Greece: Back to the Future of Austerity and Debtocracy!


The SYRIZA-ANEL made a deal with the creditors, signed in May 2, that was met with a great deal of enthusiasm from the markets. It is an agreement that will increase poverty and over-indebtedness in Greece, and will deal a blow to the country’s sovereign rights.

by Leonidas Vatikiotis & Aris Chatzistefanou

The staff level agreement which will be Eurogroup’s green light for the disbursement of the 7 billion tranche “necessary to meet debt repayments which include 2 bn. euros to private creditors due on July 17, and 3,9 bn. euros to the ECB three days later” (Financial Times, May 12), includes:

  1. Reduction of the tax-free limit from 8.636 euros to 5.681. A measure that will affect the poorest employees and pensioners, since even those who are paid 474 euros per month will be taxed.
  2. Average pension cuts of 9%, which may reach 18%, for pensions over 1000 euros. From these two measures, pensioners will lose 2 out of 12 pensions each year.
  3. Reduction of unemployment benefits (which today are received by merely 12% of the unemployed), poverty, child and natural disaster benefits. Those affected will be the poorest habitants of the country.
  4. Retail shops opening for 32 Sundays. A measure which Finance Minister P. Papadimitriou described as “modernizing” effectively equating modernization with neo-liberal deregulation of the working relations and making clear that SYRIZA has transformed completely. Against the implementation of this measure, the Trade Union and the Confederation of Small and Medium Size Businesses have already announced a strike.
  5. Collective dismissals are made easier by abolishing the requirement of ministerial decisions and vetoes for dismissing more than 5% of the total staff. A system of early warning by the employers will be enough.
  6. A reduction in the numbers of contract workers of the public sector from 49.448 on December 2016 to 49.104 at December 2017 and 48.420 at December 2019. This will result in the further dissolution of the public services.
  7. Privatization of 40% of the lignite units belonging to the Public Power Company and 17% of its shares. The sellout of energy will be the final blow to the public wealth by SYRIZA that broke its pre-electional promises after the sale of 14 airports to the German Fraport, of trains to the Italian Ferrovie and Piraeus port to the Chinese firm Cosco.


The 7 measures above are only a small part of the total 140 measures that the Greek Parliament members have to vote by fast track procedures like it regularly happens since 2010, when the country first entered the memorandum regime. As a result the ministers don’t even have enough time to go read through the memorandum laws that are always voted during the last moment. All in the name of the state of emergency that has already been around for 7 years, as long as the Coup of the Colonels lasted from 1967 to 1974.

However there is a fundamental difference. The measures that will be voted by the Greek Parliament will be applied at 2019-2020. By then another government will be in power, since the service of the current government, which was elected in 2015, ends at 2019. Also, the 3rd economic adjustment program of 86 billion dollars that was signed in August 2015 (by a government ordered to cancel the austerity and tear up the memorandum) ends at September 2018.

Therefore, neither the creditors (EU, IMF) had the jurisdiction to demand such measures, nor the government alliance of SYRIZA and the far right ANEL had the legitimation to impose them. It is unacceptable for a government to tie the next government with its decisions.

The government attempts to prettify the situation using two arguments: The first is the acceleration of the relief of sovereign debt. The government however has already signed the exclusion of a debt write-off, limiting the possible solutions to a new grace period, debt repayment lengthening and lower interest rates. As a result, debt-wise, the IMF appears to be more radical than the Left and the Far Right government.

Greek public debt reached 176% of the GDP after the 2012 restructuring, from 115% in 2009, before the arrival of Troika.

The government’s second argument is about relief measures that will be implemented in case the surplus surpasses 3,7% of the GDP. There will be spending for school meals (just so the kids won’t faint at schools), tax reliefs and so on, from the money gathered beyond the 3,7% of the GDP as a reward.

Until then however extreme poverty that affects 13,3% of the population will reach record levels. Recession will continue to shut out any possibility of unemployment reduction from 23% which is the highest in Europe. Under these conditions, the demand for immediate cessation of payments and unilateral debt write off, returns urgently. The government which has recently been congratulated by Pierre Moscovici for imposing 200 reforms against its people, surpassing any previous government, must use the report of the Debt Truth Committee, which described the public debt as odious and illegal to denounce the loan agreements and proceed to a rupture with the creditors: ECB, EU, IMF.

In this fight the people of Europe stand on our side because they know that more than 90% of the rescue loans return to the creditors. We loan to save Deutsche Bank, BNP, Paribas, ABN AMRO and the Greek zombie banks until they were bought by the vulture fund of Paulson.

Any other compromise policy will perpetuate poverty and the abolition of sovereign rights, as it keeps on happening since 2010.

In Piraeus, Chinese investment brings Chinese labour standards. Ex-employee reveals harrowing conditions at Cosco container terminal in Greece (Prin newspaper)

Mpatsoulis CoscoChinese labour standards in Europe. A daily reality for hundreds of employees, hired by subcontractors/slave traders, forced to work at abysmal security conditions and fired at a moment’s notice, in case they complain about medieval work relations. Dimitris Batsoulis, kicked out for requesting implementation of workplace safety regulations, has now gone to court against his former employer. This is his story

Interview  by Leonidas Vatikiotis 

-What are labour conditions like at Cosco?

When Cosco came to Greece it did things differently than normal employers. It did not hire full-time workers, it signed no collective agreement, it did not train its personnel, it just started doing business. It works as haphazardly as possible. Now, out of 600-700 employees, around 200-250 are working full time, with contracts privately imposed, not collectively negotiated. Their employer is a Cosco subsidiary called SEP in Greeks or PCT (Piraeus Container Terminal). The rest are hired by a complex web of subcontractors, again with privately “negotiated” contracts, very low paid. The money those people receive each month is fixed in advance (it corresponds to 10, 12, sometimes 16 workdays) irrespective of when they are called to work – nightshift, Sundays, anything goes. The main subcontractor, Diakinisi, has hired 4-5 other smaller subcontractors providing personnel, so that between each employee and the company there are 2 or 3 intermediaries. Out of one man’s wages, 2-3 layers of contractors get their cut. If this is not modern day slavery then I don’t know what it is.

Of course unions and collective bargaining are strictly forbidden. Employees receive no training whatsoever, despite the fact that the law granting Cosco rights to invest at the container terminal obliges the company to train employees.

-Theoretically, trade unions are not banned yet.

–       There are no “unionising forbidden” signs but people who speak up are fired and there is an atmosphere of sheer terror. Workers at the port are afraid, they try to salvage their wages at every cost- and the cost is truly high. If a journalist could get in there as employee for a month, or even a week, you’d understand what I mean. Nightclub style bouncers check workers, chatting amongst employees is not allowed, there are no work regulations.

-The law of the jungle?

Exactly. These are 19th century conditions. In Hong Kong, Hutchinson runs a terminal along the same lines and workers there went on strike for 45 days, and gained solidarity from other port workers around the world. Their conditions were slightly improved, but they still work with this subcontractor web that makes it impossible to find out who actually runs the port and who is responsible for these labour conditions. This is kind of what we see in Piraeus.

–       Were you working at the port before Cosco?

–       No, not at all. For 11 years I was running my own earthmoving business, I was doing digging, demolitions and so on. When the economy plummeted, I had to park the machinery and shut down my business. I was unemployed so I started looking for work as a qualified machinery operator -I ‘ve had these qualifications for 17 years now. I found out about a vacancy at Cosco by word of mouth. Then I had an interview with the main Greek subcontractor, Diakinisi.

–       And you immediately tried to form a union?

–       I did not set out with this in mind at all. I just needed work, because unemployment was 25% at the time (now it is higher). So I was forced to sign any work contract put in front of me. In this contract, 3 out of 10 terms were in blatant violation of workers’ rights.

We were made to sign two contracts, one normal full time contract and one saying we will work 16 days a month. They did this so that, if they had to fire us, they’d pay lower severance payment, according to the second contract. I was working very hard, the job was very dangerous and security measures had to be strictly enforced. But every day, we were putting our own lives and our colleagues’ lives in danger. My machine had problems, which I detailed in writing at the end of each shift. The breaks were faulty, the lubrication system was faulty, hydraulics had problems, tires had problems, lights at night had problems. The next day, we’d go back to work and find out nothing had been done about it. Heating and air conditioning at the cabin were broken. When you are doing something this dangerous, you need optimal temperature conditions, so as to work with a clear mind. Before getting to work, we used to talk about these problems, but it was impossible for all 800 of us to go to the management office and discuss these issues. We had to form a committee. Some of us indeed formed a five-member workers committee. As soon as the company found out, we were fired.

–       All five of you were fired?

–       Yes, although I do not know exact numbers. Two of us then went to court against the sub-subcontractor, claiming we were fired because we tried to form a union. We could not directly sue Cosco or the main subcontractor, Diakinisi. Let me also point out that there was no work schedule, working hours were incredible.

–       How did you know when you had to go to work?

–       We didn’t. We were getting SMS messages saying we need to be at work in three hours. Nobody knew next day’s schedule. For nine months, I was never given a work schedule. There was simply none. We didn’t even dare to go visit our parents. We tried to tell our colleagues that this must change, so that we can organize our lives. There were colleagues whose kids were in hospital and could do nothing about it, out of fear that they would be blacklisted.

–       What did labour inspectors say about this?

–       In the nine months I was working there, I didn’t see an inspector once. They were receiving tips – anonymous tips, because if someone spoke to them openly, they’d be immediately put “on ice”. Some people who alerted work inspectors were not called to work for a week. When we were fired, we went to the local labour inspection office in Keratsini and they could not show us our work schedule, although they were supposed to receive a copy every six months.

–       Did you get breaks?

–       No. If someone needed to go to the toilet, they were told to do so in the machine cabin. There were bouncer types walking around without any specific job to do and we wondered what they were doing. There was constant terror. We were constantly reminded that if we complain, we’d be the next to go. Unemployment is very high, so nobody said a word.

-Why did you nevertheless decide to speak up?

–       A machinery operator must be able to move in the cabin and see the container behind him. The machine, together with the container weigh 100 tons. This is a very responsible job. The operator should not be made to wear 10 layers of clothing to keep warm. I had to wear three jackets, because there was no heating. In January 31st 2012, I was working without heating at a temperature of -1 degree Celsius. It was snowing in Piraeus. Back in the summer we had already submitted reports saying heating does not work. After working three hours in these conditions, I could not go on. My hands were numb, my feet were numb, my brain did not work properly and I was constantly putting myself and my colleagues in danger. A 100tonne machine moving in the port at 15km per hour is a great danger. The crane can fall on a ship. I said stop, I need to get down, get warm and get back up again. They told me to go home and I heard nothing from them for a week. No SMS no nothing. Psychological warfare. After a week, they called me back, they had me work for 2-3 days and then I was summarily fired, together with others. That s how I was fired. People still working there live this every day. Workers must not think, this is the new model.

–       When Prime Minister Samaras visited Beijing, he triumphantly announced that the Chinese will buy the rest of the port as well. Is this good for the port, for the workers and for the economy?

–       The Chinese captain, captain Fu says Cosco is very beneficial for the local economy. I have not seen conditions in Perama (a very poor area near the port) improve because of Cosco. As for Samaras’ announcements, I think the blame for what s happening in the port does not lay with Cosco or with foreign investments, it lays with oversight mechanisms that are totally broken. Investors want to come in and make as much money as possible, as soon as possible. Labour inspectors (SEPE) must make daily, or at least weekly controls, they must have a constant presence in the port. Instead of this, they never come, or they come by appointment, while COSCO installs a 3 meter high fence and cameras everywhere. I tried to talk with the Secretary General of SEPE but he couldn’t see me, because he was busy running his campaign as a candidate of the socialist party.

–       How about the port as a big employment opportunity?

(Giorgos Gogos, Secretary General of the port workers union answers this question)

–       Beforehand, the Piraeus container terminal employed 400-500 people. Now it’s 700. No more than 250-300 new jobs- flexible, badly paid and dangerous. And we are not talking about stable employment. If the three of us split a monthly salary amongst us this is not three jobs, it is one job. This must be clear. Health care and insurance funds also lose out because of Cosco. The company does not pay premiums for unhealthy and dangerous employment, as it would be forced to do. Smaller wages means smaller contributions to health care and pension funds.

No taxpayer should be paid under the table. Everything must be taxed and contributions to social security must be paid. When there is no collective representation, employers give out crumbs. They divide and rule, they create an army of spies. That’s why there must be a collective agreement.

At OLP (the part of the port still run by the Piraeus Port Authority) there is a collective agreement and there is a workplace health service that works because we put pressure for it to work. When it is very hot in the summer, labour regulations are enforced. OLP is forcing us to work under difficult conditions too, the port is a very special place. A ship comes in and it needs to offload in three shifts, the client will always try to make it shorter. But when its 38 or 40 degrees outside, then inside the metal hull of the ship temperatures rise to 45 degrees. So our health service comes in with a thermometer and orders everyone to stop for a few hours. Our employer informs the client that there will be a two-three hour delay. But if there is no collective representation, then the difference is obvious. It’s people versus profits, once again.

Translation Eurydice Bersi, @ebersi

Nominal and Real Aims of Austerity Programs: the Greek (extreme) Case

Leonidas Vatikiotis & Petros C. Kosmas (International Conference: Neoliberalism and the Crises of Economic Science, Istanbul May 2011)


One year after the adoption of the Memorandum between the Greek government and the IMF-EU, many official data allows us to check, whether the objectives were implemented for which imposed. The dominant opinion in Greek political circles supports strong cuts, which will in exchange save the Greek economy from relying on the high cost of borrowing on the financial markets. This report examines the detail of the adjustment programme ofGreeceand leads to the opposite conclusion. In particular we examine: Firstly, the reasons invoked to legitimize the society the use of IMF-EU. Secondly, the measures implemented this year. Thirdly, the real causes of the Greek financial crisis. Fourthly, these results were provided in terms of social measures and the conclusions were reached in relation to the real goals of austerity. On this basis we argue that the real challenge was to improve fiscal imbalance, but with a major shift in macroeconomic policy that will allow to increase the profits of capital. Finally, reports in direct workable proposals have been produced that can solve the debt crisis faced byGreeceand the mean improvement in the position of the social majority.

1. Nominal aims

In May 2010 the government ofGreeceagreed with the IMF-EU for a set of economic austerity measures, which is supposed to solve the financial problem inGreece.

The basic outline of the financial problem inGreeceis defined by a combination of high debt and fiscal deficit. Specifically, in 2009 and 2010, Greece’s government debt to GDP ratio was 127% and 143% when the average mean of the 17 countries of the Eurozone was 79% and 85% and the of EU 27 was 74% and 80% of GDP respectively. And the budget deficit in 2009 and 2010 was 15% and 11% of GDP when the corresponding mean for the EU-27 was 7% and 6% of Eurozone’s GDP for both years (Eurostat, 2011).

The action mechanism of EU-IMF inGreeceaccelerated by rising interest rates, which made it unusually expensive to be prohibitive to fund borrowing theGreekRepublicand this in turn by the continuing degradation of the Greek economy from the credit rating agencies.

The resort to IMF- EU and the measures that accompanied the four Memoranda to date have been applied to correct these distortions.

2. Measures that imposed by IMF–EU

  • Outlining the measurements that have been imposed until today in order to confront the crisis of the public debt we observe that they concern:
  • Reductions in wages in the public and private sector by removing working allowances and cropping the 13th and 14th salary.
  • Against insurance law with reduces pensions and promotes the contributory system.
  • Sharp reduction in social expenditure having as a direct consequence the closure of 1056 schools – something unprecedented in the history of the Greek public sector, the dismantling of public health, as shown by the “working on the limits” of historic public hospitals and clinics and the shrinkage of public transport.
  • Dismissal of tens thousands of contracted employees meeting fixed and permanent needs in the broad and narrow public sector by not renewing the contracts.
  • Abolition of collective bargaining agreements and transferring the weight of trading in an increasingly low level: from the collective – in general area, then to the operational, and finally to the individual, where reigns the employing and managing arbitrariness.
  • Abolition of the institution of arbitration.
  • Increase the working hours in the public sector.
  • Reduction of compensation in order to facilitate redundancies.
  • Increased indirect taxation and in particular of the VAT and excise duties at the same time reducing the tax rate from 24% to 20% for business.
  • Facilitating business activities of multinational corporations and limited liability companies through the liberation of closed professions.
  • Sell-off public assets by privatization programmes of 50 billion euros, which were announced by the Troika, when its existence was initially denied by the government ofGreecein a categorical manner.

3. Real causes of Greek sovereign Debt Crisis

The evaluation of the real goals of the austerity programs requires the examination of the actual causes of the Greek budget crisis which are seven in total.

3.1 Measures to tackle Depression

The collapse of Lehman Brothers in September 2008 increased the interbank interest rates, limited bank financing in the economy, reduced the consumer spending as well as the public and the public tax revenues in all EU countries. Furthermore, the government intervention aiming to mitigate the effects of the crisis increased public spending and widened the gap across the EU. This situation is much worse inGreece, where from 2008 until now the banks have absorbed a total of 108 billion (of which 85 billion. were guarantees and 23 billion. were cash or equivalent bonds). Likewise, the 20 most developed countries in the world were confronted with a comparable situation. Consequently, the only times in history that recorded a similar increase in debt to that of 2009 (13%) where in time of war and especially in 1944: 22% and 1919: 14 % (IMF, 2010).

Comprehensively, it is estimated that the current crisis in advanced countries led to output loses of 25% of GDP and a consequent increase in public debt of around 24% of GDP (Laeven andValencia, 2010).

3.2 Addiction of the Greek capital in Direct Subsidies

The rescue of problematic firms in the 80s and the Olympic Games in 2004 -with an initial cost of 9.5 billion and probably a final cost of 20 billion- are the tip of the iceberg of direct aid to enterprises in the form of cash. However, in recent decades the Greek companies, especially the elite, have been steadily supported by billions each year in the form of development incentive through the Public Investment Program. The scandals are fostered by accomplices of the two powerful political parties (PASOK and ND) as well as of the big companies. The latter were imposed by the Memorandum and appear to be concerned about deficits.

3.3 Privatizations

By invoking the rationalization and the reduction of the state, the government revenues lost revenue source. The most popular but not unique example is the case of OTE Telecommunications, which was sold to the German Deutsche Telecom from the government of New Democracy under completely non-transparent procedures and a price equal to the public revenue for a year.

3.4 Equipment for Defense

The amounts spent nationally on armaments gives the impression thatGreeceis a military superpower inEuropeandMediterranean.

For the purpose of illustration, when on average in the EU of the 27 spends 1.6% of GDP on armaments, Greece spends 3,3% (SIPRI, 2011), which is twice the EU average and three times more of what other neighboring countries such as the Mediterranean Europe, spend. Although this equipment is not necessary, it is however enforced by NATO and not by the national defense.

TABLE 1: Total Expenditure for Payment of Debt, in Euro (1991-2011)
























































































































Source: Ministry of Economics, Government Budgets

3.5 Low Taxes on Capital

Greecehas one of the lower reasons for tax revenue to GDP: 32.6% of GDP when the average in the EU of the 27 and the euro area is 37% and inDenmarkthat has the highest ratio of 48%. The low tax revenues are a consequence of the almost symbolic taxation of the capital.

This reflects from the great discrepancy that display the rates of capital taxation inGreececompared to the EU: the rate is 15% inGreecewhile the corresponding tax rates are 27% in the EU (Eurostat, 2010).

3.6 Participation in the Eurozone

The participation of Greece in the European Union in 1981 and in the Eurozone in 2002 initially accelerated the liquidation of capital at the expense of manufacturing, agriculture, livestock and total employment and, of course, of government revenues. Furthermore, the reason for the low rate of exports in total GDP (21%vs.40% for the euro area) should be sought in the adoption of a monetary policy that is not only inappropriate but diametrically opposite to the interests of the Greek economy. Suffice it to say that the Greek economy is required to survive in an environment of appreciation of the «national» currency by 64% within a decade (this how much the euro has appreciated against the dollar since the01/02/2002), while in the past every seven years was devaluated.

The causes of the current crisis in the Eurozone are related to the separation of the Eurozone in periphery and center respectively.  The intensification of conflicts within was a result of depressed wages policy that was followed byGermanyover the last decade (RMF, 2010).

3.7 Servicing Public Debt  

The costs of servicing the public debt between 1991 and 2011 amounted to 513 billion € (Table 1). The redemption of short-term securities or titles only in the last 9 years (2003 – 2011) amounted to 151 billion. Evidently, it is easy to conclude that over the last 20 years we have paid the debt twice. (A clear case of compound interest!)

The destructive role of the public debt on public finances is evident by the fact that tax revenues this year (52.9 billion) is more than enough for the necessary social expenditure, i.e., wages and public pensions, pension funds and financing, costs for Department of Health, Education and Defense (51.6 billion). The public debt will instead absorb interest and amortization of 62 billion. Three times more than the salaries and pensions, and ten times more than the expenses for education will be.

4. Implications to the Society and Real Aims of the Austerity Programmes 

Although it is still early there is considerable evidence of the worsening social problem inGreece, as a result of the austerity policy imposed by the IMF and the EU.

4.1 Explosion Unemployment

Based on recent evidence of the Greek Statistical Service, the official unemployment rate in February 2011 amounted to 15.9% (affecting 787.229 people). Compared with last year this was increased by 30.1% (then hit 605,277 people) [1].

4.2 Elastification in Labour Relations

According to statement by Minister L. Katseli, businesses inGreeceusing the new workplace, in 2010 necessitated the change of contract full-time flexible in a number greater by 55% compared with 2009.

4.3 Decreases in Salaries and Pensions

On the basis of a statement of the Governor of the Bank of Greece, George Provopoulos, 2010, in the first year implementation of the Memorandum wages inGreecefell by 14% and pensions by 11%. Also, the hourly labor costs inGreecein 2010 recorded a record drop of 6.5% when the EU-27 increased by 2% and the 17 euro zone increased by 1.4% (Eurostat, 42/2011).

4.4 Increases in Poverty

Based on data released last year by the Bank of Greece, the poverty rose by one quarter and now it reaches 25.07% of the population. Obviously, workers and the social majority did not benefit from the Memorandum, while the bourgeoisie was benefited by reversing gains of several decades.

Notable gains were recorded by foreign banks, in particular the Franco-German that had the highest exposure in Greek bonds. To corroborate recent evidence showing that while the beginning of the crisis involving the foreign banks in the Greek debt was around 150 billion, now stands at 50 billion. On the other hand European banks were from 115 to 40 million. More specifically, Germans and French had the greatest exposure to the Greek debt by 30 to 8 and 45 to 12 billion euros (BIS,21 April 2010) respectively. As a result of this economic policy, the main creditors ofGreecewill not risk more than a possible cessation of payments that was initiated by the debtors. In this way, the IMF confirmed its role as negotiator and organizer of creditor’s cartel, just as had happened inArgentina(Cibils, Weisbrot and Kar, 2002).

All these measures were not only ineffective but also class-biased as the crisis deepens. Witnesses: Firstly, the increase in public debt of 127% in 2009, when decisions are taken on appeal to 160% of GDP when it is supposed to complete the memorandum. Secondly, the deterioration of the reliability ofGreecewith the explosion of interest in the secondary market and the continuing deterioration of credit rating agencies.

Table 2 below shows the trend of interest rates in the time since the adoption of the Memorandum.

Table 2: Interest Rates in the Secondary Market for 2 years, 5 years, and 10 years – Greek Government Bonds




5 May 2010




5 May 2011




Source: Bloomberg Generic

Thirdly, plans to restructure the debt and new loans will result in a failure ofGreeceto come to market in 2012. In conclusion, the simplicity and the Memorandum have not been applied to overcome the debt crisis, but to change the balance between the forces of labor and capital. In this occasion,Greecedeficits have been the testbed of the economic attack, which unleashed the hawk’s deficits (Polin, 2010). Also, the IMF, as in the case ofArgentinaandSoutheast Asia, proved unable to manage the crisis (Cibils and Vuolo, 2007).

5. An Alternative to the «Chemotherapy» of IMF-EU

In contrast to these measures a condition for overcoming the financial crisis and improve the position of the majority is to implement the following measures:

  • Stop paying the debt with responsibility of the debtor on the basis of emergency (RMF, 2010),
  • Exit from the Eurozone to halt the creation of deficits,
  • Devaluation of the new national currency[2],
  • Nationalisation of banks,
  • Barriers to entry and exit of capital,
  • Production restructuring of the economy.

This is a minimum set of measures on which the Greek society will leave from the position of Ulysses, who spent a decade to return from where it started, and will go in place of Prometheus, who pioneered the effect of helping all humanity.

6. Conclusions

The only thing in reality the packet of measures achieves is an important change in the ownership of the debt, where the national debt ofGreeceis transferred from European bank accounts to labour class. The claim that fiscal austerity during a recession is “economically correct”, in reality is “economically incorrect” and is designed to avoid public criticism. As far as to why, that many dominant circles support today this catastrophic policy, is simple: those circles are concern for the purpose of the capital, less for the interest of the workers and the poor, but rather they identify their interest with those of the Wall Street and the City, and the higher classes. The obvious beneficiary from the ‘rescue packet’ of the Eurozone governments will not be the Greek workers and pensioners who suffer from extreme cuts and resection, but the financial centres.

6. References

Cibils, A., Weisbrot M., and K., Debayani, (2002), ‘Argentinasince Default: The IMF and the Depression’, Center for Economic and Policy Research, Briefing Paper.

Cibils, Alan and R., L., Vuolo, (2007), ‘At Debt’s door: What can we learn from Argentina’s recent Debt Crisis and Restructuring’? Seattle Journal for Social Justice, Vol. 5, Issue 2.

EEAG (2011), Report on the European Economy, GoverningEurope.

Eurostat (2011), Euro Area and EU27 Government Deficit, 60/2011.

Eurostat (2010), Taxation trends in the European Union, Main Results.

Eurostat (2011), Fourth quarter 2010 compared with fourth quarter, 42/2011.

IMF (2010), ‘A Historical Public Debt Database’, S. Ali Abbas, Nazim Belhocine, Asmaa El Ganainy and Mark Horton, WP/10/245,

IMF, (2010), ‘Greece: Staff Report on Request for Stand – By Arrangement’, Country Report, No.10/110.

Laeven, L., and F., Valencia(2010), ‘Resolution of Banking Crisis: The Good, the Bad and the Ugly’, IMF Working Paper, No. 10/146.

Pollin R., (2010), ‘Austerity is not a solution, why the Deficit Hawks are Wrong’, Challenge, November / December 2010.

RMF (2010), ‘The Eurozone between Austerity and Default’, RMF Occasional Report, September 2010.

SIPRI (2011), ‘Stockholm International Peace Research Institute Yearbook, 2011.


[1]           The explosion of unemployment is the most typical failure among many other false predictions of the IMF related to inflation, the depth of the recession, etc. For unemployment in particular the IMF forecasts that this year will fall only to 14.6% (IMF, May 2010).

[2]           The option of leaving the euro and the depreciation in response to tackle the Greek tragedy is not displayed only by radical school of thoughts. It is referred for example from European Economic Advisory Group Report on the European Economy 2011: “The two options (exiting the euro and introducing a devalued drachma, the first and a radical internal depreciation, with Greek prices and wages falling sharply relative to those in the rest of the euro area, the second) impose very large costs and will not work quickly. Both will increase the burden of foreign debt expressed as a share of GDP and have dangerous effects on the balance sheets of many firms and financial institutions. An internal depreciation as large as required can certainly not be achieved without a painful and sustained contraction of the economy and higher unemployment. An external depreciation is likely to be preceded by rumours that can cause a bank run and lead to a currency crisis. There is therefore no alternative that is clearly more palatable than the other in every respect. The choice is between two evils” (EEAG Report, 2011).