From the TUC

Avoiding another Greek tragedy

10 May 2010, by Guest in International

The intervention of the IMF in the British economy in 1976 cast a long shadow over the economic competence of Labour Governments. It was a time of national humiliation, a time that was not easily forgotten, and a time which dogged the Labour Party for over 20 years. I was in Athens last Wednesday (5 May) to join the Greek unions in protests against the EU/IMF/Greek Government deal. The sense of national humiliation was everywhere, producing tensions on the streets.

The tragic deaths of three people after a firebomb was thrown into a bank were the work of an idiotic individual but other petrol bombs were tossed around and the risks of a serious incident were high. The incident overshadowed the large, peaceful demonstrations which also took place and in which I took part. The Greek unions are to demonstrate again to express their abhorrence at the deaths.

The Greek Parliament is under great pressure from an angry, humiliated population, faced with a 16% cut in Greek GDP over the next few years, with pension cuts, lower labour standards, and disruption of collective bargaining. In truth, Greece has no choice. If it does not accept the EU/IMF deal, it will have to default on its debts, which because of the single currency would take the country and the rest of the eurozone into unknown territory. But at the moment, it is hot anger rather than cool calculation which is running strongly.

In my speech to the demonstration, I wanted to put the blame for the crisis where it rightly lies – with the previous Greek Governments who cooked the national accounts to gain entry into the euro, aided and abetted by Goldman Sachs and other banks; and on the richest tax dodgers. I wanted to urge the Greeks to copy the Finns who in the early 90s were faced with a sharp drop of 15% of GDP in their economy following the collapse of the Soviet Union but who produced an agreed national economic plan which put the economy back on the path to growth. It all sounds a bit Nordic to the Greeks but they will have to work hard to preserve democracy and to summon the will to accept short-term pain for the prospect – a distant one admittedly – of longer term gain.

Remember – when the UK was briefly in the hands of the IMF, Greece was under the heel of the Colonels. Violence and chaos plays into the hands of the far right. Avoiding another Greek tragedy will be a major task for the Greek trade unions as they struggle to make the best of a very difficult situation.

GUEST POST: John Monks is the General Secretary of the European Trade Union Confederation, a position he has held since 2003. The ETUC represents workers and their national affiliates at the European level, with 82 affiliated trade union centres in 36 European countries. Before being elected to this role, he was General Secretary of the Trades Union Congress in the UK. He is also Vice-President of European Movement International, and chairman of the People’s History Museum in Manchester.

4 Responses to Avoiding another Greek tragedy

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    May 10th 2010, 9:28 am

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  2. Christine-Marie Esteve
    May 10th 2010, 11:11 am

    As previous asst Head to Brunel School of Businessand Management, and as someone who taught and researched European Strategic Business Analysis at a Russell Group University. the main concern that an investment transaction tax would lead to loss of business from the City of London is entirely based on anecdotal chats between a few favoured finance journalists and bankers over lunch. There is no evidence to support any such supposition and the intricacies of the capital and monetary markets are such that it would cost the banks more to withdraw than it would cost them to pay up. Furthermore, if in the UK the tax was linked to a domestic ceiling interest rate of 7.2 per cent above Bank Rate (ceiling rates already operate in France and Germany) this would prevent banks passing on the tax to domestic acconts and small businesses. It would force domestic banks to be more competitive and to widen their lending strategies rather than relying on high interest of over 19.0 per cent and as much as 29.0 per cent over bank rate as they do at present, with some banks charging 40 per cent in some cases where loan payments go more than four weeks in arrears. 53 per cent of Barclays reported 90 per cent increase in profits was based on interest charged on domestic banking. Far from discouraging this kind of activity, the City is becoming a plundering ground for aggressive banking and it is time for the UK Parliament to call time.

  3. How Greece should deal with Greece’s problems
    May 12th 2010, 12:56 pm

    […] this, from John Monks: I wanted to urge the Greeks to copy the Finns who in the early 90s were faced with a sharp drop of […]

  4. Tim Worstall
    May 12th 2010, 12:57 pm

    What the Finns did in the 1990s was to liberalise their economy, cut regulation, privatise etc.

    Yes, sounds like a great idea for Greece.