Greece has been under severe economic crisis for the past several years. The Greek government which did not have any foreign debt before it joined the EU in 2000, is now mired in debt. By 2009, the budget deficit stood at 15.7%, which is four times what is allowed by the EU and the external debt was 127% of the GDP. The primary reason for this situation was the easy credit offered to the Greek government by the "troika" of lending institutions, i.e., the IMF, European Central Bank and the European Commission.
In 15 June 2011, the Prime Minister of Greece George Papandreou announced that he is willing to make changes to his cabinet, including himself stepping down from the Prime Minister's post, if a national unity government can be formed through a pact with the conservative opposition party New Democracy (ND), in order to ensure the implementation of his austerity program.. This desperate announcement came against the backdrop of tens of thousands of people surrounding the parliament building, demanding that the Government not surrender to the dictate of the international and European lending institutions. Police ruthlessly attacked the demonstrators and fired tear gas to disrupt them.
The prescription of the lending agencies require mass layoffs in the public sector, cuts in workers' wages and huge tax relief for the capitalist corporations. This is directly against the interest of the working people and they are demonstrating their opposition to such "reforms" in no uncertain terms. The lending agencies have advised the Papandreou government that the main parties in the parliamentary should "make a commitment to carry out the privatization plan within the agreed timeframe.” People are fearing that such a collaboration of parliamentary parties will ruthlessly implement the dictate of the financial oligarchy.
Greece has been under severe economic crisis for the past several years. The Greek government which did not have any foreign debt before it joined the EU in 2000, is now mired in debt. By 2009, the budget deficit stood at 15.7%, which is four times what is allowed by the EU and the external debt was 127% of the GDP. The primary reason for this situation was the easy credit offered to the Greek government by the "troika" of lending institutions, i.e., the IMF, European Central Bank and the European Commission. Last year in April, the troika raised an alarm at Greece's external debt figures and IMF and EU promised a bailout package. Within a month they got the Greek government to agree to carry out severe cuts in social spending and to generate funds by privatizing its public sector units in return for a bail-out package of 110 billion Euros (approximately Rupees 7 lakh crores) over three years.
Ever since this deal was struck, the Greek people have come out on the streets to protest the consequent attacks of their rights and standard of living. Massive protests have been held in Athens and other cities of Greece like Thessaloniki. More than a dozen powerful general strikes have taken place in the period since, virtually shutting down the country. All sections of the people have participated in the protests including oil sector, manufacturing and transport workers, farmers, teachers, students, and others. With such clear opposition by a popular coalition, known as "indignant's protest", the Panpandreou government has not been able to fulfill all the conditionality of the lending institutions. The external debt has now risen to over 150% of the GDP. The international banks and European governments fear that without fulfilling the conditions of the loans, the government will not have enough income to pay off the loans. The Standard & Poor’s rating agency slashed Greece’s credit rating from B to CCC, plunging the country to the lowest possible rating. This has caused a panic and the European currency has been falling against other major currencies. They are desperately trying to avert a default by the Greek government which will surely plunge the European economy even before it had a chance to recover from the recession of 2008.
The developments in Greece once again show that capitalist imperialist system has no solution to the problems facing the people. It only works to protect the profits of the biggest capitalists and financial oligarchs by increasing the exploitation of the working masses and attacking their rights.