With Labour in the midst of its leadership challenge, Harry Tennison weighs in on Owen Smith's chances of success.Written by Harry Tennison on 21st August 2016
Is it worth continuing to punish Greece?
It was discovered by EU debt inspectors recently there was a further ‘black hole’ in Greek finances, to the tune of €15 billion that needed to be covered with further loans
It was discovered by EU debt inspectors recently there was a further 'black hole' in Greek finances, to the tune of €15 billion that needed to be covered with further loans. This will inevitably involve more debt and greater austerity until further holes are found as debt creates more debt and austerity creates greater resentment.
For the sake of an ideal of a single currency real people going through real hardship; soaring unemployment of at least 20%, minimum wages cuts of 22%, while taxes are being further raised to attempt to cover the amount lost through economic contraction, tax evasion, avoidance and flat out refusal to pay. With unemployment benefits set to last only 30 weeks, and half-pay cushion of many civil service workers recently made redundant set only to last under a maximum of two years the situation is set for a ticking time bomb
when the a large proportion of the population of Greece go from uncomfortable to desperate; and desperate people do desperate things.
Greece may have been the ancient birthplace of the idea of democracy, but let us not forget that Greece has spent most of the twentieth century either under the rule of dictators, autocratic monarchs, under foreign occupation, fighting brutal political struggles between extremists on the right and left or under the rule of military juntas until as late as 1974.
This current crisis has seen Greek politics has polarise as the moderate PATSOC party, of which the fallen George Papandreou was leader, and his grandfather founded, has slumped to merely 9% in the polls and their centrist rivals New Democracy are at 18%, that leaves 73% either withdrawing from politics in disgust or persuaded by more radical alternatives, both to the right and left.
Strikes and violence are a regular occurrence in a country where the government, currently unelected and devoid of a sense of social responsibility, is forced by the EU, ECB and IMF to continue to accept greater burdens of debt and remain in the Euro. This suffering is being felt by the Greeks for the sake of a political idea of a united Europe with a united currency. More cynically, it is the continued suffering of the Greek people for the profits of European and International Banks who do well getting high interest rates of the destitute Greek state with a worsening balance of trade and leaning on Greece to keep them from defaulting.
Being in the Euro gives Greece a currency that does not fit the needs of their economy; they need a weak currency that encourages tourism, makes imports costlier and exports cheaper. Do not get me wrong, austerity is necessary too, but the task is only manageable if they set the goals of austerity to make Greece what it can be given it's economy, not what it ought to be as an EU state.
It is ultimately inevitable that Greece will default on it's loans, abandon the Euro and reinstate the Drachma at a thoroughly devalued rate, it is the only real solution. Whether it does so as a democracy with what little stability it has left, or under the throes of anarchy and dictatorship irreparably hostile to the European project is what is now at stake.