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8 Μαρ 2013

Austerity can no longer work in Greece

By Dean Andromidas,
The Schiller Institute

March 8, 2013 EIR Economics 27

Sanofi, have stopped shipments of  drugs to Greece because of nonpayment. The country’s social

insurance funds and hospitals owe pharmaceutical companies EU1.9 billion, going back to 2011. In turn,

the government owes Greek hospitals and the insurance fund EU3 billion. The shortages include medications

for arthritis, hepatitis C, and hypertension, cholesterol-lowering agents, anti-psychotics, antibiotics,

anesthetics, and immunomodulators used to treat bowel disease.

Dimitris Karageorgiou, secretary general of the Pan-Hellenic Pharmaceutical Association, said, “I

would say supplies are down by 90%. The companies are ensuring that they come in dribs and drabs to avoid

prosecution. Everyone is really frightened. Customers tell me they are afraid of losing access to medication

altogether.” He said many are also worried that insurance coverage will dry up.

“Around 300 drugs are in very short supply and they include innovative drugs, medications for cancer patients

and people suffering from clinical depression,” said Karageorgiou. “It’s a disgrace. The government is

panic-stricken and the multinationals only think about themselves and the issue of parallel trade, because

wholesalers can legally sell them to other European nations at a higher price.” “Lines will form in the early morning or late at night when you’re on duty,” said Karageorgiou, who is based in Thessaloniki. “And when the drugs aren’t available, which is often the case, people get very aggressive. I’m on duty tonight and know

there will be screaming and shouting, but in the circumstances, I also understand. We have reached a tragic point.” Under the orders of the Troika, the government has cut the pharmaceutical budget from EU3.7 billion in 2011 to EU2.44 billion in 2012, and now the Troika is expected to demand that it be cut to EU2 billion in 2013.

Leonidas Chrysanthopoulous, a retired Greek ambassador who held senior positions in the Foreign Ministry, sent a scathing open letter Feb. 14 to European Commission vice president Olli Rehn, denouncing the EU policy as “wrong and ineffective . . . from the time it was first adopted in 2010.” He charged that the policy had led directly to the “increase of unemployment from around 16% in 2009 to 28% today, increase of the debt, increase of poverty, creation of food lines, increased suicides, unburied dead, etc.; nothing was done by the EU, IMF and the European Central Bank to correct the situation.

Austerity can no longer work on a population that can no longer afford to pay taxes to a State that cannot

give anything in exchange. And we are speaking about a member-state of the EU, which is being destroyed in

order to be saved.”

Charging that the policy has violated the EU’s own Lisbon Treaty, which calls for protecting “human dignity,

freedom, democracy, equality, the rule of law, and respect for human rights,” he concluded that the

“solution can only be one. That is to zero the Greek debt, which is about 3% of the EU’s GDP, and allow

Greece, through a program of reform, to achieve growth.”

A Social Explosion

With the economy set to collapse even further this year, warnings of an imminent “social explosion” are

being heard from very senior Greek policy circles. In reality, the explosion has already begun. Since the first

of this year, strikes and demonstrations have been taking place throughout Greece. One day it is a group of

doctors protesting the fact they haven’t been paid in

Courtesy of George D. Vardangalos

A general strike in Athens’ Syntagma Square on Feb. 20. Analysts see larger social explosions on the horizon.

28 Economics EIR March 8, 2013
months and that cuts health are making it impossible for them to save people’s lives. On another it is teachers,

the disabled, pensioners, or students.

Earlier this month the two big trade union federations held a 24-hour nationwide general strike, bringing

100,000 demonstrators to a rally in front of the Greek Parliament. The farm unions staged a month-long protest

in February. After talks broke down between farmers and the government, because it has all but ignored

their demands, they called for a rally in Athens on March 5. On Feb. 25, the opposition party Independent

Greeks spokesman Panos Kammenos called on the Greek people to “send a message of resistance” against

the austerity policies of the government, which has been “faithfully following the dictates of a foreign

junta,” meaning the Troika. The question is when with these protests will turn

Zepp-LaRouche to Hellada

In her interview to Dr. Nicolas Laos of the national

daily Hellada published Feb. 25, Helga Zepp-

LaRouche pointed to the paradigm shift, especially

in the trans-Atlantic world, “away from production

based on scientific and technological progress,

toward monetarism and the idea that ‘money makes

money,’ after President Nixon’s abolition of the Bretton

Woods System, the creation of unregulated offshore

markets, and the adoption of floating exchange

rates.” Since then, “a completely unregulated derivative

market of virtual assets has mushroomed,” exceeding

the real economy by orders of magnitude.

As for Europe, she said: “The imposition of the

euro system as the ‘price to pay for German unification’

was never done with the intention of a creating

a prosperous European economy, but rather to have

Europe revert to a feudal, deindustrialized state under

a supranational dictatorship, as various admissions

by Giuliano Amato, Jacques Attali, or Claude Juncker

confirm. The present crisis in the Eurozone is not an

accident of a well-intended policy, but the result of an

intended ‘regime change,’ away from sovereign nation-

states, toward feudal dictatorship, in which the

EU became the junior partner of an Anglo-Americandominated

empire, which is just another way of

saying ‘globalisation.’ All European peoples have

become the victims of this policy. The Greek people

were obviously the hardest hit, but Germany is also

being destroyed.”

As for the economic policy to be implemented,

Zepp-LaRouche called for immediate Glass-Steagalltype

reform: complete separation of commercial

from investment banking, with toxic assets being

written off rather than paid by the taxpayers. That

must be followed, she said, with the creation of a

credit system, and the “buildup of the real economy

through well-defined great projects, such as

NAWAPA for Canada, the U.S., and Mexico, and the

“Development Program for Southern Europe, the

Mediterranean, and Africa,” elaborated by the Schiller


Laos’s second question elicited comments on the

“asymmetric expansion of so-called financial capitalism

vis-ΰ-vis the real economy” and the need for

technological breakthroughs to revolutionize the

economy. Here, Zepp-LaRouche expanded on the intention

of both “Helicopter Ben” Bernanke of the

Federal Reserve and Mario Draghi of the European

Central Bank to go for a hyperinflationary policy, as

a means of paying off private speculative debts at the

expense of the population, a policy that must be

stopped immediately.

Zepp-LaRouche referred to the recent meteorite

explosion over Russia and the asteroid flyby, which

delivered a wake-up call to all, since impacts of large

asteroids or comets could wipe out the population of

Earth. “Human beings, however, are the only species

capable of creativity and of understanding the physical

principles of the universe at large. Therefore we

can meet these challenges in principle, if we change

our present policy course. Space exploration and

manned space travel are not an option; they are mandatory

in order to solve the problems we face. The

recent landing of the Mars rover Curiosity gives us

every reason for optimism, and to believe that we are

only at the beginning of the age of space colonization.”

March 8, 2013 EIR Economics 29

into a mass revolt that could lead to the collapse of the

government. In an interview to the New Statesman, the

above-mentioned Ambassador Chrysanthopoulos

warned, “At a certain moment, quite soon, there will be

an explosion of social unrest. It will be very unpleasant.”

Referring to recent fire-bombings and attacks on

offices of the ruling New Democracy party, he again

warned that when new, retroactive (unpayable) taxes

come due in the coming months, “there will be further

increases in armed actions. There will be bloody demonstrations.

These actions are condemnable, of course,

but I feel that this sort of armed activity will increase as

long as the government continues to impose oppressive

measures against the Greek people.”

Chrysanthopoulos revealed that the government has

hired private security companies, because “the Greek

government does not trust the police, whose salaries

have also been cut.”

Seeing the potential for a military coup, Chrysanthopoulos

said that the government has sought assurances

from the military that it would not intervene in

case of a social explosion.

Another senior Greek security specialist, Tassos Symenidis,

academic advisor to the Athens-based Research

Institute for European and American Studies,

also warned that the social unrest could lead to “spontaneous

combustion,” painting a scenario in which “mass

demonstrations overwhelm police truncheons and tear

gas and succeed in sacking government buildings,

threaten politicians, and even lay siege to Parliament.

Shots by retreating police kill demonstrators.” This

could lead to disintegration of the government, since it

would not be able to rely on the Armed Forces for help,

because they too have become victims of the austerity.

The resulting anarchy would be the direct consequence

of Greece having “reverted to a stage of underdevelopment,

deprivation, and pauperization through

the means of asymmetrical economic warfare conducted

by lenders. . . .”

The catastrophe facing Greece is the same that

awaits all of Europe, unless, as Zepp-LaRouche stated

in her interview, a Glass-Steagall reform is immediately

implemented and a new credit system created to

make the LaRouche “Program for an Economic Miracle

in Southern Europe, the Mediterranean Region, and

Afria” a reality.

There Is Life After the Euro!

Program for an Economic Miracle in

Southern Europe, the Mediterranean

Region, and Africa



Introduction by Helga Zepp-LaRouche

Greece, and a Marshall Plan for the

Mediterranean Basin

Spain: Bridge to African Development

The Rebirth of Italy’s Mezzogiorno

Africa Pass

The Transaqua Project

North Africa: The Blue Revolution

What Europe Can Learn from Argentina

A German Economic Miracle for Europe