led by Alavanos

  Dimokratiki Aristera led by Kouvelis

  Websites mentioned in this book:

  Greek ones:

  www.kke.gr http://patari.org/

  http://imfoccupationgreece.blogspot.com/

  British ones

  http://www.permanentrevolution.net/

  http://www.cpgb.org.uk/worker/