The Greek debt crisis signals a new stage in class conflict

[Joanne98]

Statement of the International Committee of the Fourth International

17 March 2010

1. The Greek debt crisis marks a new stage in the global recession triggered by the collapse of US investment bank Lehman Brothers in 2008. Governments all over the world reacted by handing over trillions to debt-ridden banks so as to avoid a complete financial breakdown. By moving to make workers pay for rescuing the banks, these governments are acting on behalf of finance capital. Their attempt to set back workers’ living standards by several generations must lead to a tremendous escalation of class conflict within Europe and throughout the world. As Moody’s, the credit rating agency, warned in a report issued on March 15, the measures that governments will be compelled to take in order to maintain the confidence of large global investors “will inevitably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.” Significantly, Moody’s statement came in a report that warned that debt levels in the United States were dangerously high.


Within this international context, it is patently obvious that the most powerful global banking institutions have strategically singled out Greece to set an example for the entire European working class. With its small economy—just over 2 percent of the European Union (EU)—and high indebtedness, it was an ideal target.

European Central Bank (ECB) chief Jean-Claude Trichet announced the end of stimulus measures on December 3. Previously, the ECB had given over €500 billion to the banks so they could lend to governments and industry risk-free. Just a few days after Trichet’s statement, financial firms began downgrading the credit ratings of Greece, Portugal and Spain, and banks began to hold back lending. According to the Financial Times, they sought “to bounce Greece into Irish-style austerity.” The Irish government was then passing an austerity package, drawn up in March 2009, over a wave of strikes and protests.

International investors drove up interest rates for Greek debt and speculated against the euro. Bureaucrats from Brussels, Berlin and Paris descended on Athens to demand draconian cuts. The same European governments that each gave their banks hundreds of billions overnight in 2008 insisted that there was no money for Greece’s €30 billion budget deficit, which had to be balanced entirely at the expense of the workers.

To this end, they relied on the cowardly collaboration of the Greek government. Prime Minister Georgios Papandreou, elected in October 2009, rapidly abandoned his cynical campaign promises about “taking on this huge concentration of power which has created huge inequalities.” He called for employers and the trade unions to negotiate the cuts to be imposed on the workers. On December 27, he passed an austerity budget to reduce social spending by 10 percent, mainly through health care cuts.

http://www.wsws.org/articles/2010/mar2010/euro-m17.shtml

[LongTomH]

1. The Shock Doctrine comes to Europe!

This is definitely an attack on Europe's more egalitarian society; the same sort of thing seen in the Former Soviet Union, South Africa, China and Louisiana after Katrina. It looks like the national health plans that have given Europeans a life expectancy about four years more than Americans will be among the first targets.

To this end, they relied on the cowardly collaboration of the Greek government. Prime Minister Georgios Papandreou, elected in October 2009, rapidly abandoned his cynical campaign promises about “taking on this huge concentration of power which has created huge inequalities.” He called for employers and the trade unions to negotiate the cuts to be imposed on the workers. On December 27, he passed an austerity budget to reduce social spending by 10 percent, mainly through health care cuts.

[Uncle Joe]

2. This won't end with Greece, the banksters need to be taken on and held accountable

or this will spread like a wildfire.

Thanks for the thread, Joanne.

[Better Today]

3. It's not just the banksters, it's most of the wealthy and uberwealthy that seem

to support starving the poor to reduce deficits instead of taxing the rich.

[Uncle Joe]

4. I agree, for all practical purposes it's economic Soylent Green.

They don't want the people; to consider the thought of class warfare in spite of having it waged against them for decades.

Just as cattle being led in procession to the slaughter house should be relaxed and mellow, just chew your cud and enjoy the process.

[leveymg]

5. No wonder New York is so nervous.

This is bound to blow-back there, in some fashion.