Three years ago European governments were forced to underwrite all of the losses in the European banking system. This effectively meant a transfer of debt from private banks (capital) to European tax payers (labour), as the ruling class attempted to make workers pay for the deepest crisis in seventy years. The debt burden that has resulted is simply astronomical. As a block, the so-called PIIGS (Portugal, Ireland, Italy, Greece and Spain) are around three trillion (3,000 billion) in debt, and they are attempting to solve this problem by borrowing from the very same vultures that they bailed out in the first place! This is clearly both a tragedy (for the working class) and a farce (in terms of its ability to work) and this week we saw the latest moves to resolve a crisis that threatens to bring down the Eurozone.

Greece is at the centre of the crisis as it has debts of over 150% of GDP (economic activity for a year) and a number of bonds that are due to be repaid over the coming weeks. Fearing that Greece would be unable to pay, the markets (banks and hedge funds) became extremely nervous, and this caused a spike in the cost of borrowing for Italy and Spain. Both of these countries are simply ‘too big to bail’ and so the latest move by the European elites has sought to quarantine the problems of Greece at the same time as making sure that private capital will have to contribute as little as possible. The essence of the deal was a second bail out for Greece (€109 billion), a reduction in the cost of borrowing for Ireland, Portugal and Greece (from around 5.5% to 3.5%), and an extension of the maturity of the loans from 7.5 years (on average) to between 15-30 years.

All of this is designed to allow Greece to avoid defaulting on its debts to private capitalists and the cost to the Greek people is a continuation of neoliberal austerity and the firesale of many of its national assets. As much as €250 billion worth of Greek assets is set to be sold-off, as everything from forests to beaches are placed into a special privatisation vehicle by the International Monetary Fund (IMF). On top of this, there have been massive cuts in Greek living standards and this is a pattern that is familiar in Ireland. In September 2008, the Irish government foisted private debts of over €100 billion onto Irish workers and along with their refusal to tax the rich, this has meant an IMF-EU ‘bailout’ much like that in Greece.

Over the next four years the Irish government is set to pay €73 billion to private bond holders (€7bn in 2011, €20bn in 2012, €17bn in 2013 and €29bn in 2014) and yet they have the nerve to argue that the current cut in the interest rate is somehow a victory for the Irish people. It is as if you were forced to take on your neighbour’s gambling debts only to be told that you should really be happy as the rate of interest being charged had been slightly reduced. The reality is that the latest deal forged to save Greece has had the effect of saving Ireland €400 million at the same time as the government insists on borrowing €18,000 million every year to pay off the bankers.

Bailing out private sector millionaires costs the country €50 million every day and so instead of being triumphant about saving eight days worth of loan repayments, the governments real job is to scrap the EU-IMF deal and to take some of the riches that still remain within the country. According to Merrill Lynch, the number of Irish high net worth individuals (those with over €1 million in cash) has actually increased over the last year - and as the economy is still around worth €140 billion, there is absolutely no reason to borrow in the markets. The only real solution to the Eurozone crisis is mass mobilisation by ordinary people, as this is the only way to ensure the debts of the bankers are not borne by the citizens of European countries. We have much more in common with Greek workers than Irish capitalists and the slogan across the EU should now be to CANCEL THE DEBT.