Greece’s catastrophe shows what lies ahead for Europe

Speaking at the Left Forum in New York, June 9, Eirini Dourou said that the working people of Greece were living through a catastrophe, produced by Troika-imposed austerity. The Troika is composed of the European Commission, the International Monetary Fund and the European Central Bank.

Dourou is a member of Parliament from the Athens area and the foreign spokesperson for Syriza, a left social-democratic coalition and the official opposition to the current Greek government. She asserted that austerity had failed to revive the economy.

In contrast, Greek Prime Minister Antonis Samaras has promised a return to growth and international bond markets next year, arguing that the harsh austerity measures his government accepted in exchange for the bailout are indeed finally working.

Dourou argues that the Greek debt crisis in 2008 gave Germany the ability to gradually impose a “neocolonial control” on Greece and that neocolonial austerity lies in the future for much of Europe. It will come sooner to Southern Europe but the rest of Europe will inevitably also be subject to austerity.

According to a May 25 Pew report, about 25 percent of all Greeks said they did not have enough money to buy food in the past year. Overall unemployment is nearly 30 percent; among youth, it’s 60 percent.

Greek incomes have fallen by about one-third since 2009 and Greece’s economy, according to the International Monetary Fund, has contracted every year from 2006 on.

According to the Statistical Institute of Greece, the Greek gross domestic product fell 5.7 percent in 2012, a figure significantly lower than in the previous three-year period during which the economy fell by 6.7 percent, 6.4 percent and 6.7 percent, respectively. Consumption during the four quarters of 2012 showed deeper declines: -7.5 percent, -7.3 percent, -8.8 percent and -9.0 percent, which illuminates the anecdotal reports of increasing hunger and homelessness throughout Greece. People are spending less on everything — even necessities.

Even though 2012 witnessed not as big a drop as the year before, it is a significant contraction, and it hardly indicates that the Greek economy is growing. According to the European Central Bank, the European economy overall is predicted to decline by a half a percent in the first quarter of 2013, so it is unlikely the Greek economy is growing.

IMF admits failure in Greece

What stirred up the people and politicians in Greece and elsewhere in Europe was a report that the International Monetary Fund issued on June 5. Commenting on what the IMF did in 2010, the report said, “Market confidence was not restored, the banking system lost 30 percent of its deposits, and the economy encountered a much deeper-than-expected recession with exceptionally high unemployment.”

The IMF did not account for the multiplier effects of the cuts that its austerity policies are necessitating.

In response to demands from Syriza to eliminate the austerity imposed on Greece, since it was based on erroneous calculations, the IMF said its second bailout package had already been corrected. Then the day after the report, IMF chief spokesperson Gerry Rice held a press briefing and said, “In the same situation, with the same information, we would probably have made the same decision today.”

He went on to say, “Greece’s economic program today is on track.” From the IMF’s point of view, the hunger, homelessness, the breakdown of health care, education, public transportation and all sorts of public services, are contributing to the expected and required fiscal performance of the Greek economy. What the IMF omits is that these developments create abject misery for large sectors of the population.

The huge number of unemployed means that even the profits that might have been created by what these workers produced — had they been working — have vanished. For many of the bourgeoisie in Greece, this is a blow. The big bourgeoisie in northern Europe, however, can use the fate of workers in Greece as a club against their own workers. The labor markets throughout Europe are flooded with highly trained Greek workers who can’t find jobs at home.

The absence of income and the diminution of the public space in Greece is an even heavier blow against the working people who had so little at the beginning of Greece’s deep depression.