What's the cradle of Western Civilisation worth to capitalism? "Junk"

"Yes, yes, yes, this is all well and good but where's your cash?"

Greece is known throughout the world as the birthplace of democracy, the cradle of western art, science, literature, drama and philosophy. It’s a beautiful country, with a healthy and delicious cuisine. What does capitalism think of Greece? “Junk”.

Yesterday Greece’s credit rating was downgraded to “junk” status, meaning that international markets think the government will be unable to pay its huge debts to banks and capitalists. Greece has been denounced across Europe, especially in Germany, which is the Europe’s largest economy, and where the right wing press has campaigned against any bailout for the Greeks. The German equivalent of The Sun, Bild, ran with the headline ‘You Greeks are getting nothing from us.’ And German Chancellor Angela Merkel, while campaigning for her party in regional elections, took the opportunity to lecture Greece on saving money and monetary responsibility, sounding just like someone who you need to borrow money off to keep afloat, but who just can’t help being a dick about it.

But throughout the day there’s been an absolute panic in international financial institutions like the IMF or the European Central Bank, and their top people have put the screws on the German government to cough up to try and keep the crisis in Greece under control. They fear that if the capitalists don’t get their cash from Greece then they’ll start to panic about other countries with big debts as well. The head of the OECD called what was happening in Greece a “contagion”, going as far as to compare it to the ebola virus (!):

“It’s not a question of the danger of contagion; contagion has already happened. This is like Ebola. When you realise you have it you have to cut your leg off in order to survive. The crisis is threatening the stability of the financial system.”

The result of all this lobbying is that the EU is going to lend Greece some money to cover its debts, but the action wasn’t fast enough to prevent the credit rating of Spain being downgraded as well, leading to yet more panic among capitalists that they weren’t going to get paid. The Portuguese government has also announced it’s going to bring forward its plan to cut spending and attack workers to try and stave off crisis.

Merkel: "I'm not lending you 20 quid, or you'll never learn, blah blah blah."

What Greece and Spain are finding out is the cost of being members of the Euro. In similar situations in the past they would have reduced how much their currency is worth, making it cheaper to buy what they’re exporting. But as members of the Euro they can’t do that, because the value of the Euro is set for the whole of Europe, meaning their needs are swamped by the needs of the much bigger German economy.

The reason the German government has decided to give some bailout money to Greece is because the future of the Euro as a currency is potentially in doubt. The Greek debt has already got much worse while Germany dithered about what to do, and whatever the pro-capitalist Greek government wants to do they may well end up having no choice but to not pay some of their debts. At that point, they may have to seriously consider withdrawing from the Euro.

The solution that the IMF and European Central Bank want is predictable: Greek (and Spanish, Portuguese, Irish etc.) workers will have to get sacked, have their pay cut and face massive cuts in their basic services. The long term implications are likely to be huge unemployment and misery for the people of Greece.

All the mainstream media present this like it’s inevitable, and that Europe has no alternative. But that’s far from true. If European countries worked together they could easily take control of the massive wealth in European banks, and instead of causing misery for the people that elected them, use that cash to transform the economy and give people meaningful work.

The reason that isn’t happening is simple: across Europe the working class are too weak, and we’re easy targets for bullying by the rich. The government in Greece is in a weaker position because the Greek people are among the most organised and militant in Europe, so they face a serious threat if they go ahead with their attacks.When the EU “rescue” plan was announced, thousands of workers and youth massed on the street to attack the headquarters of the EU in Athens. They have another general strike planned for May 5th.

But they need our support. Across the whole of the EU, it’s time for socialists, trade unionists and other working class forces to get our act together. There’s absolutely no reason we should be facing this assault from the rich, who are responsible for this whole mess in the first place.

Greek protesters show us how it's done

Unfortunately in Britain it doesn’t look like the election will change much. The same people who downgraded Greece to junk status say they’re not too worried about Britain. Simon Hayes of Barclays Capital told the Guardian:

“We expect the next government to tighten policy by a little more than is currently projected. Given the broad consensus across the political parties about the need to reduce the public deficit, and the closeness of the main parties’ stated consolidation plans, we do not believe that the election outcome will materially change the broad outlook for public borrowing and debt.”

In other words, big business doesn’t care about the election, because they know whoever gets in they’ll win. The SSP does care about the election, we’re standing in 10 seats across Scotland. But the reason for that is we hope to use it as a springboard for building up mass working class resistance to the cuts and austerity that the next government is trying to force on us, like we’ve seen with the mass protests and general strikes in Greece. The need for a fight back has never been greater.