GREECE IS THE OUTCOME OF EUROPEAN FINANCIAL OLIGARCHY

It is important to understand the crisis of austerity that has been imposed by European bankers on Greece, Spain, Italy and Portugal, among others.

What happened ?
 

1. 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 (not Greece) 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 have been trying to force the Greek government to cut pensions, education, salaries, and health care to pay for the bail out of the banks.

These funds were transferred from banks, the ECB, and the IMF to pay back banks, the ECB and the IMF. Few funds were used to assist the Greek people. That is loans have been used to refinance the debt. They have been recycled back to Germany, France and other nations’ banks.

2. Germany has the political and economic power to enforce debt repayment by starving the Greek economy and forcing the Greek nation into a great depression.

3. The current policies have imposed a depression on Greece. Austerity policies have produced a decline in the Greek economy by over 25% since 2010. John Maynard Keynes explained this effect of imposed austerity during a depression way back in the 1930s, but the bankers and the governments they control choose to ignore this reality in part because it is not in their interest. There are significant and complex economic issues here, but it is equally important to not allow narrow, technocratic, bankers’ and economists’ insiders views to go unchallenged. The problem is not that they are technocrats, but that their numeracy (number crunching) disguises a particular set of political assumptions that enriches and protects the wealthy at the expense of everyone else.
The domination of discussion in the media and in academia by a narrow and limited view of economics allows the neoliberal (pro- finance capital) assumptions to determine policy. To understand this process of wealth extraction, it is important to recognize how debt has been transferred from banks to nominally “public” institutions such as the IMF and the European Central Bank. The bankers’ assumptions produce policy choices that make the rich richer and the poor poorer. They are not the product of a science of economics but of the well-financed pursuit of self interest and the promotion of profit by the financial oligarchy.
 

It is not a Greek crisis, it is a Eurozone crisis that is currently having its most devastating effects on the people of Greece, Spain, Portugal and Italy, and immigrant minorities in France, among others. The crisis is severe. These countries, and particularly young people, are going through a depression, similar in scope and magnitude to of the Great Depression of the 1930’s which brought fascism to power in Germany, Italy and Spain.
 

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. Pensions for retirees has been  one of the major sticking points preventing a compromise between Greece and the Eurozone bankers. Main pensions have been slashed 44 to 48 percent since 2010, reducing the average pension to 700 Euros a month … About 45 percent of Greek pensioners receive less than 665 Euros monthly below the official poverty threshold. Many pensioners and their families have already been reduced to poverty, and the European Central Bank and the IMF have insisted on yet further cuts in pensions.

The crisis was initially created by the general crisis of capitalism in 2008/2009. In Europe, the banks were bailed out at public expense while the working people were required to pay the bailout costs. Bankers raised their profits by imposing policies of severe loan paybacks as a part of the program known as austerity.

Austerity policies have ruined the Greek economy. 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. In the poorer countries of Europe, the imposition of austerity made the economic situation worse year by year while maintaining a very profitable system for finance capital and capitalists.

Why is this devastation austerity policy being imposed? Austerity is imposed by coordinated economic power because, in the short term, it serves the interests of finance oligarchs in Europe. Under the current system of political economic advantage and ideological domination in the European Union, the working people, the 99%, cannot win. They are being forced into increasing desperation, at times with the support of working people in Germany, for example, who support their government’s harsh economic extractions from Greece due to nationalists’ myth making rather than an analysis of economic reality.
 

The European Monetary Union is not going to change, because the current system is very profitable for the financial oligarchy. There are alternatives. Leading economists recognize the failure of the austerity approach and have proposed alternatives, but the banking sector will not consider reform. 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. 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 home owners in the U.S. for the real estate crisis that the banks caused in 2008/2009.