How the IMF and the European Central Bank Are Strangling the Greek Economy

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With Greek workers bracing themselves for more announcements of privatization of public services and industries, the fight among political factions continues. But the drama that is unfolding proves that Greek Parliament is but a puppet regime for an occupying force known as the troika: the International Monetary Fund, the European Commission and the European Central Bank.

The pro-austerity government (led by the conservatives, New Democracy) installed this summer is already on shaky ground. With three ministers already having resigned, the country is just a few rowdy demonstrations away from new elections in the fall.  The troika is using its leverage to arrange the debt-ridden country’s economy and governance as it sees fit, which, as shadow justice minister and Coalition of the Radical Left (SYRIZA) parliamentarian Zoe Konstantopoulou said, constitute “violations of our international obligations,” and amounts to the nation being “a guinea pig for Europe, and the experiment has failed again and again.”

Common sense says that lower wages means people would spend less money, hurting the retail economy and giving the government less through value-added taxes. Unemployment is above 20 percent, and left-wing activists and politicians note the country is already experiencing pain in the healthcare sector because of medicine shortages and delays in surgeries due to cuts in spending. While the International Labor Organization recently stated that these austerity measures will only cause even more unemployment, European Commission President Jose Manuel Barroso told the Greek government to “deliver, deliver, deliver” on the cuts.

Greece has seen its fair share of foreign occupiers and home-grown tyrants: the Ottomans, the Nazis and the military dictatorship that fell in 1974. Geopolitically, Greece is the West, considering its ancient contributions to its early entrance into NATO. But in other ways, it is more like an small nation in the Global South. It’s been occupied, but never an empire in modern times. It shares a religion and borders with Eastern Europe. And like Jamaica or Argentina, it is enduring a political crisis as it copes with its debt. When the country came into the European community, it was told that it was poor, at least in terms of its industrial output, despite its agricultural self-sufficiency. The new European order would integrate it into the modern economy, which of course wouldn’t work for geopolitical reasons, so now the lenders get to auction off its assets through forced privatization.

“We were self-sufficient in bread, sugar, olive oil and meat,” Liana Kanelli, a member of Parliament from the Communist Party (KKE), said of the country before 2001. “We survived under German occupation by just eating olive oil. Now we import everything. We have three state-owned sugar companies--they will be [liberalized], and the price will go up.” Kanelli believes that unless Greece leaves the Eurozone and the entire European community, the "loan sharks" of the troika and Northern Europe will continue to come and impose hurtful economic policy onto Greeks.

Yet, the mundane punditry about the crisis focuses on this myth that Greece suffers from a bloated public sector and a backward private sector that consists of nothing but tourism and feta cheese--there is also shipping and steel, and as some activists point out, the often overlooked fact that the Greek Orthodox Church, despite being a major land owner, doesn’t pay enough taxes, they say. It is true that the public sector is rife with corruption, but activists point out that cutting people’s wages doesn’t address that problem.

And like any other colonizer, Northern Europe has found allies in the Greek 1 percent. As Konstantopoulou explained, one of the most curious things about the austerity plan first implement by the Panhellenic Socialist Movement (PASOK) led government is that its mandates for labor reform in the private sector went beyond what the troika asked for. “There are very strong internal interests who have found their way into the troika,” she said.

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