Euro leaders seek regime change

Syriza is now reaping the consequences of having taken office, writes Eddie Ford

Bank doors closed

In the end, Brussels and the ‘institutions’ did not blink - nor were they ever going to. On June 30 Athens, surprising absolutely no-one, defaulted on its €1.5 billion payment to the International Monetary Fund. On the same day, the current bailout programme officially ended after euro zone finance ministers rejected a desperate last-minute appeal by Alexis Tsipras for a third bailout of €29.1 billion that would supposedly cover Greece’s needs for the next two years.

But the very next day it was revealed that Tsipras had written to the institutions accepting nearly all of the creditors’ conditions that only a few days before he had described as a “humiliation” and “extortion”. He wanted just a handful of minor changes, such as maintaining a VAT discount for Greek islands and delaying the raising of the retirement age until October rather than introducing it immediately. But German finance minister Wolfgang Schäuble rejected the Tsipras letter, saying they just muddied the waters further, while chancellor Angela Merkel ruled out any more negotiations until after the July 5 referendum.

As readers will know, Tsipras had stunned EU leaders a few days earlier by calling for a popular vote on the proposals put forward by the institutions, which included further vicious attacks. Parliament voted in favour of the referendum, to be held on July 5, and Tsipras said he was recommending a ‘no’ vote.

Pasok, New Democracy and To Potami (The River) said the referendum would be “unconstitutional”, as the constitution apparently does not allow for referendums on “fiscal matters”, only “crucial national matters”. In response, Syriza argued quite logically that the present parlous situation more than easily complies with that. Interestingly, the ‘official’ Communist Party of Greece (KKE) declared it was against the referendum, as “both answers lead to a yes to the EU and capitalist barbarity” - which contains a certain truth.

Various European leaders and officials made their position on the referendum more than clear: a ‘no’ vote on July 5 would be a vote to leave the euro. For example, Mariano Rajoy, Spain’s prime minister, bluntly said that if Tsipras wins the referendum then Greece “has no alternative other than to leave the euro”. By the same measure, he remarked, if the Greek prime minister was defeated in the plebiscite that would be “good for Greece”, as it would pave the way for talks with “another government.” David Cameron made similar comments.

Jean-Claude Juncker, the EC president - who feels “deeply betrayed” by Tsipras - told a news conference that the Greeks must vote ‘yes’, before adding: “I will say to the Greeks who I love deeply: you mustn’t commit suicide because you are afraid of death.” Unsurprisingly, this comment raised heckles in a country that has seen a 35% increase in the suicide rate since the onset of the financial crisis.

At the same time it was announced that the banks would be closed and capital controls would be imposed until July 6 - maybe longer. Individuals are only allowed to take out €60 (£42) a day using ATMs, although they can bank online more freely. They cannot move money to accounts abroad. Credit and bank cards issued abroad can be used at cash machines freely, subject to queues and the amount of cash left in them (thus keeping the vital tourist industry going). Unsurprisingly, some ATMs ran out of cash. Fears are mounting that the capital controls announced by Syriza may not be sufficient to prevent financial meltdown. Panic could set in soon.

There are horrendously tough times ahead for the Greek people. The country’s financial system is on the brink of total collapse. Without further emergency loans to sustain Greek banks, some of the country’s major financial institutions could topple. It has been predicted that the banks will only remain solvent for up to five days following a default.

EU officials have long acknowledged that Greece would need a third bailout once the current programme expired. But in order to qualify Athens would need to have “successfully completed” the previous rescue programme. Naturally, any putative agreement on more loans for Greece would need to pass through several euro zone parliaments, including the Bundestag - where, to put it mildly, it would get a very rough ride. With absolute predictability, Syriza’s options have dwindled to virtually nothing.

Game playing

In the pages of this paper last week, comrade Arthur Bough argued that it is in the interests of capital to wipe out the debts that exist in Greece, Italy and other countries, as they amount to “fictitious capital” (ie, to claims on future revenues) and hence act as a “drag on real, productive capital” (Letters, June 25). Therefore “in terms of a Marxist economic analysis,” writes the comrade, there is “absolutely no reason why the wiping away of the debts of Italy is in any way impossible, even within the rationale of capitalism, or why it would have anything other than a beneficial effect”.

Yes, what the comrade says is quite true. If you wanted to begin a new round of capital accumulation, that is exactly what you would do. But who the hell is going to actually do it? Germany will not, nor will the United States. There is no hegemon capable of imposing such a plan or refashion the world in that way.

Now, we all know that Yanis Varoufakis - the finance minister and so-called “erratic Marxist” - has a PhD in economics and is the author of several books on game theory: a field that addresses various ‘zero-sum’ scenarios, where it is posited or imagined that one person’s gains exactly equal net losses of the other participant or participants. This background helped to fuel near endless speculation that the Syriza leadership had a cunning plan B up their sleeve when it came to the negotiations - a killer move that would force the ‘intuitions’ to concede defeat. But there was never any plan B - or even a plan A worth talking about. Instead they have spent the last six months engaged in constant brinkmanship and robbing just about every institution within Greece (such as local municipalities) in a frantic effort to scramble together every last damned euro. But to do what? Just to hand the money over to the IMF, ECB and EU.

The referendum never did make sense economically (after Tsipras’s declaration of capitulation that is doubly the case). OK, you get your ‘no’ vote - and bring back the drachma? The new currency would just go through the floor in terms of value, your life savings vanishing before your eyes. Combined with runaway inflation, and severe shortages of food and medicine, there will be a huge drop in living standards for pensioners and workers. Yes, the value of internal debts will also go down - but external debts in euros will not go away. Politically, however, the referendum made some sense. Tsipras could further shift the blame onto the institutions and Berlin, and away from the government in Athens. But, now that he has offered to surrender, where does that leave the referendum?

What next?

Frankly, the situation is bleak. When the Greek central bank recently talked about the necessity of removing “once and for all” the risk of a “credit event”, it sounded almost like a call for a coup against Syriza. There can be no doubt that the imperialist core will be sponsoring and channelling discontent against the Syriza-led government, attempting to frame a narrative - after all, how does business function when the banks are closed and strict capital controls have been introduced?

There have been relatively large demonstrations from the richer parts of Athens under the slogan of ‘Europe!’ - with more planned. All disturbingly reminiscent, in some respects, of Chile 1973 and the run-up to the coup, which saw CIA-backed protests by middle class housewives and petty bourgeois elements. It is not too difficult to imagine the same happening in Greece. Efimerida ton Syntatkton has also reported that some workers in Athens were pushed into attending a ‘yes’ rally by their employers on June 30, citing a labour minister who had received many complaints. We now hear that Thorbjorn Jagland, the head of the Council of Europe, has said that the July 5 referendum would “fall short” of “international standards” - which holds that you need least two weeks’ notice, with a “clear question” put to the people and “international observers” monitoring the vote.

True, it is very unlikely that there will be a coup right now - but it would be criminally complacent to think that it could never happen, whether it comes from the army, ministry of defence, high court, Council of Europe, or extra-state formations like Golden Dawn.

Just like the ‘official communists’ and the Salvador Allende government in Chile, Syriza has left the army completely intact - are you asking to be slaughtered, comrades? Though it does make you wonder what planet some sections of the British left come from, it has to be said that for the past six months too many have been simply heaping praise on Syriza for managing to form a government - but it cannot even carry out its own reformist programme, let alone the minimum programme of Marxism. It was doomed to become either an agent of austerity and oppression or take part in a suicide mission. But who will suffer the most? Not the privileged Syriza MPs, that is for sure, who most like will have the option to fly abroad to safety. No, it will be ordinary Greek people and their organisations that will be sacrificed.

If the people vote overwhelmingly on July 5 against austerity and the dictat of the institutions, then that would be positive, but only in a very limited sense. They will have rejected the status quo - true. But what is the alternative? The truth is, there can be no solutions within the confines of tiny Greece - or indeed any other single country.

Syriza should have avoided the temptation of office, and that was a serious option - whatever the left might dogmatically insist. It could have refused the 50-seat top-up, working to constitute itself as an extreme party of opposition andstrengthen its position within society as a whole. Most of all, the Greek left needs to work with others across Europe to bring nearer the day when we can challenge for power across the whole continent.