******************** POSTING RULES & NOTES ******************** #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. *****************************************************************
The editorial (whether as copied here or on the SR site) seems to be missing something at the end. A lost concluding paragraph? ps The Guardian's live updates today are definitely worth following: http://www.theguardian.com/business/blog/live/2015/jun/26/greece-crisis-markets-to-open-lower-ahead-of-weekend-talks-live On Fri, Jun 26, 2015 at 1:55 PM, Dayne Goodwin via Marxism < marxism@lists.csbs.utah.edu> wrote: > ******************** POSTING RULES & NOTES ******************** > #1 YOU MUST clip all extraneous text when replying to a message. > #2 This mail-list, like most, is publicly & permanently archived. > #3 Subscribe and post under an alias if #2 is a concern. > ***************************************************************** > > On the brink of Grexit? > by Socialist Resistance, June 26 > <http://socialistresistance.org/7565/on-the-brink-of-grexit> > > (This piece has been written as an editorial for the forthcoming issue > of Socialist Resistance) > > As we go to press, deadlock over the Greek debt crisis remain > unresolved, despite three emergency EU summits over the past few days. > Greece, therefore, remains not only on the verge of defaulting on its > debt to the IMF but of crashing out of the Eurozone –a so-called > Grexit – if a deal is not reached in the next few days. > > A week ago the Greek government announced that it had run out of money > and was unable to pay the €1.6bn due to the IMF by the June 30 > deadline. > > The EU was withholding the final €7.1bn tranche of bailout money until > Greece agreed to accept further stringent austerity measures. This > money, due under the third bailout agreement was the only way that the > debt to the IMF could be paid The Troika (the IMF the ECB and the > European Commission) were demanding further deep cuts to pensions, a > substantial rise in VAT, and the liberalisation of labour laws. > > The consequences and nature of the debt has been spelled out clearly > by the Truth Committee on Public Debt set up by the speaker of the > Greek Parliament Zoi Konstantopoulou (a leading member of Syriza) in > April. It includes a number of left wing and Marxist economists from > across Europe including Eric Toussaint from CADTM and Özlem Onaran, a > supporter of SR in Britain. > > Its first report concludes not only that is Greece unable to pay but > that it should not pay because the debt is ‘illegal, illegitimate, and > odious’. It says the following: > “All the evidence we present in this report shows that Greece not only > does not have the ability to pay this debt, but also should not pay > this debt first and foremost because the debt emerging from the > Troika’s arrangements is a direct infringement on the fundamental > human rights of the residents of Greece. Hence, we came to the > conclusion that Greece should not pay this debt because it is illegal, > illegitimate, and odious.” > > It concludes that “the increase in debt was not due to excessive > public spending, which in fact remained lower than the public spending > of other Eurozone countries, but rather due to the payment of > extremely high rates of interest to creditors, excessive and > unjustified military spending, loss of tax revenues due to illicit > capital outflows, state recapitalization of private banks, and the > international imbalances created via the flaws in the design of the > Monetary Union itself.” > > But last week the question posed was which side would blink first. > Unfortunately it was the Greek government. > > On Sunday June 21 the Greek cabinet decided to make major concessions. > They agreed a package that did not give the Troika everything it was > demanding—there was still around a €2bn gap between the two sides—but > it was a dangerous compromise. > > The 11 page package included a VAT increase, though not on electricity > as demanded by the Troika. It included reduction in pensions > expenditure by increasing contributions from better-off pensioners and > reduced early retirement rights—but not a cut in the rates paid as the > Troika was demanding. It also proposed raising corporate taxes. > > The biggest concession, however, appears to be on debt reduction. The > Greek Government has always insisted that any deal must include > immediate measures to cut the debt. Now it appeared prepared to accept > a pledge to address this in the future. > > It was clearly austerity, though not in the shape (or as severe) the > Troika wanted it. They wanted to target the poor more and the > employers less and they wanted to totally humiliate the Syriza > leadership in the process. > > The EU elites applied huge pressure on the Greek government to bring > about this climb down. They talked of the imminent collapse of the > banking system and speculation as to when the ATMs would close down > resulting in riots on the streets. Billions of Euros haemorrhaged from > the Greek banks and the ECB was threatening to withdraw support > facilities. > > Climb down is no answer. It will resolve nothing. Even if there is a > ‘settlement’ now, further debt major repayments are due to the IMF in > July and August. > > At first the creditors welcomed the proposals, and European Commission > President Jean-Claude Juncker described the package as “a major step > forward”. The mood then changed. When the Troika met, they rejected > the package. Led by Christine Legarde of the IMF, they tabled a > heavily revised version reintroducing their hard line demands. In > particular they were not prepared to accept the Greek proposals to > raise pension contributions, but insisted on a direct cut in the > pensions rates paid. > > This was rejected by Tsipras and hence deadlock. > > Pensions are a huge issue. There has already been a mass demonstration > of pensioners protesting about the proposals. Pensions in Greece today > are often the only part of a household income left. Several > generations are often reliant on a single individual pension as an > income. For almost 50% of families in Greece a pension is the main and > often the only form of income. > > If any deal is reached it will have to go to the Greek Parliament, of > course, where there is a real danger of it being accepted by the votes > of the right. It will also have to deal with Syriza’s base in Greece. > Tsipras, who had vowed not to cut wages or pensions, is under huge > pressure from within Syriza itself, including its MPs. Also from the > (remarkable) 47% of voters who say that they would vote for Syriza if > there was an election tomorrow. > Even if Greece wanted to pay it is unable to do so. Its debit is 180% > of GDP. It has been bled dry by the Troika. 95% of the bailout money > would be immediately paid back to the banks to service the debt. > Greece has been forced to carry the burden of the Eurozone crisis and > has been used as a test bed for austerity Europe-wide. > > The statistics are frightening: There has been a 25% drop in Greek GDP > over the past 5 years, a 28% reduction in public sector employment, a > 28.5% drop in consumption, a 61% cut in average pensions, 45% of > pensioners are living in poverty, there is 26% unemployment and over > 50% amongst the under 25s. The health and welfare system has been cut > to ribbons. > The biggest factor behind this climb down, and weakness of the Greek > position, is clear—the Greek government’s attitude to Eurozone > membership. A week ago they appeared to have returned to their > pre-election position of ‘no sacrifice for the Euro’: that if it came > to a choice between exit and austerity, they would accept exit. > This was right. Most Greek people are fearful of an exit from the > Euro—and its implications for EU membership, though the numbers > holding this position has declined from around 80% when the Syriza > government was elected to around 65% today. > > In the end, however, the fear of what will happen if Greece exits the > Euro has to be set against the realities of life under the Euro if the > terms of the Troika are accepted. > > But the Greek government backed down; making major concessions to > austerity precisely in order to avoid Grexit. To fight austerity > within the Eurozone means being prepared to leave the Eurozone if > necessary – otherwise the same threat of expulsion from the Euro will > be made every time resistance to austerity is offered. > > And the elites are not in a strong position to issue ultimatums. The > single currency has been the central project of the EU for over 20 > years. The idea that a Greek default and Grexit would cause anything > less that chaos for the rest of the Eurozone, severe reputational > damage to the whole EU and disruption for the world economy makes no > sense. > As one commentator put it: Greece may be only small part of the > economy of Europe but the plug in a bath is only a small part of the > bath, but if you pull it out it has a big effect. > Contagion across Europe—which the elites have been claiming they could > avoid—is already happening as the cost of government borrowing for > Spain, Portugal and Italy rose after attempts to reach a deal broke > down. > > The stakes are enormous for both sides. The elites fear, with > justification, that if they make a concession to Greece, similar > demands will be made by Spain Portugal and Italy and beyond. > This is why we are seeing a major class-polarisation taking place in > Greece today. The right wing and middle class business people have > taken to the streets to demand the acceptance of all the austerity > demands of the Troika in order to stay in the Euro > > There have been alternate protests outside the Parliament. One day > there have been Syriza supporters calling for the government to stand > firm and the next the right wing calling for the opposite. How long > before there will be clashes between the two sides is hard to say. The > mood has already darkened and passions could soon spill over. It is a > dangerous situation > > The election of a Syriza-led government in January, at the head of a > mass anti-austerity movement, and after 30 general strikes, was an > historic victory for both the working class of Greece and of Europe > with the possibility of giving a powerful lead in terms of the > anti-austerity struggle. > Since it was elected Syriza has been criticised by many on the > left—leaving aside the ultra left who have long written Syriza off as > ‘reformist’ or as the ‘new PASOK’ and (in Greece) stand against it in > elections—for dropping many of its pre-election pledges in order to > avoid an early default. > > This undoubtedly strengthened the elites who will always demand more. > It was also deeply controversial within Syriza itself both amongst its > leadership and its membership. > > _________________________________________________________ > Full posting guidelines at: http://www.marxmail.org/sub.htm > Set your options at: > http://lists.csbs.utah.edu/options/marxism/acpollack2%40gmail.com _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
