On 13 May 2023, a conference took place in Sofia of Bulgaria, about ‘Bulgaria in the Eurozone’, on the occasion of its forthcoming entry into the Eurozone. The event is part of the citizens’ campaign against Bulgaria’s entry into the Eurozone, where they already have collected more than 600,000 signatures for a referendum to postpone the adoption of the euro. On the occasion of these events, we have been invited by the ’23 September’ movement, to present the Greek experience and the results of the adoption of the euro. Our contribution intends to expose the asymmetry in the EU with emphasis on the theory of the weakest link, but also on the violent imposition of the debt colony regime.
G. Volanis. European Union and anisometry, the example of Greece
“I would like to thank you for the invitation to today’s conference, which has a special significance for us from Greece, as it contributes, in a first stage, to the creation of relations between the two people, who, apart from the cultural commonalities they share, also share the corresponding degree of exploitation by the imperialist integration called EU. It is particularly important nowadays to establish international relations because of the ongoing world war, where especially in your country your military industry, a legacy of your socialist past, is being partially exploited by NATO. Although we, of course, would prefer to make joint use of your socialist past, as it was written in the hearts and minds of communists worldwide by Dimitrov.”
Introduction
To be able to describe the position of Greece today, we would first have to make a separate reference to the EU as an imperialist integration, so I will try to set out some basic guidelines of the violent imposition of the “debt colony” regime. Moreover, with the complete subordination of humanity (peoples, countries and regions) to the domination of a certain Centre, which, through its economic, political and military power, excludes any possibility of independent, sovereign and complete development of society. In order to understand the nature of this crisis and its consequences, it is necessary to discern the basic features of the current stage of the world capitalist system, the contradictions of which are leading to social war and to an escalation of the ongoing World War.
Character of the Imperialist integration EU
In relation to what we have mentioned, we ought to examine the forms, types and levels of imperialist integrations, with emphasis on that of the European Union. The most complex form of integration is the creation of a certain union. Where, in addition to customs relations, agreements are established concerning the exercise of common economic and monetary policy, such as that of the European Economic Community (EEC). In any case, any capitalist integration, in its essence, is first and foremost a form of managing and exploiting the inequality between economic countries and regions, a form of sharing the world capitalist market between the strongest and largest monopoly groups. The purpose of this union is to secure unprecedented profits for the largest monopolies, to suppress the workers’ movement and the national liberation struggle, to maintain and consolidate the foundations of capitalist society, to attempt to eliminate the socialist regime in the world system, to launch wars of aggression.
Here it should be said that, by definition imperialist integrations are:
1) processes of internationalization of the economic life, the economic and political unification of capitalist countries, with various forms of transnational economic agreements and conventions, for the satisfaction of the interests of the strongest and largest monopoly groups,
2) a means of coordinating the struggle against the working class at the international level.
It is of particular importance to examine the historical development of Western European imperialist integration. As is well known, from the European Coal and Steel Community (ECSC) founded in April 1951 by six European states, we go on to the creation of the European Economic Community (EEC) founded in 1957 by the same states with the Treaty of Rome. Greece became its tenth member in 1981, followed by Spain and Portugal 5 years later. The final phase of this integration is the EU as we know it today. From the very first steps of this integration, despite the contradictions within the EU and with the USA, EU became a complementary element of the aggressive military and political Organization, NATO.
However, this imperialist integration showed its true face after the dissolution of the socialist camp, with the attachment and annexation of countries that went from early forms of socialism to reincarnations of primitive capitalist forms, with disastrous results for their peoples. Typical are the conditions of violent colonization, with systematic destruction of social and economic structures and extreme impoverishment of the population.
In capitalism, the basic equal unification of countries and peoples is impossible. This unification is always carried out in terms of imperialist exploitation based on inequality. Imperialist exploitation takes many forms and is carried out at many levels: it takes the form of technological, economic, financial, fiscal, political and military dependence and imposition, it creates new forms of colonization, exploiting the asymmetry between the Centre and the periphery of the EU and the Eurozone and the subsequent forms of external public debt. Here, the periphery of the Eurozone, and particularly its weakest link, Greece, is being turned into a debt colony as a guinea pig.
So we are reaching the point where the EU is launching for Greece a long-term process of extraction of the surplus value, not only of the current generations, but also of the future ones, through unprecedented loan contracts, guaranteed by the public sector, under the supervision and surveillance of external and internal institutions. This process brings about conditions of genocide through the so-called internal devaluation.
Context and weak link
The ongoing economic crisis marks the transition to a new era which is linked to the above-mentioned essential features of imperialist globalization and in particular to:
1) the redistribution of power among the main imperialist centers and integrations, with the weakening of the traditional strong capitalist states and the emergence of new rising powers, with an increasing possibility of a local, regional or even global war conflicts
2) the outbreak of the class war, in a global level, waged by the capital, on the forces of labor, which, although unevenly, marks a sharp and significant deterioration in the living standards of billions of people
3) the increased possibility of the emergence of revolutionary processes in different regions of the planet.
The most aggressive forces of capital are desperately looking for ways out of the crisis, ways of massive devaluation-destruction of capital, of production forces, in order to restart the system, beginning from the “weak links”. Greece, precisely because of its position and its role in the global division of labor (being on the periphery of the Eurozone), is a “weak link” of the global system.
At this point we would like to make a point, since the question is often raised as to the character of countries such as Portugal, Spain and Greece in terms of the contradictory pattern of either imperialism or dependency. It is clear that countries that are components of regional imperialist integrations with an average level of development (with all the community residues of small and medium-sized capital), and dominated by the capital economy of multinational monopoly groups, have imperialist characteristics but occupy an intermediate dependent position in the system of imperialism. A position in which a regime of a new type of colonization is imposed on it, led by its EU-supervised bourgeoisie. It is here that unprecedented forms of overexploitation are imposed.
The colonial system of imperialism actually includes states, which are technically independent, but in fact are in full economic dependence and are also objects of exploitation, like ordinary colonies. In its essence, the colonial system of imperialism is not just a sum of colonial and independent countries, but part of the complex organism that is the global capitalist economic system. In peripheral countries, a new type of colonization is taking place. Including countries like Greece, Ireland, Portugal, Cyprus and Spain. Indeed, this colonization is invested with a racist discourse, which is encapsulated in the term “PIIGS”.
The global capitalist market is ruled by relations of domination and economic enslavement of the underdeveloped countries, which leads to the aggravation of the contradictions of capitalism. With the help of unequal exchanges and other forms of economic and political oppression, the countries of the Centre exploit the economically underdeveloped states.
Contrary to what is often said, entering the euro, for Greece had a negative impact on the living standards of the Greek people from the very beginning. Due to the high euro-drachma equivalence, it was known from the outset that inflationary pressures would be high. This was reinforced by the fact that the government of PASOK (social democratic ruling party for 20 years) submitted false data, and no preventive measures were taken, resulting in a sky rocket increase of prices in consumer goods. This of course, led to a dramatic fall of the real value of wages.
This resulted in the emergence of a relatively new phenomenon for Greek capitalism, household borrowing. However, it is undeniable that in the case of Greece, during the period of the so-called ‘miracle’ of Greek capitalism after the middle of the last century, the savings potential of Greek households was increased and thus the need for loans was low. With the entry into the euro we see a fall in real income which has resulted in the savings system collapsing. Also, low interest rates, after entry into the euro led to the phenomenon of heavy borrowing by households, which contributed to the bubble of mortgage and consumer loans in the following years. This led to a temporary boost in consumer demand, a phenomenon that could be described as the ‘wealth effect’. The bubble of prosperity and fake growth, which mainly benefited financial and fictitious capital, was abruptly burst with the global structural crisis of 2008, which revealed the structural weaknesses of Greek capitalism (low levels of profitability, constant de-industrialization, low capital accumulation, uncompetitive in the international market, etc.)
At this point we should emphasize that, the Euro represents the dominant relations of production as well as a mechanism of transnational exploitation based on the increasing inequality by the corresponding imperialist integration. On this basis, we see that the euro is competing with the dollar as the dominant instrument of international trade, while forcing the countries of the periphery to give up the possibility of exercising trade and exchange rate policy as well as having a nationally independent monetary policy.
Greece, precisely because of its position and its role in the global division of labor (being on the periphery of the Eurozone), is a ‘weak link’ in the European and global system. This situation leads to a dramatic aggravation of the class conflict within Greece, as well as it creates a regime of national subordination and humiliation, with the emergence of neo-colonial forms of exploitation, particularly through the instrument of public debt. This is showed, by The ‘bailout’ mechanisms that have been set up and are operating highly efficiently for financial capital. It is a proven fact that less than 5% of the 220 billion euros of loans granted to save Greece in the first five years of the memoranda ended up in the Greek budget, while the rest went to bailing out European banks. 86.9 billion euros went to repaying old debts, 52.3 billion to repaying interest and 37.3 billion to recapitalizing Greek banks. 95% of the EU and IMF memorandum loans were used to bail out European banks (and other private creditors) at the expense of the whole. “The period of the “bailout” (2010-2014) saw the largest increase in Greek public debt. It got out of control, going from 299.69 billion euros (129.7% of GDP) to 317.94 billion (177.1% of GDP).” For 2016, the debt-to-GDP ratio shot up to 193.5% of GDP. In 2015, Greece’s debt stood at €321.33 billion, and according to the timetable, repayment will end in 2059. According to the European Financial Stability Facility (EFSF), the repayment of these loans are expected to extend until 2054. The assets of the Greek State are converted into debt repayment resources that can be liquidated at any time. However, ‘public debt is the vehicle for transferring the costs of the 2007 crisis from the private financial sector to the public sector at a global level’. In short, ‘public debt is an instrument of monetary and economic policy and its local and international implications make it an important tool for handling the social and economic policies of a State. In order to leave no doubt about the debt colony’s ownership status, public real estate is pledged under supervision by the lenders through a superfund that mortgages the State’s property for 99 years. In fact, those involved in the forthcoming privatization of public property through the superfund enjoy full immunity, since they are ‘exempt from the application of the laws of the State.
If we add to this the overall capital loss and, above all, the flight of highly skilled young people, over-exploitation takes on truly catastrophic proportions. This proves that the brain drain – the most creative part of the domestic labor force – is the main export product of the debt colony.
Conclusion
The euro as a currency is not just a simple accounting problem. It is a reflection of the relations of production. When you have unequal economies the scale will turn towards the stronger, since the common currency is the basis of all European imperialist integration, for the absorption of surplus profits. Characteristic is the fact that when a country enters the EU the total deficit is being shared. Researches have demonstrated the fact that, the surpluses of the center = with the deficits of the periphery. Also we have to mention that, the industry of the center is an industry that consists of high-tech layouts in cooperation with research centers and institutes, meaning, they are consisted of high capital intensity. A classic example is Netherlands where it has the know-how for producing the means needed for creating high-tech microprocessors. On the other hand, we see that the countries of the imperialist center have the possibility of transferring low-type industry (high polluting production processes, monotonous and repetitive work, low-quality specialization) to the periphery. Regarding international trade and reserves, we understand that it is a privilege for the one who has the right to issue currency, since it allows him, in crises, to export deficits and import profits (unilateral import of surplus profits). Due to anisomery, as we have already mentioned, the euro becomes a tool of over taxation in order to solve their own deficits. As the local currency is replaced we have a new form of neo-colonization. And since the countries of the periphery do not have a say in their budgets, since an amount is collected by the EU and then wherever they decide they make a redistribution, they cannot have a rudimentary planning of their economy.
In this crisis juncture, as it manifests itself in the “weak link”, there can be no “productive restructuring” nor any king of appropriate management, without a break from the colonial debt regime. The overcoming of the crisis in Greece and countries that are in a similar position like Bulgaria, from the point of view of the needs of the working people, for a radical reconstruction of the economy, society, politics and culture as a whole, is part of the major problem of our era. Just as the imperialists are banding together to face their economic crisis, trying to save their position and their system, especially at this time, with a hot world war in the offing, the need arise for the peripheral countries that are oppressed and exploited, to come together and find strength in unity and victory through resistance.
We think that the contribution of Dimitrov is extremely important. Especially his proposal, which in our opinion is one of the most important documents of Marxist philosophy on tactical and strategic issues in the communist movement worldwide. In the current crisis situation, with a third world war in progress, the obvious fascist front created by the ruling classes, can only be opposed by a United People’s Anti-Fascist Anti-Imperialist Front. The transnational forms and methods of the ongoing fascist attack dictate the mandatory international character of our front, based on the dialectical unity with patriotism and internationalism.