LAST week the Greek Syriza government avoided defaulting on its debt repayment to the IMF by the skin of its teeth.
Just before Tuesday’s deadline for coming up with 750 million euros they managed to come up with the money by the simple expedient of borrowing it from an emergency cash reserve set by the IMF itself, meaning that Syriza borrowed money from the IMF to pay back the debt owed to the IMF!
This isn’t the only desperate measure taken by the left reformist Syriza to buy time while they hope beyond hope to reach a negotiated settlement with the Troika (IMF, European Central Bank and EU) that will give a respite from the demands that the Greek working class pay off the nation’s debts through austerity and privatisation.
In April the Greek government ordered its public sector bodies, local authorities, hospitals and universities to hand over any reserve cash to help it meet a payment due to the IMF in return for IOUs.
The party that swept to power pledging to end privatisation has spectacularly reneged on this with plans to sell off Greek railways and ports to Russia and China.
Despite all these attempts to meet the demands of the Troika negotiations are getting nowhere. On the contrary, the Troika are not interested in negotiations, they want to force Greece to use up every last euro of its meagre reserves, bankrupt the country and create the conditions whereby Syriza is forced to cave in after having its bluff called.
The European bourgeoisie, led by the German finance minister Wolfgang Schäuble, believe they will have dealt a death blow to all the reformist ‘left’ parties in Europe who have gained huge popularity with their anti-austerity stand.
As for the risk to the eurozone of a Greek default, the belief is that the capitalist economy of Europe is now strong enough to contain the explosion of the Greek economy and even withstand the forced exit of Greece from the eurozone.
Even economic commentators in the bourgeois press are aghast at this complacency, saying that Germany might be too ‘optimistic’.
The optimism of Schäuble is certainly not shared by German investors who have been running a mile from the euro and piling into gold.
According to the World Gold Council, Germans increased their buying of gold (coins and bars) by 20% in first three month of 2015.
The reasons cited for this rush into gold by these investors are precisely the reasons played down by Schäuble, the threat that a Greek default will bring the entire eurozone crashing down.
Adding to their insecurity is the threat to the German economy with its reliance on export markets and energy supplies, posed by the failed attempt to smash the working class in the Ukraine through the EU orchestrated coup in Kiev, plus the Quantitative Easing programme instituted by the ECB which has had the effect of driving down the euro.
This rush into gold has been seen across Europe as capitalists and investors desert the increasingly worthless paper money being churned out in trillions by central banks and head for the ‘safe haven’ of gold which alone represents real value.
Gold is the universal measure of value, without its backing the euro, dollar, pound etc. are just worthless bits of paper.
These European investors know full well that a currency crisis of historic proportions is about to explode, a crisis that will see the working class not just in Greece but across the continent in revolutionary conflict with a capitalist system that is bankrupt and unable to survive except through the pauperisation of millions of workers.
The crisis is forcing the working class to break with left reformists like Syriza – who refuse to call for the overthrow of capitalism – and has placed on the agenda the building of revolutionary parties of the Fourth International in every country to take this mass movement forward to the victory of the European socialist revolution as part of the world socialist revolution.