Social desperation has led to an increase in the number of suicides while life expectancy has dropped and infant mortality has risen significantly.
So what does the troika have in mind for Greece after the elections? First of all, if Greece against all odds should actually be forced to leave the euro zone this would certainly be accompanied by a massive devaluation of a new drachma which in turn would lead to a further loss of purchasing power and have a dramatic effect on the poorest sections of society. Also, a devalued drachma would attract foreign investors who would be able to engage in a new round of currency speculation and could then use their profits to buy up even more small and medium sized Greek businesses at rock bottom prices. Moreover, a devaluation of the drachma would prolong repaying government debt and lead to an extension of debt servicing over more than a generation.
But what if Greece were allowed to stay a member of the euro zone? Could this go along with an easing of austerity measures? Quite the contrary: In order to repay government debt which in relation to GDP is presently 27 % higher than when austerity started in 2010, the new rulers in Athens would not only have to stick to the path set out by the troika, but would even have to tighten austerity measures, further cutting government spending, laying off more public workers, and increasing the exploitation of labor in order to improve the economy’s ‘competitiveness’.
However, as all these measures would very certainly not suffice to significantly lower Greek government debt, one should be prepared for even sharper moves. It is worthwhile taking a look at the troika’s intervention in Cyprus where the bail-out of banks (saving banks with taxpayers’ money) was partly replaced by a bail-in, i.e. forcing small investors and savers to bear the burden of repaying government debt. Also, one should look at the IMF’s publication “Taxing Times” published in October 2013, which proposes a 10 % tax on all private households in order to fill the holes in state budgets. One should definitely expect the troika to enforce measures like these on any future government in Athens.
But what if Syriza wins the elections on 25 January 2015? Would they be able to withstand the troika’s demands and lead Greece out of its crisis? Well, let’s take a look at their program: On the one hand they are promising Greek voters to put an end to austerity, but on the other they are announcing that they will keep cooperating with the EU. This is, to say the least, a highly contradictory strategy of which one thing can be said for sure: That it will meet with the troika’s fiercest resistance.
So far Syriza’s leaders and a lot of their followers seem oblivious to the fact that the troika – the executive organ of European and American finance capital and the major international driving force of global financial markets – is much more powerful than any single government in the world. If Syriza does come to power and actually starts cutting back on austerity measures, one can be sure that the financial markets will immediately react, and this reaction will resemble an earthquake. They will bring down the Greek economy within days and force Syriza to comply with the demands of big international financial institutions or resign. This in turn will lead to factional struggles within Syriza and also bring about to a massive radicalization of disappointed voters who will demand that Syriza stick to every one of its promises.
Actually, it is this development that Germany’s government, the EU and the IMF fear most: They are deadly afraid that once Syriza gets tangled up in its contradictory policies, the working people of Greece could insist on their demands, take to the streets in huge numbers and spark off protests and demonstrations in other European countries which could easily assume dimensions not seen on the continent since World War II.
Ernst Wolff is a freelance journalist and the author of the book “Pillaging the World. The History and Politics of the IMF”, published by Tectum Verlag, Germany.