The Greeks have said enough! Hope has defeated fear and SYRIZA has won the election and have beaten New Democracy and the fear-mongers, as expected. This is a major victory for anti-austerity forces which could change the economic and political landscapes.
However, they did not win an outright majority (they were short 2 seats) and were forced into coalition with a right-wing, nationalist (pro-Greek Orthodox) anti-austerity party, the Independent Greeks (referred to as ANEL from now on).
Irrespective of this, we do have quite a lot to celebrate! The election of SYRIZA is a shot directly across the bow of neoliberalism and its flagship of ideas, aka as the austerity project. The European ruling class (which includes mainstream political leaders) are a wee bit shaken especially Germany. Whether or not the Troika is forced to negotiate the debt successfully, this is a victory and it is forcing the ruling class in Europe to take stock over whether austerity (and destroying the working class) is more important than the EU project. The stakes are literally that high!
While it is possible that the ruling class thinks they can live without Greece (all EU private banks are protected), the question is whether they can live without Spain (elections in December 2015 and Podemos and Izquerida Unida do not have the same issues as KKE and SYRIZA), Portugal, Italy, and Ireland. Moreover, since none of these countries want to leave the Eurozone (forget the European Union), is holding onto a monetarist (Euro) and neoliberal agenda more important than the whole project? Is insisting on shrinking economies to cover debt more important than allowing economic growth (commensurate with rising incomes) to pay for some of the debt? The reality is that Greece cannot pay the debt as is; attempting to force it to do so has created an humanitarian crisis and has destroyed the Greek economy. If they do not renegotiate now, Greece will never be able to pay back the debt!
Needless to say, if people think that winning an election was difficult, that was a cakewalk compared to what comes next. As Stathis Kouvelakis (SYRIZA’S Central Committee and a leading member of the SYRIZA’s Left Platform) says in his reporting of the elections:
“The new government (whose composition was unknown at the time of writing) will have to deal with truly staggering obstacles. The coffers are empty and the state’s revenues are collapsing quicker than expected. It will very soon become apparent that the financing plan set out in the ‘Thessaloniki programme’ was based on very over-optimistic estimates (or even simply wrong ones). The goal, here, was to give the impression that the programme could be realised half by redirecting the European credits (which are earmarked, some of them already allocated, and whose payment is entirely dependent on EU agreement) and half through a more effective collection of tax receipts, without tax reform and without a need for increased budget deficits. The government’s strategic orientation toward the EU is also rather unclear. Yesterday Tsipras was keen to reassure the EU and the markets, speaking of a ‘sincere dialogue’ and ‘mutually advantageous solution’. He didn’t mention the word ‘debt’ (http://www.europe-solidaire.org/spip.php?article34188).”
The Coalition with ANEL, the response of the international left, the Left Platform of SYRIZA
When I wrote before the elections on Greece, I had raged against the sectarian stupidity that the KKE and ANTARSYA had shown by not running on the SYRIZA list and the KKE’s outright refusal to talk (forget join) in a coalition government with SYRIZA respectively. I had expressed my worries that SYRIZA would win the election, but come up short on seats which would force them into coalition with a right-wing anti-austerity party; alas it did not require a crystal ball that this could be a strong possibility.
Governing as a minority government is difficult as an understatement. Even more so when it is not normal that individuals in various parties could be drawn to support you in a specific measure or piece of legislation; constant negotiation with political enemies means far less ability to manoeuvre and keep to one’s programme. Given that they could not even count on the sectarian KKE to abstain on votes (KKE seems to want them to fail just for a “we told you so” moment), it would be impossible. A minority government would have a rather short life or would wind up hopelessly compromised. So, if you want to yell at anyone, the KKE is an excellent target as their 15 seats would have done it and created a true hard-left, but that would mean that the Left could actually get passed its sectarianism and that seems to be almost impossible even in the best of times.
It became rather obvious that Tsipras and those around him had planned for this possibility in advance as a government was formed (as Athenian said) with ANEL the next morning following the elections
Needless to say, this has raised quite a bit of consternation in the left; both inside and out of Greece (see: http://www.leninology.co.uk/2015/01/syriza-anel-coalition.html; http://www.workersliberty.org/node/24596; http://www.criticatac.ro/lefteast/coalition-of-syriza-with-anel-2/; http://rs21.org.uk/2015/01/26/on-the-deal-between-syriza-and-anel/; http://thepeopledemand.org/?p=819, and of course, http://www.wsws.org/en/articles/2015/01/27/gree-j27.html (who oppose broad left parties in principle).
The left are clearly concerned about both the nature of ANEL’s right-wing politics (which is not friendly to immigrants and there is more than a whiff of hostility to those not belonging to the Greek Orthodox church witnessed by their leader’s (Panos Kammenos) statement “that Jews, Muslims and Buddhists do not pay taxes.” There is a serious worry about SYRIZA’S ability to get though the watered down Thessaloniki programme which they ran on in 2015, dependent upon a right-wing party for votes, forget the 40 Point Plan of 2012.
By the way, it also probably caused the mainstream media some distress as they had to re-write the “ultra-left seize Greece meme” that was inevitably going to follow a SYRIZA victory.
What is good news is that at least 30 elected MP are members of the Left Platform; and if there is strong support on the streets for SYRIZA staying in the left, this will hinder a right-ward drift (the former is something that is feared by the European ruling class; witness this article in the Financial Times (http://www.ft.com/cms/s/0/f8753d64-a4e2-11e4-b943-00144feab7de.html#axzz3QQvtOD7b). One serious issue is the decline in street protests recently; hopefully this will change once some positive changes in the life of the Greeks start.
In an interview before the election with Sebastian Budgen in Jacobin Magazine, Stathis Kouvelakis said the following about the role of the Left Platform; I strongly encourage comrades to read the whole piece:
“Even the minimal platform presented at the Thessaloniki congress and slightly updated by Tsipras recently: even sticking to that means going to a major confrontation, which means of course being supported by and stimulating popular mobilization on the one hand, and mobilizing the party and other social and political subjects in the whole process.
This is the role, I think, of the Left Platform: to play, to be a catalyst in this kind of dialectic between what will happen at the level of government and what will happen at the level of society. And this is the mission, perhaps the historical mission, if things go well, of the Left Platform. We have a more coherent force within the party that can act as a catalyst of energies and prevent a gap from opening up between what’s going on at the level of grassroots mobilization and at the level of government (https://www.jacobinmag.com/2015/01/phase-one/).
Following the naming (http://greece.greekreporter.com/2015/01/27/greek-government-announces-new-cabinet/) of the cabinet (https://euobserver.com/beyond-brussels/127392#.VMjlukk-eIOt.facebook) and their swearing in (www.euronews.com/2015/01/27/tsipras-anti-austerity-government-sworn-in), things have moved swiftly. ANEL was not given any economic positions, these are held by SYRIZA. As expected, New Democracy and To Potemi (The River) denounced their choices and priorities.
The cabinet is a bit short on women as an understatement (as are the numbers of women from SYRIZA in the Parliament), but there are some in serious positions, just not enough. Whether that is a reflection of numbers of women in SYRIZA, the willingness and time for women to do this work or machismo culture, I am not clear; but according to Kouvelakis, SYRIZA has strong connections with the women’s movement, LGBT movement, and migrant communities. At this point, this must be noted and watched to see what happens and how/if women’s issues are addressed. A positive point is the appointment of a class and gender specialist, Rania Antonopoulos as a deputy minister as she is a supporter of full employment focusing on social infrastructure (e.g., child-care provision).
What has been done so far?
As SYRIZA said, their first priority was dealing with the humanitarian crisis and they have got off to a roaring start (try to ignore the word “blitzkrieg” she begs flinching):
“One by one they were rolled back, blitzkrieg-style, mercilessly, ruthlessly, with rat-a-tat efficiency. First the barricades came down outside the Greek parliament. Then it was announced that privatisation schemes would be halted and pensions reinstated. And then came the news of the reintroduction of the €751 monthly minimum wage. And all before Greece’s new prime minister, the radical leftwinger Alexis Tsipras, had got his first cabinet meeting under way.
After that, ministers announced more measures: the scrapping of fees for prescriptions and hospital visits, the restoration of collective work agreements, the rehiring of workers laid off in the public sector, the granting of citizenship to migrant children born and raised in Greece. On his first day in office – barely 48 hours after storming to power – Tsipras got to work. The biting austerity his Syriza party had fought so long to annul now belonged to the past, and this was the beginning not of a new chapter but a book for the country long on the frontline of the euro crisis (http://www.theguardian.com/world/2015/jan/28/alexis-tsipras-athens-lightning-speed-anti-austerity-policies?CMP=share_btn_fb).”
One of the first groups that will be rehired are the Greek cleaners sacked from the finance ministry in 2013; SYRIZA had already came out in support of their struggle and their reinstatement following SYRIZA’s victory is more than symbolic as their sacking was part of austerity measures and this shows SYRIZA’s support for public sector workers and trade unions.
In many senses, this was the easy stuff as they tore up the memorandum pledges. It is what happens next that is where things get tricky as that is out of direct Greek control and depends on two things: the Troika (i.e., the ECB, the IMF, and the EU) and whether negotiations on debt reduction happen (and whether they are successful) and whether the Greek economy begins to rebound after shedding the shackles imposed by austerity.
One obvious issue is getting revenue to fund these policies and to create economic growth; this will be needed irrespective of running deficits (which will certainly bring them into conflict with EU neoliberal polices). The majority of the expected capital flight happened before the elections. Getting taxes out of the ruling class (especially the shipping industry magnates) is not going to be easy. The shipping industry has been given tax breaks and those need to be reined in; however, these are the ones that can easily move their bases of operations and they have been threatening just that. Tax evasion and avoidance is common and it will require international support and agreements to get hands on that money. The most common tax base for governments (what many call the middle class) have been deeply economically eroded and essentially is tapped out.
Debt Negotiations and Economic Revival
Undoubtedly, this will be where many bumps and potholes in the road. There are several points that fall under this discussion: debt negotiations on Greek debt and with whom (the Troika, the EU, the ECB or the Eurogroup), divisions amongst mainstream European politicians, and the possibility of Grexit (greek exit) from the Eurozone if all else fails and what that would entail for Greece and its implications for the rest of the Eurozone.
SYRIZA has decided to separate two things that are constantly interwoven in discussions on this issue; addressing the debt and membership in the Euro. SYRIZA is arguing that resolving the issue of the debt can be done independently from discussing membership in the Eurozone. “It is the debt that is the problem, not the Euro.” This is not only a pragmatic position due to the fact that the vast majority of Greeks do not want to abandon the Euro; leaving the Euro itself will not solve the debt crisis or stop austerity unless they default on the debt at the same time which will involve serious economic repercussions for the Greek working class. Moreover, that will only affect Greece, there is a desperate need for the whole of the EU to abandon austerity and neoliberalism and that will require a political shift by the working class in other countries in the EU to the left. Now, Greece may be forced to leave the Eurozone (and that may be a credible threat to force concessions or it may not), but at the moment, Grexit is not on the table, but is an undercurrent to all the discussions.
As Tsipras hits the road (he is travelling to Italy, Cyprus, France to meet with their Prime Ministers and Brussels to meet with EC President Jean-Claude Juncker), the next steps are being watched with interest.
It is not only the Greeks and heterodox economists that know the debt cannot be paid off; some right-wing economists are also clear on this issue and this is leading to splits within the ruling class about how to deal with the Greek debt.
An excellent piece on the economic options available to Greece has been written by ?zlem Onaran in which she explains the situation. She outlines three different possibilities on the debt:
1) “The most important point of clash will be over debt. For a start, the financial markets seem to expect that the European elite could be pushed for a clause that would increase the maturity of the debt, decrease the interest rate, offer a lengthy grace period without debt servicing, or even link debt servicing to economic growth by setting a ratio to GDP. That is without touching the taboo of accepting a debt write-off. Olli Rehn, the Finnish ex-EU commissioner, who was a key player in the Greek bailout deal gave signals of the acceptability that the debt repayment deadlines could be extended for quite long periods giving reference to the payment of the British World War II debt to the US. However, SYRIZA’s election pledge aims to write-off the greater part of public debt and calls for a “European Debt Conference” as happened for Germany in 1953 after World War II.
2) There is also an interesting progressive option suggested by the chief economists of SYRIZA, Yiannis Milios and Dimitris Sotiropoulos and Spyros Lapatsioras, that aims to go around the taboo of debt write-off, while arriving at the same result of substantially reducing debt: “Our main strategy is for the ECB to acquire a significant part of the outstanding sovereign debt (at market prices) of the countries in the Euro Area (EA) and convert it to zero-coupon bonds. No transfers will take place between individual states; taxpayers in any EA country will not be involved in the debt restructuring of any foreign Eurozone country. Debt will not be forgiven: individual states will agree to buy it back from the ECB in the future when the ratio of sovereign debt to GDP has fallen to 20 percent. The sterilisation costs for the ECB are manageable. This model of an unconventional monetary intervention would give progressive governments in the EA the necessary basis for developing social and welfare policies to the benefit of the working classes. It would reverse present-day policy priorities and replace the neoliberal agenda with a programme of social and economic reconstruction, with the elites paying for the crisis. The perspective taken here favours social justice and coherence, having as its priority the social needs and the interests of the working majority.”
3) The Greek Debt Audit Campaign launched in 2011 had gone one step further by calling to stop all public debt repayments until the human, social, economic and cultural rights of all inhabitants in Greece are upheld, and form an official international and independent audit commission composed of experts but also representatives of social and labour movements with an ultimate aim to cancel all illegitimate, odious, or unsustainable parts of the public debt. Although the idea is still relevant, it has not been a theme of mobilisation for the majority of SYRIZA so far (http://socialistresistance.org/7111/syrizas-economic-options).”
Killing the Troika
The appointment of Yanis Varoukfakis, as finance minister is an interesting one. Contrary to his description as hard-left in many mainstream reporting, he is actually a post-Keynesian game theorist. There are many Marxist economists in SYRIZA holding a wide range of positions on how to address the debt and whether or not to stay within the Euro to deal with restructuring the Greek economy. Most probably this is a sign of how they intend to deal with the negotiations over the debt. Paul Mason says that the confrontation is not over the debt itself, but over its resolution and SYRIZA’S refusal to deal with the Troika as a body and refuses to accept their austerity programme as a precondition for debt renegotiation.
When Varoukfakis met Jeroen Dijsselbloem (the President of the Eurogroup), Varoukfakis made it clear that instead that negotiations would happen individually with the various European bodies with the time-table decided by the Greeks and has given 1 month notice that this will not happen on the 28th of February when new negotiations with the Troika were set to begin; that if the ECB wants to set the stage for the collapse of Greek banks they should do so.
It is a “game” of high stakes and “who blinks first” and it the issue of what is more important to the leaders of the EU and Eurozone, the EU and Euro or the neoliberalism and monetarism that they have used to undermine workers’ incomes (wages plus benefits) and conditions of work or the EU and Euro itself. Given the EU Stability and Growth Pact, and the limits placed on debt and deficits for members of the EU (and Eurozone), renegotiation of the Pact could force through the possibility of progressive forms of addressing the crisis beyond the austerity measures which have destroyed so much of the state sectors and social welfare states and the gains for which workers fought so hard.
At the end of the press conference following their meeting, Varoufakis and Dijsselbloem whispered to each other during their rather tepid hand-shake that Varoufakis killed the Troika, we can only hope this is not an exaggeration; but I have a feeling that like Dracula in every Hammer vampire movie, the Troika is not easily slain and there is still quite a fight ahead.
Paul Mason argues that:
“Syriza, and its ally Podemos in Spain, which also has a chance to gain power this year, want Europe to be a full fiscal union. Yanis Varoufakis, the Syriza finance minister, has proposed for example that the Greek banks be “Europeanised” – with banks in Cyprus, Greece and Spain handed over to the ECB to recapitalise direct.
So long term, Syriza’s leaders know the fate of their government lies not just in debt renegotiation, but in the ability to make QE apply to Greece, to grab a part of any infrastructure money that comes out of the commission, and in forcing a strategic policy change in Germany which leads to a banking and fiscal risk-recycling union (http://blogs.channel4.com/paul-mason-blog/tsipras-reverse-shock-doctrine/3155).”
Division among mainstream political leaders
As mentioned earlier, there is a bit of division amongst mainstream political leaders in Europe on debt negotiation; this arises simply due to the fact that Greece cannot pay its debt and the issue will not resolve itself by the continued destruction of the Greek economy. Austerity itself is making it impossible for the Greeks to pay; it has destroyed any possibility of economic recovery. So, the choices are stark; either continue destroying Greece (and for that matter the economies of Europe) or abandon austerity and allow some recovery which the working class (the majority) can share in.
Angela Merkel has already rejected debt relief. The same cannot be said for all as some members of the Eurogroup have left the door open for partial renegotiation based on repayments following economic growth (which is what SYRIZA is demanding).
“We have common goals; ensuring that Greece as a nation can stand on its own two feet, clean up its finances, and become a jobs generator again. A Greece that is growing, and can pay its debts,” said the EU’s Economic Commissioner Pierre Moscovici (http://www.euronews.com/2015/01/26/eurogroup-leaves-door-open-for-syriza-to-at-least-partially-renegotiate-if-/).”
The problem is convincing Angela Merkel and the German working class (and for that matter the working classes of Europe). These are different issues.
Merkel’s intransigence (irrespective of Germany’s benefit from debt forgiveness) is based on her belief in the neoliberal programme of monetarism combined with breaking the backs of workers; after all it was export-led growth and the undermining of German workers income that, in her mind, kept the German economy so dominant in Europe.
“Though no one can say what a Greek default would mean for the euro, it would certainly entail risks to the currency’s continued existence. Just as surely, the mega-disaster that might result from a eurozone breakup would not spare Germany.
A compromise would de facto result in a loosening of austerity, which entails significant domestic risks for Merkel (though less than a failure of the euro would). But, in view of her immense popularity at home, including within her own party, Merkel is underestimating the options at her disposal. She could do much more, if only she trusted herself.
In the end, she may have no choice. Given the impact of the Greek election outcome on political developments in Spain, Italy, and France, where anti-austerity sentiment is similarly running high, political pressure on the Eurogroup of eurozone finance ministers – from both the right and the left – will increase significantly. It does not take a prophet to predict that the latest chapter of the euro crisis will leave Germany’s austerity policy in tatters – unless Merkel really wants to take the enormous risk of letting the euro fail (http://www.project-syndicate.org/commentary/syriza-greece-eu-crisis-by-joschka-fischer-2015-01#KM9QSGBfY3VaQ3ld.99).”
On the other hand, the European working class have been sold a pile of lies: that austerity is the only choice and that the bailout of Greece actually helped the Greeks, protecting them from “their own incompetence.” These lies are what must be defeated; the truth is that the bail-out was a bank bail-out and that the interests of the German working class are the same as those in Greece, Spain, etc. That is the role of the German left, those in Die Linke and those outside, to break the consensus behind austerity among the working class and to challenge the neoliberal agenda. That is the job of all of the left in Europe. To do this requires solidarity and the recognition of class interests and that is the only thing that can break the back of neoliberalism. Whether that happens will depend not only on the battles between political leaders behind closed doors or played out in the mainstream media, but importantly on the mobilisation of the working class in all countries in solidarity and in their own interests and their ability to pressurise the ruling class.
The struggle ahead will not be an easy one …