They have featured Jean Claude Juncker’s comments that the Greek government is suffering from ‘egotism’ and that he has ‘the Greek people’s welfare at heart’. They never mention that Juncker was President of Luxemburg when deals were done with 343 multi-national companies to avoid paying tax.
The government’s line that Greece ‘walked away from negotiations’ is repeated regularly.
But the reality is that Greece was presented with a set of proposals which the Finance Minister Varoufakis stated would be ‘impossible’ to pass through their parliament. When the Greek government asked for a one week extension of bail-out funds to hold a referendum, they were asked to leave a meeting of eurozone Ministers. Here is how the Channel 4 correspondent, Paul Mason describes what happened.
At this point chairman Jeroen Dijsselbloem announced there would be “a meeting of the 18”– that is the Eurogroup without Greece. Asked how such a meeting could issue acommuniqué he replied, according to a Greek witness “we can do what we like since we are an ad hoc body”. The Brussels press corps dutifully reported that the Greeks had “walked out”.
There has also been very little reporting of the actual details of what the ECB, the EU and the IMF were demanding of Greece.
The Greek government had already moved away from its election promises by proposing extra taxes on incomes. Varoufakis acknowledged that their own proposals‘contains many parts that Greek society rejects’.
But on June 25th, the Troika demanded even more cuts. They wanted someone who was on a pension of €500 a month to accept cuts that could amount to a loss of€200 a month. In the words of Prime Minister Tsipras, they demanded measures ‘leading to further deregulation of the labour market, pension cuts, further reductions in public sector wages and an increase in VAT on food, dining and tourism, while eliminating tax breaks for the Greek islands.’
The irony is that the bail-out money was not used to help the impoverished society which accepted these conditions. The €7.2 billion loan was to pay back €5.3 billion to the IMF and the remainder for bills borrowed by Greek banks.
Greece has been put on a treadmill of debt where new borrowing just helps fund interest and debt payments for previous loans. Austerity policies have destroyed its economy and it now functions on a life support machine. The EU is powering down the machine in order to carry out a silent coup against the Syriza government.
However, the EU had not calculated for the militancy and determination of Greek workers. The workers have been pressurising Syriza and have told its MPs to vote against any further austerity measures. The Syriza’s leadership response was to call a referendum in the hope that a democratic mandate would strengthen their negotiating hand with the EU.
This was a perfectly legitimate move and the EU’s reaction showed their deeply undemocratic instincts. But the referendum also shows that Syriza has now come to a crossroads.
Inspired by the ideas of Nicos Poulantzas, they thought they could fight both within the state and outside it through the pressure of social movements. But they are now finding that the Greek state is embedded in a network that stretches from Brussels to Athens and is designed to suit the needs of the wealthy. This class will use economic blackmail and obstruction to stop any reform of their system.
If the Greeks vote NO – or Oxi in Greek- they will need to take steps to re-organise their economy outside a capitalist framework. They will have to fully nationalise the banks and take control of the top corporations which dominate their economy. They will need to confiscate assets of wealthy individuals who are co-operating with the EU bureaucracy in punishing their population. It is only the militancy of the workers movement who can drive this programme forward.
Any other path will lead back to punishment by an EU who is determined to stop the ‘contagion’ of resistance to austerity spreading across Europe.