Working in partnership with Sri Lanka Muslim Economists' Association-UK Chapter & Sri Lanka Think Tank-UK
Tuesday 29 May 2012
Thursday 17 May 2012
Greece and the global crisis of capitalism
The political, economic and social breakdown in Greece is an acute
expression of a broader crisis of European and world capitalism.
The
fate of this small nation is being decided solely according to the
predatory interests of the global financiers and their political
representatives at the head of national governments as well as the
“troika”—the European Union (EU), European Central Bank (ECB) and
International Monetary Fund (IMF).
For Greek workers, the impact
has been catastrophic. They have already suffered the greatest decline
in living standards since the Nazi occupation. Unemployment has doubled
to 22 percent and 50.8 percent among young people, while millions more
are relegated to precarious and part-time work.
Mass unemployment
and poverty are set to worsen. The social counterrevolution in Greece
is, moreover, setting a benchmark for all of Europe as the economic
crisis spins out of control and the world is plunged into a recession
deeper than that triggered by the crash of 2008.
The political
stalemate in Greece, following the virtual collapse of the country’s two
traditional ruling parties in the May 6 election, takes place within
the context of a deteriorating economic situation in Europe, the US and
Asia. Falling global equity markets, bank downgrades, rising
unemployment and stagnating or declining growth rates point to a slide
into depression.
In the US too, mass unemployment, poverty and
homelessness are epidemic, and the type of austerity measures being
carried out by European governments are replicated at the state and
local level. In California, whose economy is comparable to Italy’s and
bigger than Spain’s, the governor has demanded a new round of drastic
cuts in health care, education and public employee wages.
There
is an air of unreality surrounding all official discussions on Greece.
Politicians and media commentators speak of imminent economic collapse
and social devastation in one breath, only to demand that more money be
paid over to the banks and greater hardship imposed on working people in
the next.
Each proposed way out of the crisis only creates the
conditions for deeper crisis down the road. All the money supposedly
paid over to Greece as a “bailout” has gone straight into the coffers of
its major creditors. Any additional loans will go to feeding the same
ravenous beast.
Calls for further sacrifice have become
impossible to accept. Mass working class opposition to austerity is on
the rise across Europe. This has been expressed not only in the Greek
election, but in France and other recent elections in Britain and
Germany, where voters repudiated those parties most closely associated
with austerity policies.
This reflects an extreme heightening of
social tensions, rooted in the existence of an irreconcilable conflict
between the most basic needs of the masses and the institutions of
capitalist Europe.
Greek workers registered their opposition by
rejecting the parties directly involved in negotiating the bailout
conditions—PASOK and New Democracy. But the main beneficiary of this
sentiment was SYRIZA, a party that speaks for a section of the Greek
bourgeoisie that wants more extended debt repayment to avoid economic
collapse and cosmetic alterations in the deficit-reduction terms to
placate popular opposition. SYRIZA categorically defends the European
Union and the euro, while presenting itself as an opponent of austerity,
but this circle cannot be squared. Austerity and ever-deeper attacks on
the working class are an integral requirement of the bankers’ EU and
the capitalist order it defends.
The proposed solution advanced
by the Greek Communist Party (KKE)—exit from the euro and a return to
the drachma—is also fielded by numerous international commentators. But
this would still leave Greek workers at the mercy of the global
financiers and keep the rule of the Greek capitalists intact, while the
value of workers’ homes, wages and what little savings they have would
be immediately slashed by as much as 80 percent.
Ever broader
layers within the ruling elite are coming to the conclusion that Greece
will be forced to exit the euro zone. Some boast that this can be
“managed” and that Greece should be simply pummelled until every last
euro has been extracted from its people. Others warn that the very
survival of the euro is threatened, as financial contagion spreads
throughout the continent and beyond.
The latter view is more grounded in reality. Global financial institutions have a $536 billion exposure
to Greek debt, but the Institute of International Finance estimates the
true global cost of a Greek exit to be closer to $1.2 trillion,
entailing “killer losses”. Wirtschaft Woche magazine says an
exit would cost euro zone governments alone $300 billion and would push
the continent into a 1930s style depression.
More importantly, a
Greek exit will inevitably hasten the collapse of much bigger economies
that are teetering on the brink such as Spain, Portugal and Italy. The
run on Greek banks, which have already lost more than a third of their
deposits since 2010, points to the dangers ahead. A full-blown bank run
can quickly develop in one European country after another.
Workers
in Greece and Europe have come face to face with the consequences of
the failure of the capitalist system. Every “solution” to the present
economic crisis that does not take this as its starting point brings
with it the danger of further social destruction and a descent into
barbarism.
Fresh Greek elections are scheduled for June 17, but
they have no more chance of resolving the crisis than those that took
place this month.
A new period has opened up where only the most
radical solution is realistic. Greek workers must now adopt a
revolutionary socialist and international perspective on which to base
the struggles ahead. The same applies to the workers in Europe, the US
and internationally.
The ruling class anticipates and is
preparing for an upsurge in the class struggle, in which they know the
destiny of Greece will be decided. PASOK’s Michalis Chrisochoidi, who
heads the Ministry of Citizen Protection encompassing the police and
secret services, this week warned that following an exit from the euro,
“What will prevail are armed gangs with Kalashnikovs, and which one has
the greatest number of Kalashnikovs will count … we will end up in civil
war.”
Historically, the Greek bourgeoisie has demonstrated that
it will stop at nothing, including military dictatorship, when it comes
to preserving its rule. The working class must act in this knowledge.
What
is required is the development of an industrial and political
offensive, with the aim of establishing a workers’ government. Such a
government must take control of the commanding heights of the Greek
economy, seize the assets of the banks and the corporations and prevent
any further flight of capital. The representatives of the troika must be
shown the door and Greece’s resources employed to fund all measures
necessary to alleviate the suffering of its people and provide decent
jobs, education, housing and health care.
These measures will be
realisable only as part of a broader political mobilisation of the
European working class against the authors of Greece’s tragedy and their
own hardship and suffering. Workers in Germany, France, Italy, Spain
and the UK must take up the fight for the overthrow of Merkel, Hollande,
Monti, Rajoy, Cameron, et al. Against the European Union of big capital
and the financial parasites, the perspective must be the establishment
of workers’ power in a United Socialist States of Europe.
Those
who recognise the gravity of the present crisis and the political tasks
posed should take their place in the ranks of the International
Committee of the Fourth International. (WSWS)
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