Greece is considered to be the birthplace of European political thought, with the longest history of democratic forms of political power dating back to the stage of slave society. Today, in the early 21st century, the people of Greece are confronted with a State that openly places its duty to its external money-lenders above its duty to its own citizens.
The monopoly banks of Europe and the US have imposed draconian “austerity” measures on the Government of Greece, as the condition for advancing a “bail out” package of special loans. Austerity has meant massive cutbacks in government spending on all essential services, leading to thousands of jobs being lost. As output falls and unemployment rises, people have less to spend and the government’s revenue is lower than before, leading to further demands for government spending cuts. Thus the vicious cycle goes on. The economy is sinking in a downward spiral as the external money lending institutions drain more and more out it, like leeches sucking the blood out of an animal until it dies.
The US and European leaders have been claiming for many months that they will put together a financial package to save Greece from going bankrupt. A credible solution is still not in sight. What is acceptable to the big banks that have lent money to the Greek state is not acceptable to the broad masses of people of Greece. This is one major stumbling block. Another problem is that French banks are far more exposed to Greek debt than German banks are, and the two are unable to agree on how much of the burden should be borne by those who lent money to the Greek government.
Mass street protests are becoming widespread and growing in intensity. The people of Greece are refusing to accept that their Government’s obligations to its external creditors must take precedence over its obligations to its own electorate. They are refusing to bear the burden of a crisis that has been brought about by the uneven development and relations of dependence and plunder within Europe following the adoption of Euro as common currency.
The key question facing the masses of people in the country is whether the conditions of the money-lending institutions, headed by the European Central Bank and the IMF, are to be accepted or should Greece refuse to pay these creditors and walk out of the Euro zone.
Under pressure from the mass resistance to the austerity packages, the government headed by Papandreou agreed to hold a Referendum among his people. This immediately spread panic in the German ruling class and among the highest circles of finance capital throughout the western world. Papandreou was forced to withdraw his proposal to hold a Referendum, leading to the fall of his government. He has been replaced by someone known to be trusted among banking circles. The crisis is bound to continue and become more intense in the coming months.