Socialist Worker

Capitalist debt is crushing Greece

Issue No. 2200

The Greek economy is caught in the vice of the capitalist system.

The budget deficit – the amount public spending exceeds tax revenues—last year was 13.6 percent of the value of all Greek goods and services. The state debt totals 300 billion euros.

This means it has had to borrow large sums of money. Many speculators are fearful that the government will stop paying and default.

This has increased the interest rate that Greece is forced to borrow money at, intensifying its crisis.

The EU is worried that the Greek illness might also contaminate other countries, and hit their banks.

European banks have a $189 billion exposure to Greek debts, with French banks accounting for $75 billion of that.

German chancellor Angela Merkel has talked tough on the bailout deal. But she’s concerned that any default might hit Germany’s banks, which also hold a high level of Greek debt.

Ordinary people are bearing the brunt, while the rich are getting off scot free. The Greek rich are addicted to tax evasion.

The vast majority of wealthy Greeks declare that they earn less than 30,000 euros a year to avoid tax. It is believed that 20 percent of Greeks earn more than 100,000 euros a year, though less than 1 percent admit they do.

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