Greek government approves brutal austerity measures in proposal to EU

By Alex Lantier
July 10, 2015
World Socialist Web Site

 

Greece’s Syriza-led government agreed to a massive new €13 billion (US$14.34 billion) package of austerity measures yesterday evening, less than a week after Sunday’s landslide “no” vote in a referendum on European Union (EU) austerity.

The proposal would be the deepest package of cuts since the EU austerity drive began in Greece in late 2009. It goes well beyond the proposed €8 to 9 billion in cuts initially demanded by the EU in talks with Syriza.

The 13-page proposal was submitted to the EU, International Monetary Fund (IMF) and European Central Bank (ECB) before the midnight deadline previously set by the institutions. In exchange for cuts, the Greek government is reportedly asking for a €53.5 billion ($59.2 billion) loan to the Greek state and some form of debt restructuring, allowing it to avoid state bankruptcy and remain in the euro currency area.

The austerity measures reportedly include sharp increases in the regressive VAT sales tax and an increase in the retirement age to 67 by 2022. The elimination of additional payments to the poorest pensioners will take place by the end of 2019, a year earlier than previously scheduled.

Plans for the privatization of state assets, including ports and airports, will go forward. The proposal also includes a reported increase of the corporate tax to 28 percent, rather than 29 percent, a reduction requested by the IMF.

In proposing the new austerity package, Syriza has with extraordinary rapidity repudiated the vote in Sunday’s referendum, which Syriza itself had called and presented as a model of democratic accountability. More than 61 percent of the population rejected precisely the measures that the government has now adopted.

Even as Syriza officially called for a “no” vote, Tsipras had no intention of fighting EU austerity. The prime minister expected to lose the vote and, in response, abandon office and leave it to another government to impose the cuts. (See also: Tsipras petitions EU for new austerity deal)

Following the vote, the Syriza-led government has moved as quickly as possible to reach an accommodation with the pro-austerity parties within Greece and approve a deal that would be acceptable to the European banks.

The measures were finalized in discussions between Greek Prime Minister Alexis Tsipras, Deputy Prime Minister Yiannis Dragasakis, Finance Minister Euclid Tsakalotos and Economy Minister Giorgios Stathakis—all from the ruling Syriza (“Coalition of the Radical Left”) party—and adopted by the Greek cabinet on Thursday.

The government is planning to seek a vote in the Greek parliament today, relying on support from the openly pro-austerity New Democracy and PASOK parties. On Saturday, eurozone finance ministers are scheduled to meet to review the proposal, followed by a meeting Sunday of the EU leaders.

The new austerity proposal was rushed through amidst threats from European officials to entirely cut off funding for Greece and force the country out of the eurozone. In response to these threats, Syriza continually refused to take any measures that would threaten capitalist property relations and rejected any appeal to workers throughout Europe for a common struggle against austerity.

It is uncertain whether an agreement will be approved by the EU, even on the surrender terms being offered by Syriza. Sections of the European ruling class are discussing forcing Greece to default on its debts, expelling it from the euro zone, and pushing it through a drastic economic crisis by forcing it to restore a devalued national currency.

German Finance Minister Wolfgang Schaeuble said yesterday that any significant restructuring of Greece’s debt was unlikely, as this would violate EU rules.

Other European officials have indicated a desire to reach agreement with the Greek government. Syriza members told the Guardian that French finance ministry officials had worked with Greek Finance Minister Tsakalotos to rewrite the austerity package Athens was proposing, in order to make it acceptable to the EU.

Donald Tusk, the chair of the EU summit, urged European officials to take certain measures to allow Greece to pay back its debt. “The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors,” Tusk said.

Germany has also come under pressure from the Obama administration to ensure that Greece is not pushed out of the eurozone. On Wednesday, US Treasury Secretary Jack Lew publicly intervened to push for an agreement on austerity between Greece and the EU and call for some form of “debt restructuring.”

Criticizing those who “create more of these kind of life-and-death deadlines,” Lew said they were creating far greater economic and political risks, including a broader financial panic across southern Europe and the possible splitting of Europe. The US wants to ensure that Greece remains within NATO and continues to support the campaign of military and economic aggression against Russia.

With Greece’s banks still closed and depositors limited to €60 in daily cash withdrawals amid the crisis, the Greek economy is rapidly grinding to a halt.

The National Confederation of Hellenic Commerce released a report Wednesday that found that consumption had fallen 70 percent since the closure of Greece’s banks, costing €1.2 billion to the economy. Greeks are reportedly stocking up on key medicines as well as non-perishable foods, such as rice and pasta, fearing a possible collapse of supplies of imported food and medicine.

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13 thoughts on “Greek government approves brutal austerity measures in proposal to EU

  1. sojourner

    Absolutely disgusting and disappointing! It isn’t just here and in your country that the people are ignored, and don’t matter, it’s all over this planet!

    Every government, monetary system, border, and national identity, as well as every other divisive entity, including race and gender, but be torn down and never allowed to exist again. Otherwise, there is no hope for humanity or this planet!

    Liked by 2 people

    Reply
      1. sojourner

        There is no way. But there will be psychopaths left who will want to start the entire nightmare over again, and these few must be dealt with, and severely. Humanity cannot afford to allow this cancer to ever grow back in any way again!

        Liked by 1 person

  2. sojourner

    Reblogged this on An Outsider's Sojourn II and commented:
    We the individuals of this world have no say in what happens to us anymore, not that we ever did.

    And here is one more example:

    “Greece’s Syriza-led government agreed to a massive new €13 billion (US$14.34 billion) package of austerity measures yesterday evening, less than a week after Sunday’s landslide “no” vote in a referendum on European Union (EU) austerity.”

    Like

    Reply
  3. migarium

    The member of Central Committee of Communist Party of Greece (KKE) and Parliament of Athens, Thanasis Pafilis said today:
    “History repeats itself as tragedy, not comedy in this time. You are bringing a new memorandum. Just like the previous ones … the same, or even you have adopted a worse method from the previous one. Do you expect that the Communist Party to approve it? We do not accept pocket applications. Obviously we do not worry about the naming issue as a shock anymore, because you have made a habit of it by taking over from the New Democracy and PASOK since the last year. We are not condemned memorandum in simply. We make call to the people for resistance of the memorandum by organizing this struggle. Bon voyage to you for the remaining procedures. Well, we know that you are all inside the same pocket. Keep away us from your political games. Approval of Tsipras’s step came from all parties except KKE. Rest of all is wheeling and dealing. I say these both SYRIZA and the attitudes of the other party. Thank you.”

    Being honorable is everything. When there is no money it should think about it. And I applaud Mr. Thanasis Pafilis because of this speech!

    And hi again dear Earthling;)

    Liked by 1 person

    Reply
    1. newsfortherevolution Post author

      As of right now, I’ll be having the scope on July 20.

      I’m not doing so well today. I think not eating or sleeping has taken its toll on my health in general. It take a lot out of me just sitting in front of the computer. My back is also starting to seize up, which is causing a lot of pain.

      Oh the joys of chronic illness!

      I hope you are feeling better!

      Liked by 1 person

      Reply
      1. sojourner

        They need to take both of us back out behind the barn and put us down;-)

        I’m sorry, I know what back issues are as well. I had two car accidents when I was young that really did a number on the spine. And I’m also sorry to hear the digestive issues are still plaguing you. The Twentieth is a long way yet, I hope they can move you up!

        The asthma is still not completely under control, and so like you, I am not getting my rest. Asthma loves to torture its victims at night! It should work for the government;-) Wayne, my friend I speak of, invited me to his house today for a cookout, but I am too rundown and my stomach isn’t up to par either.

        I sound like my grandparents taking to my parents when I was a kid: “My rheumatism is kicking in and I’m passing wind day and night!!” I’m like the commercial, “I’ve fallen and I can’t get up!”

        We might as well laugh, because crying just makes me more congested;-)

        Take care of yourself!

        Liked by 1 person

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