Tuesday, June 30, 2015

The failure of austerity and the Greek political and economic crises

As the political  and economic crises in Greece deepens, thousands have gathered in Athens today calling for a vote against austerity in Sunday's referendum.

After five years of painful austerity Greece will miss a crucial debt repayment on Tuesday and the left-leaning Syriza led government is planning a referendum on Sunday for the Greek people to decide whether to continue to be politically and economically strangled by  regimes of austerity imposed by  the European troika, or to reject the austerity regimes and in all likelihood leave the Eurozone. 

All of us have a stake in this struggle between the forces of corporate and financial capitalism and the interests of ordinary people.

The political economist C J Polychroniou argues that the leftist Greek government failed to see that Europe’s neoliberal elite is wanting to finish  them off  completely to send a message to all potential 'troublemakers' of the fate awaiting anyone who dared challenge the neoliberal, austerity-based orthodoxy. 

He writes that the referendum is  a tool of politics rather than a reflection of some sort of a deep-seated desire on the part of the Syriza-led government to widen democracy and popular participation in the decision making process:

"....this is a sham referendum, with Tsipras trying to hold on to his job, as the bailout programme expires on June 30, which means that this is now a referendum on whether or not Greece should remain in the Eurozone.....The call for referendum on the future of Greece in such a short period of time must be seen for what it really is: a tool of politics, a way for the leftist Greek government to take the pressure off its shoulders, a refusal to accept responsibility for having dragged the country into five months of never ending negotiations with its lenders with disastrous consequences for the economy."

In the Guardian Aditya Chakrabortty  writes that this a battle between what people want and what their rulers force down their throats supposedly for their own good. It is, he argues, a struggle between a cruelly unworkable version of capitalism and people: 

'What this story reminds you is that the breakdown in Greece is not recent. Since 2010 the troika has peddled the fantasy that spending cuts amid a historic recession, and “structural reforms” – or the shredding of workers’ rights, the firesale of public assets and the pummelling of the welfare state – will somehow fix Greece. Half a decade later that always doubtful forecast is now proved to be a lie: the country is even more broken. Yet the technocrats keep repeating the propaganda to the subjects living through its wretched reality'
Costas Panayotakis, from New York City College of Technology of the City University of New York (author of Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy)  writes that the woes affecting the Greek economy stem from capitalist mismanagement of the Greek economy:
   "Since its election in January the Greek government has, in its attempt to reach an agreement, made many concessions to the eurozone’s austerity agenda. The fact that, in the course of the negotiation, Greece’s European partners always asked for more suggests that they may not have truly desired an agreement, instead preferring to squash the only European government with the audacity to openly criticize the neoliberal consensus. The European response to the Greek prime minister’s announcement of a referendum also displays the long-standing aversion of European economic and political elites to democratic processes that allow European people to have a say over the future of the European project......... A resounding ‘No’ to the European proposal would face the Europeans with the dilemma of either risking the rupture of the Eurozone or negotiating in good faith with the Greek government."

Writing in Corporate Watch Pratap Chatterjee quotes Joseph Stiglitz, former chief economist of the World Bank and a Nobel Prize winner, who writes in the UK Guardian that almost none of the money loaned to Greece went there, but ended up being paid to corporate creditors- including French and German banks.
Chatterjee draws from a Corporate Watch report The Eurozone Profiteers to show how the imposition of neoliberal market driven competition in financial services  directly benefited German and French banks rather than the Greek people:
"The Greek government is in debt today to Germany and France not just because they borrowed money for unwise projects, but also because the bankers pushed them to take money that they would never have been able to approved under normal circumstances".
In Roar magazine PhD candidate and hip hop artist Leonidas Oikonomakis, a Greek citizen living outside Greece, writes:
However, this time we are being asked by the government — that of Alexis Tsipras — what we really want it to do. And for once, we will be able to say a proud and dignified ‘NO!’, as we had always wanted the deputies who were supposed to be representing us to say! We owe it to our friends who migrated, our parents and grandparents who saw their salaries and pensions being slashed, our comrades who were beaten up and arrested by the cops, and to our dead: to Pavlos and Shehzad Luqman, who were assassinated by Golden Dawn, and to the thousands who committed suicide over the course of the past five years. It is a matter of dignity — something that can not be measured and cannot fit into the Troika’s economic statistics, but that can give strength to the humiliated to rise up against those who have humiliated them for so long." 

Reporting here in Australia reflects mainstream and traditional interpretations of the crisis, either ignoring or  glossing over the reality that this catastrophe demonstrates the systemic crisis gripping corporate and financial capitalism.
In New Matilda, Ben Eltham draws out consequences for Australia, arguing that the Greek crises shows that policy makers get economic policy seriously wrong with profound consequences for ordinary people. 

 Eltham is right to argue that the crises demonstrates the complete and utter failure of austerity as a policy and exposes the hypocrisy of politicians, political leaders and economic mandarins who seek to impose anti-democratic economic policies on sovereign nations against the wishes and democratic aspirations of citizens.

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