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Ear to the Ground

Austerity Is a Way to Build a Europe for the Rich

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Posted on Oct 9, 2012
Aster-oid (CC BY 2.0)

Leftist Greek lawmaker Alexis Tsipras says austerity for his country and other hurting European nations is a form of blackmail intended to build a new Continental economy based on cheap labor, deregulation, reduced public spending and tax benefits for the wealthy.

Tsipras points out that since austerity economics were adopted shortly after the 2008 crisis, the “Greek economy has contracted by more than 22 percent, workers and pensioners have lost 32% of their income, and unemployment has reached an unprecedented 24% with youth unemployment at 55%.” Benefits have been slashed, the labor market has been deregulated and the “limited” welfare state has eroded as well.

Austerity alone can make Greece whole again, the government says. But Tsipras contends that the opposite is true and that austerity has stifled growth and sent his nation tumbling further into the pit of recession ensured by a rising public debt.

—Posted by Alexander Reed Kelly.

Alexis Tsipras at The Guardian:

All this is known to the European and Greek policymakers and elites, including Merkel, who aim to implement similar programmes in all European countries facing debt problems, such as Spain, Portugal and Italy. Why do they insist so dogmatically on this disastrous political and economic path? We believe that their aim is not to solve the debt crisis but to create a new regulatory framework throughout Europe that is based on cheap labour, deregulation of the labour market, low public spending and tax exemptions for capital. To succeed, this strategy uses a form of political and financial blackmail that aims to convince or coerce Europeans to accept austerity packages without resistance. The politics of fear and blackmail used in Greece is the best illustration of this strategy.

My party, Syriza-United Social Front, respects the ordinary European taxpayer who is asked to shoulder loans to countries in distress, including Greece. The European citizens should know, however, that loans to Greece are paid into an “escrow” account and are used exclusively to repay past loans and to re-capitalise near bankrupt private banks. The money cannot be used to pay salaries and pensions, or to buy basic medicine for hospitals and milk for schools. The precondition for these loans is even more austerity, paralysing the Greek economy and increasing the possibility of default. If there is a risk of European taxpayers losing their money, it is created by austerity.

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