What is really at stake with Greece?

March 6, 2015 at 9:19 am | Posted in Articles | Leave a comment

It is worth considering what is really happening at present in the Greek conflict with the EU Euro zone. At issue is not just Greece but the nature of the EU itself. Is the EU an instrument of neo-liberal market discipline or a democratic political union of solidarity, rationality and freedom?

What is being proposed to Greece in response to the election of Syriza? It is to maintain the status quo of the troika bailout programme with its mandatory conditions of fiscal contraction and ‘austerity’. Why, when we can readily see the empirical consequence of this programme on Greece itself. Greece is in an economic depression worse than that of the US in the 1930s. Enormous social suffering has resulted. Its accumulated sovereign debt (+170% of GDP) is mounting to a point where it cannot be re-paid ever. Greece is now borrowing solely to re-pay its debts in a perpetual debt cycle.

The alternative proposal from Syriza is in effect a moderate Keynesian approach. That this is regarded as ‘hard left’ shows how far our political centre of gravity has shifted rightwards in the last few decades. Central to their proposal is to end austerity, increase state spending for investment and social solidarity and address Greece’s deep humanitarian crisis. Writing off state debt is essential to recovery.

If the status quo is not working why is it being insisted upon? Three reasons at least can be identified:

  1. The purpose of the debt is not that it be paid back but that it serves to exercise control over indebted countries by permitting the imposition of market discipline
  2. All the other Euro zone countries are politically led by neo-liberal market ideologues who will not, or even cannot, think outside its ideological categories
  3. For the other indebted countries within the Euro zone collective adherence to austerity is necessary in order to avoid any possibility of an alternative being recognised

What has Ireland’s role been in this crucial moment? From the election of the new Greek government Ireland has been particularly antagonistic and, indeed, patronising of the Greek endeavour. This seems to be for two clear reasons:

  1. Having implemented an aggressive austerity programme the Irish government cannot concede that there was / is an alternative.
  2. We wish to maintain and even assert our allotted role as poster boy for austerity.

Two additional points need to be made here. First, the Irish government is putting its party political interests above that of the wider national interest. Why not join with Greece and others in re-configuring debt by, among other possibilities, Europeanising it in Euro Bonds? Why willingly pay over €7 billion per annum in interest re-payments? Secondly, Ireland is not a proof of the effectiveness of austerity. It is despite austerity that the economy is growing. The Irish economy is export-led due to the significant role of foreign multi-national corporations attracted to Ireland by low taxation and other financial incentives. Our growth is inflated by the routing of vast global revenues through Irish companies. Foreign corporations use Ireland as a base for their activities with limited connection to an indigenous economy. In addition, austerity in Ireland has in fact caused enormous social suffering and considerable emigration.

The time has come to change the ideological imprisonment of neo-liberalism and construct new models centred on social equality and ecological well-being. It can start with actively supporting the modest Greek project for liberation from Troika-imposed austerity.

 

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