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.
