Socialist Worker

Greece: 'bailout' makes crisis worse

Issue No. 2262

Greek workers march during their general strike last month  (Pic: Workers Solidarity)

Greek workers march during their general strike last month (Pic: Workers Solidarity)

European leaders were patting themselves on the back last week over a new deal to handle the economic crisis in the eurozone. Despite the deal, though, the turmoil shows no sign of ending.

Eurozone leaders met to discuss Greece. The country is 300 billion euros in debt, and was the victim of a

110 billion euro “bailout” last year from the European Union (EU), the European Central Bank and the International Monetary Fund (IMF).

This bailout came with strict austerity conditions that have wrecked Greek workers’ lives—and made the crisis worse.

European leaders wanted to ensure that the banks that held Greek debts would receive their payments, and stop any “contagion” spreading to other countries.

But the crisis has since spread to Ireland and Portugal—which have also received bailouts—and threatens bigger countries such as Italy and Spain.

The latest 109 billion euro bailout will be channelled through a strengthened European Financial Stability Facility—the EU’s answer to the IMF.

This fund can now lend directly to banks and buy up debts. French president Nicolas Sarkozy said it could lead to an EU “economic government” .

But the deal has not had the effect they wanted. Credit rating agency Moody’s downgraded Greece’s credit rating even further this week as it believes the likelihood of a Greek default is “virtually 100 percent”.

It also warned that other European countries are facing major problems.


In Greece, where the austerity measures have been pushed through in the face of mass resistance from the working class, few are convinced things will improve.

Costas Pittas, an engineering worker in Athens, said, “The government are hailing the new deal as fantastic but the general attitude of people is that it doesn’t make any difference.”

He explained that people’s lives will still be made worse by austerity. “We will have to pay for the crisis for even longer,” he said.

He added that the anger is reflected as protests continue through the summer, usually a quieter time in Greece.

“Taxi drivers and owners have been striking and blockading roads against the liberalisation of their profession,” he said.

“Local government workers protested at the Athens council meeting on Monday against job losses. Media workers have occupied against sackings at newspapers.”

Students have also held protests, as have anti-racists in solidarity with refugees facing deportation, saying they should not be blamed for the crisis.

The fightback against austerity continues in Greece and across Europe.

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Tue 26 Jul 2011, 18:32 BST
Issue No. 2262
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