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It has been quite a weekend for Europe. The bondholders’ settlement has been well and truly shaken. First Hollande deposed Sarkozy. He has entered office on a pledge to amend or reject Fiscal Union, a treaty that will force Eurozone governments to cut spending during any present or future recession. Yet the real tremor came on Sunday when the Greeks – who for 6 crucial months have been ruled by an unelected former banker – were finally given a say on how they ought to be governed.
And thus a long overdue bonfire of Greece’s mainstream parties took place. PASOK, Greece’s main social democratic party, spent its time in office imposing savage cuts in order that the country could continue to service its debts to French and German bondholders. On Sunday they were all but wiped out. Their share of the vote dropped from 42% to 14%, and they were beaten into 3rd place by the Coalition of the Radical Left. Like PASOK, Greece’s major Conservative party had pledged to stick to the terms of the European imposed austerity plan. And they too saw their share of the vote tumble from 33.5% to 19%.
The real winners were the three big parties of the radical left who been them took a third of the vote. Meanwhile, an absolute majority of seats has been won by groups who, in opposition to the mainstream parties, pledged to reject the bailout-austerity package – a system under which Greece continues to cut public spending to the bone, in order to keep the debt payments flowing to Europe’s banks, and in return is allowed to borrow just enough to keep on functioning.
Of course, neither Angela Merkel , nor her allies in the EU and the ECB, are troubled by such trifling matters as the results of elections. After all, it is German bankers who, first and foremost, stand to lose if the countries of Southern Europe begin to unilaterally repudiate their evidently unpayable debts. It took less than 24 hours for Europe’s new Holy Roman Empress to come out and tell Greece to bloody well carry on as before.
Needless to say, she has been quickly backed by Europe. Pia Ahrenkilde, spokeswoman for the unelected European Commission said that she “hopes and expects that the future government of Greece will respect the engagement that Greece has entered into” with regard to the bailout-austerity package.
Now of course, in the generality of human life, there is some virtue in people sticking to what they agree. But the pertinent question is “what was agreed and by whom?”. Because so far the people of Greece have not had the chance to agree to anything. When the former PASOK PM Papandreou proposed that Greeks be given the the opportunity to agree to the bailout-austerity system, by means of a referundum, Merkel and her Euro allies wasted no time in hounding him out of office and replacing him with Papademos – an former official of the European Central Bank, who had never stood for public office. And for the past 6 months it has it been he who, with no popular mandate, has negotiated Greece’s austerity plan vis-a-vis the EU and the IMF.
Just who on earth do these people think they are? How dare Pia Ahrenkilde – elected by nobody – tell Greece to ignore the fact that its voters chose to shatter the country’s political establishment, and that they did so precisely over the question of the EU/IMF bailout. It’s democracy versus the bondholders, and the EU establishment all know who’s side they are on.
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