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Greece edges closer to the brink

Greece is closer than ever before to social breakdown as the Pasok “socialist” government struggles to force through yet more austerity measures demanded by lenders, including the European Central Bank (ECB) and the International Monetary Fund.

The credit rating agencies which assess each country’s health have now driven their assessment of Greece to the lowest in the world, because its now crumbling government has, as yet, been unable to impose a sufficiently brutal assault on its people.

Some Pasok MPs are refusing to vote for a new round of cuts, while the right-wing parties are opposing them for their own reasons. Another 24-hour general strike today brought the country to a halt while thousands of activists and unionists converged on Athens' central Syntagma Square on the parliament's front steps to try to prevent deputies from debating the measures.

"Thieves, traitors!" many chanted. "Where did the money go?" "I feel rage and disgust," said 45-year old public sector worker Maria Georgila, a mother of two. "These are very tough measures and they won't get us out of the crisis. I can't believe they have no alternative."

Daily mass protests have drawn hundreds of thousands of people on to the streets in every town throughout the country. They have rejected pleas from prime minister George Papandreou that it is his patriotic duty to make the cuts. Demands raised include a call for Greece to default on its massive foreign loans, to leave the euro and return to the drachma and for the replacement of the current political system with direct democracy.

New cuts would increase the size of unemployment, which is already at a record 16% and deepen a recession now into its third year. The Greek economy shrank by a further 5.5% in the year to March 2011, household consumption contracted 7.8%, while investment was down 19%.

The Greek protests are directed at the government, but behind it stands something much more threatening. Yesterday the finance ministers of the eurozone under pressure from the ECB failed to agree on a proposal to force private investors to share the cost of a further bailout by extending the period of their loans to the bankrupt country.

The ECB fears the wrath of “the markets”, the private investors who lend on the expectation of a fat return for their money. Also concerned are major European banks who stand to suffer if Greece defaults on its loans. The banks have Greek debt on the asset side of their balance sheets and a write-off would be catastrophic.

Across the Middle East, North Africa and Europe, the rapidly developing global capitalist crisis has driven millions of people, young and old into action against a system of governments – both autocratic and parliamentary – which became established during the post-1945 rebuilding of capitalist production.

In Britain, public sector unions, including teachers and civil servants, are set for the largest day of strike action for a generation at the end of the month over pensions and job losses. It’s a welcome start, but as the experiene of Greece shows, strikes by themselves cannot push back the waves of the deepening crisis.

During half a century, the inexorable logic of capitalist growth demanded international agreements which enabled the emergence of increasingly powerful global manufacturing, trading, property-owning and financial corporations. Their “rights” are established in contracts backed by international treaties more powerful than the laws of any country.

Ending their power over people’s lives is the key to finding a solution. To respond to Maria Georgila, “they” actually do not have an alternative. “We”, however, can proceed to build people’s assemblies and establish a new global economy and politics based on social ownership, democratic control and not-for profit sustainable production for need.

Gerry Gold
Economics editor
15 June 2011

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