The Assassination of Greece
by Dr. James Petras, Veterans News Now
The Greek government is currently locked in a life and death struggle with the elite which dominate the banks and political decision-making centers of the European Union.
What are at stake are the livelihoods of 11 million Greek workers, employees and small business people and the viability of the European Union. If the ruling Syriza government capitulates to the demands of the EU bankers and agrees to continue the austerity programs, Greece will be condemned to decades of regression, destitution and colonial rule. If Greece decides to resist, and is forced to exit the EU, it will need to repudiate its 270 billion Euro foreign debts, sending the international financial markets crashing and causing the EU to collapse.
The leadership of the EU is counting on Syriza leaders abandoning their commitments to the Greek electorate, which as of early February 2015, is overwhelmingly (over 70%) in favor of ending austerity and debt payments and moving forward toward state investment in national economic and social development (Financial Times 7-8/2/15, p. 3). The choices are stark; the consequences have world-historical significance. The issues go far beyond local or even regional, time-bound, impacts. The entire global financial system will be affected (FT 10/2/15, p. 2).
The default will ripple to all creditors and debtors, far beyond Europe; investor confidence in the entire western financial empire will be shaken. First and foremost all western banks have direct and indirect ties to the Greek banks (FT 2/6/15, p. 3). When the latter collapse, they will be profoundly affected beyond what their governments can sustain. Massive state intervention will be the order of the day. The Greek government will have no choice but to take over the entire financial system . . . the domino effect will first and foremost effect Southern Europe and spread to the ‘dominant regions’ in the North and then across to England and North America (FT 9/2/15, p. 2).
To understand the origins of this crises and alternatives facing Greece and the EU, it is necessary to briefly survey the political and economic developments of the past three decades. We will proceed by examining Greek and EU relations between 1980 – 2000 and then proceed to the current collapse and EU intervention in the Greek economy. In the final section we will discuss the rise and election of Syriza, and its growing submissiveness in the context of EU dominance, and intransigence, highlighting the need for a radical break with the past relationship of ‘lord and vassal’.
Ancient History: The Making of the European Empire
In 1980 Greece was admitted to the European Economic Council as a vassal state of the emerging Franco-German Empire. With the election of Andreas Papandreou, leader of the Pan-Hellenic Socialist Party, with an absolute majority in Parliament, hope arose that radical changes in domestic and foreign policy would ensue.1/ In particular, during the election campaign, Papandreou promised a break with NATO and the EEC, the revoking of the US military base agreement and an economy based on ‘social ownership’ of the means of production. After being elected, Papandreou immediately assured the EEC and Washington that his regime would remain within the EEC and NATO, and renewed the US military base agreement. Studies in the early 1980’s commissioned by the government which documented the medium and long-term adverse results of Greece remaining in the EEU, especially the loss of control of trade, budgets and markets, were ignored by Papandreou who chose to sacrifice political independence and economic autonomy in favor of large scale transfers of funds, loans and credit from the EEC. Papandreou spoke from the balcony to the masses of independence and social justice while retaining ties to the European bankers and Greek shipping and banking oligarchs. The European elite in Brussels and Greek oligarchs in Athens retained a stranglehold on the commanding heights of the Greek political and economic system.
Papandreou retained the clientelistic political practices put in place by the previous right-wing regimes – only replacing the rightist functionaries with PASOK party loyalists.
The EEC brushed off Papandreou’ phony radical rhetoric and focused on the the fact they were buying control and subservience of the Greek state by financing a corrupt, clientelistic regime which was deflecting funds for development projects to upgrade Greek economic competitiveness into building a patronage machine based on increased consumption.
The EEC elite ultimately knew that its financial stranglehold over the economy would enable it to dictate Greek policy and keep it within the boundaries of the emerging European empire.
Papandreou’s demagogic “third world” rhetoric notwithstanding, Greece was deeply ensconced in the EU and NATO. Between 1981-85, Papandreou discarded his socialist rhetoric in favor of increased social spending for welfare reforms, raising wages, pensions and health coverage, while refinancing bankrupt economic firms run into the ground by kleptocratic capitalists. As a result while living standards rose, Greece’s economic structure still resembled a vassal state heavily dependent on EEC finance, European tourists and a rentier economy based on real estate, finance and tourism.
Papandreou solidified Greece’s role as a vassal outpost of NATO; a military platform for US military intervention in the Middle East and the eastern Mediterranean; and market for German and northern European manufactured goods.
From October 1981 to July 1989 Greek consumption rose while productivity stagnated; Papandreou won elections in 1985 using EEC funds. Meanwhile Greek debt to Europe took off … EEC leaders chastised the misallocation of funds by Papandreou’s vast army of kleptocrats but not too loudly. Brussels recognized that Papandreou and PASOK were the most effective forces in muzzling the radical Greek electorate and keeping Greece under EEC tutelage and as a loyal vassal of NATO.
Lessons for Syriza: PASOK’s Short-term Reforms and Strategic Vassalage
Whether in government or out, PASOK followed in the footsteps of its rightwing adversary (New Democracy) by embracing the NATO-EEC strait-jacket. Greece continued to maintain the highest per capita military expenditure of any European NATO member. As a result, it received loans and credits to finance short-term social reforms and large scale, long-term corruption, while enlarging the party-state political apparatus.
With the ascent of the openly neoliberal Prime Minister Costas Simitis in 2002, the PASOK regime “cooked the books”, fabricated government data on its budget deficit, with the aid of Wall Street investment banks, and became a member of the European Monetary Union. By adopting the euro, Simitis furthered deepened Greece’s financial subordination to the non-elected European officials in Brussels, dominated by the German finance ministry and banks.
The oligarchs in Greece made room at the top for a new breed of PASOK kleptocratic elite, which skimmed millions of military purchases, committed bank frauds and engaged in massive tax evasion.
The Brussels elite allowed the Greek middle class to live their illusions of being ‘prosperous Europeans’ because they retained decisive leverage through loans and accumulating debts.
Large scale bank fraud involving three hundred million euros even reached ex-Prime Minister Papandreou’s office.
The clientele relations within Greece were matched by the clientele relations between Brussels and Athens.
Even prior to the crash of 2008 the EU creditors, private bankers and official lenders, set the parameters of Greek politics.
The global crash revealed the fragile foundations of the Greek state – and led directly to the crude, direct interventions of the European Central Bank, the International Monetary Fund and the European Commission – the infamous “Troika”. The latter dictated the ‘austerity’ policies as a condition for the “bail-out” which devastated the economy, provoking a major depression; impoverishing over forty percent of the population, reducing incomes by 25% and resulting in 28% unemployment.
Greece: Captivity by Invitation
Greece as a political and economic captive of the EU had no political party response. Apart from the trade unions which launched thirty general strikes between 2009 – 2014, the two major parties, PASOK and New Democracy, invited the EU takeover. The degeneration of PASOK into an appendage of oligarchs and vassal collaborator of the EU emptied the ‘socialist’ rhetoric of any meaning. The right wing New Democracy Party reinforced and deepened the stranglehold of the EU over the Greek economy. The troika lent the Greek vassal state funds(“bail-out”) which was used to pay back German, French and English financial oligarchs and to buttress private Greek banks. The Greek population was ‘starved’ by ‘austerity’ policies to keep the debt payments flowing-outward and upward.
Europe: Union or Empire?
The European economic crash of 2008/09 resounded worst on its weakest links – Southern Europe and Ireland. The true nature of the European Union as a hierarchical empire, in which the powerful states – Germany and France – could openly and directly control investment, trade, monetary and financial policy was revealed. The much vaunted EU “bailout” of Greece was in fact the pretext for the imposition of deep structural changes. These included the denationalization and privatization of all strategic economic sectors; perpetual debt payments; foreign dictates of incomes and investment policy. Greece ceased to be an independent state: it was totally and absolutely colonized.
Greece’s Perpetual Crises: The End of the “European Illusion”
The Greek elite and, for at least 5 years, most of the electorate, believed that the regressive (“austerity”) measures adopted – the firings, the budget cuts, the privatizations etc. were short-term harsh medicine, that would soon lead to debt reduction, balanced budgets, new investments, growth and recovery. At least that is what they were told by the economic experts and leaders in Brussels.