By Mathew D. Rose, a freelance journalist in Berlin
The austerity policy dictated to the Eurozone by Germany has failed to generate a recovery. The news goes from bad to worse – and even worse. Nowhere is that more tangible than in Greece. Just to repeat the otherwise well known facts for the German readers of Naked Capitalism, who are withheld such facts in their own media: 1 million people have lost their jobs (approximately 25 percent of the working population); youth unemployment is well over 50 percent despite massive immigration; a third of business have closed, salaries have sunk almost 40 percent; pensions have been reduced almost by half; the economy has contracted by a quarter; there has been a 43 percent increase in child mortality and the health system has broken down; the Greek economy is in deflation; and, since the imposition of the austerity programme in 2010 the public debt has increased from 130 percent of GDP to 175 percent.
All these figures hide the most important fact: What is occurring in Greece is not so much an economic crisis as a humanitarian disaster. That the Greeks have raised the question of the appropriateness of austerity by precipitating elections is proof that democracy has survived these pernicious times and deserves our greatest respect. I sincerely do not believe that German democracy would have survived under similar conditions.
The democratic process in Greece is a threat for Germany and its allies, the political elites in Europe. They have a serious problem with democracy. When in 2011 the then prime minister of Greece, George Papandreou, announced a referendum to determine if the Greek people wished to adopt the imposed austerity programme, he was forced from office by the Germans and EU and replaced by a hand selected EU bureaucrat, a former vice-president of the European Central Bank. With the balance sheets of German and French banks in danger due to their extensive exposure to Greek bonds, that was no time to be consulting the Greek people.
Helping the Greek people in their time of need has never been an issue for the Germans and the EU. We know from Timothy Geitner’s book “Stress Test” that at the inception of the Greek crisis “EU leaders were obsessed with crushing terrible Greeks” and Germany’s finance minister, Wolfgang Schäuble was just as obsessed with throwing Greece out of the Eurozone (which he still is).
We further know from files leaked to the Wall Street Journal that within the IMF in 2010 Argentina, Brazil, India, Russia and Switzerland all argued that a portion of Greece’s debt owed to private banks should be cancelled before any bailout from the IMF. They knew all too well that the planned Troika (European Central Bank, EU Comission and IMF) “bailout” was intended to rescue the European banks, predominately those of Germany, France and Britain, with their high exposure to Greek government bonds, leaving the Greek people in an even direr situation. The head of the IMF, the French politician Christine Lagarde, denied this the existence of this dissent for years. Two years later Greece’s debts were reduced by half, but by then most of the debt lay with the EU and IMF, the banks and other financial institutions having exited the Greek bond market.
There has been no tangible solidarity or compassion shown by EU leaders during the Greek crisis – except with their banks. Today the Troika pertinaciously demand increasingly destructive “reforms” from Greece, but have neglected the two most important: a purging of the corrupt political elite of Greece that was responsible for the crisis and clamping down on the systematic tax evasion of Greece’s oligarchy.
The two parties that have dominated Greek politics since the demise of the dictatorship in 1974 and are responsible for the crisis, New Democracy and PASOK, are still in power, enjoying support from the predominant EU parties, who are no less corrupt than their counterparts in Greece. There has been little progress in pursuing major tax evaders of the past and present. The head of the General Secretariat of Public Revenue responsible for tax compliance comes from PwC, a firm that has recently found itself in the middle of the affair concerning corporate tax dodging in Luxembourg.
Germany does not want change. It is more interested in keeping its Greek Quislings in power. No wonder that in Germany there is currently a campaign by the political elite and their media bullying the Greeks and falsely mobilizing public sentiment against a potential Syriza government. The German government is threatening to throw Greece out of the Eurozone, although such a procedure is not foreseen in the laws regulating the common currency. This is the prerogative of the stronger, claiming that Greece is bound by contract to repay its debts to the EU, but on the other hand not in the least interested in the regulations of the Eurozone contract.
What the Germans seem to have in mind is a financial blitzkrieg against Greece should Syriza win, reducing the land to economic rubble and dust, an example for other potential refractory Euro nations. This has been justified by claiming that Syriza is blackmailing Germany with a default, but then Germany claimed its invasion of Poland in 1939 was also an act of self-defence. Things do not change.
This sort of rhetoric has not issued from other Euro nations. In fact we are hearing nothing with the exception of the French President Francois Hollande, who stated in an interview: “The Greeks are free to choose their own destiny. But, having said that, there are certain engagements that have been made and all those must be of course respected.” This has little in common with Germany’s threats of “awe and destruction”.
Germany’s current policy has little to do with the Euro, but is a reaction of a challenge to their hegemony in Europe. The idea behind the European Union was to extirpate cataclysmic wars within the continent. Now it seems that such practices have returned – using economic means, much like we are seeing with Russia.
Should Syriza win the elections later this month, and a government is formed that wishes to renegotiate the so-called bailout imposed upon the Greek nation, then it is the responsibility of the Eurozone members to negotiate. Should a compromise not be forthcoming and all sides agree that Greece’s exit from the Eurozone is necessary, then it is still the responsibility of the member nations and those of European Union to see that this is done in an orderly and humanitarian fashion. Greece is part of the “European family”, as the union has been labelled in more auspicious times, and has no intention and no reason to leave the European Union, even if it should withdraw from the Euro.
Germany’s threats are certainly not in the spirit of the EU, but reflect its rekindled dreams to dominate the continent, signaling the return of the same brutal nationalism and large nations throwing their weight about that has plagued Europe for centuries and almost led to its destruction in the Second World War.
Admittedly Germany does have a number of serious issues to deal with.
First, any sort of rebellion against Germany’s hegemony in Europe could easily spread. Europeans are increasingly fed up with austerity and German financial – and unsuccessful – dogmatism.
Second, Syriza is a leftist party and that is anathema to a politically reactionary nation like Germany.
Third, should Greece default activating German government guarantees, Germany’s much heralded balanced budget for 2015 could be in jeopardy.
Fourth, the European perception of Germany is increasingly that of a bully dragooning small nations. Furthermore, having to negotiate with Greece will domestically appear to be a sign of weakness and would be grasped upon by the up and coming rightist, anti-EU party “Alternative for Germany”, which is drawing voters from Chancellor Merkel’s Christian Democrats.
There is a further question: Is Germany simply trying to influence the Greek elections with its threats and posturing? Forty years ago as the dictatorships in Greece, Portugal and Spain collapsed; to prevent the success of leftist parties, the German government channelled large amounts of money to parties on the right. To do this, they used the dubious publically financed foundations of the German political parties: the Konrad-Adenauer-Stiftung, Friedrich-Ebert-Stiftung, Hans-Seidel-Stiftung and Friedrich-Naumann-Stiftung. The funds were surreptitiously provided by the Foreign Office (Auswärtiges Amt), packed in suitcases and the couriers from the foundations provided with diplomatic passports. From the foundation offices in the above mentioned nations the suitcases could be inconspicuously given to a member of a sister party of the foundation. These German foundations had closed their offices in Greece many years ago, only to reopen them in 2012. It could well be that suitcases full of cash are once again travelling south from the Foreign Office in Berlin to Athens.
What is especially fortunate for Europe is that this challenge to German hegemony and the corrupt political class of Europe is coming from the Left. To leave this issue to the rising ultra-right and neo-fascist parties would have been calamitous, giving them the reputation as champions of democracy in Europe. A new force seems to be rising in Europe, once again giving a voice to a European perspective of social justice and peace. One can only hope that prosperity will follow – should Germany not instigate a second Götterdämmerung for Europe. You never know with the Germans.