Democrat January-February 2015 (Number 144)
Greece needs the Drachma not more structural adjustment
by Brian Denny
The Greek coalition Syriza-Anel government's new agreement with the EU is basically an extension of the memorandum signed by the previous Pasok/New Democracy government with the troika of lenders (EU-ECB-IMF).
This includes all the commitments to mass privatisation and the marketisation of all public services, ie massive structural adjustment in favour of the corporate sector.
The Syriza-led regime had gone to the EU, ie Germany, to ask for less austerity and Berlin said a categorical No!
German Finance Minister Wolfgang Schaeuble stuck to his hard line on Greece, saying the onus was on Athens to fulfil the conditions of its bailout programme before further aid would be paid out.
"Before money can flow, Athens has to show that it is meeting the agreed conditions," Schaeuble said.
Athens struck a deal with the Eurozone in February to extend its bailout by four months, but it is running out of options.
The much-maligned Greek Communist Party (KKE) tabled a draft law to cancel the anti-worker agreements with lenders (the memoranda) and all laws and loans agreements agreed by the previous governments.
Syriza had previously supported similar motions but now in government Syriza, which includes many former Pasok MPs that backed austerity, is refusing to back the KKE.
Ultimately Athens, locked into the euro, the key prop of ailing capitalism in Europe, sent their negotiating team off to get a little less austerity.
But the rules of the Euro does not permit such flexibility. In fact if you ask for a relaxation of the rules or oppose their central plans you are likely, as is the case for Greece now, to get a double dose of control by overseas banks and Germany which runs the euro.
Austerity is integral to the objectives of the EU, the euro and, of course, the finance capitalist class which rules the political roost.
Syriza MP Costas Lapavitsas has broken ranks with his party and is calling for Greece to bring back the Drachma, its former national currency. Grexit would allow the elected government to re-gain control of its economy and reboot its economy in the interests of the population, a long-standing policy of the KKE.
Global privateer Goldman Sachs reacted immediately against any chance of Grexit.
"Transitioning from the euro to a new national currency is no straightforward task either for Greece or for Europe.
"Greece can't just introduce a national currency," Goldman said in a statement, once more revealing the fundamentally undemocratic nature of the EU. However Iceland has shown that there is life outside the EU and the Eurozone neo-liberal straitjacket.
Iceland was hit hardest by the credit crunch in 2008. Now Iceland is being held up as the model for an alternative way to deal with the debt that plagues so many economies.
That is because when Iceland's banks went spectacularly bust, instead of pouring in billions of taxpayers' money to shore them up, Iceland just closed them down.
Foreign debts were written off - including £4.9bn of deposits from savers in the UK and Holland.
The economy is now growing faster than most European countries with a lower public sector deficit and unemployment is falling.
But Iceland's approach is about much more than just getting its banking sector in order says president Olafur Ragnar Grimsson.
"It is also about affirming the will of the people over the financial institutions.
"In Europe there is a conflict between the democratic will of the people and the interests of the financial markets," he said. Quite.