The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

The Creditors’ Savagery

Jul 20, 2015

Paul Krugman, a winner of the Nobel Prize for Economics, said, “this Eurogroup list of demands is madness.” Even those who ordinarily support the creditors could only say, “the reform plans that Greece agreed to will push the economy down,” as the French newspaper Les Echos wrote.

In fact, even before any discussion on the possibility of having access to new credit, the Greek government had to have its Parliament vote between July 15th and July 22nd on a series of austerity measures. The national sales tax will rise to 23% on most goods. A lower rate of 13% applies to water, grocery staples and energy. The normal age for Social Security retirement is now 67 and by the end of 2019 the government has to stop paying a supplement to those receiving low benefits. In the event the government runs a budget deficit, automatic freezes kick in to prevent a new deficit.

The Greek government agrees to “undertake a rigorous reexamination and modernization of collective bargaining agreements, union action and ... mass layoff procedures.” Sunday work must be allowed. The plan pushes the Greek government to go back on certain measures it took recently; in particular, it requires the layoff of certain newly hired public employees. And for any new law connected to the adjustment plan, the government will first “have to consult creditor institutions before any public discussion or in Parliament,” which means nothing less than putting the Greek government under a control which intends to refuse it.

Finally, the government has to set up funds which will raise 55 billion dollars by privatizing government enterprises. This is an incredible amount given the size of the Greek economy. That means in addition to the already planned privatization of regional airports, the most important ports of the country and the electrical network, many other sectors will be privatized. Out of the proceeds from the sale of these enterprises, at least 25% must go immediately to pay off creditors.

In exchange for all this, the Greek government has only obtained a vague promise of discussion over a rescheduling of its payment on public debt.

While since 2008 the Greek economy has continued to collapse, strangled by a debt which never shrunk, today finance capital seeks to pump still more profit out of it, which will inevitably worsen the situation still more. But the Heads of State who play the role of managers for the financial institutions don’t want and never wanted to “aid Greece.” They want to make an example out of it and show all the exploited of Europe what it will cost them to fight them, even through the ballot box.