Greek government “waterboarded” into submitting to German demands

On Monday, after being submitted to a ferocious pressure campaign that some compared to “waterboarding,” Greek Prime Minister Alexis Tsipras agreed to a draconian and humiliating set of demands from the “Eurogroup” of 18 countries, besides Greece, which participates in the Euro currency.

As demanded by the Eurogroup, he submitted an initial bill to approve the measures for quick approval by the Greek parliament, though he himself says he “does not believe” in them but only accepted them under duress, and though it is not guaranteed that the parliaments of the other countries, especially Germany, will approve them. 

Amid great uproar and consternation, with several cabinet members and 32 deputies from Tsipras’ own Syriza Party voting  “no,” the bill passed 229-64 with six abstentions.

Just a week before, on July 5, Greeks had voted in a referendum to reject a milder set of demands by a margin of 61 to 39 percent.

But Greek banks are on the point of running out of money and all aspects of the economy are in dire straits. Without money, Greece will not be able to import even food, in which it is far from self-sufficient, nor medicines, nor fuel.  This was used by the wealthy countries of Northern Europe, led by German Finance Minister Dr. Wolfgang Schäuble, as the anvil on which to hammer Tsipras into submission. 

Tsipras came to power when his left-wing SYRIZA party won a large plurality in elections in January.  He had promised to fight against the fierce austerity program imposed on Greece by the “Troika” of the International Monetary Fund, the European Central Bank and the European Commission (the executive body of the European Union) starting in 2010, as the condition for bailouts, in 2010 and  2012, for the  country’s unsustainable debts.

However, Tsirpas and his government had to deal, also, with the fact that public opinion polls showed that a large majority of the people in this trading nation did not want to leave the Euro currency and go back to the old Greek currency, the drachma. So he set himself the task of fighting against the austerity program while doing his best to keep Greece within the Euro.

This should perhaps not have been an impossible task, but it made Greece vulnerable to a vicious campaign of coercion, especially from the German ruling class, working through the Troika and the Eurogroup.  Perhaps Tsipras hoped that the referendum on July 5 would strengthen his hand, but the views of Greek voters count for nothing in the minds of Europe’s corporate rulers.

There is massive grassroots opposition to the austerity program imposed by the Troika on poor European countries.  This is building to a possible electoral threat to right wing governments in Portugal, Spain and perhaps other countries.  However Greek banks are very close to running out of money, with their operations closed and deposit holders only permitted to take out 60 euros a day, with a possibility of a complete bank shutdown looming.  The European Central Bank, under strong influence from the German government has denied a new cash infusion to tike Greece over, adding to the pressure on Tsirpas’ government.  On Monday July 20, also, Greece is expected to come up with a payment of $3.5 billion to the European Central bank, having defaulted on a payment to the IMF on June 30.

The Greek government has questioned the legality of much of this debt, and repeatedly asserted that it is unpayable and moreover that austerity measures make this situation worse.  Since 2010  Greece has seen at least a 24 percent contraction of its economy, with a  quarter of its workers unemployed, including half of younger workers.  Wages and pensions have been slashed, thousands have been laid off, and many enterprises shuttered as the economy has shrunk. Tsipras has argued that it is madness to try to “solve” this problem by adding more austerity and shrinking the economy even more.

Now he will have to re-fire laid off government workers he had re-hired earlier in the year, sharply increase value added tax (similar to sales taxes in the U.S., and also highly regressive), cut pensions, increase the retirement age, and put numerous Greek state assets, including entire coastal islands plus ports and other basic infrastructure up for sale to private interests (and all of this under the control of the Troika, a direct insult to Greek national sovereignty). 

Much of the language of the memorandum agreed to on Monday is vague and subject to further tugs of war.  There is ominous language about “modernizing” Greece’s labor laws. This almost certainly means weakening them, to the detriment of Greek workers and their unions.

A recent analysis by the International Monetary Fund, agrees with the Greek position that the debt is unpayable, and that more austerity will only make the situation worse.  If the problem is that the Greek state does not have the income flow to pay its bills, shrinking the economy further will reduce that income flow even more.

The IMF report suggests that Greece’s creditors may have to accept losses or extend the program of Greece’s payments, and contains the threat that the IMF will withhold funding for the bailout otherwise.

Former Finance Minister Varoufakis, in an interview with the New Statesman, said that when he would bring such commonsense economic arguments to his fellow finance ministers from the Euro group, they would pay absolutely no attention. So the harshness of the new austerity regime imposed on Greece is motivated as much by politics as by economics.

Schäuble had been hinting broadly that a Grexit, an exit of Greece from the Euro currency group, at least temporarily, might be a better option.  He and others in the governments of the wealthy Euro countries have accused the Greeks of being unreliable and were particularly incensed by the July 5 referendum, which they saw as a ploy by Tsipras to get out of commitments agreed to by previous Greek governments, and not as an elementary democratic right of the Greek nation to express itself on its own future.

German companies are highly involved in the Greek economy and stand to gain by a new round of privatizations.  For example the Hochtief Construction,  a group with deep roots in the Nazi period of German history (it used slave labor) now has been fingered as one of the worst tax scofflaws in Greece, owing between $654 million and $1 billion to the Greek Treasurary. A Hochtief spinoff has the privatization concession to run the Athens airport. More such contracts will now be on offer.

Greece got zero support from the governments of Portugal and Spain, two other countries under the hammer of Troika-imposed austerity. Its “populist” policies were also condemned by representatives of former socialist countries in the Euro group.   The right wing governments in all of these lands have been complicit in shredding the safety nets and busting the unions of their own people, and don’t want Greece to prosper and give their toiling majorities ideas. 

We in the U.S. should take heed; this is the same juggernaut that is headed our way.

Photo: Greeks take part in a demonstration supporting the anti-austerity movement.  |   Lefteris Pitarakis/AP


CONTRIBUTOR

Emile Schepers
Emile Schepers

Emile Schepers is a veteran civil and immigrant rights activist. Emile Schepers was born in South Africa and has a doctorate in cultural anthropology from Northwestern University. He has worked as a researcher and activist in urban, working-class communities in Chicago since 1966. He is active in the struggle for immigrant rights, in solidarity with the Cuban Revolution and a number of other issues. He now writes from Northern Virginia.

 

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