From the International Report delivered to the CPGB-ML’s central committee on 4 March.
A condition of releasing sufficient bail-out funds from the EU for Greece to be able to avoid default has been that even more stringent austerity measures should be implemented. The measures have been duly passed by the Greek parliament, and so the Greek people have been rising up in rage as their living standards are being mercilessly and sharply forced downwards.
As the Greek people put up a spirited fight against austerity, and opinion polls suggest that they will use their votes in April’s parliamentary elections to vote against austerity and, subject to leftist parties being able to cooperate for the purpose, perhaps even return a government that will resist the demands of Greece’s creditors, the inclination among politicians from other EU countries is developing towards letting Greece default and leave the euro. This is seen by many as the cheaper option, although others are still more worried about how much their own banks will lose if this happens and consider it is worth while attempting to turn the screw even harder on the Greek people for at least a little while longer.
An article on this subject appears in the latest Lalkar.
From the International Report delivered to the CPGB-ML’s central committee on 3 December
There is a real threat that the euro is going to collapse as a currency. This is because everybody is trying to get rid of their euro holdings. The reason this is happening is that it has become clear that Greece is not going to avoid defaulting on its debt, with the general consensus being that its lenders are going to have to take a 50 percent ‘haircut’.
At the same time, Portugal’s debt has been reduced to junk status by credit rating agencies, and borrowing costs for Italy and Spain have soared above the affordability mark, with even German bonds suffering increased borrowing costs. Now France is under threat as it is likely to need to bail out its banks as a result of their losses on their Greek debts, etc.
Attempts to put together a firewall that will enable European countries to continue to borrow at affordable rates of interest are floundering, and the Germans are resisting attempts to have the European Central Bank step in to perform this service, because they make the largest contribution to this bank and don’t want to throw good money after bad and then find themselves in financial trouble.
There is some suggestion that Germany would be willing to be more accommodating if the European countries would agree to greater fiscal integration, which of course implies a surrender of sovereignty to the EU which in turn is very much dominated by Germany and France. They of course can be expected to use that control for their national benefit at the expense of other EU countries.
In the meantime, the elected leaders of Greece and Italy have both been forced to resign, to be replaced by unelected ‘technocrats’ with close links to Goldman Sachs (which in turn was intimately involved with the repackaging of subprime debts as high quality by camouflaging them in complex ‘derivatives’). The new head of the ECB is also a former Goldman Sachs man.
The UK and the US are said to be making contingency plans for the chaos that will certainly ensue if the euro does in fact collapse. More detail in this month’s issue of Proletarian.