THE Greek Prime Minister Lucas Papademos was in Brussels yesterday seeking final approval from Germany and France for Greece’s second bailout deal.
Greece is continuing with the spending cuts required before it can get the 130bn euros ($174bn; £110bn) of loans it needs to pay the first instalment, by March 20, to avoid a default on 14.5bn euros of its bonds that are due to mature, and to prevent being drummed out of the union.
Greek MPs, by a 202 to 80 vote in their parliament, have agreed a further 3.2bn euros of spending cuts, including new pension cuts and a reduction in the minimum wage. Further budget cuts were due to be voted on late yesterday.
The financial and political crisis of the EU is deepening fast. Yesterday 800 banks borrowed another 530bn euros from the European Central Bank. This is after the banks borrowed 489bn euros from the ECB in December.
The bank’s president, Mario Draghi, said after the first operation that ‘a major, major credit crunch’ had been averted. As the latest borrowing proves, at best it has been just postponed.
In fact, the banks used the 489bn euros they borrowed last year to cover maturing debt, and no doubt they will do the same again, as their indebtedness escalates. However, ECB officials have said that the central bank is creating even bigger problems by releasing what they term these ‘waves of cash’.
The financial, economic and political storm could well be unleashed on the EU as a consequence of the calling by the Taoiseach of an Irish referendum on the Fiscal Stability Treaty.
The Taoiseach will sign the Fiscal Compact Treaty on Friday and arrangements for a vote will be made in the coming weeks.
It has already been decided that in the case of a ‘no’ vote, there will not be a second referendum.
Sinn Féin leader Gerry Adams said he welcomed the announcement, calling the treaty an ‘austerity treaty’, that will condemn people to austerity.
Sinn Fein TD Padraic MacLochlainn said the treaty was about satisfying Germany and Angela Merkel, and would enshrine austerity into the Irish Constitution.
Should Ireland reject the treaty, it will remain outside the pact, but it will also be precluded from any future funding should Ireland need a second bailout.
It is almost taken for granted in Ireland that the Irish masses will vote ‘no’ to hit back at the monstrous austerity programmes that have been imposed on them by the EU and are now really hurting and doing extreme damage to working people.
The compact gives the EU intrusive powers to police the budgets of debtor states, and is being denounced as feudal bondage. Irish workers voted ‘no’ to both the Nice and Lisbon treaties before being made to vote again. This time there will be no second vote.
An Irish ‘no’ will unleash a tsunami of hostility to the austerity programmes right across the EU, making the current events in Greece seem like an appetiser.
There will be revolutionary explosion across the EU that will break the EU and also the eurozone.
Already the new Spanish government of Mariano Rajoy has said that it will be ‘suicidal’ to try to slash the deficit to 4.4 per cent this year to meet EU demands, fearing that it will drive unemployment to six million, or more than 25 per cent.
The Spanish budget minister Budget Cristobal Montoro has also warned that it will require 43bn euros of of fiscal cuts to comply, but his request for better terms, and going easier on Spain, met with a negative response in Brussels.
An Irish ‘no’ to the fiscal treaty will prepare the way for the working class throughout the EU to take revolutionary action to overthrow the EU of the bankers and bosses and replace it with the Socialist United States of Europe.
