For Canadians, the suffering of the peoples of Greece, Ireland, Portugal, Spain and elsewhere in Europe brings home once again the necessity of the working class to come to the fore. We are witness to representatives of the owners of monopoly capital reduced to self-serving incoherence in the face of the problems of their respective economies of mass industrial production. Even with the enormous capacity of modern production, the ruling elite cannot guarantee livelihoods or the security and rights of the people, which are theirs by virtue of being human. The potential of modern economies is more than enough to meet the needs of the people but is squandered under the dictatorship of the monopolies. The monopolies and their owners and directors are incapable of utilizing the enormous capacity of the socialized economy. Their private narrow aim and ownership and control of competing parts of the economy are in contradiction with the socialized reality of modern production and distribution and the necessity for the economy to be under the control of the actual producers.
The onslaught of monopoly capital in Europe is met with
the desire of the working class and peoples to resolve the crisis in
their favour. They are striving to make their voice effective but face
the problem that workers are deprived of their own thinking, view,
independent politics and agenda to deal with the political, economic,
cultural problems of the modern era. Canadian workers and those of all
countries of Europe are faced with the historic necessity to intervene
in life as
it presents itself with their own thinking, views, outlook, and
politics and agenda. That is the greatest lesson from the unfolding
Europe, as Canadians wish the people well in charting a course forward
towards the new.
"They Shall Not Pass!" reads this slogan in Spanish at a mass demonstration in Athens, Greece, May 22, 2012. The slogan comes from the days of the Spanish Civil War when it was held high by the anti-fascist fighters.
May Day 2012, Lisbon, Portugal: "Oppose exploitation and impoverishment!"
The working class of each nation state is fighting the status reserved for it by government -- the role of spectator without its own agenda or strength to defend its own interests and those of their respective societies. The ruling oligarchs in conjunction with the monopoly-controlled media frame the debate as one between a Union of European Monopolies and unleashing racial, ethnic, religious, nationalist and other divisions within and amongst the nation states governed by insular political parties. The ruling oligarchy throughout Europe is playing both cards to deprive the working class from finding its bearings and uniting behind its own program to constitute itself the nation, vest sovereignty in the people and defend the rights of all.
The crises have struck the various nation states of Europe with varying severity similar in many ways to Canada and other large capitalist countries where uneven regional economic development and downturns are a permanent feature.
The European Union of 27 countries was established formally with the adoption of the Maastricht Treaty in 1993. The eurozone is an economic and monetary union of 17 European Union member states.
Centralized European control of the economies of eurozone members is already pronounced. Executive rule is the norm. Decisions are not discussed in any institution where the polity of the member states have anything more than nominal representation. These institutions include the following amongst others.
Eurozone -- The eurozone is an economic and monetary union of 17 European Union (EU) member states that have adopted the euro [...] as their common currency and sole legal tender.
European Central Bank -- Monetary policy of the eurozone is the responsibility of the European Central Bank governed by a president and a board of the heads of national central banks that are within the eurozone.
No common representation or governance from the member states exists dealing with fiscal policy. The monetary policy of all countries in the eurozone is managed by the European Central Bank (ECB) and the Eurosystem, which comprises the ECB and the central banks of the EU states that have joined the euro zone. Countries outside the eurozone are not represented in these institutions. However, all EU member states such as the United Kingdom are part of the European System of Central Banks (ESCB).
The ECB has authority to issue and print euro banknotes and the volume of euro coins minted. The current president is Mario Draghi.
The eurozone has established and used provisions for granting emergency loans to member states in return for the enactment of anti-social economic reforms similar to the International Monetary Fund. The eurozone has also enacted some aspects of fiscal integration, for example in peer review of each other's national budgets preparing material conditions for the legal formation of a Union of European Monopolies.
The eurozone is represented by its finance ministers, known collectively as the Euro Group, and is overseen by a president, currently Jean-Claude Juncker, the Prime Minister of Luxembourg and former governor of the World Bank.
Since the present series of global economic crises began in 2008, the Euro Group has met irregularly not as finance ministers, but as heads of state and government. It is in this forum, the Euro summit, that many eurozone reforms have been adopted. Former French President Nicolas Sarkozy has pushed for these summits to become regular and twice a year in order for the Euro group to become a "true economic government."
President of the Euro Group Jean-Claude Juncker has suggested that the eurozone should be represented as a bloc within the imperialist system of states and its organizations such as the International Monetary Fund rather than each member state representing itself. Juncker said publicly, "It is absurd for those countries [in the eurozone] not to agree to have a single representation at the IMF. It makes us look absolutely ridiculous. We are regarded as buffoons on the international scene."
Joaquín Almunia from Spain stated that for common representation of the eurozone to become a reality, member states should agree to a common political agenda. Mr. Almunia is European Commissioner for Competition for the European Union. The portfolio carries responsibility for such matters as commercial competition, company mergers, cartels, state aid, and anti-trust law. The position became the sole merger authority for the European Economic Area in September 1990. The Competition Commissioner is one of the most powerful positions in the European Union and is notable in affecting global companies.
The European Financial Stability Facility (EFSF) -- The EFSF is a special purpose vehicle financed by members of the eurozone to address the European sovereign-debt crisis. It provides financial assistance to eurozone states in economic difficulty. The EFSF is authorized to borrow up to 440 billion euros, of which 250 billion euros remained available after the Irish and Portuguese bailouts. A separate entity, the European Financial Stabilization Mechanism (EFSM), a programme reliant upon funds raised on the financial markets and guaranteed by the European Commission using the budget of the European Union as collateral, has the authority to raise up to 60 billion euros.
Proposed European bonds (or Stability Bonds) -- These eurozone bonds are currently a hot topic amongst the ruling oligarchy as a means to gain further control over the finances of sovereign member states. Eurobonds would be debt instruments whereby an investor loans a certain amount of money, for a certain amount of time, with a certain interest rate, to the eurozone bloc as a whole, which then forwards the money to individual governments.
Presenting the idea of "stability bonds," European
Jose Manuel Barroso insists that any such plan would have to be matched
tight fiscal surveillance and economic policy coordination as an
counterpart so as "to avoid moral hazard and ensure sustainable public
finances." Under the proposals, which now seem to have the approval of
German Chancellor Angela Merkel, if accompanied with movement towards
integration, eurozone governments would have to submit their draft
budgets for the following year to the European Commission. The
would then be able to ask the government to revise the budget if it
that it was not sound enough to meet its targets for debt and deficit
set out in the Euro convergence criteria.
Mass rally in London, England, November 30, 2011, to oppose cuts to public sector jobs,
public services, wages and benefits.
The ruling oligarchy is determined to deprive the working class of each nation-state from developing its own thinking, view, outlook, politics and agenda. With this in mind, the ruling elite has created pro and con lines regarding the Union of European Monopolies and all matters of concern. The working class is browbeaten to fall into line behind one of the opposing lines of the ruling oligarchy. The working class is directed to fall dutifully behind Frau "austerity," the Chancellor of Germany or Monsieur "growth," the President of France, or take up a line broadly in support of integration under a dictatorship of the most powerful monopolies, or an opposing line based on dividing the working class of Europe into hostile entities under the control of monopoly capital using national chauvinist, racial, religious, cultural, linguistic, ethnic or any other difference that can be concocted such as sporting events like the European football championship where state-organized hooliganism is promoted and widely publicized.
The working class must have the courage of its own
thinking in opposition to the ruling oligarchy and develop its own
politics and agenda to open a path to progress and solve the problems
their own nation states and those facing Europe and all humanity.
German Newspaper Süddeutsche Zeitung on the Economic Crisis and Sovereignty: "The Price of the Euro: German Money, France's Independence," June 6, 2012
"If the euro and the historic initiative to unite Europe are to be salvaged, the continents two strongest states will be forced to contribute their two greatest treasures: Germany will have to share its money, and France its sovereignty . If Europe is to issue federal bonds like the United States, it will have to become a proper federation.... If this is to happen, France will have to give up much more of its sovereignty. In any case, the quest for grandeur in the world of tomorrow is beyond the reach of nation states and can only be achieved by Europe." (Süddeutsche Zeitung is the largest German national subscription daily newspaper.)
The debate regarding the Euro and the formal creation of a Union of the European Monopolies is dominated by fascists both pro and con and those who pretend to be mostly detached. An alternative view of the working class for a pro-social solution to the political and economic problems in Europe and the various nation states is missing.
"Sarrazin Launches Crusade Against Euro," Presseurop, May 23, 2012
Quoting Frankfurter Rundschau:
"Once again, Thilo Sarrazin, the author of a bestselling and highly controversial book on immigration in Germany, has shocked readers with the 'ugly nationalist' tone in his new book, Europa braucht den Euro nicht ('Europe Does Not Need the Euro').
"'This book is a disgusting litany of false arguments,' announces Frankfurter Rundschau. The German daily notes that Sarrazin, who worked for the IMF, the German Ministry of Finance and the Bundesbank, should have some mastery of the subject, which 'he fails to address' -- Sarrazin constructs an opposition between an efficient Northern Europe and a chaotic South -- between workers and layabouts, and whites and dark-skinned people. He refers to countries which he claims behave irresponsibly as 'Club Med' states. And where does he situate France? In this Club Med! [...] As an adversary of the euro, he puts forward a theory as to why Germany has been pro-European until now: the Germans' persistent enthusiasm for Europe can only be explained by 'the moral deadweight of the Nazi era.' This is a book of lies. [...] Let's hope it rots on booksellers' shelves!"
"Social Democrat's Rant Rocks Germany," Presseurop, August 27, 2010
"'So that Germany doesn't become even more stupid,'
headlines Frankfurter Allgemeine
Zeitung (FAZ). The paper has entered the fray in
controversy surrounding a book by City of Berlin's former financial
Social Democrat Thilo Sarrazin, 'Deutschland schafft sich ab' ('Germany
self-destructing'). Currently a director at the German Federal Bank,
blames, among others, Muslim immigrants for lacking 'the desire to
society while 'costing the state too much,' reports the FAZ. The paper
criticises the indignant anti-Sarrazin reactions of several political
including Chancellor Angela Merkel -- denouncing the 'hypocrisy' of
a blind eye 'to the problems of immigration.' The Frankfurt daily
readers that 'the majority of Germans share these views.'"
Charleroi, France, February 29, 2012: "No to a Europe of the financiers! Yes to a social Europe!"
"Here Comes the United States of Europe," The Guardian, June 5, 2012
"If Germany is to pay for the eurozone crisis, then fiscal and political union is the likely price. And plans for this are already being drawn up ahead of what could be a momentous EU summit on 28-29 June.
"It is a measure of the speed at which the politics of the euro crisis is changing. Only a fortnight ago all the attention was being lavished on France's new president, François Hollande, being sworn in in Paris as Monsieur Growth and rushing off on his first assignment to challenge Europe's Frau Austerity, Chancellor Angela Merkel.
"'We need new solutions. Everything's on the table,' Hollande pledged, meaning he would force Merkel to remove the noseclip and consider things that give off a foul odour in Berlin, foremost among them eurobonds -- Germany solving the crisis at a stroke by agreeing to underwrite the debt of Spain, Greece, Italy and all the rest. Fat chance.
"By Saturday the growth versus austerity contest had receded as Merkel turned the tables on Hollande.
"It was her turn to declare there should be no taboos in grappling with the hard options facing Europe's leaders as they wait to see what will happen in Greece and Spain, and plot their next moves at what is shaping up to be a momentous summit at the end of the month.
"Merkel appeared to be calling not only Hollande's but France's bluff. By announcing there could be no censorship of the eurozone to-do list, she meant tabling radical, federalist steps involving gradual loss of national sovereignty over budgetary, fiscal, social, pensions, and labour market policies with the aim of forging a new European political union over five to 10 years.
"The USE -- United States of Europe -- is back. For the eurozone, at least. Such 'political union,' surrendering fundamental powers to Brussels, Luxembourg and Strasbourg, has always been several steps too far for the French to consider . In the third year of muddling through, the choices facing Europe's leaders are getting starker -- the death of the euro or the birth of a new European federation."
"Secret Plan for a
New Europe," Presseurop, June 5, 2012
Presseurop summarizes an item from the Sunday, June 10 edition of Die Welt.
"Die Welt offers details of a programme currently being hatched by the leaders of European institutions. According to the Berlin daily's sources, European Council President Herman van Rompuy, European Commission President José Manuel Barroso and Eurogroup President Jean-Claude Juncker are working on a proposal that could be tabled for discussion at the 28 and 29 June European Council meeting. The plan will focus on four major themes ... structural reform, banking union, fiscal union and a political union. [...] If the 27 member states succeed in reaching agreement, the result will be a completely new Europe."
Mass rally in Syntagma Square, Athens, outside the Greek Parliament, February 12, 2012. The square has been a focal point for the Greek people's mass protests against austerity measures, which have been ongoing for the last two and half years.
countries of the Eurozone are experiencing an unparalleled collapse not
since the 1930s. The peoples of Greece, Spain, Portugal, Ireland and
suffering terrible levels of unemployment, insecurity, state-organized
fascist attacks and cuts to social programs and public services. Even
German working class, for many years held up as the strongest and most
resistant to inroads on its well-being has seen recent year after year
deterioration of wages, benefits, pensions and working conditions. In
ongoing crises are being couched in the mass media and in the mouths of
European ruling oligarchy as a "chance to break the back of the German,
Italian and French working class" and bring it down to the lower levels
wages, benefits, pensions and working conditions of the smaller member
especially in the south.
To accomplish a victorious assault on the European industrial working class, the most powerful monopolies want to establish their supreme dictatorship within a Europe without national or other restrictions to their rule. In the opinion of the ruling elite, the economic crises have become an opportunity to accelerate the anti-social restructuring of Europe into a Union of European Monopolies based on unchallenged monopoly right and the denial of the rights of the people. In the words of German Chancellor Angela Merkel, "Member countries should hand in power to the EU headquarters gradually in a bid to prevent such a crisis from happening again."
The crisis is framed as a lack of central executive authority to take the important decisions that would right the European ship and that the nation states are failed states incapable of reforming their economies to suit the European monopolies. The economic crisis is presented in such a way to lead people to unfounded conclusions that favour a European-wide dictatorship of the monopolies, the destruction of the existing nation states, and their economic and political integration into a European union under the control of the most powerful monopolies.
The monopolies never question let alone address the reality that private monopolies and their owners are captive of their own narrowness, but why else would "debt" become the overriding concern to the point of ludicrous obsession and incoherence. Debt is not a problem; debt is merely the movement of money around to serve private interests. Debt never built or produced anything, only the working class transforming the bounty of Mother Nature can produce or provide services. Debt can be eliminated with a simple decision and ruling by those in authority. Organization of production and distribution under the control of the actual producers to serve the needs of the people and the general interests of society within a self-reliant economy that engages in trade for mutual benefit is the problem to be addressed. Defence of the rights of the people, which are constantly under threat from the imperialist system of states, is the problem. The working class is charged by history to take up those real problems for real solution.
The aim of the monopolies to serve their private interests is in opposition to the public interest and blocks the public authorities from taking any decision that restricts monopoly right to serve public right and interest and the common good. The narrow aim of the monopolies is in contradiction with the broad demands of the modern economy and politics. The European economy in all its nation states is socialized while ownership and control remain private and increasingly dominated by industrial/financial/commercial oligopolies. That is the contradiction, which in its broad material conditions must be resolved under the leadership of the working class upholding the human factor/social consciousness.
Owners of monopoly capital want expanded political authority to serve their private interests, depoliticize public interest and maintain their private iron grip over political power and the socialized economy, which is divided into competing privately owned parts. With executive power over Europe (with the current exception of the UK and a few others that remain within the U.S. imperialist empire), the most powerful monopolies stand ready to confront the European industrial working class in a showdown to completely gut the post-WWII social contract and weaken its resistance, so as to compete with U.S./UK monopolies and to suppress and gain control of Russia, China, India, Brazil, and all other countries and peoples of Asia, Africa and the Americas through all means including war.
The working class of Europe holds a grave responsibility
to combat this
reactionary project representing monopoly right. It must not hesitate
uniting and defending its interests and the rights of all and block the
monopolies from their fascist path towards a Union of European
It must develop its own agenda that suits the material conditions to
open a way
forward for humanity.
Rally in Madrid, Spain, May 13, 2011, marking one year of the Spanish people's mass protests against austerity measures. Some 100,000 people demonstrated across the country, with 70,000 in Madrid alone.
Spain's statistics bureau June 1, revealed the country's jobless rate rose to 24.4 per cent in the first quarter, up from 22.9 per cent in the fourth quarter of last year, approaching its highest level on record. In the first quarter of 1994, Spanish unemployment reached 24.6%.
More than half of workers under 25-years old (52 per cent) could not find livelihoods to support themselves or their families.
"The figures are terrible for everyone and terrible for the government," Foreign Minister José Manuel Garcia-Margallo said in a radio interview, "Spain has been, and is, in a crisis of huge proportions."
Spain's working class, youth and small and medium
business have been
hard hit by the economic crisis and cuts to social programs and public
Owners of capital have removed tens of billions of euros from the
in various ways. Spain's labour laws facilitate the dismissal of
restrictions leaving workers to fend for themselves with no economic or
political authority assuming social responsibility to provide
guarantee the well-being of those without a job. The number of
unemployed totals about 5.6 million workers. Spain's unemployment rate
more than double the 10.7 per cent eurozone average.
Rioja, Spain, February 29, 2012: "No to labour reform, the lowering of salaries and the new EU Treaty."
Economic Statistics for Spain
GDP by sector (2009)
Working class working or looking for work (2011) -- 23.1
Workers by sectors:
The U.S.-controlled business rating agencies have launched a full-scale attack on Spain and other European countries downgrading their government debt to junk status making new loans more expensive.
Spain's Prime Minister Mariano Rajoy came to power last December, pushing through draconian budget cuts, labour-market reform to attack the working class and a plan to bail out the country's private banks. June 8, the eurozone announced a pay-the-rich scheme to bail out Spain's private banks with an injection of $125 billion in capital.
Analysts cynically say that Spanish companies are becoming more competitive as they slash their staff levels and find more success in negotiating advantageous (for them) wage deals with unions. This fits the rhetoric of the ruling oligarchs that everything must be done to make the monopolies more competitive on the backs of the working class and that European economic growth "will be driven primarily by exports, with domestic demand continuing to be depressed as companies and households attempt to work off a massive debt load accumulated during a decade-long housing boom."
The Rajoy government announced it is planning a rise in indirect taxes next year taking an additional 8 billion ($10.6 billion) from individuals in regressive taxation. Retrogressive individual taxes make life more difficult for the working class, especially those who have no livelihood or are on fixed incomes. Individual taxes divert government claims away from the private and public enterprises within the socialized economy. This public money does not go for social programs and services, which are being slashed, but is privatized in pay-the-rich schemes for the monopolies. Under modern capitalism, the working class pays to sustain the system of its exploitation and oppression, a system that is systemically flawed and can never overcome its inner contradictions without radical reform to harmonize ownership and control with the socialized nature of the economy.
Conditions for the Spanish working class in summary:
Nearly one Spaniard in four is unemployed.
Government minister talks of a "crisis of enormous proportions."
The data from the National Statistics Institute showed 367,000 people lost their jobs in the first three months of this year.
That means more than 5.6 million Spaniards or 24.4 per cent of the workforce are unemployed, close to a record high set in 1994.
Foreign Minister José Manuel
García-Margallo compared the European
Union to the doomed liner Titanic,
if all worked together to find a solution. His words are hardly
that monopolies work for their own private interests and demand
where they can better compete against other monopolies. How can such a
self-centred motive born out of empire-building and competition give
working together? García-Margallo is using this Titanic rhetoric to
put the solution
to the crisis as one of Europe working together within a union of the
monopolies where their representatives have executive political power
people are deprived of any power and rights, with their struggle for
and economic empowerment suppressed rather than enhanced and encouraged
materially and subjectively to blossom.
Syntagma Square in front of the Parliament building in Athens, February 19, 2012.
In Greece, the international financial oligarchy is indebting the debtors to repay the creditors while worsening the economic crises and the living and working conditions of the people. The problem is said to be one of debt and the solution more debt. The political and economic incoherence is so pervasive any change or solution demands a radical break from the old and a new direction and aim for the economy.
With the introduction of the euro in January 2001 and
the annexation of
the Bank of Greece by the European Central Bank and Eurosystem, the
people lost sovereign control over their money supply and monetary
The Eurosystem became the monetary authority for Greece and all other
members of the eurozone. The Eurosystem, which is dominated and
by representatives of the most powerful private European monopolies,
the monetary policy for member states. The loss of sovereign control
no input in prices within Greece or control over the financial sector
the banks, insurance and other financial enterprises. The Eurosystem
as an objective, the financial integration of member states and their
The Eurosystem defines and implements the monetary policy of the
conducts foreign exchange operations, and holds and manages the
foreign reserves of the member states.
Greece lost sovereign control of its financial system and enterprises, money supply, monetary policy and financial institutions, all of which came under the direct legal dictate of European finance capital through the Eurosystem. Cascading and worsening economic crises have been the result without any resolution of the problems and plight of the people.
Ironically, one of the few remaining financial tools of the Greek government has been to issue bonds for which the Greek people are responsible. These bonds have been readily bought by finance capital. Wikipedia states, "At the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001, for arranging transactions that hid the actual level of borrowing.... Despite the crisis, the Greek government's bond auction in January 2010 had the offered amount of 8bn 5-year bonds over-subscribed by four times. At the next auction in March, the Financial Times again reported: 'Athens sold 5bn in 10-year bonds and received orders for three times that amount'...."
Greek bonds, which were considered necessary to pay debt that was coming due, were eagerly bought because they offered higher interest rates at a time investment opportunities in Europe were depressed.
The U.S.-controlled bond rating agencies downgraded Greek bonds to junk status in late April 2010, which according to Wikipedia, "caused the private capital market to freeze, so that all the Greek financial needs now instead had to be covered by international bailout loans, in order to avoid a sovereign default. In April 2010, it was estimated that up to 70% of Greek government bonds were held by foreign investors (primarily banks). The subsequent bailout loans paid to Greece were mainly used to pay for the maturing bonds."
The reasons for the existence of the debt are mostly obscure. If explained at all, it seems it just appeared from bad policy choices or manipulation by powerful forces beyond the control of the Greek people. The following is an example of an attempt at an explanation that in the end explains nothing other than "it is what it is."
Greek MP Dimitris Papadimoulis:
"If there is one country that has benefited from the huge amounts Greece spends on defence it is Germany. Just under 15% of Germany's total arms exports are made to Greece, its biggest market in Europe. Greece has paid over 2bn for submarines that proved to be faulty and which it doesn't even need. It owes another 1bn as part of the deal. That's three times the amount Athens was asked to make in additional pension cuts to secure its latest EU aid package."
Meanwhile the Greek economy and people have been reeling under the blows of a severe economic collapse. Its Gross Domestic Product declined 6.9 per cent last year. Its seasonally adjusted industrial output ended 2011 28.4 per cent lower than in 2005. More then 111,000 Greek companies went bankrupt in 2011 alone, which was 27 per cent higher than in the already terrible year in 2010. The unemployment rate reached 19.9 per cent in November 2011 and continues to deteriorate climbing to 21.7 per cent this past March with youth unemployment rising to around 50 per cent.
Eurostat figures show that the percentage of Greeks
living at what the
statistical agency calls the "risk of poverty or social exclusion"
one-third of the population in 2011 and continues to climb rapidly.
Pressure on the Greek people to accept the status quo is enormous with constant Chicken Little screams that asserting its sovereign rights to control its own political and economic affairs and chart a new direction would be "disastrous" and "unacceptable" to the European ruling elite. Hysterical statements are constantly made by members of the financial oligarchy threatening the Greek people with dire consequences if they assert sovereign control over their own affairs.
According to Japanese financial company Nomura, a Greek exit from the eurozone would lead to a 60 per cent devaluation of any new drachma. The Swiss global financial enterprise UBS warned of "hyperinflation, military coups and possible civil war that could afflict a departing country." A "confidential staff note" drawn up in February 2012 by the Institute of International Finance and released surreptitiously said it now "favoured an orderly default with a continued Greek membership of the Euro, as the opposite scenario was expected to create losses of at least 1 trillion." Of course, the "losses" that concern the financial oligarchs are to their private interests. They are not concerned with solving the problems confronting the Greek people, their society and economic and political institutions and the necessity to break new ground in opening a pro-social path forward in the twenty-first century.
The "solution" of the oligarchs was to continue down the same road of debts to pay off debts, to shuffle money around to pay-the-rich and protect their private empires of wealth and class privilege.
In October 2011, they (Eurogroup led by Jean-Claude Juncker) offered an "orderly default combined with a 130bn bailout loan, making it possible for Greece to continue as a full member of the Euro. The offered orderly default and bailout loan, was however conditional, that Greece at the same time approved a new austerity package." (BBC News)
Wikipedia writes, "On 9 March 2012 it was announced that 85.8% of private holders of Greek government bonds regulated by Greek law (equal to 152 billion), had agreed to the debt restructuring deal. Thus, the total amount of debt to be restructured was now ... equal to 196.7 out of [a total debt of] 205.5 billion."
During the period prior to the just-concluded May 6
Greek election and
leading to the subsequent June 17 election, the monopoly-controlled
media and powerful spokespeople of the European Union have threatened
consequences if Greeks do not agree to the debt and austerity plan of
Eurogroup and decide instead to step out on their own independent path
rejecting the continuous debt cycle of the imperialists that solves
none of their
political and economic problems. The specific consequences of choosing
"wrong path" have not been spelled out but considering the recent
NATO in dismembering Yugoslavia, attacking Afghanistan, Pakistan and
and threatening Syria and Iran, military action against the Greek
certainly be on the table in the boardrooms of imperialist Europe.
Protest outside the Finance Ministry, Athens, June 14, 2012.
Comments from Various Experts on the Greek Crisis
In 2009, the combined exposure of foreign banks to Greek entities -- public and private -- was well over 200 billion euros.
After the bailouts, the exposure of foreign banks had fallen dramatically to around 80 billion euros by mid-February 2012.
"The shift in liabilities from European banks to European taxpayers has been staggering: the public debt of Greece to foreign governments, including debt to the EU/IMF loan facility and debt through the eurosystem, increased by 130 bn, from 47.8 bn to 180.5 billion, between January 2010 and September 2011." ("Eurosystem debts, Greece, and the role of banknotes," Lancaster University Management School, March 2012)
"The director of London School of Economics' Hellenic Observatory mused: 'Who is rescued by the bailouts of the European debt crisis? The question won't go away.... The Greek banks -- vital to the provision of new investment in an economy facing a sixth year of continuous recession -- have certainly not been 'rescued' ... [and] face large-scale nationalisation.... Athenians might well turn the aphorism around and warn their partners in Lisbon: 'Beware of Europeans bearing gifts'." (Kevin Featherstone, March 23, 2012, "Are the European banks saving Greece or saving themselves?")
"Though it was largely foreign banks, represented in the various talks by the Institute of International Finance, who originally held Greek government bonds they had so recklessly bought, by the time of the February 2012 negotiations they had sold on perhaps half their holdings, largely to hedge funds and other investors....
"In February, hedge funds were thought to control 25 to 30% of Greek bonds, and are widely believed to be unwilling to participate in any voluntary debt reduction, complicating any deal.
"A 'haircut' of 110bn on privately held bonds is matched by an increase of 130bn in the debt Greece owes to official creditors. A significant part of this increase in Greece's official debt goes to bail out private creditors: towards recapitalising banks in a scheme that will keep those banks in private hands and allow shareholders to buy back any public capital injection with sweetly priced warrants....
"The new bonds will also be subject to English law, where the old bonds fell under Greek jurisdiction. So if Greece were to leave the eurozone, it could no longer pass legislation to convert euro-denominated debt into new drachma debt. This is an amazing sweetener for creditors." (Nouriel Roubini, March 7, 2012, "Greece's Private Creditors Are the Lucky Ones.")
"One estimate is that Greece actually subscribed to 156bn worth of new debt in order to get 206bn worth of old debt to be written off.... Taxpayers are now liable for more than 80% of Greece's debt." (Ronald Janssen, March 28, 2012, "The Mystery Tour of Restructuring Greek Sovereign Debt.")
"In the background of the Greek bailouts and debt
restructuring lurks Wall
Street. While US banks are owed only about 5bn by Greece, they have
significant exposure to the situation via German and French banks, who
significantly exposed to Greek debt. Massively reducing the liabilities
German and French banks with regards to Greece thus also serves to
US banks." (Robert Reich, May 10, 2011, "Follow the Money: Behind
Europe's Debt Crisis Lurks Another Giant Bailout of Wall Street.")
Athens, June 5, 2011
Mass anti-austerity protest, Frankfurt, May 19, 2012.
Germany finance capital was the largest holder of Greek public and private debt at the onset of the 2008 crisis.
The GDP of Germany is the largest in Europe and fourth largest in the world ($3.577 trillion, 2011).
The German service sector contributes approximately 71
per cent of the
total GDP, industry 28.1 per cent, and agriculture 0.8 per cent (2011).
The official average national unemployment rate in March 2012 was 7.2 per cent. German statistics include in this rate all workers who are looking for a full-time job and do not have any livelihood or only have a part-time job. Excluding those with a part-time job brings the unemployment rate down to 5.4 per cent.
In 2009, the estimated size of the active working class
(either working or
looking for work) was 43.59 million. The official figure for the number
of workers unemployed and looking for a full-time job:
3,168,000 (7.3 per cent). Excluding those with part-time jobs, the
number of unemployed workers was 2,464,000 (5.7 per cent).
According to European statistics, German-based monopolies have benefited the most from the introduction of the Euro and the formation of the eurozone and have increased their domination of Europe. Trade imbalance in favour of German monopolies explains in part the explosive growth of debt in some countries although particular reasons also played a role such as the housing bubble in Spain.
Imperialist trade is always unequal and disruptive because it is not based on a common aim of mutual benefit. Also, the refusal to work out alternatives to the use of imperialist currencies and differences in productivity when trading commodities, whose actual value is embedded in their work-time, leads to corruption, exploitation and uneven development.
In the simplest terms, German monopolies want to export
commodities to people who cannot afford them and suppress any tendency
towards economic self-reliance and trade for mutual benefit. Similar to
dealership (or house mortgage broker) that lends buyers the money to
car (or house) they cannot afford (or possibly need); German monopolies
through their financial institutions lend the people of other countries
to buy German commodities in an unsustainable downward spiral to
crisis. A November 17, 2011 item in Foreign
"Germany's total export trade value nearly tripled between 2000 and 2007. Though a significant proportion of this is accounted for by trade with China, its trade surplus with the rest of the EU grew from 46.4 bn to 126.5 bn during those seven years.
"Germany's bilateral trade surpluses with the Mediterranean countries are especially revealing:
"between 2000 and 2007, Greece's annual trade deficit with Germany grew from 3 bn to 5.5 bn;
"Italy's doubled, from 9.6 bn to 19.6 bn;
"Spain's almost tripled, from 11 bn to 27.2 bn;
"Portugal's quadrupled, from 1 bn to 4.2 bn."
Dean Baker, in a November 16, 2011 item for the Center
for Economic Policy and Research, "Germany's 'Success' and Southern
Europe's 'Failure,'" writes: "[Germany wants to maintain its huge trade
while still insisting that they make good on their debts. This is like
owner insisting that his customers keep buying more from him, while
paying off their debts."
In a March 29 item in the Telegraph, Bernhard Speyer of Deutsche Bank is quoted, "If the eurozone is to adjust, southern countries must be able to run trade surpluses, and that means somebody else must run deficits. One way to do that is to allow higher inflation in Germany but I don't see any willingness in the German government to tolerate that, or to accept a current account deficit."
In a March
9, item, "Greek aid will go to the banks," Presseurop writes: "German
and other financial institutions have scooped a
huge chunk of the
[Greek] rescue package: 'more than 80 percent of the rescue package is
to creditors -- that is to say, to banks outside of Greece and to the
Central Bank. The billions of taxpayer euros are not saving Greece.
saving the banks."
German finance capital represented by Chancellor Angela Merkel has recently engaged in substantial cuts to social programs and public services. Owners of capital have used the economic crisis to launch a broad attack against the German working class and its standard of living and working conditions. German workers are exhorted to make sacrifices so that their monopolies can compete with those in other countries where workers claim lower wages, benefits and pensions for the goods they produce and services they provide and work under worse conditions.
German workers are constantly bombarded in the monopoly-controlled media with state-organized racist and chauvinist comments directed against immigrant workers and the peoples of the Mediterranean countries. They are made to think that the lowering of their own claims and attacks on their standard of living are a direct result of "non-German" habits of other countries who want German workers to subsidise bailouts for their bad work habits and expectations of "entitlements."
The official forces in favour of the European Union and
those opposed are
dominated by fascists connected with this or that section of finance
The situation is similar to the Cold War where the thinking of the
class and its independent views, outlook, politics and agenda are
through a state-organized ideological, political and cultural assault.
German police attack anti-austerity protest, Frankfurt, May 19, 2012.
GDP by sector (2010 est.):
Working class working or looking for work (2010 est.):
Working class by sector (2005):
Speculation is rampant in the U.S. imperialist press over the prospects of a severe economic collapse in Italy:
From Being the Next Domino to Fall,"
"Mario Monti, the Italian prime minister, said, 'Strengthening the euro zone is of collective interest....'
"Mr. Monti, a former European competition commissioner has a reputation as a savvy leader trusted by international officials.... He faces a host of problems at home that may ultimately lead investors to take aim at this too-big-to-fail, 2 trillion economy.
"'There's no doubt contagion will come to Italy,' Daniele Sottile, a managing partner at the financial advisors Vitale & Associati in Milan, said at the weekend conference, which was convened by the Council for the United States and Italy on an island near Venice. 'It's proof that the European mechanisms designed to stop the crisis are not working.'
"Italy's pressing issues include the fact that Spain's
acceptance of a bailout
means Madrid can no longer serve as a guarantor of one of Europe's
firewalls, the European Financial Stability Facility, which is meant to
quarantine the debt crisis. That means Italy, with the third-largest
economy, after those of Germany and France, [although Italy has a
larger industrial output and industrial working class than France --
Ed.] will have to shoulder a larger portion of the bill -- even as
grapples with its own sharp economic downturn.
"Bankers say Rome will now have to guarantee 22 percent of the fund, instead of around 18 percent currently. But because Italy does not have enough economic growth to generate the money itself, the government will have to borrow it at high interest rates, adding to an already heaving debt load....
"Few question Mr. Monti's competence: Within the first six weeks of coming to power, he ... [increased] the retirement age, [raised] property taxes, [simplified] the operation of government agencies and [went] after tax evaders. And still pending is ... an effort to overhaul Italy's notoriously inflexible labor rules....
"'Market attention looks set to shift to Italy,'
Commerzbank analysts wrote
Monday in a note to clients. Combined with weak growth, they said,
be just a matter of time before Italy also seeks help.'
"Since Monti came to power, the Italian economy -- like most of Europe's -- has grown weaker, expected to contract 1.5 percent this year and increase just 0.5 percent in 2013. Italian banks have sharply curtailed lending, pushing thousands of small and midsize Italian businesses into bankruptcy.
"The country's unemployment rate is rapidly marching toward 10 percent [10.2 per cent (April 2012) -- TML Ed.] ....
"Nervous investors in the bond market have pushed Italy's borrowing costs above 6 percent at times recently amid fears that the Italian economy cannot grow fast enough to pay down a mountainous national debt.
"It has Europe's second-largest manufacturing and industrial base, after Germany's, and is one of the biggest export-oriented economies in the euro zone.
"The country is also filled with state-owned assets like power companies and the national postal service that could bring in billions of euros should the government manage to privatize them to raise money...."
With the last sentence, one can see owners of monopoly
for the chance to seize Italy's remaining public assets, as they
anticipation of the big scores that are theirs for the taking within a
Italian trade unions participate in European Day of Action for jobs and against austerity, February 29, 2012.
1. Eurozone Members: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain (All members of eurozone must also be part of the European Union)
Ten countries are members of the EU but are not within the eurozone: Bulgaria, the Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania, Sweden, and the United Kingdom.
2. Mario Draghi: Born in 1947, Draghi is an Italian banker and economist who succeeded Jean-Claude Trichet as President of the European Central Bank in 2011. He was previously the governor of the Bank of Italy from January 2006 until October 2011. From 1984 to 1990, he was the Italian Executive Director at the World Bank. In 1991, he became director general of the Italian Treasury, and held this office until 2001. During his time at the Treasury, he chaired the committee that revised Italian corporate and financial legislation and drafted the law that governs Italian financial markets. He is also a former board member of several banks and corporations (Eni, Istituto per la Ricostruzione Industriale, Banca Nazionale del Lavoro and IMI).
Draghi was also vice chairman and managing director of Goldman Sachs International (U.S. global investment bank) and a member of the firm-wide management committee (2002-2005).
In his capacity as Bank of Italy governor, he was
member of the
Governing and General Councils of the European Central Bank and a
of the Board of Directors of the Bank for International Settlements. He
governor for Italy on the Boards of Governors of the International Bank
Reconstruction and Development and the Asian Development Bank. In April
2006, he was elected Chairman of the Financial Stability Forum, which
became Financial Stability Board in spring 2009. He served in that
until 2011 when he was succeeded by Mark Carney, Governor of the Bank
Canada. Note that Carney for thirteen years was also a leading
executive of Goldman Sachs. (Wikipedia and various sources)
(Photos: CGTP, ETUC, Greek Coalition of
Xinhua, J.P. Anderson, N. Kaz)
Read The Marxist-Leninist Daily