Lessons from the Greek tragedy

The  working class and all other sections of the working people have been struggling for the past five years without respite against this massive attack on their livelihood and rights. The working class went on innumerable general strikes against the austerity measures. . 

The results of the referendum show that the Greek people are ahead of the Syriza government.  They are totally against the continuation of austerity measures and more burdens being added on them. It is notable that 75 per cent of the 18-25 years age group of young people voted “No” as they see no future in this rotten system. The European big business, bankers and ruling classes have declared war on the Greek people. The Greek people are being punished for electing a government which declared that it will not abide by the austerity regime. In the campaign for the referendum, the entire Greek mainstream media, the right-wing and mainstream political parties and big business vigorously campaigned for a “Yes” vote. But the Greek people have stood firm in defence of their rights. Democracy and national sovereignty is something which is anathema to the ruling establishment of the European Union. The call for a referendum and the democratic exercise by the Greek people was met with stunned disapproval by the Troika. Some quarters openly called for change in government.

The Syriza, belongs to that stream of the European Left, mainly of the erstwhile Euro-Communists, which is strongly committed to European unity and the European Union. That is why the Tsipras government goes on asserting that it wishes to continue with the Euro and in the European Union.  This is one of the dividing lines with the Communist parties of Greece, Portugal, Cyprus and other countries who see the EU as a project of big business and transnational capital. 
—Peoples Democracy

Roots of the crisis lie in the loss of competitiveness of the developed countries vis-à-vis the developing countries. Developed countries like Germany, UK and the US are still doing okay. But, the smaller developed countries like Greece, Italy, Ireland and Portugal are sinking into a financial crisis. The crisis had hit Greece first since it was perhaps the weakest among the developed countries. The only pathway available to Greece for generating income to repay the loans was to raise taxes as advised by the IMF; and reduce price of its goods to compensate for the increase in taxes. But such a reduction in price of goods is not possible because prices have to be cut in the entire supply chain. An increase in taxes works in the opposite direction. Imposition of more taxes led to the price of a hotel room increasing for the foreign tourists. Greek goods became expensive and the economy collapsed. Hence, policy suggested by the IMF failed. The same logic applies to government spending. The IMF is correct in telling Greece that it should reduce government expenditures. But it is politically very difficult to make a cut in the salaries of government servants. The way forward for Greece is to come out of the EMU, recreate its own currency the Drachma, devalue the Drachma, make its economy competitive and bounce back. India should not look to the developed countries for investments. The developed countries are passé. The Greece crisis is the tip of an iceberg. More is to follow. We must look inwards rather than taking help from the developed countries.
—Organiser