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by Maurice Ulrich


Dr Good-News and Dr Bad-News both prescribe the same remedy : bloodletting

Translated Monday 15 February 2010, by Kristina Wischenkamper and reviewed by Henry Crapo

Should Greece be bailed out? It’s the question the 27 EU member states are due to answer today.

The Bad-News doctors talk about inter-State loans. The Good-News doctors assure us that the patient will recover on her own, but both prescribe the very same remedy: blood-letting. If Greece is bailed out there will be draconian conditions attached. The country will be forced to reduce its deficit, thereby placing the burden of its recovery squarely on the population, raising the retirement age, cutting salaries of civil servants who, indeed, were protesting yesterday, and then more of the same will follow. If Greece is not bailed out, it’s because the country is considered capable of reducing its deficit on its own, thereby placing the burden of its recovery squarely on the population ...

What’s most remarkable about all this, and it’s too serious to be funny, is that an entire population and its democracy have been taken hostage by the financial markets and speculators and our very own virtuous Europe can find no better solution than to make the hostages pay their own ransom. Because it’s the financial markets and the phenomenal economic crisis — for which they are entirely responsible — that have caused States to indebt themselves more and more. They’re the ones at the root of the torment that racks Europe and the euro, and who are making more and more money out of it. The very same euro, let’s just mention in passing, that was supposed to, if we remember rightly, unite us all in one great single currency under the protective figure of a central European bank, answerable to no-one but expected to steer the ship without quite knowing where it was going. Of course the Greek debt is considerable. Nearly €300bn. But there’s another figure that might put it into context. Public opinion has just discovered credit default swaps, those infamous and juicy insurance contracts against risks run by States, which have themselves become a sophisticated financial product exchanged on world markets. In just one year, the credit default swaps taken out on Greece have doubled and on their own represent a quarter of the national debt. Of course the Greek debt is considerable but apart from the international hedge funds, 45% of this debt can be traced back to the Greek banks themselves which actively take part in this speculation, treating their country like a product.

But Greece, as we know, isn’t the only ailing patient in Europe. Portugal, Ireland, Spain, Italy, they’re all under the sword of Damocles of the famous marking agencies that hand out plus and negative points to the assiduous students of globalized capitalism. On Tuesday in France the Court of Audit expressed concern about the French debt and recommended ... raising the age of retirement, cutting back the number of civil servants, raising social contributions .... A familiar tune. Everything that the Head of State and his government will be putting into place with indecent haste after the regional elections. Yet there are alternatives. In France, by going back on the tax shield and the billions in exonerations for businesses, extending the base of social contributions to financial income, and taxing this same income. In Europe, with a quite different role for the Central Bank to help development in the member States, in public services, with interest rates to discourage speculation .... You have to choose: capitalism or the people? You can’t serve two masters at the same time.

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