International

30-09-2012 • The Troika, consisting of representatives of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), has once again descended on Athens. In the midst of the piles of rubble left by last week’s riots, the Troika finds itself in an equal state of confusion. The SP has once again been proved right: what’s owed turns out to be much higher than expected, the demolition policy isn’t working and according to the IMF it’s time for a real restructuring of the debt. Meanwhile the Greeks are not only desperate, but are gradually losing all restraint. Alexis Tsipras, opposition leader in the Greek Parliament, predicts the swift downfall of the government as a consequence of growing popular protest. Will Brussels listen this time? Or will we see in October, once again, yet another non-summit of government leaders?

The Greek government has in the meantime completed its budget for 2013: €11.5 billion in cuts and €2 billion in tax increases, which conforms to the Troika’s demands. But there’s a snake lurking in the grass: according to German news weekly Der Spiegel, Greece’s budget deficit could amount to €20 billion, rather than €13.5 billion. From this distance there isn’t much one can say about this, and the Troika seems for the time being to be sticking to its €13.5 estimate. This does, however, show how great is the confusion.

There remains, in addition, a great deal of uncertainty over the necessity for a possible third aid package. The fact is that currently a quarter of all Greek debts to Greek banks are no longer being repaid. In essence, the banking sector has collapsed. Despite this, 95% of the next tranche of the aid package, which Tsipras expects to amount to around €30 billion, will be used to save the banks. This means simply more of the same. Money from Europe goes once round the Acropolis and then straight to the bankers. Whatever else, the SP will not go along with this, a stance which was supported by Alexis Tsipras. Such an aid package will do nothing for the real Greek economy. In Athens one in three shops has already fallen into bankruptcy, and the city is on the way to becoming a ghost town.

It is therefore also quite striking how little notice is taken of what IMF chief Christine Lagarde is saying. She has already, on earlier occasions, advocated a realistic reorganisation of debt which could make it possible to give the Greek economy a new start. The only thing that the ECB seems prepared to do is possibly to roll over the loans which should otherwise be paid back over the next three years, some €27 billion in state bonds which the ECB has bought up and which mature during that period. This is, however, no more than a drop in the ocean and yet is being presented now as the ultimate concession.

It is absolutely tragic to see how the Troika is maintaining its stranglehold on the Greek government, when any sensible person can see that this isn’t working. The only explanation I can think of for this is that Greece is being used as a guinea pig, an experiment to see how far you can, via a crisis, go in a deindustrialised part of the world in running down wages and other conditions of employment and dismantling public services. In other words, is it possible to reintroduce the minimal ‘night watchman’s’ state of the 19th Century? That’s neoliberalism all over. But are we really going to let it go so far? Or should we, not only in Athens, Rome and Madrid, but eventually in the whole of Europe get people out on to the streets in order to preserve our social model? I fervently hope that the latter will be the case, because otherwise the Greeks will be facing some hard, dark years yet. And yes, in that case not only will the lights go out, but civil war would not be unthinkable. There is thus a heavy responsibility on the leaders of EU member state governments to prevent things from going so far.