Greece Gyrates

Greece is now buying time as it gyrates on its debt-axis. The Standard & Poor’s have pushed Greece to the lowest level in the world, lower than Ecuador, Jamaica, Pakistan and Grenada. And, the Greek people are paying prices as the finance oligarchy is putting the burden of the crisis on the working people, and the bankers are preparing to have bigger chunks of public properties. The fear is that a formal default by Greece would widen and deepen the financial crisis.

Citing Standard & Poor’s, a Reuters report informs: Greece is now the lowest-rated country in the world. “The cost of insuring Greek debt is now almost twice as much as the price of insuring Pakistani bonds.” The move is the latest blow for the country. Ratings of four Greek banks – National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, and Piraeus Bank – will probably be downgraded also. The capitalist European country with a “socialist” government was downgraded by the rating agency on June 13.

Simultaneously, there was a warning: “Any attempt to restructure the country’s debt would be considered a default.” A Greek default could trigger a widespread meltdown having dire consequences in the world banking system. The lower rating has put a massive blow on the government.

The Greek government was not happy with the latest rating. It said, the downgraded rating ignored its efforts to secure funding. The Greek Ministry of Finance said, “The decision ignores the intense consultations taking place … between the same institutions and the IMF aimed at designing a viable solution …” The ministry expressed its willingness, in the name of “all Greeks”, to remain within the euro zone. France’s Credit Agricole that owns the Greek bank Emporiki, and some other banks have stood in favor of rolling over their holdings of Greek debt. Germany’s banking association, a few days ago, backed the idea of private creditors participating in the rescue. A finance-circus is going on.

In this bankers’ game, the finance players are not unanimous on ways to deal the Greek problem. Many of the lenders are the French, German and other banks. Talks between the EU, eurozone countries and the IMF over a second bailout for Greece are facing problems with Germany’s preference of involving private investors. The positions expose competitions. The ECB and the French banks are among the worst exposed to a Greek debt restructuring. The ECB, IMF and EC are demanding control over the Greece economy: to be in charge of the privatization program that will sell out public properties and give the money to the banks.

To ensure continued funding, the Greek government is pushing cruel austerity measures with plans to sell stakes in a number of domestic corporations including the telecom firm OTE, state-owned Postbank and the ports of Athens and Thessaloniki, public pay cuts, civil service redundancy, regressive tax hike, etc. It is part of the “socialists’” privatization program. About 150,000 workers would be thrown out of jobs, and only one worker would be hired for every 10 retirements in an economy, where unemployment is 16% of the workforce. Among the 15-24 year age group, the rate is 42%.

New austerity plans in the shrinking economy with annual rate of 5.5% have sparked 20 days of protests in Athens. About 80,000 protestors have set up a tent city in an Athens square. The workers at state-owned utility PPC announced strikes to oppose the privatization of the company. Demonstrators including workers and students shouted in front of parliament: “Thieves, thieves, thieves”. Polls show that a large number of Greeks are against the policies. These are challenges to the forces of finance oligarchy. General strike is being planned by the Greek citizens.