Lagarde says Greek euro exit will ‘probably’ not mean end of euro


THE head of the International Monetary Fund, Christine Lagarde, admitted on Thursday that she could not ‘preclude’ Greece being forced out of the eurozone.

This is after four months of negotiations about securing another bail-out for the shattered Greek economy have floundered in the face of the IMF and ECB demands. They want the reformist Syriza government to produce massive debt repayments for past loans and bail-outs, as well as agreeing to the mass privatisation of all remaining publicly owned assets, cuts to pensions and wages and an increase in unemployment from the already sky-high levels of over 25% overall. Youth unemployment is now a staggering 56%!

The ‘debts’ which the IMF and ECB are demanding be repaid are gigantic, far beyond the capability of an economy that has been driven into the ground after five years of the most savage austerity measures, imposed by successive governments acting on the diktats of the central bankers.

In June alone, they are demanding Greece pay back 1.5 billion euros to the IMF – starting with 300 million euros due on 5th June. Ruling out any possibility of a fudged agreement, Lagarde told the German newspapers: ‘We have rules, we have principles. There can be no half-baked programme review.’

She went on that ‘a Greek exit is a possibility’ and that this would ‘not be a walk in the park’ but she insisted an exit would ‘probably not’ mean the end of the euro. The phrase ‘probably not’ means that Lagarde and the ECB don’t have the faintest clue whether or not a forced exit from the eurozone by Greece will bring the whole unstable economic house of cards crashing around their ears.

Their overriding imperative, which forces them to take a gigantic gamble on the future of European capitalism, is to make sure that the working class of Greece is made to pay in blood for the debt crisis caused by the desperate need to save the banks. Back in 2010, Greek capitalism found itself faced with huge debts owed to private banks and financial institutions – debts which couldn’t be repaid.

To stop the speculators and banks from losing money and going bust, the IMF and ECB ‘refinanced’ the Greek debt – so now the money was owed to the IMF and ECB who had it in their power to screw the money out of Greek workers by demanding that the government implement austerity.

The Greek crisis, therefore, is part of the international debt crisis of capitalism, where banks and speculators facing bankruptcy have transferred their debt to the capitalist state with the demand that they recoup it from the working class.

The reason why the IMF and ECB are insisting that Syriza cave in completely and accept their diktats, is that behind Greece stands the entire working class of Europe.

Lagarde and the central bankers live in dread of the Greek working class rising up and repudiating all of the bankers’ debts and refusing to submit to any more austerity. Already, millions of workers and young people across Europe – mass movements like those that have erupted in Spain, Portugal, Italy and France – have been inspired by the refusal of Greek workers to submit.

If Lagarde and the ECB think that they will smash this mass movement of the working class by teaching Greek workers a ‘lesson’ that resistance is futile, they are badly mistaken. The lesson that the workers are being forced to draw, is that the reformist Syriza government, with its policy of staying at all costs within the eurozone and negotiating a ‘just’ settlement with capitalism, is completely finished.

The working class of Greece and Europe must demand immediately that all bankers’ debts are repudiated, that the banks, along with industries and land, are nationalised under the control of the working class as part of the socialist reorganisation of society.

This requires that a new revolutionary leadership, sections of the Fourth International, are built in every country to lead the struggle for the working class to seize the power and put an end to capitalism through the victory of the socialist revolution.