Caught between a rock and a hard place….
Few people would want to be in the position of the PAOSK government in Greece. On the one side it is at odds with its own people who are simply refusing to take the austerity measures demanded by the international community lying down and on the other skeptical European officials are pushing it to cut harder and faster.
The position of European leaders is portrayed as hard-nosed but it is in fact ignorant. Greece has been set-up for a fall; Goldman Sachs and other American banks are currently under investigation for helping Greece conceal the extent of its debt on one hand but on the other encouraging market players to bet on Greece and other European nations defaulting on their debt.
If Greece falls then the expectation is that Spain and Portugal would not be far behind and if they collapse then the whole viability of the Euro would come seriously into question. In other words, the European Unions current stance is cutting off its nose to spite its face. Both Portugal and Spain are also the sites of strong organised resistance to austerity from trade unions. British Euroskpetics who see this as a cause for secret glee should bear in mind that this contagion could easily quickly plunge the world into a second economic meltdown.
The notion that Britain would be somehow immune is fanciful to say the least when the world’s stock markets are closely following events in Greece. In general, the pattern in Greece will most likely be replicated in Britain at some level. Already, the PCS has announced it will strike which, although its case looks weak, will find its echo in time across the union movement. Strikes in this context are a measure of desperation and are a result of genuine ‘backs being against the wall’. In time also the clamour will be for truly radical structural change; the first demand will be for a radical state curtailment of the speculative aspect of finance.
The world economy is far from being out of the woods yet….