Why is Greece insolvent?
“In 2010 and 2011, mainly German and French banks in pursuit of high profits made massive loans to Greek firms. When the banks recognized that this was a high risk, they were bailed out … by transferring the debt from the banks to the public institutions like the European Central Bank and the IMF. Now the ECB and the IMF are trying to force the Greek government to cut pensions, education, salaries, and health care to pay for the bail out of the banks.”
Why is Greece suffering so much hardship?
“The German nation owes as much money to the Greek people as Greece owes to Germany and the European Central Bank combined. But Greece can not collect from Germany. Germany has the political and economic power (and allies such as the U.S.) to enforce debt repayment by starving the Greek economy and forcing the Greek nation into a great depression.”
What is the effect of the austerity imposed on Greece?
“Austerity policies have produced a decline in the Greek economy by over 25% since 2010. … The crisis is severe. … The austerity demands of European bankers and politicians have shattered the economy of Greece, producing layoffs, wage and pension reductions, and huge cutbacks in health care. Some 44 percent of the Greek people are now living below the poverty line.”
What role do pensions play in the standoff between Greece and its creditors?
“Pensions for retirees is currently one of the major sticking points preventing a compromise between Greece and the Eurozone bankers. The Financial Times reports, ‘main pensions have been slashed 44 to 48 percent since 2010 .… About 45 percent of Greek pensioners receive less than 665 euros monthly — below the official poverty threshold.’ This is about $745 dollars per month. … Many pensioners and their families have already been reduced to poverty, and currently the European Central Bank and the IMF insist on yet further cuts in pensions.”
How did the bankers manage to impose their will on Greece?
“Bankers imposed their plan for austerity through their influence on government power, and quasi-governmental institutions such as the International Monetary Fund, the World Bank and the European Union Central Bank.”
Is everyone — rich and poor alike — suffering equally?
“In the poorer countries of Europe, the imposition of austerity has made the economic situation worse year by year while maintaining a very profitable system for finance capital and capitalists. This is class war of the rich against the poor and impoverished.”
What are the alternatives?
“There are alternatives. … A Greek exit from the Eurozone may be the best of several bad options. They could leave the 19-member Eurozone (European Monetary Union) but remain in the 28-nation European Union. As an example, Great Britain is in the European Union but not in the European Monetary Union known as the Eurozone. Another alternative … would be for Greece to follow the example of Iceland and nationalize the banks rather than bail them out with further bank and IMF loans that must be repaid by further cutting of pensions, schools, health care and social services.”
Should we believe the media?
“The bankers and the governments that they control argue that Greece is just being irresponsible. This blaming the victim is the same argument that U.S. finance used to blame the poor and people of color homeowners in the U.S. for the real estate crisis that the banks caused in 2008/2009.”
“Duane Campbell is a professor emeritus of bilingual multicultural education at California State University Sacramento, a union activist for over 40 years, and former chair of Sacramento DSA. He blogs on politics, education and labor at www.choosingdemocracy.blogspot.com and www.talkingunion.wordpress.com He recently returned from Greece.”
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