Socialist Worker

The Greek bailout sums don't add up

by Panos Garganas
Issue No. 2292

The second Greek bailout is in trouble before it even starts to be implemented. The idea that the European Union (EU) and the International Monetary Fund (IMF) will “save” Greece despite the massive opposition of the Greek people themselves is just not on.

One reason for this is the sheer economic irrationality of the bailout programme.

The “troika”—the European Central Bank (ECB), the EU and the IMF—carried out a study of the Greek debt problem.

It found that the target of reducing debt to

120 percent of GDP by 2020 will only be achieved if economic growth bounces back to 3 percent every year after 2013.

There is no ground for such assumptions. In 2010 the troika predicted that Greece’s problems would be over by 2012.

It also said Greece would be able to return to the international financial markets for its borrowing needs. Instead the recession deteriorated.

A return to 3 percent growth is unrealistic.

The latest European Commission figures show that every member state except Poland is set to miss that—with Greece at the bottom of the list.

An alternative scenario of 2 percent growth puts the level of Greek debt at 160 percent of GDP in 2020. That’s hardly a viable solution after ten years of horrific sacrifices.

And it’s not just the economics of the plan that do not add up. It is the politics too.

In October last year George Papandreou’s government collapsed after a 48-hour general strike and mass demonstrations.


EU politicians thought that a new coalition government might stabilise Greece. So they imposed Lucas Papademos, a former deputy governor of the ECB, as prime minister.

Less than four months later Papademos is faced with exactly the same revolt that toppled Papandreou.

We had three general strikes on 7, 10 and 11 February followed by huge demonstrations on 12 February.

The difference this time is that the troika has discredited all the political forces that support its plans for Greece.

The New Labour-type Pasok party won the 2009 election with 42 percent of the vote. Some opinion polls say it may now be down to single digit figures.

The conservative New Democracy party that did a U-turn to support the second bailout package of austerity measures has split. Some of its leading figures have announced a new right wing party opposed to the troika.

And the extreme right Laos is in chaos. It withdrew from the government—but two of its ministers in the cabinet have split to join New Democracy.

This situation led Germany’s finance minister, Wolfgang Schauble, to suggest that elections in Greece should be postponed.


In Athens this statement only helped to further inflame anger.

Workers rightly feel that the troika and its Greek friends want to loot not only our wages, pensions and jobs but also our political freedom.

When the IMF came to Greece in 2010, a Financial Times article warned that it may get bogged down as the US did in Vietnam.

That is starting to feel true.

Workers’ resistance may not yet have kicked out the troika. But there is certainly a guerilla war of strikes and occupations against the vicious cuts of the neverending “bailout”.

The workers of Fiat had a chant during Italy’s Hot Autumn of 1969 that went, “Agnelli [the Fiat boss], you have Vietnam in your factories.”

Many workers in Greece are saying the same thing now.

They include steel strikers in their fourth month of occupation in Attica, media workers in Eleftherotypia producing their own paper and striking hospital workers.

They need all the solidarity they can get.

Panos Garganas is editor of Workers Solidarity, Socialist Worker’s sister paper in Greece

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Article information

Tue 28 Feb 2012, 18:49 GMT
Issue No. 2292
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