More austerity in Greece and Cyprus

This video is called Greece: student protest rally in Athens.

By Robert Stevens:

After Cyprus, more austerity in Greece

30 March 2013

The European Union’s financial looting of Cyprus marks a qualitative turn in the brutal austerity measures being rolled out across the continent.

The EU’s €10 billion bank bailout is tied to the destruction of the island’s banking sector in the interests of the most powerful sections of finance capital.

Bank deposits over €100,000 have been raided, and strict capital controls are in force. Cyprus’s Foreign Minister Ioannis Kasoulides has said these could last for “up to a month” although commentators say they expect them to remain in place for years.

The bailout is tied to drastic spending cuts and privatisations. Representatives of the troika—the EU, European Central Bank and the International Monetary Fund—have been in Cyprus since the beginning of the month, drawing up a list of potential privatisations, including major utilities.

At the same time, demands for greater austerity are being made of Greece, which has been in recession for five years as a result of EU measures.

Troika officials are to return to Athens early next month to complete what German Finance minister Wolfgang Schaeuble described this week as a “tough supervision mission”.

Speaking to Greece’s Ta Nea newspaper, Schaeuble refuted any suggestions that the population could no longer bear further austerity, saying “Right now all macroeconomic indicators are showing that the recipe is yielding fruit. But more time will be needed than what many in Greece would desire.”

In December, the troika agreed to release €50 billion from its current €130 billion loan agreement with Greece. In return, it demanded that Greece impose further massive job cuts, tax rises and other crippling austerity measures. The money is disbursed in tranches which are strictly conditional on attached austerity measures, with regular reviews of their “progress”.

But last month troika officials abandoned negotiations with the Greek government, delaying the disbursement of a €2.8 billion loan from that previously agreed.

At the centre of the crisis was the troika’s insistence that Greece fully adhere to promises to cut 25,000 jobs in the public sector by the end of 2013. Fearful of rising and explosive social anger amid record levels of unemployment, the government instead proposed to avoid compulsory layoffs and transfer the employees into a “special labour reserve” by 2014. Even though this would result in workers’ wages being slashed by 40 percent for a year, and the layoff of 150,000 employees by 2016, it was still rejected by the troika as insufficient.

Based on its loyal adherence to EU diktats, the coalition government of New Democracy, the social democratic PASOK and the Democratic Left had claimed that receiving the further tranche would be a formality. Finance Minister Yannis Stournaras commented at the time, “This time it will be easy. If they [the troika] stay a few extra days, it will be to see some antiquities.”

Instead, the troika spent double the time it had allocated in Athens, then ended the talks and withheld the promised loan on the basis that the government could not stall on the measures already agreed, including the shedding of thousands of jobs in the public sector.

In response, an anonymous government official told the Guardian that the receipt of any money from the troika was now gravely threatened: “There are very real concerns that come the summer the next loan disbursement [from the bailout] will not be made. Nothing is certain.”

Central to the EU’s action is a policy to drive down the wages and conditions of workers in all European countries to a level on a par with those in Eastern Europe, China and India.

In revealing comments prior to the last visit of the troika to Athens, a Greek representative of the Commission, Maria Damanaki, told To Vima FM radio, “The strategy of the European Commission over the past year and a half or two has been to reduce the labour costs in all European countries in order to improve the competitiveness of European companies over the rivals from Eastern Europe and Asia”.

This was the backdrop to meetings held late April between Kostas Hatzidakis, Greece’s Minister of Economy and Development, and the managing directors of 11 of the largest international companies operating in Greece. A report by GR Reporter noted that, “Eight of the eleven managers supported the idea that a [monthly] salary of 250 – 300 euro for part-time work could create new jobs.”

It cited the comments of the executive manager of Barilla Hellas George Spiliopoulous, who said, “I do not see why a minimum level of the salary should be maintained in a country where youth unemployment has reached incredible levels.”

It is this drive to destroy workers’ wages and conditions which accounts for the ruthlessness with which the EU has dealt with Cyprus and others, as well as the venality of their national governments in aiding its actions.

The ruling elite is moving rapidly to exploit the now catastrophic levels of unemployment, which stand at nearly 30 percent for adults and more than 60 percent for youth. With such demands, the ruling elite seeks to satiate itself even further just months after the government, under troika insistence, reduced the minimum wage for all under-25-year-olds by 25 percent, to €510 per month from €740. For a worker above 25, the minimum wage was cut by 22 percent to just €586 per month.

This week, the German federal statistics agency Destatis released research showing that in 2012, Greece was the only EU country to see a decrease in average labour costs in the private sector. According to the study, the cost of one hour worked, including non-wage elements, in the Greek private sector was €15.50 last year, down 6.8 percent from 2011.

No area of social provision has been spared, as living conditions in the country were thrown back to a level of those that existed during the Nazi occupation of the Second World War. Even further attacks are being implemented, under cost-cutting measures agreed with the troika, including the closure of regional hospitals in an already decimated health service and the slashing of the right to higher education under the “Athina Plan”.

This plan is called after Athena, the ancient Greek goddess of wisdom. Like this unwise attack on university education got a mythological name from the Greek government, they also gave a name from ancient myths to another one of their disastrous policies. A witch-hunt against refugees and immigrants which they called Zeus Xenios. Zeus Xenios in ancient Greece was the name of the supreme god as protector of foreigners.

Wikipedia says: “Zeus Xenios, Philoxenon or Hospites: Zeus was the patron of hospitality and guests, ready to avenge any wrong done to a stranger.”

What a cynical name for such a xenophobic witchhunt. Maybe this cynicism is inspired by the United States occupiers of Afghanistan calling their bloody war, also outside Afghanistan, “Enduring Freedom.”

Famous Greek composer Mikis Theodorakis reacted against the Athina plan:

Iconic 88-year-old composer Mikis Theodorakis has spoken out openly against the Athina plan, which over and above mergers or abolitions of many public institutions has proposed reducing the number of students in remaining universities and further, severe reductions in state funding of institutions.

The composer’s reaction was provoked by the plan’s indirect attempt to abolish the public nature of higher education, which is embodied in article 16 of the Greek constitution, by suggesting that institutions seek private sponsorship and make greater efforts to connect their educational programmes to the demands of the market.

Referring to IMF and EU admissions that the numbers for economic recovery in Greece had been wrong – though this did not lead to corrections to economic policies that are plunging Greeks into greater poverty – the famous composer said:

“Athina is not another mistake; it is a well planned step towards the further downgrading not only of Greek education but also of the whole of Greek society, individually, occupationally, biologically and educationally.”

In the same message, the composer argued that powerful groups “want our people on their knees, obedient, ignorant and submissive without resistance and without national conscience or patriotism, in order to usurp our national resources and in order to turn us into well-behaved slaves; they are taking us back to the period of colonialism”.

In a direct appeal to students, he said: “Don’t let them do that. It is up to you, together with your parents and the rest of the Greek people, to ensure the safety of the country, to take the problems of our motherland in your own hands.”

Robert Stevens continues:

The aim of Athina is to close many higher education facilities and abolish the right to higher education, currently enshrined in article 16 of the Greek constitution. Under its aegis, institutions will be required to seek private sponsorship and connect their educational programmes to the demands of the market.

This course is being insisted on under conditions in which the austerity agenda has left Greece mired in its sixth year of recession. The Greek central bank has forecast that the recession is set to worsen, with the economy projected shrink more than 5 percent this year, compared with the troika’s projection of 4.5 percent.

The loan terms dictated to Cyprus by the troika of the European Union, European Central Bank and the International Monetary Fund (IMF) are predicated on the destruction of the pay and conditions of the working class and an onslaught against vital social and welfare programs: here.

Greece: LEADER of the Coalition of the Radical Left (SYRIZA) Alexis Tsipras has warned that the Troika ‘maybe wants to abolish democracy’: here.

Related articles

• Troika robbery of Cyprus depositors (dearkitty1.wordpress.com)
• Cyprus workers fight back (dearkitty1.wordpress.com)
• Savers across Europe will look on in horror at the Troika’s raid on Cyprus | Michael Burke (guardian.co.uk)
• EU in ‘denial’ that sick economy costs lives, say health experts (ekathimerini.com)
• Cyprus: Austerity Test-Case is ‘Biggest Experiment in Financial History’ (commondreams.org)
• Chomsky Says Germany Wants Hold On Greece (eu.greekreporter.com)
• Health study: Austerity is costing lives in Europe (nhsfightback.org)
• Greece suffers deflation for first time since 1968 while resentment towards German austerity continues to mount (thisismoney.co.uk)
• Spiegel Suspects Deposits Haircut in Greece (greece.greekreporter.com)
• ILO Foresees Social Unrest in Greece and Cyprus (eu.greekreporter.com)