Greece on the brink as bailout and austerity cycle deepens

The social and economic crisis in Greece is continuing, as the country votes on more cuts demanded by the Troika in return for a new bailout loan.

Greece debt protest
A banner at a protest in Greece reads ‘Cancel the Debt – IMF EU out’.

The ‘Troika’ of the IMF, the European Union and the European Central Bank are pushing to make a new €31.5 billion loan to Greece conditional on the introduction of a new austerity measures – a set of €11.5 billion cuts in salaries and pensions, privatisations, and reduction in redundancy payments.

With unemployment soaring to 30%, the Greek economy contracting by 25% in 4 years and debt overshooting predictions (now expected to peak at 189% of GDP instead of 167% according to the Financial Times), government and EU officials are arguing that the new loan will keep bankruptcy and an exit from the Euro at bay. Yet serious concerns have been raised by political parties and social justice organisations that the debt levels are unsustainable and additional cuts are disproportionately affecting the most vulnerable.

Some of the new austerity measures have been deemed unconstitutional according to the High Court in Greece, but nonetheless the measures are being put forward in a vote tonight, sidestepping the normal voting procedure. The coalition government is split on the vote with junior members in the coalition pledging a ‘No’ vote on part of the legislation. Opposition leaders are now asking for fresh elections, the third this year, claiming that the Government is not representing the interest of the people.

This week has been marked by massive demonstrations in Greece, including occupations of public buildings and a 48-hour general strike by unions. Greek unions are also set to join Europe-wide strikes on the 14 November along with other countries such as Portugal, Spain, Cyprus, Malta and Italy that are in deep trouble because of the mounting debt crisis.

The never ending cycle of austerity and loans from the Troika should stop, lest more chaos and misery engulf Europe’s periphery.


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