Vol. 79/No. 26      July 27, 2015

Tsipras, leader of the Coalition of the Radical Left (Syriza), asked, in exchange for agreeing to deeper attacks on the living standards and rights of working people, that the imperialist lenders at least write off a bit of Athens’ $360 billion debt and make it easier for him to sell the deal.

But German Chancellor Angela Merkel refused, and in doing so sent a message to weaker crisis-wracked capitalist governments, from Spain and Portugal to Italy and Ireland — and her erstwhile allies in France.

The capitalist rulers and their media talk about a “debt crisis.” But the unpayable debts are just one result of the world contraction of capitalist trade and production. For nearly two decades the bosses worldwide have mostly not invested in expanding production and productive capacity, where their profit rates have been falling.

Instead, they pour massive amounts of capital into stocks, bonds, derivatives, loans and other forms of fictitious capital — until the speculative bubbles inevitably burst. Then the rulers seek to squeeze more out of the working class, whose labor is the source of their wealth.

The crisis is shattering the myth of a united capitalist Europe, and increasing competition among rival powers. The capitalist governments in Europe are united only in their determination to make working people bear the brunt.

Within the European Union, which includes the 19-member eurozone, capitalists in each country go after the wages and living conditions of working people within their borders, and the ruling classes of the larger powers seek to reinforce their domination and deepen the exploitation of toilers in the weakest. That’s what’s playing out in Greece.

‘Bailout’ is assault on working class

Among the terms of the so-called bailout: steeper cuts in pensions, increased sales taxes, automatic cuts in government spending if budget surpluses don’t meet targets, privatization of electricity transmission, weakening union collective bargaining rights and removal of obstacles to laying off workers.

Under the deal Athens must privatize some $55 billion of government assets and place the proceeds in a fund supervised by EU institutions. Some 50 percent of the fund is to be used to “recapitalize” Greek banks, i.e. protect the deposits of bondholders; 25 percent to service the Greek debt; and 25 percent for unspecified “investment.”

Current laws that protect bread and milk sellers from competition will be repealed “to open Greek business to the international marketplace” the New York Times reported. Restrictions on Sunday work will be lifted.

In an attack on Greek sovereignty, the deal instructs Athens to “consult and agree” with the EU on all bills before making them public or presenting them to parliament.

While the Wall Street Journal on July 10 described Tsipras’ capitulation as a “spectacular U-turn,” it was in continuity with Syriza’s class-collaborationist course. After winning election in January on a so-called anti-austerity platform, the Tsipras government stated its intention to “honor its financial obligations to all of its creditors.” In a vote a few days before the deal, only two of Syriza’s 149 deputies in parliament opposed authorizing Tsipras to agree to the EU demands. Another 15 either abstained or were absent.

Tsipras used the referendum to claim that he fought as hard as he could, but this was the best he could get. In the absence of any revolutionary proletarian leadership in Greece, nothing different is possible.

Workers in Greece have already been paying a high price for the capitalist crisis. Since 2010 their wages and living standards have been forced down as part of previous “bailout” deals. Nearly 30 percent of government workers have been laid off and pensions slashed 40 percent. In 2012 the minimum wage was cut by 22 percent, for those under 25 the cut was 32 percent.

With unemployment at 25.6 percent — up from 10 percent in 2010 before the imposition of EU cost-cutting demands — it’s now the highest in the EU and higher than in the U.S. during the Great Depression of the 1930s. And for youth it’s more than 50 percent.

Production has plummeted. Per capita gross domestic product has declined 25 percent since 2007.

A July 13 editorial in the New York Times complains that the crisis in Greece cannot be resolved unless there is a plan to “restore its moribund economy to life.” But under today’s worldwide conditions of stagnation of capitalist trade and production, and bled by the terms of the “bailout,” that is a tall order.

Meanwhile, the Greek government is increasingly turning to Moscow, which is ready to capitalize on the crisis. Greek Energy Minister Panayotis Lafazanis told the Financial Times in early July that Moscow has offered to build a pipeline to deliver Russian natural gas through Turkey. If agreement is reached, Moscow could then bypass its existing pipeline in Ukraine.
 
 
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