On Feb. 12, open rebellion broke out in Athens. “Layoffs! Layoffs…You will save Greece without the Greeks!” protesters proclaimed against the Greek parliament’s approval of a new round of austerity measures, dictated as conditions for a new 130 billion euro loan by the European Central Bank, the International Monetary Fund and especially the European Union’s (EU) rich creditor nations like Germany. The rage that fueled the burning of 50 buildings at the center of Athens and looting of shops peddling luxury goods was over the unending downward spiral pushing the majority of Greeks into ever more severe material deprivation. They see no end to the cycle of austerity measures, economic contraction, and more austerity.
The Greek economy has been contracting, especially since the 2008 financial meltdown, while finance capitalists who caused the global economic crisis drained the public treasuries. Austerity measures mandated by a 2010 loan caused Greece to suffer a much deeper depression, leaving it with less ability to get out of debt. Now unemployment is over 20%, 50% among the youth, and public services like healthcare have been gutted. Without a new loan Greece will go into default in mid-March when a big bond interest payment is due. To get the loan, both major parties in the government had to agree to a long list of conditions including huge new pensions cuts, cutting an additional 150,000 jobs in the public sector and reducing the minimum wage by 22%.
Far from being a “bailout,” this deal, constructed by Greece’s financial masters, is another totally cynical ploy designed to fail. The Greek economy, which contracted 7% in 2011, will, by the financiers’ own estimates, shrink at least another 4% in 2012 and will have no capacity to meet debt repayment conditions. The financial overlords and creditor states think that by sacrificing Greece they can save themselves. With this contemptible move to micromanage the Greek economy and to hamstring any new government that may come to power, the last bit of “solidarity” that could be attached to the word “Union” in the EU’s name has been shredded.
German Finance Minister Wolfgang Schauble at first suggested that Greece delay April elections and install a technocratic government. When this was met with outrage in the birthplace of democracy, Schauble insisted on structuring the loan so that most of it goes into an escrow account to be first used to pay bond interest because his only concern is managing the Greek default in the interest of the financiers.
Within a few months a new calamity of homelessness, ever more massive lines at soup kitchens, and deaths from lack of healthcare awaits the Greek people. The search for “real democracy” in the public squares in Europe in the wake of Arab Spring was nowhere more deep and persistent than in Syntagma Square in Athens, which has been rife with general strikes and mass action demanding the overthrow of the “dictatorship of capital.” On Feb. 18 solidarity rallies were held throughout the world from Occupy Wall Street to Berlin, exclaiming, “We’re all Greeks.” In Syntagma Square, Manolis Glezos, a national hero for his role in the resistance to Nazi occupation, asked for global solidarity to “overturn a rotten system.”
Greece is only the weakest link in capital’s stalled accumulation after the financial meltdown revealed a much lower rate of profit in the real economy. The scarcity in opportunities for accumulation drives nations, who can get away with it, to try to save themselves at the cost of others. Thus, Germany uses its economic power to keep other nations in Europe from bringing their trade into balance. Portugal, Spain, Ireland and even Italy are not far from the same austerity-induced death spiral inflicted upon Greece.
New massive demonstrations have erupted again in Spain, where in many areas teachers and garbage collectors haven’t been paid since December. Spain’s EU-mandated cuts were supposed to address the problem of its public debt but, predictably, the resulting economic contraction made their level of public debt much worse. The Eurozone as a whole, as well as EU countries outside the Eurozone like Britain, are now in the midst of a new recession which threatens to bring the global economy down with it.
While European nationalism, which precludes Europe from acting as an economic unit, exacerbates the crisis, even the U.S. economy, which is growing again, has anemic job growth and is still in the midst of the most severe long-term unemployment since the Great Depression. Governments of other major world economies are trying to force Europe to better use the levers of finance to manage the general collapse in the rate of capital accumulation in the real global economy.
That collapse, as Marx predicted, is inherent to capitalism because of a tendency for the amount of capital needed to employ each unit of living labor to rise. Global capital accumulation’s absolute is a future of growing permanent unemployment and pauperization. Only freely associated human solidarity between workers, not governments drifting toward war and nationalism, can pave the way to a different future. “We are all Greeks!”