Socialist Worker

New bailout is blood transfusion for rich

Issue No. 2201

The European Union (EU) and IMF are ready to hand another $1 trillion to the bankers while demanding an intensification of the assault on Greek workers.

The “bailout” announced on Monday does not mean money for Greek people. It is designed to stave off global financial collapse and to protect the assets of banks that have lent to Greece and other struggling countries.

US president Barack Obama had contacted German chancellor Angela Merkel and French president Nicolas Sarkozy to call for “resolute action to build confidence in the markets”.

The New York Times feared that “the EU’s sovereign debt crisis might lead to the type of systemic collapse that followed the fall of Lehman Brothers”.

So, in a replay of 2008, European leaders have pledged hundreds of billions of dollars of public money to guarantee that the loans taken out by Greece and other governments will be repaid.

At a time when every government bays for cuts, this shows that there are still unlimited funds for the bankers.

Every cent of the $1 trillion funds comes with conditions. These impose wage cuts, cataclysmic reductions in public services, up to 14 years increase in the age of retirement and more.

That’s why there is resistance in Greece, and why it is crucial for the whole continent.

The Spanish and Portuguese governments announced this week that they are speeding up the implementation of their austerity packages in an attempt to ensure that they are not the next target for financial speculators.

But as the cuts spread, so does the potential for a fightback. Romanian workers who are already feeling the whip of the IMF, are discussing mass strikes.

In a bitter foretaste of what Greeks can expect, Romanian president Traian Basescu said this week that public sector wages will be cut 25 percent from June, and pensions and jobless benefits would fall 15 percent.

The government of Luxembourg, one of Europe’s wealthiest countries, nearly collapsed recently over a cuts plan.

Belgium’s government, painfully stitched together over months, fell apart recently.

Nor is it clear that $1 trillion will be enough. Tuesday morning’s print edition of the Financial Times announced, “Markets surge after EU unveils rescue plan”.

By 8.20am on the same day the paper’s web update was noting, “Monday’s dramatic rally appeared to have petered out, as Asian stock markets failed to take on the baton from Monday’s surge in Europe and the euro faltered.”

The total borrowing needs of eurozone countries exceeds $1,200 billion this year alone. Economic growth is stagnant.

The rich will continue to demand further blood transfusions to keep their faltering heart beating. And the blood is coming from us.

Everywhere the battle is on to see who pays the price for the repeated bailouts. That’s the real issue after the election here, just as it is in Greece.


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What We Think
Tue 11 May 2010, 17:13 BST
Issue No. 2201
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