For the Regime in Greece, Austerity has Nothing to do with Reducing Debt

For several years now, successive governments have been imposing austerity that places the price for the financial crisis entirely on Greek workers, notably those in the public sector. The rationale for this is well known. Government spending must be cut, and for politicians in Greece they rather cut the wages of teachers than cease expensive military purchases of German weaponry. Beyond the self-evident injustice of this austerity program, it’s simply doesn’t work since what savings made by unemploying public sector workers are outpaced by the resulting economic contraction.

But the point of austerity isn’t debt reduction. The neoliberals in the Greek government aren’t just going after public sector workers. The Greek government is now insisting that private sector unions and employers agree to cut monthly wages and the bonuses that supplement the already low wages in existence. The Greek daily Kathimerini reports on the dispute over private sector wages that is actually uniting workers and employers against the radical neoliberal plans by the government:

“Employers and labor unions found some common ground during the first day of wage talks on Wednesday but it appears that neither side is willing to agree to Prime Minister Lucas Papademos’s suggestion that private sector workers’ salaries should be reduced.

‘We are on the right track,’ said Vassilis Korkidis, the head of the National Confederation of Greek Commerce (ESEE). ‘The social partners agree that the minimum wage is not to blame for the recession and businesses closing down.’

Yiannis Panagopoulos, the head of Greece’s private sector umbrella union GSEE, criticized the government for suggesting that it might force a law through Parliament that adjusts salaries if it is not happy with the outcome of union and employer talks.”

With organized labor and employers both opposed to private sector wage cuts, and private sector wages having nothing to do with Greece’s public debt, it leaves bare for all to witness the ideological nature of austerity. Debt and deficits are pretexts for austerity, austerity that isn’t the cure to debt problems. It’s supply side economics being forced through in the middle of a crisis. Make the supply cheap by suppressing wages (as opposed to employer compensation) and supposedly the demand for the supply will pick up. This has nothing to do with reducing the debt of Greece. It has everything to do with an ideological commitment by policy makers to crush workers, whether during a financial crisis or not.


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