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NEWS: Greek austerity measures include water privatization, oil exploration

The Toronto Star reports, “The Greek government submitted a bill (today) as it pushes ahead with harsh austerity measures… Parliament will vote next week on the bill which aims to suspend 30,000 government workers at reduced pay by the year-end and to further cut salaries by an estimated 2.8 billion euros ($3.73 billion U.S.). The new cutbacks come on top of salary and pension cuts, as well as a string of tax hikes over the past year and a half that have outraged ordinary Greeks trying to cope with a 16 percent unemployment rate. …Debt inspectors from the International Monetary Fund, European Central Bank and European Commission are now in Athens evaluating reforms before the funds are released.”

WATER PRIVATIZATION: The Guardian UK reported in June, “Stakes in various state assets will be placed on the auction block, in an effort to raise €50bn over the next four years. …Stakes in Thessaloniki Water are scheduled for sale. In 2012, the pace picks up, with €10bn of assets earmarked. This includes stakes in Athens Water.” The Washington Post specifies, “Sell 27.3 percent in the Athens utility and 40 percent in Thessaloniki. Keep network state-owned but privatize services.” Global Water Intelligencer added, “Katerina Zaharopoulou, an analyst at Eurobank, has identified a number of action points which she believes Athens Water will need to address in order for it to become sufficiently attractive to generate interest from strategic investors. Among these are the implementation of a wastewater tariff increase in order to claw back the cost of building the 750,000m3/d Psytalia wastewater treatment plant, which is currently in operation, but losing money. The integration of outlying municipalities into Athens Water water supply network, meanwhile, should enable the company to take full advantage of retail water pricing structures, versus bulk water pricing at present.”

OIL EXPLORATION: “Meanwhile, Greece’s Deputy Minister of Environment, Energy and Climate Change Yiannis Maniatis said the government has approved a search for offshore hydrocarbon deposits in three areas in the north and southwest of the country with an estimated combined quantity of 250 million barrels.”

There are approximately 250,000 Hellenic-Canadians.

What is austerity?
Council of Canadians trade campaigner Stuart Trew explains:

The boom and bust cycle is an inevitable feature of capitalism. The extent of the current collapse, however, was new but avoidable. According to the UN Conference on Trade and Development, a sustained process of financial deregulation, which led to an explosion in new novel financial products and excessive risk taking, are the ultimate causes of the crisis. The assumption that markets are self-regulating has been forever discredited. Global efforts to re-regulate in area of finance have been slow while major economies, including the European Union and United States, have continued to push financial deregulation onto trading partners through neoliberal free trade deals.

After the global financial meltdown of 2008, which was sparked by bank failures in the United States and Europe, G20 nations were united on the need to jumpstart economic activity with stimulus spending on job-creating infrastructure and other projects. However, less than two years later some countries, including Canada began, to endorse cutbacks in the stimulus, as well as austerity measures designed to quickly reduce government spending.

Canadians will be familiar with the process. In the mid-1990s, “deficit” became the dirty “d” word in Canada, and deficit reduction the most important policy recommendation of mainstream economists and business lobby groups. Partly this was in response to a downgrade in Canada’s credit rating, which affects government borrowing. As finance minister for Jean Chretien, Paul Martin announced major cuts to the public sector and drastically reduced transfer payments to the provinces for education, health care and other services.

Austerity is also an ideological project. To reduce government spending in Greece, for example, the International Monetary Fund has tied vicious conditions to its debt relief, including requirements to reduce workers pensions and privatize essential services such as water. The winners are the private sector who get cut rate deals on government infrastructure. The losers during austerity are inevitably the workers whose salaries and benefits are reduced or gutted, as well as the poorest in society who cannot afford to pay higher taxes or to do without accessible public services which are threatened by under funding or privatization.

It’s because of the way austerity takes from the poor and transfers it to rich multinationals, bondholders and other financial capitalists, that it can be called a type of class warfare. The more governments are held hostage by private credit rating agencies and the financial elite, the more austerity becomes the norm, the more our democracy will suffer. It would be far better policy today in Canada if the government would continue to stimulate job growth through needed infrastructure projects (water, transit, green energy, roads, etc), and to reverse corporate tax cuts which are leading to the worst income inequality in Canada since the Great Depression.

For campaign blogs related to austerity, please see