A shaky agreement patched up between the Greek government and the troika of international organizations, consisting of the International Monetary Fund, the European Central Bank and the European Union, may prevent Greece from defaulting on its international debts July 15.

It is feared that if Greece defaults, more endangered economies, such as those of Portugal, Spain, Italy and perhaps others, would have been next, and that the entire European Union and Euro currency zone might go off a cliff of cascading defaults. This could, said European bankers, have stopped any recovery (including in the United States) from the 2008 financial and mortgage crisis, and led to a worldwide depression.

The governments of Greece, Portugal and Spain have been vying with each other to comply with the demands of the troika and the European ruling class that they balance their budgets with cruel austerity measures: laying off thousands of government workers, cutting wages and pensions, eliminating many social services and privatizing a large part of their state enterprises at fire sale prices.

In all of these countries and even ones that are not in immediate trouble, such as the United Kingdom, mass protests of near-unprecedented size have been taking place to demand that the austerity strategy be rejected, and that instead the corporate ruling class be made to pay for the damage their own irresponsible practices had caused. A call for a restructuring of the debt, which would stretch payments out over a longer period (and therefore shift more of the burden onto wealthy bondholders), has been central.

For the most part, both the governments and the troika have been ignoring the mass protests and demands, or handling them as police matters, with repression. However, a tiny concession was made in that French and perhaps German banks appear agreeable to a slight restructuring via an extension of the time for Greece to pay.

But now Standard and Poor's and Moody's, the international bonding agencies, have stepped in. Two weeks ago, Standard and Poor's issued a finding that the proposed restructuring of the Greek debt to French bondholders constituted an actual “default.” This would mean that Greece would not be able to raise new funds by bond sales, which is crucial because the temporary fix negotiated with the troika was supposed to open the door to a new bailout loan.

Now Moody's has downgraded Portugal's sovereign bonds to junk status, the lowest in Europe, which also would make it virtually impossible for the Portuguese government to finance further debts. And Italy, Ireland and Spain fear they may be next.

Many in the affected countries were taken aback by the bond rating agencies' actions. Even the European Central Bank reacted negatively. Others pointed out that bond rating entities like Standard and Poor's, Moody's and Fitch are in no way accountable to the U.S. or international public or anybody else except the corporate elites, yet they seem to have the power to push entire countries into “default” situations in which they can find no way out other than condemning their citizens to grinding poverty.

This latest development calls into question not only the viability of the European Union and the Euro currency, but also of the entire capitalist system. The potential domino effect of the multiple crises in international finance is an illustration of what is meant by the “general crisis of capitalism.”

There is sometimes a false dichotomy drawn between the “general crisis of capitalism” and the incompetence, inefficiency or criminal depravity of this or that individual or institutional actor. In fact, Marxists should see these things as two sides of the same coin. For the general crisis of capitalism to lead to a socialist breakthrough requires that specific actors (individual and collective) on both sides of the class struggle play out their roles to the fullest. Currently, capital is doing so, but the level of class consciousness and mobilization of labor is not sufficient to stop capital from imposing a solution on the backs of the workers. In Greece, Portugal and Spain, the communist and radical left parties have played a splendid role in fighting against the austerity programs. Yet electoral results show that the level of mass support the left receives is not yet sufficient for it to beat back the assault and to replace the social democrats as the real opposition. Many working-class people and others still support the social democratic parties, and others are either staying out of politics or moving to the right.

The situation is similar in the United States. Resistance to the corporate anti-worker onslaught has been organized by the left, by the unions and by a sector of the Democratic Party. Yet these forces are not yet strong enough to turn the situation around, let alone to open the door to a socialist solution. Broadening and deepening the grassroots resistance is the main priority, in Europe as well as here.