Madam Chancellor, Europe is in a bad condition. All over Europe it is the hard-working people with ordinary wages who pay most taxes while the rich people duck away. Many wage-earners are not able to live off their job income. Also in Germany. After a life of hard work, often enough, a miserable pension looms. The wealth of millionaires, however, has reached new peaks. In all of Europe the states are highly indebted because they have taken over the losses of irresponsible bankers and speculators. Greece´s debt is particularly high. Here, a corrupt political class together with Greek oligarchs and the international banks has shamelessly accumulated wealth for years and years. Since the introduction of the Euro especially, the party was on. Many small and medium-sized enterprises on the other hand were swept from the market by the new currency which was way too hard for Greece. In the year 2010 Greece was bankrupt. It was clear already then that it would not be able to repay its debt. Yet despite that, Madam Chancellor, in 2010 you set the course for Germany and the other Euro countries to accept the liability for the Greek debt. By so doing you protected banks and hedge funds from losses in the billions. For the European tax payer who was never asked, however, this decision was a fatal error. It was clear from the beginning that a high amount of our money would be lost. Together with other parliamentarians of the Left I pointed this out to you in the Bundestag. You would not listen to it.
The political standoff between the West and Russia has put many through difficult times. Russia is living through a severe crisis, exacerbated by EU sanctions – but that’s as business in Europe also is in trouble, as the loss of a major partner has dealt a blow to prosperity. Can the European Union afford the confrontation, given the state some of its economies are in, and the dissent that is growing within some member states? Does the EU even need this confrontation – or is it simply following some larger agenda? We ask these questions to the Vice-President of Germany’s Left Party and Member of the Bundestag. Sahra Wagenknecht is on Sophie&Co today.
Syriza’s election victory on 25 January is an opportunity for Europe. The Greek population is rebelling against a financial dictatorship which has wasted hundreds of billions in taxpayers’ money, driven millions of people into unemployment and poverty, deprived trade unions of their rights, and destroyed the prospects of an entire generation in southern Europe. This rebellion has also resulted in a crack in Chancellor Angela Merkel’s power, since she is primarily responsible for an approach to crisis management which consists of slashing wages, pensions and social benefits in an attempt to close the black holes caused by the bad bets made by banks and hedge funds.
1. What does the German public think about the negotiations with the Greek government? There has been a disgusting campaign by the German tabloid BILD, saying that German taxpayers should no longer pay for the "greedy Greeks", which stirred up chauvinist sentiments in our country. This kind of agitation poses a bit of a challenge especially for the conservative party in Germany as concerns the vote for another billion dollar credit for Greece– which is probably needed in June in order to make debt repayments to the IMF and the ECB. On the other hand, there are also many people in Germany who increasingly understand that the Troika policy of fiscal waterboarding has been a disaster for Greece, that more than 90 per cent of taxpayer’s money went to the banks whereas the Greek population had to pay an enormous price for this kind of "help". It is a great success of your government and your people that all over Europe there is a new discussion about the mistakes which have been made in dealing with the crisis, about the failure of the European institutions and the risks for democracy and the EU as a whole if this antisocial policy continues.
"I believe it was wrong for a majority of the Left Party parliamentary group to give its blessing to the outcome of this policy of blackmail by voting in favour of the motion in the Bundestag last Friday. Abstaining would have conveyed both messages: that the situation in Athens has changed due to the election of the new Syriza government, which can rely on our solidarity. But also our opposition to the failed policy towards Greece and the German government’s blackmail strategy."
Tuesday’s crunch meeting of eurozone finance ministers ended with an outrageous ultimatum to Greece: unless the new government in Athens goes back on every promise it made to its voters in the election campaign by Friday and asks the hated Troika to return to Athens, the country risks being thrown out of the eurozone by the European Central Bank (ECB).
Greek finance minister Yanis Varoufakis was initially rebuffed at his meeting with the Eurogroup finance ministers last Wednesday. The next meeting is due to take place today. How urgently does the debt row need to be resolved? Sahra Wagenknecht: There have been reports suggesting that capital flight and the tax revenue shortfall in Greece have reached dangerous levels, but that could just be scaremongering. What is clear is that so long as Greece achieves the planned budget surplus, it can finance its current spending and there is no danger that public-sector wages or pensions will not be paid, for example. The Greek state’s horrendous obligations to creditors such as the International Monetary Fund or the European Central Bank pose a separate problem; this year alone, these creditors are demanding a good 21 billion euros from Greece in repayments. Greece’s bailout expires at the end of the month, and if its creditors do not provide any new loans, they will have to live with their existing loans not being serviced. This is not really a new situation, however; Greece has, de facto, been insolvent since 2010. As we have seen, new loans will just exacerbate the problem of the country’s over-indebtedness, so there is no way around a debt haircut in the medium term.
SYRIZA’s election victory is a historic opportunity for the whole of Europe. The Greek electorate has voted for an end to the catastrophic policy of austerity imposed on the country by the Troika, which consists of the European Commission, the International Monetary Fund (IMF) and the European Central Bank (ECB). The election result is therefore also a defeat for Merkel. No other head of government in Europe is – rightly – associated so closely with the hated cuts to wages, pensions and social spending, modelled on the Agenda 2010 policy. Those who do not bow to Merkel’s dictates do not receive financial "assistance" and are thrown to the wolves, in the form of the financial markets.
The Greek elections offer the opportunity for a fresh start. At last, there is a chance to challenge the claim that there is no alternative to a policy which is increasing inequality and poverty throughout Europe.Instead of awaiting the outcome of democratic decisions, the German government is interfering openly in the Greek election campaign. It is threatening a potential left-wing government with expulsion from the eurozone, and remaining loyal to a bankrupt elite which is responsible for corruption, an underdeveloped tax system and excessive arms spending.
Europe’s biggest problem is that it seems to expect taxpayers to pay for bank speculation. This is a problem with three aspects: the dominance of banks, the European Union and German chancellor Angela Merkel.
It would undoubtedly be possible to preserve the euro without destroying the welfare state and democracy in the countries of the south. However, the prerequisite for this would be the implementation of central demands of the Left Party: it would require a reduction in the debts of the crisis-hit countries, an end to the imposition of cuts, and the launch of substantial investment programmes instead. Domestic demand would need to be drastically boosted in countries such as Germany, and this would require significant wage increases. A minimum wage of ten euros would need to be introduced, the power of the trade unions strengthened, and the socially unjust Agenda 2010 "reforms" repealed. And even once all of these measures were implemented, the imbalances in the eurozone would probably still be so great that transfers from strong regions to structurally weak regions would be necessary for a time.
A storm is brewing in Southern Europe. In Greece on November 6 and 7 another general strike will take place. On November 14 Portuguese, Cypriot, Spanish and Italian trade unions intend to go on strike in opposition to the austerity policies of the European Union. Belgian and British trade unions, as well as the European and German trade union confederations, are also calling for action. If the mobilization is successful, this transnational strike will be a milestone in the formation of a European protest movement desperately needed to prevent the final demolition of the European welfare states.
German Left Party Vice-President Wagenknecht on wage repression in Germany and the European Stability Mechanism
Today, our European discourse is built on lies. Has Greece really been aided? […] If Greece had declared itself insolvent back in May 2010, the financial sector and private investors would have suffered big losses, and European taxpayers would have suffered small losses. With every tranche of credits that has been approved under the purported aid scheme for Greece, the potential losses to the financial sector and private investors have become smaller, and the potential losses to European taxpayers have become larger. As early as 2010, it was clear that Greece's debts and the interest payments due on them were far too high for there to be any possibility of their being serviced over the long run. But every month by which the aid packages have delayed sovereign default in Greece has been advantageous for the banks, hedge funds and speculators. With every passing month, interest has been received that would otherwise not have been paid, and bonds have been redeemed that would otherwise have been worthless.
At a late hour on Friday 29 June 2012, the Bundestag took two far-reaching decisions. The so-called European Stability Mechanism (ESM), better known as the bailout fund, as well as the Fiscal Pact, a treaty modelled on the socially regressive German "debt brake" law and a blueprint for social service and public sector cutbacks in Europe, were up for vote. 491 Bundestag members voted for the ESM, 111 voted against it, and 6 members abstained. 493 members voted for the Fiscal Pact, 106 voted against it, and 5 abstained. Only the Bundestag members of the Die Linke party voted unanimously against these anti-social legislative packages. Because the Fiscal Pact is irrevocable and compels governments to implement a harsh policy of savings, these decisions set the course in Europe toward permanent reductions in social spending that will undoubtedly result in cutbacks to public services and the privatization of public property. At the same time, the ESM will make available massive amounts of money to safeguard the interests of banks and the wealthy. In her speech in the plenum Sahra Wagenknecht assailed the federal government for a policy that is driving all of Europe into ruin, and she directly addressed the Chancellor: "You are not saving the euro, but rather you are saving the euros of the millionaires."
Because no elected government would stand a chance of revoking this policy, I will vote against the ratification
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