ATHENS — The instability rocking Greece this week is the latest manifestation of a troubling new phase in the global financial crisis: political turmoil is sweeping through Europe, toppling governments and threatening to undermine efforts to rescue the financial system and, ultimately, the euro zone itself.
It seems likely that Prime Minister George Papandreou of Greece will manage to hold his government together long enough to push through the deep cuts required for his debt-ridden country to receive its next installment of international aid. He reshuffled his cabinet on Friday, replacing Finance Minister George Papaconstantinou with veteran Socialist Evangelos Venizelos as part of a broader cabinet reshuffle aimed at restoring waning confidence among Greeks and foreign creditors.
But with a rising tide of voter anger against bank bailouts, budget cuts and austerity measures, his popularity is plummeting. And it is not just Mr. Papandreou who is feeling the public’s wrath.
Across Europe, people are complaining that they are unfairly paying the price for the mistakes of their governments while they are growing increasingly resentful of the international banks and the preferential treatment they seem to receive. And they are getting louder.
“They took everything, and we have to pay,” said Katerina Fatourou, 30, an elementary school music teacher in Athens, summing up a common sentiment here after a large and sometimes violent general strike. It is not likely to be the last in Europe this summer.
In a vicious cycle, the rising political turmoil is sowing unrest in global financial markets, raising the interest rates paid by heavily indebted nations in Europe to ever higher levels and threatening their solvency.
European officials are also worried that if Greece’s politicians bow to popular anger and reject the austerity route, other countries might follow, with potentially dire consequences for Europe’s banks and the common currency. So concerned were European Union officials about the potential for trouble that the bloc’s top financial official, Olli Rehn, hinted in Brussels on Thursday that Greece might get the new financial aid even if European finance ministers failed to approve the loan at a meeting this weekend.
In recent months, the governments of Ireland and Portugal have been ousted over efforts to cut budgets and benefits. Students have rioted to protest tuition increases in Britain, and young people who feel shut out of their own futures have held nationwide sit-ins in Spain, where the governing Socialists are in trouble in the polls. Right-wing political parties are gaining strength, tapping, in part, the populist rejection of austerity plans.
This week, Mr. Papandreou became the latest politician pulled in opposite directions by the markets, which hang on his every word, and his country’s citizens, who have already been stung by one round of wage and pension cuts and are resisting new spending reductions and tax increases. But he needs those measures to persuade the International Monetary Fund to release the next installment of a $155 billion bailout package negotiated a year ago.
“It’s hard enough to get the electorate to support austerity at the best of times,” said Simon Tilford, the chief economist of the Center for European Reform in London. “They promised endless austerity with no prospects of a return to growth, and there will be mounting opposition to this.”
The banksters and hedge fund managers thought that they had gotten away with their thefts.
They thought that they had handed the bill over to the working and middle classes in the form of budget cuts, layoffs, benefit cuts, service cuts and austerity measures.
They have continued to enjoy government bailouts and tax cuts for themselves, even as the middle and working classes are forced to bear the brunt of a crisis created in large measure by the banksters and hedge fund managers..
But there is a lot of anger and resentment out there.
Take this, for example:
In Athens this week, the pessimism was as thick in the air as the tear gas that the police sprayed during Wednesday’s demonstration.
“A year ago it was bad, but not like now,” said Irene Anastasiou, 22, a quiet marketing student who has been taking part in a peaceful sit-in in Athens’s central Syntagma Square for the past three weeks. “I am a young Greek girl. I have dreams, and they destroyed them,” she said of the government.
Silly 22 year old - you have had your dreams destroyed so that Goldman Sachs and JP Morgan Chase can make money.
That's what all these politicians have been put into place to do - help the banksters and the financial companies and the corporations steal and exploit their way to unimagined wealth.
This is a horrific cycle - layoffs, budget cuts and service cuts for the working and middle class, tax cuts and bailouts for the wealthy.
Repeat until working and middle class are jobless, moneyless, and hopeless.
The banksters and the politicians say it's the only way to save the economy.
And yet, it's not working, is it?
Except for the banksters and many (though not all) of the politicians themselves, it is working.
And after all, isn't that what life is about - helping out the banksters and their political hacks?