GREEK PM Antonis Samaras is meeting the organisation of Greece’s international creditors, the Troika (IMF, EU, ECB), to try to persuade it to give Greece more time to repay part of the gigantic loans that have been made to it, and to hand over the 31.5 bn euros that Greece needs to avoid immediate bankruptcy.
After the recent declaration of the German Finance Minister, that Greece quitting the EU no longer holds any horrors for Germany, the Greek government is going to get short shrift rather than a deal to hand over the cash.
Without these funds Greece goes under, with them it has a tiny breathing space.
With the Greek working class already on the streets and getting ready for massive revolutionary actions, Samaras is pledging to make even bigger attacks on the working class to try and clinch the loan. He is willing to impose another two-year, 11.7bn euro cost-cutting plan, slashing yet again pensions, benefits and healthcare to try to satisfy the international banks. He is also pledging the privatisation of all state assets.
But Greek capitalism is weakening by the minute. Last Tuesday, Samaras declared that the country’s economy was expected to contract by 7% in 2012, more than the 5% previously forecast by the Greek central bank.
Last Friday the European Commission gave a ‘temporary’ verbal approval, without any hand-over of the cash, to inject 18bn euros into four busted Greek banks – Alpha Bank, EFG Eurobank, Piraeus Bank and the National Bank of Greece – after they wrote off 107bn euros of their debt. This awaits a demonstration that the Greek government is in control of the situation, which it isn’t.
The essence of the situation is that the Troika is not prepared for further rescue operations unless Samaras pays up and carries through even more savage cuts, while the Greek workers will resist further cuts with revolution. Greece faces both being drummed out of the EU and a revolutionary explosion of working class anger.
Where Greece treads, Spain, Italy, France and even Germany follow.
5.7 million Spaniards, equivalent to almost one in four, are now seeking work, with over 50% of youth jobless. Spain’s third largest bank, the CaixaBank, reported an 80% fall in net profits during the January to June period. Santander has also reported its profits have halved during the period.
Earlier in the week, Spain’s borrowing costs jumped to 7.6% on worries that the bankruptcy of its regional governments would require a 450bn euro bailout.
Behind Spain lies Italy, where a number of regions, including Sicily, have also gone bankrupt and need bailing out.
Behind Italy lies France, whose banks are heavily into euro debt and whose car-makers are in crisis. Renault has said net profits in the six months to June fell 39% to 786m euros ($966m, £615m), down from 1.25bn euros a year earlier.
France’s PSA Peugeot Citroen has announced 8,000 job cuts and plant closures. Peugeot’s Aulnay plant near Paris, which employs more than 3,000 workers to build the Citroen C3 subcompact, will end production in 2014. Aulnay will become the first French car plant to close in two decades.
Then there is Germany whose triple A status is now under threat and where 17 German banks have been downgraded by the Moody’s rating agency.
Last week Frank-Walter Steinmeier, the parliamentary floor leader of the Social Democrats (SPD) in the Bundestag, declared that the writing was on the wall. He told MPs about bailing out Spain: ‘If the majority of us still vote in favour, this is only because in our view, too, the damage would be catastrophic if Germany denied aid to Spain…That also means, however, that it cannot go on like this.’
He is right – things cannot proceed like this. To survive, Europe needs reorganisation as a socialist planned economy, under workers control and management. What this requires is the socialist revolution throughout Europe to replace the bankrupt EU with the Socialist United States of Europe.