Not that this will seep into, filter thru the noise, it is simply posted to remind anyone interested what the facts are:
Causes of the Crisis and the Austerity Response
Rather than locating the causes of the crisis within Greece itself, Laskos and Tsakalotos identify problems in the global economy in general, and the unevenness within the European Union (EU) in particular. The role of Germany and its export-led growth strategy is clearly at the heart of the problem. “
Germany depends quite heavily on demand generated within the rest of the European Union,” the authors point out. “In 2007, when the trade account was 8.15 per cent of GDP, some 4.44 per cent of GDP (i.e. 63.4 per cent of the trade account surplus) originated in Germany’s surplus arising from its export of goods to other EU countries” (p. 86). Importantly, this not because Germany’s production was based on higher levels of productivity based on new technology and working practices. “In Greece productivity increases actually outstripped those in Germany, especially in the later period. Rather, it is the German restrictive wages policy after 2000 that made it almost impossible for the periphery to compete” (p. 83).
When Greece faced bankruptcy in 2010 and 2012, bailout packages were provided, but they came at the cost of permanent austerity imposed by the Troika consisting of the European Central Bank, the Commission and IMF. As the authors make clear, austerity has not solved the economic crisis. Instead, a vicious circle of austerity-recession-more austerity commenced, undermining further Greece’s productive capacities. “Industrial production (manufacturing, mining, electricity) fell by 23.3 per cent between October 2008 and October 2012, widening the gap between Greece and its EU partners” (p. 104). Moreover, “between 2010 and 2012 almost 60,000 enterprises closed down each year” (p. 106). If economic recovery was not achieved, why was austerity continued? What was the real purpose behind austerity?
Laskos and Tsakalotos convincingly demonstrate that austerity has ultimately been a class project. It was used as opportunity by capital to strengthen its position vis-à-vis labour. It was used “as opportunity to finish the neoliberal modernizing project in terms of reducing wages and pensions, dismantling labour protection, and undertaking an even more radical program of privatization” (p. 103). The external role by the IMF, in co-operation with local elites, is crucial. “By the time of the second austerity programme, the IMF was making it clear that Greece should consider its competitors to include countries such as Bulgaria, and that consequently wage levels in the private sector still had some way to fall” (p. 111). An already highly unequal society was pushed into further inequality. “The adjustment programmes have raised inequality and poverty to new heights” (p. 131).
The Neoliberal Restructuring of Greece. Causes of the Crisis and the Austerity Response. | Global Research - Centre for Research on Globalization
