"The time has come," the Walrus said,
"To talk of many things:
Of shoes-and ships-and sealing-wax-
And cabbages-and kings-
And why the sea is boiling hot-
And whether pigs have wings."
– The Walrus and the Carpenter
(Wednesday, Feb. 24) — Scrambling to stabilize the current Greek financial crisis inspectors from the European Commission, European Central Bank, and International Monetary Fund descended on Greece the eve of today’s 24-hour general strike. It was the second such strike in two weeks, with as many as 2 million workers expected to take action against the Papandreou governments forced "austerity measures." The workers do not want to pay for a crisis they did not create themselves. Yet Papandreou is eagerly imposing these measures anyway so that Greece can become "credible again."
European Union (EU) panic over Greece, a nation whose entire population (11 million) is less than the official number of US unemployed (15 million), is not overblown. The worry is that Greece’s financial problems, which include a gross debt forecast for 2010 at 125% of its GDP, may lead to the first national debt default in the euros 11-year history and threaten default contagion across Portugal, Italy, Ireland, and Spain – collectively known as PIIGS – the most heavily-indebt countries in Europe. These countries, like Greece, have experienced government cut-backs and labor unrest.
Against this back drop of debt and crisis the Eurozone is in a frenzy to save its sinking currency. The euro is now in a nine-month low. But the crisis is about more than money. Many worry that the crisis could deal a blow to the stability of the EU and global economic recovery. Gideon Rachman of the Financial Times notes that the current situation could initiate a "crisis of confidence" for the EU, which in-turn could mean that the "powers it has acquired" on everything from immigration to social policy would come into question, "The Greek crisis is about the very basis on which European unity has been built for the last 60 years. It threatens not just the euro but the entire edifice of the European Union. The risk for Europe now is that if the EU does not move forward politically in response to the Greek crisis, it will move backwards – and the long process of European integration could start to unravel."
Greece is at a cross-road and the direction it takes is likely out of its own control. One road, a path that third-world countries are usually pushed down, is where "austerity" policies are forced onto the country so that it becomes beholden to new debtors and owners. The other road is that taken by privileged first-world nations who are allowed to pursue some form of bailout and development. The EU has given Greece a March 16 deadline to show "improvements" in its budget, which translate to reduced deficit spending by imposing further "austerity measures." Cuts in state funding already enforced include the freezing of public sector wages and hiring, slashing bonuses, hiking consumer taxes, pushing the age of retirement back two years, and increased fuel prices. Greece now has to convince Brussels that these cuts are enough to reduce its budget deficit by 4 percentage points this year to 8.7 percent of GDP.
Whether Greek economic recovery arrives in the form of a multi-billion dollar EU or IMF bailout, loans at lower interest rates, the purchase of billions in Greek bonds, or the United Arab Emirates investing in a Greek development fund, all currently being considered – just as before the crisis as after, Greek society is being managed for the sake of the economy rather than Greek society managing the economy for the citizens themselves. The average Greek, not elites – like the average person everywhere – pay the price when forced to bail those out who created the crisis, with further wealth and power extracted from their already disempowered lives during times of business as usual. Key economic decisions will not be made by Greeks as a whole but rather forced upon them by speculators, bureaucrats, and managers.
Like much of the third-world and also workers in the first-world, Greece has been victim to global capital and financial speculation. Although the investigation by the EU statistics agency Eurostat revealed that Goldman Sachs "helped" Greece join the EU using a complicated "currency swap" in 2001, masking the extent of its public deficit and national debt, speculation against the euro and Greece continues.
Even German Chancellor Angela Merkel, quoted by Business Week at her Feb. 22 speech in Hamburg, acknowledges that Euro debt "is now becoming the object of speculation by precisely those institutions that we saved a year-and-a-half ago" and that, "That’s very difficult to explain to people in a democracy who should trust us." Alluding to Goldman Sachs, Merkel criticized those banks "that brought us to the brink of the abyss" and said it would be a "scandal" if those same banks were found to have helped Greece obscure its finances. The lesson, of course, is that we should not trust them.
In a country familiar with 20th Century occupation and dictatorship, regardless of where any bailout comes from, Greece is more likely to feel déjà vu from 21st Century neo-liberal colonization imposed from above by Brussels than what is passed off as supposed benevolence in the form of "EU solidarity." While a classless and self-managing alternative to capitalism may be far off in the future, the current EU crisis should lay bare the imperative for worker and consumer control over domestic and international economic institutions with new objectives for serving human needs rather than the needs of capital.