Posts Tagged ‘austerity’

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The details of the agreement between Greece and its European creditors are now available. And there’s no doubt about it: this (as the top-trending Twitter hash tag puts it) is a coup. Greece has been forced to surrender (or, given the upcoming debate in parliament, to have the freedom to consider surrendering) a large part of its national sovereignty in exchange for a new European Stability Mechanism program bailout.

Alexis Tsipras [ht: sk] may or may not be a hero, “who fought like a lion against unfathomably large interests” and made it possible for Greece “to live to fight another day.” But that’s really beside the point. So, in the end, is Greek sovereignty—and, for that matter, the humiliating terms sponsored by Germany.

Because what we’re really witnessing is a coup in Europe as a whole. Merkel, Tsipras, Schäuble, and the rest are just the dramatis personae of a series of events that have turned the European project against its own people.

The dream, of course, was to expand democracy, eliminate national rivalries, and promote universal prosperity. But now the European project has become a nightmare of enforcing the conditions of creating and capturing profits—of large enterprises and banks—across an entire continent. And anything that gets in the way—whether existing pensions and state-owned enterprises or rehiring doctors, nurses, and cleaning women—will be sacrificed on the altar of those free-flowing profits.

And who are the losers? The hundreds of millions of workers, farmers, students, young people, and children who are being forced to endure extraordinary levels of unemployment, poverty, and economic insecurity in order to promote a post-2008 recovery that is benefiting only a tiny minority across the continent. And that’s just as true in Germany as in Greece, in England as in Spain. Not to the same degree, of course. But the current negotiations over Greek debt—in which all of their leaders and finance ministers have participated and to which they have given their assent—have demonstrated to the working people of Europe that nothing will be allowed to stand in the way of the interests of the free deployment of capital under conditions that are administered by the troika.

And if an entire nation has to be humiliated in order to serve as an example, so be it. . .

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By now, everyone knows that the Greek people overwhelmingly voted “oxi” in yesterday’s referendum. They rejected by a very large margin the austerity measures that have been imposed on and in that country since the first bailout plan of 2010 (a bailout, as I explained the other day, of European private banks).*

Difficult days lie ahead—and, at this stage, no one knows what the outcome will be.

But the results of the referendum do merit at least a few remarks. First, the margin of victory of the no vote is extraordinary considering the relentless campaign of fear and intimidation, from public pronouncements of non-Greek politicians and finance ministers to the strangling of Greek banks, that took place during the week leading up to yesterday’s vote. The Greek people stood up that campaign and both rejected the continued imposition of austerity measures and registered a vote of confidence in their still-young leftwing government.

Second, the polls and pundits that filled the media last week, indicating a close vote and how much of a gamble Tsipras was taking, now appear to be less of an objective analysis of events on the ground and more a part of the larger campaign, inside and outside Greece, against a no vote. In the end, it represented a desperate attempt to topple a democratically elected government and to send a clear message to other anti-austerity movements across Europe—and it didn’t work.

Finally, the fact that Yanis Varoufakis was forced to step down as finance minister is the moment of farce that has become part of this Greek tragedy. Apparently, the delicate sensibilities of the negotiators for the European creditors were offended by Varoufakis’s unwillingness to act and speak as a desperate supplicant—and instead to speak to them as a democratically elected European equal.

The Greek people have spoken with a clear voice. Now, it’s up to the rest of Europe to respond by immediately injecting liquidity into the Greek banking system, by renegotiating the structure of the outstanding debt, and by creating a space for another economic model to be allowed to grow in Europe.

*I write “on and in” because, as our analysis often forgets, the austerity measures, while imposed on Greece by its official creditors, were also imposed in Greece by the country’s oligarchy and governments prior to Syriza’s election.

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While much of the discussion of austerity has recently been about Greece, the United States has been enduring its own version of austerity: through declines in public-sector employment.

As the Economic Policy Institute explains,

public sector jobs are still nearly half a million down from where they were before the recession began. Moreover, this fails to account for the fact that we would have expected these jobs to grow with the population–taking that into consideration, the economy is short 1.8 million public sector jobs.

This shortfall in public sector jobs not only removes the multiplier effect on private sector demand, it also swells the ranks of the unemployed and underemployed, thereby increasing the downward pressure on workers’ wages.

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