Which way out of the trap? (re: Greece)

[TexasTowelie]

Greece's left-wing government is being pushed closer to the brink of default--with unknown consequences for the economy in Greece and across Europe--by relentless pressure from the European political and financial elite to impose the same austerity measures that previous governments agreed to, and that the left-wing SYRIZA came to power vowing to oppose.

Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis agreed to a wholesale retreat from SYRIZA's election program with the deal negotiated in February with the Eurogroup finance ministers that continued the bailout of the Greek financial system for four months, at the cost of continuing the policies required under the Memorandums. Since then, the Greek government has made offers of further concessions, but the European rulers have not loosened their iron grip on the economy.

In the latest issue of its newspaper Workers' Left, the socialist group Internationalist Workers Left --a co-founder of SYRIZA in 2004 and a leading voice in the party's Left Platform--published this editorial calling for drawing a line against the blackmail of the lenders.

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The stance of the lenders--building on the disastrous concessions made by the previous Samaras-Venizelos government, but also the major mistakes contained in the February 20 agreement--has lured the SYRIZA-led government into a fatal trap.

It is obligated not only to make full and timely payments on interest and successive installments of state debt, but to pay wages, pensions and other social commitments--all without any resources available to it from outside Greece and with tight restrictions on borrowing from the Greek banking system. This is the same banking system that was "recapitalized" with tens of billions of euros from the state, which contributed greatly to putting the government in the difficult position it faces today.

The recent decree putting all available funds held by local governments and public institutions under the control of the Bank of Greece--which is still headed by Yannis Stournaras, the former finance minister under the previous right-wing government led by Antonis Samaras--shows that there is little time before the trap is sprung.

If the government doesn't find an alternative, it will soon be forced to seek loans so it can pay salaries and pensions, not merely interest and debt payments. And the pressure will become overwhelming for the government to sign a third Memorandum that the lenders are clearly demanding as a minimum condition for loosening the noose around Greece.

Read more: http://socialistworker.org/2015/05/06/which-way-out-of-the-trap