212.7 - Greece: what the "bailouts" mean

Greece: what the "bailouts" mean

I was thinking of doing a big bit on the whole "Greece fiscal crisis" business but I decided to put if off because, frankly, to do is full justice, with context and background, would take up the entire show.

For the moment, though, I will say this: It should come as no surprise to anyone that the coverage of this by the American mass media has been just dreadful. It is presented with essentially no context or background, has focused almost entirely on a combination of personalities - in particular, Greek prime minister Alexis Tsipras, who is presented as either a fire-breathing leftist radical or a incompetent loose cannon and often both - and on a version of the horse-race coverage American media loves so much because it gives the impression of being informative without actually having to do much work, in this case going on and on about who has the upper hand in negotiations.

Here's one example of how bad it is: You know, I'm sure, that the overall issue is economic support for Greece, which was hit harder than most of the rest of Europe when the world economy cratered in 2008. Well, on July 6, in the wake of Greece's referendum on austerity, the Washington Post reported that

[Prime Minister] Tsipras also is expected to present new proposals to a tough audience: seeking to persuade European partners that Greece can be trusted to trim its spending.

Trim its spending?

Alexis Tsipras

As a condition for previous aid, Greece has been forced into a program of severe austerity imposed by the European Union and the IMF, the International Monetary Fund. Over five years, between 2010 and 2015, Greece cut government spending by 23 percent. In addition to cutting government spending, it cut salaries, slashed pensions, privatized public assets, deregulated businesses, and raised taxes, all based on the demands of the EU and IMF, with the entirely predictable result that the economy sank into an even deeper hole. Unemployment has been stuck above 25 percent since the end of 2012, 40 percent of children now live in poverty, infant mortality is sky-rocketing, and youth unemployment is close to 50 percent.

And when austerity fails, as it always does, as it has in the case of Greece, when it only leaves the victim in a downward-sucking whirlpool of increasing debt, the answer for struggling nations is always the same, and it is the answer now given to Greece: more austerity.

And now we have this new deal, announced on July 13, one described by Reuters as

Euro zone leaders ma[king] Greece surrender much of its sovereignty to outside supervision in return or agreeing to talks on an 86 billion euro bailout.

Note well: not even a bailout, but talks about a bailout. Greece is on its knees and instead of helping it up, the EU - particularly German Chancellor Angela Merkel, who appears to be the most extreme hardliner on this - is beating it with a club. Every provision, every sentence, every line, ever word, every punctuation mark of this so called deal, this economic terrorism, has one single, overriding purpose: See to it that at the end of it all, no matter what, no matter how, the banks get paid.

That's what matters in the long run and it's the only thing that matters in the long run. Whatever suffering actual people have to go through to secure that,well, that's just not important.

In fact, the conditions the EU is putting on Greece now are so onerous that even the IMF is saying they are too harsh and that any new deal should include significant debt relief for Greece, that is, some of that indebtedness should just be written off and that unless that is part of a new deal, the IMF won't take part.

That's what's happened, that's what has been going on, that is what is being done to Greece: a depression the likes of which have not been seen in Europe since the early 1930s.

But what does one of the leading American newspapers wonder? If Greece can "trim" its spending.

What a waste our major media is. No wonder Americans have so little awareness or understanding of the wider world around them.

Sources cited in links:
http://fair.org/home/after-greece-cuts-a-quarter-of-its-budget-wapo-asks-if-its-willing-to-trim-spending/
http://www.thenation.com/article/austerity-has-failed-an-open-letter-from-thomas-piketty-to-angela-merkel/
http://www.huffingtonpost.com/entry/euro-zone-greece-bailout_55a366a6e4b0ecec71bc6171
http://www.bbc.com/news/business-33531845