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The Greek Economy is Kaput


“The Greek economy is finished. The Greek economy is in a great, great depression… There is no power, no force within the Greek economy, within Greek society that can avert it….Imagine if we were in Ohio in 1931 and we were to ask: What can Ohio politicians do to get Ohio out of the Great Depression? The answer is nothing.”

– Yanis Varoufakis, Greek economist

After 5 years of negative growth, record-high unemployment and savage cuts to essential safety-net programs, Greek society is beginning to buckle. Diabetics cannot afford their insulin, suicides and anti-depressant usage is off-the-chart, tuberculosis and HIV rates are soaring, and desperate pensioners in Athens have been reduced to dumpster diving outside grocery stores for a few scraps of food to feed themselves and their families. The shocking devolution of a modern nation into a failed state did not happen overnight or without the help of EU bureaucrats and financial potentates who dictate economic policy from Brussels, Frankfort and Berlin. These so-called “managers” have steered the 17-member eurozone into the biggest slump since the Great Depression, imposing belt tightening measures that have choked off growth, sent unemployment skyrocketing, and incited protest and street violence across the continent. Greece has been particularly hard hit. Poverty and destitution are now widespread. The country is a basketcase. Here’s more from an article in the Guardian:

“Greece is currently in the centre of a humanitarian crisis…. A large proportion of Greek households currently live in conditions of “material deprivation”. A little more than 11% actually live in “extreme material deprivation”, which means without enough heating, electricity, and use of either a car or a telephone…There has been explosive growth in soup kitchens and general food distribution. … the Church of Greece distributes approximately 250,000 daily rations… By recent government order, municipal rations will be expanded further because of rising incidence of children fainting at school due to low calorie intake.

The evidence of poverty, inequality, and inability to access primary services confirms the increasingly desperate statements by people at the frontline.” (“Greece is facing a humanitarian crisis”, Guardian)

The Guardian concedes that there are political reasons why the crisis has not been adequately covered in the media. “By acknowledging the severity of the situation, the Greek government and the EU would also have admitted that the current state of affairs has been brought about by the so-called economic “rescue” of Greece. So the authorities have chosen to keep quiet.” (Guardian)

Greece has not been rescued nor was that ever the plan. From the beginning, austerity was meant to punish and humiliate, to shrink the state and expropriate anything of value. Still the charade goes on, and the EU stewards continue to claim that their discredited theory is achieving its objectives. Case in point, here’s vice president of the European Commission, Olli Rehn, cheerleading austerity as the antidote to Europe’s debt woes.

“The decisive policy action undertaken recently is paving the way for a return to recovery. We must stay the course of reform and avoid any loss of momentum, which could undermine the turnaround in confidence that is under way, delaying the needed upswing in growth and job creation.”

There is no recovery. The EZ is in the throes of a Depression. Economic fundamentals have been jettisoned to advance the interests of the wealthy overlords who benefit from from the imiseration of working people. Austerity is a sham that has laid much of the south to waste. An increasing number of families are now abandoning their children because they’re no longer able to provide for them. According to Press TV:

“There has been an increase in the number of newborn babies dumped outside clinics and offloaded on charities ….”Families are breaking up, instances are mounting of mothers and fathers no longer being able to bring up their own kids,” General Secretary of the civil servants’ union ADEDY, Ilias Ilioupolis said.” (“Greek crisis ups abandoned kids”, Press TV)

The political implications of austerity are equally worrisome. Growing opposition to Brussels diktats has led to a resurgence of right wing extremism notably the uber-nationalist Golden Dawn whose Nazi-like standard and anti-immigrant rhetoric is now finding broader appeal among Greece’s unemployed and disaffected youth. Xenophobia and anti-semitism are on the rise. Policymakers in Brussels could reverse this dangerous trend, but have chosen to intensify Greece’s humiliation by increasing their demands and withholding desperately needed fiscal assistance. As a result, reactionary elements are gaining strength while democratic institutions are progressively weakening. Meanwhile, the EZ economy continues to deteriorate.

In Greece, for example, 3rd quarter output shrank by 7.2 percent, deeper than the 2nd quarter’s 6.3 percent decline. That means the economy is getting worse. It also means that Greece will not meet its deficit targets and will be forced to implement more austerity measures. As the government slashes public investment, demand will weaken, state revenues will fall, and the severity of the slump will intensify. The same pattern has been repeated for 20 quarters without change. Greece is being carved up and sold to deep-pocket corporations and wealthy businessmen. It’s being kept on life-support so that EU banks and bondholders avoid the losses for which they alone are responsible. The EU’s criminal elite have reduced the country to rubble.

THE MEMORANDUM: A death warrant for Greece

In February 2012, Greek parliamentarians signed the nation’s death warrant by ratifying the heinous “Memorandum of Understanding” (MOU), a document that effectively repeals Greek sovereignty and hands the nation over to foreign banks and corporations. The 43-page edict imposes strict rules on everything from reduced spending on life-saving drugs to “lifting constraints for retailers to sell restricted product categories such as baby food.”

The MOU calls for a 10 percent cuts to government workers wages, cuts to “social security funds and hospitals”, and more privatizing of publicly-owned assets, all of which has further shrunk GDP. Ratherpath for Greece to exit its present slump, the Memorandum curtails public spending while creating new opportunities for exploitation and plunder. Here’s an excerpt from the MOU:

“The Government stands ready to offer for sale its remaining stakes in state-owned enterprises, if necessary in order to reach the privatisation objectives. Public control will be limited only to cases of critical network infrastructure.”

Public assets are being sold for pennies on the dollar to foreign corporations and entrepreneurs. Then there’s this:

“The Government will neither propose nor implement measures which may infringe the rules on the free movement of capital.”

In Greece, the interests of the people have been subordinated to the interests of profitmaking industries and their shareholders. Capital rules. The MOU turns the basic principal of representative government on its head. The memo also features predictable attack on organised labor. Here’s a clip:

“The Government will take measures to foster a rapid adjustment of labour costs to fight unemployment and restore cost-competitiveness, ensure the effectiveness of recent labour market reforms, align labour conditions in former state-owned enterprises to those in the rest of the private sector and make working hours arrangements more flexible. This strategy should aim at reducing nominal unit labour costs in the business economy by 15 percent in 2012-14. At the same time, the Government will promote smooth wage bargaining at the various levels and fight undeclared work.”

The Greek government must revoke collective bargaining rights and reject minimum wage laws that undermine “cost-competitiveness”, an Orwellian term which means “slave wages”. The authors of this rancid warrant try to conceal their animus for working people behind the public relations invention, “debt crisis”, but their real intention is clear. Here’s more from the MOU:

“The Government establishes a task force (to) review the ….judicial case management, including the possibility of removing dormant cases from court registers.” …Following on the submission of the work plan for the reduction of the backlog of tax cases in all administrative tribunals and administrative courts of appeal in January 2012, which provides for intermediate targets for reducing the backlog by at least 50 per cent by end-June 2012, by at least 80 per cent by end-December 2012 and for the full clearance of the backlog by end-July 2013, the Government presents by end-May 2012.”

The MOU provides a get-out-of-jail-for-free card for tax cheats. How does that help to balance the budget? It doesn’t, but it does help to illustrate that the “debt crisis” is a fraud designed to crack open Greece like a pinata and steal whatever big finance and their corporate colleagues can lay their hands on.

The financial oligarchy is now using its political agents in Athens to intensify police state repression and quash any outbreak of organized resistance. According to the World Socialist Web Site:

“The Greek government has now resorted to martial law on four separate occasions to force striking workers back to work since the European Union began dictating austerity measures for Greece. …Any form of effective collective resistance against the relentless austerity measures that have already cost tens of thousands of jobs and slashed wages and pensions has been effectively declared illegal…

The attack on the right to strike in Greece is being carried out in collaboration with and support from other European governments and EU institutions. The so-called “troika”—the International Monetary Fund (IMF), European Commission and European Central Bank (ECB)—monitors every measure taken by the Greek government and has deployed observers to watch over specific Greek ministries. (“Greek government imposes martial law on ferry strikers”, World Socialist Web Site)

Austerity is being used to mask the looting of Greece by foreign capital. The troika-led attack on the battered nation has pushed youth unemployment above 60 percent, reduced millions of working people to a state of “extreme material deprivation”, and left the public health care system in a shambles.

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at

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