Greek ‘bailout’ derailed


The Chairman of the EU group of finance ministers, Jean-Claude Junker, spelt out at the weekend exactly what the EU and IMF ‘bailout’ of the bankrupt Greek economy really means.

In an interview with a German magazine, Junker explained that under the terms of the agreement, passed by the Greek parliament last week, teams of privatisation ‘experts’ would be descending upon Athens to force through the biggest sell-off of state assets and industries ever seen.

In the process of this tidal wave of privatisation, aimed at raising £45 billion to repay the European banks, Junker freely admitted that ‘The sovereignty of Greece will be massively limited’.

In other words, the governance of Greece will be placed firmly in the hands of the bankers determined to exact their pound of flesh from the Greek working class, while the Greek government’s role is limited to that of ensuring that the workers and youth are kept in their place and forced to accept poverty as the price for keeping the banks afloat.

These terms include not just the complete privatisation of state assets but the immediate sacking of thousands of civil servants, raising taxes for all, even the poorest, and cutting the public sector wages by 30%.

These savage cuts are in order to secure a loan from the EU central bank and IMF totalling 110 billion euros, but even this loan will only stave off default and state bankruptcy for at most a year, and already it is being derailed.

Yesterday, just days after the Greek parliament voted to accept the terms of the bailout, Standard and Poor’s (one of the main international credit agencies) announced that a central feature of the EU’s plan for restructuring the Greek national debt  would, in effect, constitute a default.

What is worrying the credit agencies is the proposal by the German and French banks for the Greek debt to be rolled-over, that is, debts due to be repaid to the banks in the near future be extended by up to 30 years.

While this sounds very magnanimous on the part of the banks what it really means is that instead of facing immediate default on their loans and taking a hit that would plunge not just them but also the entire international banking system into collapse, the debt is transferred from the Greek capitalist state on to the Greek workers who would be forced to repay the debt over the new loan period through poverty, unemployment and the complete destruction of social services and pensions.

But even this is not enough for international capitalism.

In effect, the credit agencies, whose ratings are regarded as the final word by the international capitalist class, have declared Greece bankrupt even with the restructuring and are demanding that the entire massive debt be repaid immediately.

This can only be achieved through the complete subjugation of the working class under some form of dictatorial, repressive regime, it cannot be achieved under the guise of bourgeois democracy.

This is true not just of Greece but throughout capitalism internationally.

The world crisis is driving the capitalist state to come out openly as ‘bodies of armed men’ as bourgeois democracy is ripped up as the state prepares to fight it out with the working class for its survival.

Against this is a powerful international working class that is undefeated and learning every day that it cannot live under capitalism.

This massive sharpening of the class struggle, exemplified in Greece, can only be resolved through the working class taking power through the revolutionary overthrow of capitalism and its replacement with socialism.

This is the issue immediately facing the Greek workers and the working class internationally.