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ORIGINAL FRENCH ARTICLE: Et si les Grecs refusaient le racket de Bruxelles...

by Bruno Odent

What If the Greeks Refused To Be Fleeced by Brussels?

Translated Thursday 30 June 2011, by Isabelle Métral and reviewed by Derek Hanson

The fate of the new austerity plan that will fleece the poorest and the middle class - for instance by lowering the annual income tax threshold to 8,000 euro - will be decided this week, in the face of rising popular resistance.

The Greeks are now entering a decisive week. They have now been informed of the particulars of the diet that the European Union (EU) and International Monetary Fund (IMF) mean to inflict upon them in order to “rescue” them from bankruptcy. Indeed their government has yielded to the blackmail and accepted to submit to Parliament a new austerity plan next Wednesday and Thursday, as being the only means to obtain the payment of the fifth instalment of the rescue plan adopted eighteen months ago by the troika (the EU, the European Central Bank and the IMF).

In Brussels the European Council has agreed to launch a second rescue plan of the same kind as the first, probably (110 billion euro), on the same conditions, the second plan having in the interval become necessary owing to the country’s increased difficulty in “holding on” until 2015.

The most destitute will be the hardest hit

The “purge” promises to be nothing less than a systematic and general fleecing of the poorest and the middle class. The flagship measure of this 28 billion euro “budgetary corseting”” consists in lowering the income tax threshold to 8,000 euro a year (against 12,000 euro as of today). Which means that wage-earners or pensioners that barely survive on 680 euro a month will be made to contribute…

New rises in indirect taxes – generally known to be most painfully felt by the most destitute - are also on the agenda, among them an increase in VAT or a new tax on domestic fuel. To which must be added a tightening of eligibility standards for unemployment benefits (19.9% of the active population), new reductions in public workers’ salaries, and the right to dismiss salaried workers of public agencies that have been closed down or merged. The middle class is also invited to contribute to the paying back of the debt through the levying of a 1 to 5 % tax called the “solidarity tax”. Lastly, a fund for the exploitation of the State property, on which representatives of the euro zone and of the European Commission will sit as “observers”, is to pilot a vast privatization scheme , from the harbours and airports to the post office, through the Greek energy companies (electricity, oil, and gas) and even the banks.

That vast discount sale of the Greek national patrimony to the immense benefit of the euro zone’s big groups (German, or French etc.) is predicted to yield up to 50 billion euro.

Even though Papandreou got a first confidence vote last week, the game seems far from being over. For it is clear those measures are sure to aggravate the legitimate indignation that has spread across the country. The campers on Syntagma Square (from May 25th) in the centre of Athens, might be joined by thousands of others. They are going to hold a siege around the seat of Parliament, where the Prime Minister’s Socialist party has only a narrow majority of 155 out of 300 to pass the “purge”. Trade unions have called a two-day general strike on Tuesday and Wednesday and some in their ranks now consider organizing a renewable action “until the government yields.”

The euro zone’s finance ministers are to meet on July 3 in order to check that the conditions for the European deal have been met. However, the Greek people’s resistance can prevent irreparable damage from taking place. For the benefit of Greece and of the whole euro zone.

An agreement concerning participation of the banks

The French treasury and financial institutions have apparently agreed on a scenario destined to favor the participation of private lenders in the plan to bail out the Greek economy, according to "leaks" made public on the web site Figaro.fr this weekend. Nicolas Sarkozy, last Friday in Brussels, stated that the French banks and insurance companies are ready "voluntarily to underwrite" Greek public debt. A so-called "roll-over" process will be established, the holders
of Greek bonds being ready to make new loans to Greece just when their coupons are ready to be cashed in, loans equal to the amount due. Using this technique, the loans will yield less profit to the lenders, but do present a certain advantage, in that the lenders will face a lesser risk. The objective of the European leaders is to obtain conditions where about 30% of the plan to aid the Athens government will be financed in this way.

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