Greeks vote No to austerity; Creditors threaten to pull the plug

After Greek voters on July 5 overwhelmingly voted No to harsher austerity measures demanded by their foreign creditors, European trade unions urged European leaders to reach a “sensible compromise” with the Greek government in order to end the current crisis in Greece.

The No vote came after Greek creditors on June 25 issued an ultimatum that Greece accept more austerity measures or be denied new loans needed to deal with the country’s current crisis.

After the No vote, Greece submitted a new loan request that Greek Prime Minister Alexis Tsipras told the European Parliament addresses some of the objections raised by Greece’s creditors and provides a path toward reaching a “viable agreement.”

Whether European leaders and Greece’s creditors are willing to reach a compromise agreement remains highly problematic.

They said that they will make a decision on the Greek proposal on Sunday (July 11) night.

Since January when Greek voters voted in a new government led by Syriza, or the Coalition of the Radical Left, Greeks have been trying to renegotiate the terms of loans made to the country in 2010 after a financial crisis caused their economy to implode.

In return for the loans, the European Commission, the European Central Bank, and the International Monetary Fund demanded that the country impose austerity measures that reduced social spending on health and human services, cut pensions, privatized government resources, and forced the government to reduce other services.

The result has been a disaster. Five years after the austerity measures were implemented the unemployment rate remains above 25 percent, 40 percent of Greece’s children live in poverty, people’s access to health care has been curtailed, spending on education has been reduced, and the promises of the renewal that austerity was supposed to bring have proved to be empty.

To make matters worse, much of the money from the loans has been used to service debt from previous loans.

“The money that was given to Greece never went to the people,” said Tsipras in his speech to the European Parliament. “The money was given to save Greek and European banks.”

European leaders and Greek creditors, however, have insisted that in return for any new loans, Greeks must double down on the failed austerity measures.

When creditors issued their June 25 ultimatum, The Greek government called for a referendum on whether to accept the creditors’ demands.

Greek voters voted No by a margin of 61 percent to 39 percent.

The No vote, said former Greek Finance Minister Yanis Varoufakis, restored dignity to the people of Greece.

The No vote was also “a loud yes to the vision of a Eurozone offering the prospect of social justice and shared prosperity for all Europeans,” writes Varoufakis on his blog.

The European Trade Union Confederation, whose members represent 60 million European workers, urged European leaders to respect the No vote.

“Greek people have voted against austerity, unemployment, and poverty that made Greek debt unsustainable.  They have not voted against the EU or against the Euro,” reads a letter from the confederation addressed to European leaders.

“EU leaders have now an unavoidable responsibility to find a sensible compromise,” continues the letter.

But so far the EU leaders including the bankers who lead the European Central Bank have shown no inclination to compromise.

Among the creditors, Germany has been the most intransigent about insisting on more austerity measures as a condition of debt relief.

Germany’s intransigence is ironic. In 1953, Germany was suffering from an unsustainable national debt resulting from its aggression that started World War II.

Its debt burden impoverished ordinary Germans trying to recover from the aftermath of the war and made an economic recovery unattainable.

Germany’s creditors recognized the problems created by unsustainable debt and agreed to forgive 50 percent of the German’s debt obligation.

The debt relief allowed Germany the breathing space needed to rebuild its economy, which became the largest in Europe.

One of the features that made the German economic recovery possible was the fact that the government created a strong system of social welfare and insurance and implemented labor laws that protected worker rights.

Today Germany is demanding that Greece slash its social spending and jettison laws that protect worker rights.

The Greeks on the other hand are asking for relief not dissimilar to the relief that creditors offered Germany in 1953.

“The splendid No vote (must be) invested immediately into a Yes (for) a proper resolution,” writes Varoufakis. “To an agreement that involves debt restructuring, less austerity, redistribution in favor of the needy, and real reforms.”

SYRIZA keeps anti-austerity promise by rehiring civil servants

The Greek Parliament on May 6 voted to reinstate nearly 4,000 civil servants laid off two years ago as part of the austerity measures imposed on Greece by the nation’s creditors.

SYRIZA, the leftist party that won the Greek elections in January on an anti-austerity platform and now leads the government, promised after it was elected that it would rehire those civil servants who had been laid off in violation of the country’s constitution.

Those who will be rehired include municipal police officers, public school janitors, as well as other civil servants.

The new law also reestablishes the country’s public broadcasting network and calls for the rehiring of its employees who were laid off.

Among those who will be returning to work are 32 women custodial workers who until two years worked for the Ministry of Finance.

After being laid off, the women, who became known as “the cleaning ladies,” set up a protest camp near the Ministry’s offices and vowed to maintain the camp until they were rehired.

The SYRIZA-led government said that more re-hirings and other anti-austerity measures will follow.

“This is not our last word, it’s the first step of (administrative) reforms we’re going to make that won’t be neoliberal but will have a social aspect,” said Giorgos Katrougalos, the deputy minister for administrative reform to the Financial Times.

After learning that their jobs would be restored, the cleaning ladies held a celebration at their protest camp.

“I’m very, very happy (to get) my job back,” said Irene Chantzi to the BBC at the protest camp after learning the news.

Chantzi and the other cleaning ladies were joined by some cabinet members who belong to SYRIZA, including Katrougalos, Nadia Valavani, deputy finance minister, and Nikos Voutsis, interior minister.

The cleaning ladies’ protest camp became a symbol of Greek outrage at the austerity programs imposed on the country.

Last December the cleaning ladies gained wider fame when they traveled to Strasbourg, France and confronted the European Commission about the hardships that they and their fellow countrymen had endured as part of the austerity regime demanded by banks and other Greek creditors.

Greek President Alex Tsipras congratulated the cleaning ladies on their victory and said that they had played an important role in making Europe aware of the hardships caused by the austerity measures.

“Even the Chancellor (Germany’s Chancellor Angela Merkel), in a meeting that we had and without me bringing it up, referred to how unfair what the previous government did to you was,” said Tsipras to the group. “Your fight was known abroad because it was a fair fight.”

The current Minister of Finance, Yanis Varoufakis also expressed support for the cleaning ladies and said that when the SYRIZA-led government speaks of reform it means change that will help people like the cleaning ladies not change that satisfies the desires of capital.

“We remind (creditors) that our government has a different perception of what constitutes a reform,” Mr Varoufakis said.to the Wall Street Journal.

Greece has been in negotiations with other European countries to reach an agreement on changes that Greece must make in order to receive €7.2 billion in loans that Greece needs to stabilize its economy, which crashed in 2010 when creditors demanded that their loans be repaid immediately.

The troika is demanding changes to the economy that will weaken unions, privatize more government services and resources, reduce pensions, and give the demands of creditors priority over the needs of the people.

Greece in return is demanding that it be allowed to carry out its anti-austerity proposals that were emphatically endorsed by the Greek public when in January it elected SYRIZA to lead the country.

Varoufakis and Tsipras have expressed confidence that the two sides can find some common ground that will make it possible for Greece to receive the €7.2 billion.

On May 12, Greece made a €750 million loan repayment to its creditors that the government sees as a good faith gesture that will help it secure the money it needs.

On May 11, Varoufakis met in Brussels with other European finance ministers in hopes of sealing a deal.

No agreement was reached, but Varoufakis said that some progress was made thanks to efforts by the Greek government.

“In recent weeks there has been considerable convergence, primarily due to our government’s great efforts and major concessions during the Brussels Group negotiations,” said Varoufakis at a media briefing. “Today’s Eurogroup meeting has acknowledged the strides we have made, and was conducted in a thoroughly positive atmosphere.”

Union leaders urge support for democracy in Greece and an end to austerity measures

European labor leaders are urging European leaders to recognize that the election of the new Greek government in January was a popular rejection of the austerity measures imposed on Greece by its lenders and to give Greece some breathing space as the country’s newly elected government led by Syriza, the Coalition of the Radical Left, tries to carry out its popular mandate to end the austerity measures that have shattered the Greek economy and caused widespread misery.

“The people of Greece have taken a democratic decision that five years of austerity, of hardship and of pain have failed, and they have chosen a new path,” said Oliver Roethig, a regional secretary for UNI Global Union, an international federation of 900 unions representing 20 million workers in the skills and services industries. . . . “Greece must be given time and space to obtain the financial means to fairly negotiate its debt. A program bridge until June this year is the best pathway to achieving this.”

“The new Greek Government must be given time to put in place new policies,” said Bernadette Ségol, general secretary of the European Trade Union Confederation. “It is vital for Europe’s democracy that the Greek people’s clearly expressed wish for an end to austerity is respected.”

Greece in 2010 was forced to implement austerity measures in return for €240 billion in loans to deal with a financial crisis that began when foreign lenders started calling in loans owed by Greek investors.

The austerity measures included a reduction of public spending, lower pensions, cutbacks in public health and health care, and new labor laws that weakened unions and collective bargaining.

These measures were supposed to improve the Greek economy, but since 2010 the Greek gross domestic product has shrunk by 25 percent, the unemployment rate increased to 25 percent (50 percent among the youth), national income is down 21 percent, health and human services have been drastically reduced, and one-third of the population lives in poverty.

Hundreds of thousands of Greek workers have lost their jobs, homes, and access to health care.

Much of the€240 billion that was lent to Greece has been used to pay foreign lenders.

The Syriza-led Greek government wants to restructure the loans so that it can use some of the money being siphoned off to foreign banks to restore basic health and human services and make public investments that can revive the Greek economy.

Greece’s lenders appear to be willing to offer some debt relief, but they are demanding that Greece adhere to the austerity measures imposed by the European Union, the European Central Bank, and the World Bank, or the troika as they have come to be known, as a condition for receiving the loans.

On February 16, European finance ministers demanded that Greece submit by February 20 a proposal for extending the loans that come due on February 28 and that the proposal must pledge that the Greek government will continue to enforce the troika’s austerity measures.

Greece’s Finance Minister Yanis Varoufakis said that Greece would not accept such an ultimatum. The new Greek government, said Varoufakis, has drawn a red line that will not be crossed. That red line prevents Greece from returning to the austerity policies of the troika and the old government.

On February 18, Greek Prime Minister Alex Tsipras in a speech to Parliament said that Greece would submit a proposal for extending the loans but do so on its own terms.

Tsipras in the same speech pledged to “end the medieval regulation of the labor market created by the troika to serve the interests of the oligarchs.”

Those regulations have crippled unions and eliminated collective bargaining.

Tsipras has said that strong unions and real collective bargaining are essential to building a prosperous and sustainable economy that can reverse the effects of austerity.

While European leaders continue to pressure Greece to maintain the troika-imposed austerity measures, unions throughout Europe have been expressing support for the Greek government’s stance against austerity.

At a February 15 Solidarity with Greece rally attended by more than 3,000 people in London, Billy Hayes speaking for the British Trades Union Council (TUC) said that, “The TUC both in this country and internationally, has said this: the international financial institutions and European authorities need to respect the voice of the Greek people.”

In Germany where national leaders have taken the hardest line against Greece, union leaders and others have signed a declaration of solidarity with the new Greek government authored by Riner Hoffmann, president of the German Trade Union Federation (DBG, its German acronym).

“Serious negotiations with the new Greek government must get under way, without any attempts at blackmail, in order to open up economic and social prospects for the country beyond the failed austerity policy,” reads Hoffmann’s declaration.

“Anyone who now demands that the country simply continue along the previous, so-called ‘path to reform’ is in fact denying the Greek people the right to a democratically legitimized change of policy in their country,” continues Hoffmann.

In his statement, Hoffmann called for an end to all European austerity policies that have led to anemic economic growth since the Great Recession of 2008.

“The European project will not be furthered by austerity dictates but only by a bottom-up democratic initiative in favor of economic regeneration and greater social justice,” said Hoffmann. “This initiative must be supported now in the interests of the Greek people. At the same time, it will help to kick-start the process of policy change across Europe as a whole. The political upheaval in Greece must be turned into an opportunity to establish a democratic and social Europe!”

Troika wants more austerity; Greek workers honor general strike; two austerity measures ruled illegal

A committee of the European Council ruled that two Greek austerity measures aimed at curtailing labor rights are illegal. Meanwhile the European Union, the International Monetary Fund, and the European Central Bank, otherwise known as the troika, demanded that the Greek government take further steps to curtail labor rights.

The troika made its demands when its representatives met with the Greek finance minister in Brussels this week to discuss the terms of $17.7 billion loan that the Greek government is seeking to prevent default on loans that are coming due in November.

Among other things, the troika is demanding that the Greek government slash the severance pay that private sector workers receive when they are dismissed from a job, eliminate automatic cost of living raises that private sector workers receive once every three years, and fire 15,000 public sector workers.

The Greek government has already reduced pensions, frozen pay for public sector workers, substantially reduced social spending on services like education, health care, and social insurance. These and other austerity measures have caused misery throughout the country, whose unemployment rate is nearly 24 percent.

While the Greek finance minister was meeting with representatives of the troika, Greek workers on October 18 staged a general strike to protest the government’s willingness to sacrifice the short- and long-term interests of Greek working people to the desires of Europe’s financial elite, which sees the Greek economic crisis as an opportunity to eliminate rights and protections that Greek workers won through hard fought struggle over many years.

“Agreeing to catastrophic measures means driving society to despair and the consequences as well as the protests will then be indefinite,” said Yannis Panagopoulos, leader of GSEE to Reuters.

GSEE, a confederation of private sector unions, along with ADEDY, the confederation of public sector workers, organized  Thursday’s general strike.

The misery brought on by the austerity measures and the demands by the troika for more cuts has created a popular backlash against the government.

A recent poll shows that if an election were held today, the leftist Syriza party, the main opposition to the Greek government would win more than 30.5 percent of the vote, more than three percentage points higher than the 26.9 percent it won during elections last June.

New Democracy, the right wing party that leads the current coalition government had the support of only 27 percent of the people polled.

The fascist Golden Dawn, which opposes the austerity measures but also assaults immigrants and blames them for the economic crisis, increased its support to 14 percent among those polled.

Members of Syriza joined the general strike on Thursday. Speaking about the Greek government, Alex Tsipras, Syriza’s leader told  Reuters as he marched with general strikers in the streets of Athens, “Their time is running out. People are taking matters into their own hands.”

About 70,000 people marched through Athens, and commerce and transportation throughout Greece either ground to a halt or slowed noticeably. Flights were cancelled, public transportation was disrupted, and hospitals, schools and shops shut down.

The general strike and the possibility of more general strikes appears to be shaking the resolve of the government. Members of PASOK and Democratic Left, two minority parties that are part of the coalition government led by New Democracy, said that they wouldn’t accept the new changes to Greek labor laws sought by the troika.

“Further interventions on labor issues don’t help productivity, competitiveness or employment,” said Evangelo Venizelos, leader to PASOK on Greek television. “We must look elsewhere now and the (troika’s) insistence on this is wrong.”

While the troika seeks to curtail more labor rights, European Committee on Social Rights, a standing committee of the European Council, ruled that two austerity measures passed by the Greek government are illegal.

One of the austerity measures lengthens the probationary period when a worker can be fired without notice; the other reduces the minimum wage for workers 25 years old and younger to two-thirds of the minimum wage for those older than 25.

The Committee on Social Rights  serves only in an advisory role and has no power to enforce its decisions, but it is possible that the committee’s ruling could bolster legal action that Greek unions are taking to overturn some of anti-labor austerity measures that the government has implemented at the behest of the troika.

A statement issued by the committee about its ruling said that budgetary readjustments necessitated by the global economic crisis should not lead to an erosion of workers’ rights enshrined in the European Social Charter.

Spaniards, Greeks resist government austerity programs

Anti-austerity protests ignited again this week in Spain and Greece as the governments of the two countries prepared to implement new austerity measures.

In Spain thousands of people on September 25 surrounded the country’s Congress in Madrid carrying signs reading, “NO” and demanding that the government, which has imposed a series of austerity measures that raised the unemployment rate to 25 percent and increased the poverty rate to 22 percent, resign.

In Greece, about half of the Greek workforce honored a general strike called by the country’s two labor confederations shutting down much of the country while 50,000 people marched in Athens to demand an end to the government austerity program that has raised the nation’s unemployment rate to 25 percent and sent the Greek economy into an endless convulsion of economic contraction.

The Spanish demonstration was organized by some members of the M15 Indignado movement, a social justice movement that inspired the Occupy movement in the US.

The Spanish government tried to discredit the demonstration by describing it as an attempt to incite a coup. According to the government, the protestors planned to occupy the building where the Congress meets, a crime under Spanish law.

The protestors made it clear before the demonstration that it had no intention of occupying Congress, saying that it only wanted to surround the building to show that people had lost faith in the government and wanted it to resign so that new elections can be called.

Protestors accused police of infiltrating their meetings prior to the demonstrations and spying on them, a charge that the government does not deny.

As the protestors gathered to press their demands for an end to austerity measures, they were greeted by about 1,000 police officers including a handful of snipers stationed at high points near the demonstrators.

Video from Democracy Now shows the police charging the demonstrators, wielding riot control clubs, and making arrests as the demonstrators fall back, then move forward as the police give ground.

The battle between the police and demonstrators continued throughout the day and into the night. Police fired rubber bullets and flash-bang grenades. Demonstrators threw stones and other objects at hand.

Thirty-eight demonstrators were arrested and charged with crimes against the nation. They will be tried in a court that tries people for such serious crimes as terrorism.

On Thursday, the Spanish Prime Minister Mariano Rajoy announced a new budget that raises the value added (sales) tax rate from 18 percent to 21 percent and cuts spending on health, education, and other services by 8.9 percent.

According to Maria Carrion speaking to Democracy Now, these new cuts come on top of cuts to education and health that total 27 billion euros.

The government’s new round of austerity measures are aimed at winning loans from the European Union that will be used to bail out failed banks whose reckless lending led to the economic crisis that has caused two recessions since 2008. An estimate by an independent auditor found that the bank bailout could cost 60 billion euros.

While the new Spanish budget reduces education and health funding, it is more than 5 percent higher than last year’s budget. The budget increase will be used to pay interest on bonds held by Spanish banks and foreign creditors.

“Since the beginning of the crisis, we have protested, but the government has played deaf,” said Feli Velazquez, a pensioner from Madrid to USA Today at the September 25 rally. The government has not listened to us; it is serving the markets. If we don’t [protest] we will lose our public health care and public education.”

In Greece, the people have been equally hard hit by austerity measures, and the Greek government wants to impose more.

The government has put together a budget that cuts government spending by 14.6 billion euros. According to the Greek Reporter, the cuts are “aimed primarily at workers, pensioners and the poor.”

The Greek labor movement responded to the proposed cuts by calling a one-day general strike on September 26.

GSEE and ADEDY, the two labor confederations that called the strike, issued a joint statement condemning the government and the European Central Bank, the International Monetary Fund, and the World Bank, known as the “Troika”:

We reject the new austerity round comprising fresh deep cuts in wages and pensions, welfare slashes, tax hikes, thousands of public sector layoffs, and express privatizations. We reject the pressure exerted by the Troika to further destroy labor and its institutions:

·         a leaked ‘confidential’ Troika letter ordains the government to further reduce the minimum wage­ – slashed only last February to sub-subsistence levels – and establish ‘a single-rate statutory minimum wage on a permanent basis legislated by the government;’ and

·         the Troika dictates include a six-day work week, longer working hours with an 11-hour minimum rest period for five days’ pay, a yet shorter notice period and less severance pay. The retirement age is to be raised to 67.

Like the demonstrations in Madrid, the government tried to break up the demonstration in Athens with a show of police force.

Police fired rubber bullets and flash-bang grenades at demonstrators, some of whom fought back with rocks and Molotov cocktails.

While the police broke up this demonstration, the unions promised to continue the fight against austerity. “With this strike we are sending a strong message to the government and the Troika that the measures will not pass even if voted in Parliament, because the government’s days are numbered,” said Yiorgos Harisis, a member of ADEDY, the confederation of public sector unions.