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The fate of Greece a warning to all of us

Greece has “reached the limits of the social and economic system”, according to its public order minister Christos Papoutsis, and its “people cannot take any more”. It’s a message that will reverberate around the whole of Europe this year.

As unemployment soars to new highs in Britain, especially among young people, the system has indeed reached its “limits”. To those charting the course of the rapidly deepening crisis, the Greek drama is just the full-dress rehearsal. A global slump of terrifying proportions is threatening, only held back by central banks making cheap credit available to stricken banks and the printing of money by state agencies.

Papoutsis is a hated figure inside Greece. He is a minister from Pasok, who amazingly still call themselves “socialist”, who joined with others on Sunday to impose yet more savage cuts in spending, reduce pensions and sack thousands of public sector workers. Yesterday, the Greek cabinet under Lucas Papademos, the unelected prime minster and Goldman Sachs advisor, met in the wake of the violent protests that accompanied the vote in parliament.

On Sunday, Papademos bullied the Parliament into agreeing the terms of the latest IMF, European Central Bank (ECB) and European Union bailout. He threatened the country with a much worse result if Greece were forced to leave the eurozone in the wake of a default.

Papademos is well-qualified to act as the voice of capitalist finance. Amongst his many posts, he was senior economist at the Federal Reserve Bank of Boston in the 1980s, and vice-president of the ECB from 2002 to 2010. His assault on democracy forced coalition parties to expel more than 40 MPs for failing to back the bill.

Clearly shaken by the riots and burning buildings in the centre of Athens, Papoutsis was begging for mercy. "The government is making superhuman efforts”, he said. “From now on, Europe has to take the responsibility", washing his hands of any further responsibility.

But his appeal fell on deaf ears. Eurozone finance ministers cancelled today’s meeting with Greece when it became clear that the Athens government had again failed to deliver on the latest round of assaults designed to consign its people back to and beyond the poverty of the 1930s. They want more cuts and an undertaking that whoever wins April’s general elections will implement the EU’s demands. Democracy? Forget it.

The day after the vote in Athens, credit ratings agency Moody’s went fishing for more and bigger victims. They put the UK, France and Austria on negative outlook. By raising the prospect that the three countries would lose their triple A ratings due to exposure to the eurozone debt crisis, Moody’s issued instructions to these governments: the pace of the assault on living standards must be accelerated and its scope broadened out to the rest of Europe’s population.

Every day, further evidence emerges of the unstoppable catastrophic implosion of the capitalist economy. In the last quarter of 2011, Greece’s GDP dropped by 7% compared with the same period last year, a steeper decline than the 5% recorded in the third quarter, according to preliminary data published by Elstat, the national statistics body. Greece’s economy has now shrunk in every quarter but one since mid-2008.

It’s not only Greece that has reached the limits of the social and economic system. It is now time to make a leap to something new. As with the Telaithrion Project in Greece, in every country people are experimenting with different ways of living and producing the necessities of life and a great deal can be learned from them. The Transition Initiative has gone global since its launch in 2007.

But the challenge is to go beyond alternatives. Whilst the current profit-seeking capitalist system exists it is obliged to drive up the rate of exploitation of what corporations see as theirs to take – human labour and the natural resources of the planet. The system must be dismantled and its components used to build anew. Let’s compost capitalism.

Gerry Gold
Economics editor
15 February 2012

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