Athens burns: has Greece entered its Argentina moment?

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by Jerome Roos, chief editor, ROAR
Thank you, Jerome
We present this article with select original comments.

EVERY DAY THAT PASSES, WE SEE HOW LITTLE THE CORPORATE MEDIA CONTRIBUTE TO OUR UNDERSTANDING OF THE WORLD, IN FACT HOW BADLY THEY POLLUTE OUR CONSCIOUSNESS. —Eds.

Greece’s political establishment trembles as banks and government offices burn amid violent anti-austerity riots. Has the country finally reached a tipping point?

Exactly ten years ago, the crisis-ridden country of Argentina spiraled into a bout of social unrest that would eventually lead to the largest sovereign default in history. After three years of being forced to swallow the bitter pill of IMF-imposed austerity, a tipping point was finally reached: foreign creditors and neoliberal governments had pushed the people too far. They rose up in defiance and ousted five successive Presidents in the space of just three weeks.

With the incredible images of flame-engulfed buildings and policemen emerging out of Athens, it now looks like Greece may be headed down the same path. The country has become ungovernable. Even though a majority of traitors was found to pass yet another deeply unpopular austerity package through Parliament, this weekend’s violent protests indicate that the ‘Argentina moment’ may have arrived. The Greek people simply can’t take any more austerity.

This weekend’s 48-hour strike and mass demonstration witnessed some of the largest mobilizations in Greece to date. Even our weathered comrades inside Greece reported that the scale of the protests and the severity of the violence were some of the worst yet. With over 100,000 descending onto Syntagma Square, riot police desperately clung on to their perimeter as they were pelted with rocks and firebombs. The Guardian reported that:

More than 40 buildings were set ablaze in an orgy of looting that left scores injured as protesters vented their anger at the caretaker government and parliament’s ordering of a further €3.3bn of savings by slashing wages and pensions and laying off public sector workers … Meanwhile street battles between police firing rounds of teargas and demonstrators hurling firebombs and marble slabs left Syntagma square, the plaza in front of the parliament building, resembling a war zone.

“The rebellion has begun,” the Greek resistance hero and veteran left-winger Manolis Glezos told reporters. Indeed, as students and anarchists fought back waves of riot police assaults on the occupied University Law Department, as hundreds of outraged protesters took over a TV station, and as plumes of smoke and clouds of teargas filled up the Athenian night skies, one thing became overly clear: the social situation in Greece has spun entirely out of control.

Just before the weekend, the Guardian’s veteran Greek correspondent, Helena Smith, wrote that she feared for a “social explosion”, warning that the “Greeks can’t take any more punishment.” With poverty deepening, social inequality worsening, protests persisting and the economic situation only spiraling ever deeper into despair, “it is easy to see why, among politicians at least, there is little stomach for more.”

A series of resignations by ministers on Friday, unwilling to support the latest measures, not only underlined the panic of the political class – in a country where MPs no longer feel safe walking in the streets – but proved how tenuous public support is for the bailout. If there is to be a social explosion, many said that it would come because Greeks had been pushed too far.

In my own PhD research, which compares the Argentine crisis of 2001-’02 to the Greek debt crisis, I am paying particular attention to the process through which the “impossible” at some point becomes “inevitable”. In Argentina, two factors conspired to make a default and a massive devaluation of the peso — both of which previously seemed heresy — inevitable: massive popular protests combined with a willingness of foreign creditors to let Argentina fail.

In Greece, we appear to be approaching a similar tipping point. Six government ministers resigned this weekend, the far-right Laos party deserted the coalition, and over 40 lawmakers were sacked after they rebelled against the terms of the EU-IMF bailout. As the Guardian rightly concluded, “the scenes of mayhem on the streets of Athens and all across the country leave big questions unresolved regarding Greece’s capacity to stick with the savage austerity.”

Unlike two years ago, “when the angry graffiti demanded that the ‘IMF go home’ and ‘reject austerity’, it now exhorts protesters to ‘murder bankers’ and ‘rise in rebellion’ and ‘never be slaves’. The spirit of resistance shows no sign of abating. With support for the left … growing by the day, opposition to any cost-cutting reforms is bound only to increase.” As one opposition leader put it, “Martial law has to be imposed for these measures to be implemented.”

At the same time, Greece’s foreign creditors appear ever more willing to allow the country to default. Helena Smith has pointed out that, “as the talks [between Greece and its creditors] rolled on last week, a growing number of voices in the single currency’s more stable “core” countries suggested they could manage without Greece … Some investors, too, argue that, because a default has been a possibility for many months, financial markets would take it in their stride.”

Dutch Prime Minister Rutte — who throughout this crisis has been playing hard-ball with Greece, usually followed a few weeks later in his radical neoliberal footsteps by Angela Merkel — has already raised the possibility of a Greek exit from the eurozone. So have EU Commissioner Neelie Kroes and German Finance Minister Wolfgang Schauble. All in all, Greece’s creditors appear to be preparing the ground for what they previously told us was “impossible”.

Yet as the elites persist with their scaremongering just to buy themselves a little more time, at least the 82-year old WWII survivor Stella Papafagou won’t be afraid of the “apocalyptic” consequences that Prime Minister warned of in Parliament today. “We’ve fought several times for liberation,” she told the New York Times. “But this slavery is worse than any other. This is worse than the ’40s. I would prefer to die with dignity than with my head bent down.”

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4 comments on “Athens burns: has Greece entered its Argentina moment?
  1. Andrew Stergiou February 13, 2012 at 09:46
    [Original Comment]

    The foreign bankers should be arrested for the bond crisis they promulgated, advanced, conspired for, committed fraud for, murdered for, and should die for as a debt to society for their crimes against humanity on behalf of the US, Germany, France, Holland Britain, for corporate parasitism.

  2. Chuck February 14, 2012 at 20:12
    [Original comment thread]

    Reached an Argentina moment? You mean they aren’t in enough trouble NOW that they wish to join the circle of nations that NO business of any sort will do business with without serious upfront hard (foreign) currency?

    Greece got to this period in their history by doing exactly what Argentina, Zimbabwe, N. Korea, Venezuela, Cuba etc has done (and the US/most of the developed world is currently doing) by spending madly, inflating their currency, expanding their government, and in general meddling with their economies. The longer they try to put off the moment of truth of the necessity of downsizing government, removing it’s presence from the economy, and in general accept the fact that subsidies to everyone is bankrupting them-Greece will continue to burn.

    Parasites will fight hard to keep their share of others money so I don’t see things getting better there anytime soon. I also doubt the other nations elsewhere facing similar walls of reality will slow their race to expand government activities and control.

  3. Jerome Roos February 14, 2012 at 22:17

    Spending madly? Check out the stats: public expenditure is below the EU average. Inflating their currency? Impossible, they’re in the eurozone. And the parasites? Those are precisely the moneyed elite: the powerful shipping industry; non tax-paying, self-employed petit bourgeoisie; and the upper classes in general, those who refuse to pay corporate taxes or their swimming pool taxes. If you refer to people living on a 500 euro wage (in one of the countries with the highest living costs in Europe) as parasites, you must be at least mildly deranged.

    Besides, no one wants to do business with Argentina? Eh. Where are you getting your facts from? Argentina may have been locked out of global capital markets, but their economy has been growing at spectacular 7-9% rates ever since their much-dreaded default and massive devaluation. The reason? Breaking the oppressive dollar-peso peg — which merely served the rich Argentine elites and powerful foreign financial interests — set the country free, liberated its exporting sector from the shackles of an overvalued currency, and restored monetary policy autonomy to a government that was actually (relatively) accountable to its people.

    I don’t want to overdo the Argentine “success story” — Kirchner was way too reformist to be taken seriously as an agent for serious social change — but it is undeniable that Argentina (which suffered over 50% poverty rates in 2002, compared to less than 10% today) benefited MASSIVELY from its default and devaluation. Perhaps it’s time to get yourself informed on the facts for a change?

  4. OBSERVATIONS on the NEW GREEK BAILOUT

    By now if you’ve been following the situation in Greece, you know the main points of the new “Memorandum of Understanding” the incompetent Greek government has inked with the Troika. 130 billion Euros, most of which will NOT go to the Greeks (the banks now have first dibbs on EVERYTHING now), are to be given in exchange for a 22% cut to the already sliced minimum wage, many thousands MORE government workers to be laid off (though most have not received paychecks in months), $1.5 billion Euros MORE to be cut from Greek hospitals (which are already out of critical medical supplies), cuts to already decimated pensions, as well as many other horrors.

    I wanted to bring to your attention however two other “insignificant” items in this agreement that have completely escaped mainstream media attention, because in these items, we can REALLY see what’s actually going on here.

    The first of these is that in addition to the 22% cut to minimum wage, there is also a 32% (!!!) cut to the YOUTH minimum wage. I find this curious, because while some government workers may actually receive minimum wage (although I don’t know this for sure), these youth workers certainly do not work for the government. Why this is curious is because payments to youth workers (being private sector) will have NO IMPACT on Greece’s ability to service their government debt. So why even put this in?

    The second item is this item taken directly from the Memorandum: “lift constraints for retailers to sell restricted product categories such as baby food.” So the Greeks apparently have laws regarding what sort of baby food can be sold, which would seem rather prudent to me. Except that the Troika doesn’t like these restrictions. Which brings up the obvious question: Why in hell would a minor item like baby food be specifically singled out in a MAJOR agreement over 130 billion Euros? Especially when lifting these restrictions would INCREASE Greece’s trade deficit, which is exactly the opposite of what Greece needs, and which WOULD impact Greece’s ability to service its debt, at least in a small way. Like the youth minimum wage cut above, this defies all logic as to what should be in this agreement. Unless of course the agreement isn’t really about Greece servicing its debt at all.

    As it turns out however, BOTH of these fit neatly into the pet ideas of the Neoliberal Project; namely that both floors on wages and ANY restrictions on trade for whatever reasons are “bad” for the economy. The neoliberal dream economy, that is. One where people are subservient to profits, and where small businesses are an annoyance simply to be blown away for the sake of global corporate mega-giants.

    Look, Greece can’t pay this new debt, and they couldn’t pay the debt incurred from their last bailout. In fact, they couldn’t pay their debt before any of these bailouts began, and it beggars belief that the entire Troika is so stupid that they didn’t know this up front. So these bailouts CAN’T be about Greece paying its debt, and they MUST be about something else. Something else that we can easily see simply by looking at these two items I’ve highlighted above. And that is this: Regardless of the pain inflicted upon the good people of Greece, the Troika is using Greece’s financial problems as an excuse to turn Greece into a neoliberal surf colony, forever indebted beyond the ability to pay, and reduced to groveling for even a mere subsistence existence. Naomi Klein’s shock doctrine writ large. No matter how much it hurts the Greek people.

    From a distance, it may look like the Greek government is simply bowing its collective heads in obedience to its new corporate masters of international finance and industry. I hope not. I hope what we are seeing is their bowing of their heads in their collective shame.

    Note: RONALD PIRES is a member of the Facebook group Links for the Wildly Left, created by editor Diane Gee.

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