European Debt Colony: Austerity Bites Hard in a Greece Shackled to its Lenders
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But the deal comes with one condition: that Greece remain on the same route of austerity for at least the next 10 years.
This will cause the country's social and economic situation to rapidly deteriorate in the near future. The recession will continue, new austerity measures will be introduced and debt repayments will become even more difficult to maintain, while another recapitalisation of the Greek banks will probably be needed shortly. As the leader of the opposition party SYRIZA said in a recent interview with the Guardian, if these policies continue then in ten years, Greece "will have become a no-man's land".
In order to impose austerity measures, the government is already using undemocratic methods like legislative ordinances that bypass parliamentary control. But even that is not enough for Greece's saviours, who demand a further narrowing of democracy.
The Greek government has agreed not only to transfer all of the revenues from privatising public assets to a special account for servicing its debt. It has also agreed to transfer all of its budget surpluses up to 4.5 percent of GDP, and an additional 30 percent of any surplus beyond that! So even in the best-case scenario, in which Greece would have the fiscal resources to raise pensions and boost funding for the public healthcare system and public education, it will simply not be permitted to do so. There is no room for political decisions anymore.
It is not an exaggeration to claim that Greece is a debt colony now, shackled to its lenders. It is subservient to a trust of bankers, bureaucrats and neoliberal fundamentalist politicians in northern Europe (and within Greece, too) who aim to impose their doctrine regardless of its apparent failure and the will of the Greek people.
By accepting all of these demands, the Greek government will not only hurt its own people, but also destabilise Greece's position within the eurozone - and put forth a dangerous model for other countries in similar situations.
German finance minister Wolfgang Schauble was right to characterise Greece's situation as similar to that which eastern Europe went through during the 1990s in his recent speech at the German parliament. Just as some countries in eastern Europe never reached western European standards of living, so a similar process is happening now in the south.
But "the enemy" now is not a state-planned economy. Rather, "the enemy" is - in the eyes of the Greek government and its lenders - the very social welfare system Europe has guaranteed to its people for almost a century.