While I’m writing this, stock markets worldwide are wobbling in response to the imposition of capital controls in Greece and in anticipation of the coming Greek referendum on austerity. If Greece votes no, they will almost certainly be kicked out of the eurozone.
Those sentences up there — at least from my safe position on the west coast of the United States — simultaneously feel like an account of a major world-historical event and just deadly, deadly dull. It’s easy to see how something like the marriage equality debate is a conflict between freedom and love on the one side and control and hate on the other. In this debate, though, the conflict is stated in abstract terms that make it difficult to tell what the fight is about and why it matters.
This is all about austerity – the practice of cutting social safety net programs and removing worker protections during recessions, in the interest of inspiring investor confidence. Although this is a position that makes some theoretical sense, when implemented, austerity measures tend to shrink economies rather than grow them. Cuts to government services, welfare and pensions, combined with increased retirement ages, all serve to take money out of the hands of people who need to spend it to live – spending that stimulates the economy – and put it into the hands of people who can stockpile it instead.
Although austerity has consistently harmed countries that have implemented it, and although most mainstream economists have come to agree that austerity doesn’t work, the European Commission, the European Central Bank, and the International Monetary Fund (a group collectively known as the troika) have repeatedly demanded increased austerity measures from Greece in exchange for loans to keep their weakened economy afloat. Because austerity itself causes recession conditions, the troika here is like a medieval doctor following up on a bloodletting that didn’t cure their patient by prescribing more bloodlettings.
After five years of austerity, Greece’s economy is wrecked – they now have an unemployment rate of 25 percent, 50 percent among younger residents. In response, this year Greece elected Syriza, a previously fringe party. The name means “Coalition of the Radical Left,” and their logo bears red, green, and purple flags, representing Marxism, environmentalism, and feminism.
In negotiations with the troika, Syriza has offered up proposals that could allow Greece to continue making loan payments without implementing austerity. These compromises have been consistently rejected, indicating that the troika’s interests are more about imposing austerity than about collecting debts.
And now that Syriza have refused to follow orders, the troika is imposing pain on the Greek people, in the hopes that Greek citizens will replace Syriza with a government more likely to capitulate. Of course, the far right has also been empowered by the crisis, so if Syriza falls there’s a chance the overtly fascist Golden Dawn could be next:
Margaret Thatcher famously stated that there is no alternative to the economic arrangement we’ve come to know as neoliberalism. This is the idea that the economy is best controlled by private sector leaders and financial experts, rather than by democratic methods.
However, that phrase “there is no alternative” is not an idle observation. It is a threat, a promise that anyone who attempts to set up an alternative will be willfully punished by banks and markets. This is the process we see in Greece.
The real question being decided in Greece right now is relatively simple. It is whether everyday people are allowed to make decisions about economic matters, or whether we must instead defer to the powerful even when they’re wrong.
Ain’t no party like a socialist party ’til a socialist party gets inevitably crushed.economy Europe Greece