• by Roberto Savio
• Monday, July 11, 2011
• Inter Press Service

In Europe, the financial crisis is not in Athens but in Brussels. The governments of the eurozone allowed Greece into the monetary union without performing the necessary evaluations despite suspicions that its balance sheets contained false entries and that Athens' deficit was far higher than it declared, writes Roberto Savio, founder and president emeritus of Inter Press Service (IPS) news agency.

In this analysis, the author writes that once the truth came to light there were two alternatives: accept that Greece was bankrupt and pass the bill to all who helped it build up its colossal debt, including US and European banks, or make the governments of the region pay. EU governments are making monumental loans to Greece to keep it afloat knowing that it will never be able to pay them back. In effect the more Athens cuts social spending, the less revenue it will take in and the fewer jobs there will be. The result: tax revenues plummet as the deficit remains unchanged.

But whatever happens, the banks remain untouchable. Every possible step is being taken to contain fiscal deficits and avoid the downgrading of a country's bonds by the same ratings agencies that vouched for the soundness of Wall Street before the financial disaster of 2008. Fiscal deficits are effectively being swapped for social deficits, by firing tens of thousands of people, cutting health care, education, and other state services that, according to the current economic fashion, could be better provided by the private sector at a lower cost and more ethically. But a glance at recent figures immediately raises doubts about the "ethics" of the private sector.

(*) Roberto Savio is founder and president emeritus of Inter Press Service (IPS) news agency.

// NOT FOR PUBLICATION IN CANADA, CZECH REPUBLIC, IRELAND, POLAND, AND THE UNITED STATES //

© Inter Press Service (2011) — All Rights Reserved. Original source: Inter Press Service

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