Wednesday, 28 April 2010

What are we doing to Greece?

So in terms of capital Greece is having problems with paying off it's creditors. The countries in the Eurozone seem to be slow putting together a 'rescue package' and now all talk is of the IMF rolling in in as the knight in shining armour with a poison chalice of loans and repayment schemes.

But scratch the surface of any capitalist scheme and you'll find the real load carried - asset stripping, passing control to foreign investors, making the state dependant on unelected capital and the transfer of assets held in common to the capitalists. Oh, and the people pay with the attached 'austerity package'.

There's a good article by James Meadway on Counterfire, well worth a read. In fact I'll cut and paste some items from there to make a few points as the article is so well written! It captures and puts into words a lot of the anger and disgust I feel inside.

As of this morning, the effective interest rate on Greek debt, paid back over two years, stands at 38% - compared to 1.3% last November.


Typical capital response to 'problems'. Greece is in trouble so you screw them into the ground when what they really need is help. Loans are now attracting a massive 38.1% interest compared to 1.3%. So how doe this help Greece and her people? It doesn't. It's a mechanism to enrich those who have by taking from those who don't. It mirrors what we already see with personal debt with credit cards - what you have to repay depends on how much you have. The less you have the more you repay.

Credit rating agencies, which assess the ability of borrowers to repay their loans, yesterday downgraded Greek debt to ‘junk bond’ status. The cost of insuring loans to Greece against default has risen to an all-time high.


So the way in which the international community relates to Greece is dependent upon the status awarded to Greece by these unelected bodies called credit rating agencies. Our assistance is not based on need but on the estimated potential to get a return. In capitalism humanity is discarded.

‘Default’ can in practice mean many different things. The Greek government, and the major Euro economies, will be desperate to avoid a complete cessation of debt repayments. The damage to the credibility of the Euro itself would be immense.


So the reaction of international finance and countries is not in response to the need of the Greek people but a tool to retain the credibility of the Euro? God help us that these people are in such positions of influence.

The critical issue for the markets is the credibility of the Greek government to meet its debt obligations. They are demanding massive public spending cuts to pay for them.


Spending cuts. So we know see the usual method of enriching those with capital - they take from those without influence and power.

But IMF cash is no gift. It will be strictly conditional on the Greek applying exceptionally harsh austerity measures, like further wage reductions and redundancies, public spending cuts, and privatisation.

The aim of an IMF loan, as always, is to pummel an economy for international investors. It steps up the international pressure already applied to Greece.

Measures already promised, under EU supervision, include cuts of up to 30 per cent in public sector wages and pensions, and swingeing tax increases for ordinary people.


An enhanced version of what our political leaders in the UK are softening us up for. The people will pay. As always. Why is it never the financiers who pay? Why is it never the shareholders who pay? Why is it always the people? Because this is capitalism and this is how it has to work.

I think I'm going to stop here before I explode. We have already seen rioting in Greece and inside a part of me is excited by it. Would that this civil disturbance could spread and eventually lead to the dismantling of this evil system and it's replacement by one that works for the people.

Cant Pay, Won't Pay: Solidarity with the people of Greece - Join the Facebook group