THIS week sees the return to Athens of the Troika’s ‘bail-out monitors’ to oversee yet another round of austerity cuts designed to crucify the Greek working class and drive them even further into the gutter to keep the European banking system from going bust.
For months now, two members of the Troika, the IMF and European Central Bank, have apparently been in bitter disagreement over the question of debt relief for Greece. The IMF recently warned that Greece’s debts are on an ‘explosive path’ and called for the ECB and EU to provide ‘significant debt relief’ for Greece, that is for the banks to take a haircut and swallow the losses.
The position of the EU bankers was quite clear; they would accept no haircut, and that Greece would have to accept even more austerity in return for the next bailout of £5.9 billion due in July. At the weekend, it was announced that a compromise deal to break the deadlock between these two had been reached that would allow a further bail-out to take place.
No details of this agreement have been published but it was immediately greeted by the Greek prime minister, Alexis Tsipras, as some huge victory. Speaking in the Greek parliament he said: ‘Today, I have the absolute conviction we have achieved an honourable compromise. For the first time in seven years it was agreed, and this is crucial, to leave behind us the principle of perpetual austerity.’
In fact it is clear Tsipras, whose left-wing Syriza party was elected in 2015 on a platform of an end to all austerity, has once again signed up to another round of cuts to pensions along with tax increases and a whole host of unspecified austerity measures including further attacks on the employment rights of workers.
While Tsipras was hailing an end to austerity for Greek workers and talking of historic compromises, the German deputy finance minister, Jens Spahn, was showing no signs of the bankers making any compromises.
He rejected out of hand any notion that the EU and the banks would accept any haircut in the form of debt relief saying: ‘There must not be a bail-in’, before insisting Greece needed ‘reliability’ not debt relief.
The ECB’s own rules state that when a bank goes bust it must be bailed-in, that is the depositors and account holders are deemed to be creditors and so lose their money to cover the bank debts.
This, however, does not apply to Greece; their creditors, the ECB and IMF, have no intention of taking a haircut for the simple reason it would bring on an almighty financial crash across the continent.
The ECB knows the Greek debt can never be repaid, it intends to get its money by insisting that the entire Greek state be effectively sold off in a mass privatisation campaign. Ports, transport, public utilities and land have already been sold off in the past to repay previous bailouts and this will increase until the bankers have everything, while the working class has its pensions and rights completely destroyed.
This latest attack has been met with calls for the unions to escalate the struggle against austerity and for a massive militant strike response to this new all-out offensive against the working class.
Greek workers are being driven inexorably down the road of confrontation with the left reformists of Syriza who have betrayed them at every turn – and they are not alone.
Last week, the EU issued instructions to the Italian government to cut its public debt, a massive 133.3% of GDP, or face being fined by Brussels. The EU is insisting that new austerity measures attacking workers’ wages and conditions be forced through as the only way of cutting the debt.
What is clear is that workers throughout Europe are in a life and death struggle with a capitalist EU that can only survive by driving workers into abject poverty. The EU must be smashed and replaced with a Socialist United States of Europe as the only way forward for the working class. This requires the building of sections of the Fourth International to lead this struggle to victory.
