18.12.2014
Troika demands more blood
Eddie Ford thinks it is irresponsible to spread illusions in a Syriza-led government
Once again, the markets and the European political establishment have become spooked by the thought of a Greek exit from the European Union (‘Grexit’). The latest crisis was triggered when Antonis Samaras, the Greek prime minister and leader of the centre-right New Democracy, suddenly announced on December 9 that he would be bringing forward the presidential elections by two months - causing near pandemonium.
Samaras claimed the election, initially due to take place in February, had become imperative to dispel the “clouds of political uncertainty” that had started to gather over Greece - calling on MPs to assume “political responsibility” by backing Stavros Dimas, a former EU commissioner, for president. But, of course, Samaras’s move had the opposite effect. The Athens stock exchange instantly dropped 13%, its biggest one-day fall since December 1987, and investors felt fear again, as the yield on 10-year government bonds (or debt) jumped on December 11 to 9.15% - way above the 7% considered to be the level at which the debt becomes unsustainable. For instance, both Ireland and Portugal had to ask - or beg - for a bailout from the dreaded European Commission-European Central Bank-International Monetary Fund troika once the yields on their government bonds had reached that level, effectively shutting them out of the capital markets. At the time of writing, Greek 10-year yields stand at 9.06%.1
The prime minister’s announcement came as a particular surprise because only hours previously Athens had been granted a two-month extension of its bailout programme by the troika after negotiations ostensibly aimed at taking Greece into a ‘post-bailout’ era stalled. The main bone of contention was the budget (or austerity package) passed by the Greek parliament on December 7. The government predicted that the Greek economy, after shrinking by more than a quarter in the past five years, will grow by 2.9% in 2015 - a glorious achievement that will signify “exit from the memorandum” and a “return to the markets”. However, the troika (and also opponents of the coalition government like Syriza) regarded this forecast as a fairy tale and refused to endorse the budget/plan - which envisaged, amongst many things, new tax increases worth €1.5 billion, a €1 billion reduction in social spending, the slashing of public investment by €400 million, and so on. Naturally, the troika did not think this went anywhere near far enough and demanded more blood: such as a further increase in taxes on food, medicine, books, alcohol and tobacco; confiscation of the assets of those in debt to the banks; new attacks on pensions and pension funds; a reduction in the number of people entitled to receive benefits, etc.
Now, four years after receiving €240 billion in emergency funds - the biggest rescue programme in global financial history - Greece is slipping towards a further crisis. Troika inspectors are expected to return to Athens early next year to conclude their review before a January 26 meeting of euro zone ministers. Failure to meet the deadline has raised the prospect of Greek banks running out of liquidity if life support money of €7 billion from the ECB is put on hold. As things stand now, Greece needs to repay IMF loans worth about €2.8 billion by the end of March and then in July-August over €5 billion in maturing debt. Running faster and faster to stay still, like an exhausted hamster in a wheel.
Gamble
Of course, when it comes to the election of a new president, Samaras is engaged in a high-risk gamble that could easily backfire. The fragile two-party alliance of New Democracy and Pasok (headed by the finance minister Evangelos Venizelos) has a very slim majority with 155 seats in the 300-member house, and is going to struggle hard to get the required number of votes in parliament. The cumbersome voting system for president involves three rounds of voting by a special session of parliament. The first ballot requires the votes of a two-third majority of the total number of MPs (ie, 200) and, if that majority is not attained, the ballot must be repeated five days later with the same majority required. If there is still no majority, the ballot is held once more, but this time the majority required is lowered to three-fifths (180 votes). However, if this third ballot also fails to deliver the goods, parliament has to be dissolved within 10 days and a general election held.
The first round was held on December 17 and Dimos only managed to secure 160 votes. Most pro-government commentators had been hoping for 170 in the first round, putting him at least in sniffing distance of the 180 votes needed in the final round on December 29. But that now looks unobtainable. Dimos will need the support of at least 20 more deputies and politically that means the Independent Greeks and the Democratic Left (Dimar) - which have 27 MPs between them.
If the necessary majority is not attained, polls have consistently been showing that Syriza would win the consequent general election. For instance, a survey conducted on December 16 by GPO has Syriza first on 28% followed by New Democracy with 23.1%2 Another poll conducted by Pulse gives Syriza a 3.5% lead. Yet it is highly unlikely that Syriza would win an outright majority, even with the undemocratic 50-seat ‘top up’ for the leading party, and hence would be forced to go into coalition with at least one other party. Whatever the outcome, Greece will be plunged into uncertainty and the tremors will be felt throughout the euro zone and beyond. After all Syriza is committed to at the very least renegotiating the terms of Greece’s debt. This has led Charles Robertson, chief economist at Renaissance Capital, to warn that Greece “may prove to be more important for global markets than Russia/Ukraine was in 2014”: a possible Syriza election victory “may force” the euro zone leaders to choose between a debt moratorium for the country or the first euro exit.
“Syriza has once again brought the word ‘Grexit’ to the mouths of foreigners,” Samaras told New Democracy deputies. “What Syriza says provokes fear and doubt everywhere,” he continued: the “markets are reacting because the possibility of elections occurring and Syriza winning is interpreted as assured catastrophe for the country”. Hence the burning need for a snap presidential election.
Yes, it is certainly true that the markets regard Syriza with fear and loathing. The Financial Times reported on December 9 that Alexis Tsipras and his senior aides recently presented their economic programme to a meeting of hedge funds and banks. Less than impressed, one senior analyst from Capital Group - a fund with $1.4 trillion of assets - described the measures proposed by Syriza, like an agreed ‘restructuring’ of the country’s debt burden, as “worse than communism” and a recipe for “total chaos”: according to him, everybody coming out of the meeting wanted to “sell everything in Greece”.3 Similarly, the Bank of America’s Merrill Lynch view Syriza’s economic programme as a “Greek tragedy” and the Wall Street Journal dismissed Tsipras as the “Hugo Chávez of the Balkans” - his economic plan would set him on a “collision course” with the rest of Europe.
Meanwhile, the EU’s finance commissioner, Pierre Moscovici, flew into Athens on December 15 for a two-day visit focusing on the stalled negotiations with the troika. Oddly enough, or maybe not, he did not meet Syriza leader Alexis Tsipras - something described as an “unbelievable” snub by a Syriza official. As for Tsipras himself, he has claimed that Greece is being subjected to a campaign of “frenetic fear-mongering” not only by Samaras, but also by senior EU figures ahead of this week’s first round ballot - an “operation of terror and lies is underway”. The Syriza leader even suggested that Samaras wanted a run on the banks in order to blackmail the MPs, and the country as a whole, into accepting Dimas as president.
Take the power?
Readers of this paper will know that many on the British left, especially within Left Unity, want Syriza to ‘take the power’ - imagining that this would be a ‘workers’ government’ that will resist austerity and in general provide an inspiration for workers throughout Europe: maybe even ignite the spark of revolution.
An almost pristine example of this from Andrew Burgin appears on LU’s website, entitled ‘Why we must support a Syriza government in Greece’ (December 10).4 The comrade argues that this will be the “first workers’ government elected in Europe since the Popular Front took office in Spain in 1936” (we shall ignore the little matter of Stalinist treachery and the victory of fascist counterrevolution), yet it will be a government in which the “working class holds office in the parliament, while the other institutions of state will remain in the hands of the ruling class”. This will “create a highly unstable political situation” - at the last election it is estimated that nearly 50% of the police voted for the fascist Golden Dawn and elements of the military also have close links with various fascist organisations; indeed, they have helped train their combat units.
The comrade says that a Syriza government’s “central defence” will come from the “mass support in the streets and in the communities” - Tsipras and his governmental colleagues will be “rebuilding” a country whose economy has been “almost destroyed” by the demands of international capital and whose social fabric has been “ripped apart”. However, the comrade thinks the “mere election” of Syriza will unleash a “wave of expectation, not just in Greece but throughout Europe”, and “millions will be moved to action”.
Therefore the central task of Left Unity, it seems, is “defence of this government” which will come under “enormous attack” - a defence that will “doubtless be the priority for the whole movement in Greece” and “will have to be so throughout Europe too”. He sternly challenges Syriza’s unnamed “left critics” as to whether they “will support the formation of such a government” and “whether they will fight to defend it” on the grounds that it “constitutes the front line” in the “struggle against the system which will destroy us all unless, collectively, we resist”. Comrade Burgin concludes that “defence of a workers’ government in Greece” will be “a test for all who consider themselves socialists across Europe” - urging everyone in Left Unity to “rally to support a government that promises to break with austerity”.
A similar approach, albeit more critical, can be found on the Committee for a Workers’ International’s website (slightly edited from an article in the current issue of Xekinima - CWI in Greece).5 For all of Syriza’s obvious faults, we read, “there is no other choice” but to elect a Syriza-led government as the “only way to start fighting back” against the troika. A “struggle is needed” on the left to ensure a Syriza government will “carry out socialist policies”. Thus the depressingly Bennite slogan: “For a Syriza government with bold socialist policies!”
Surely it is reckless and irresponsible to spread illusions in Syriza. As it is the party subscribes to a mealy-mouthed left Keynesianism that is utterly doomed to failure - exacerbated tenfold by the near certainty that it will be coalition with another party constantly pulling it to the right (eg, Democratic Left or worse). Quite clearly, a Syriza-led coalition, enjoying minority support across the country, would have problems of legitimacy from the very beginning. It would too come under extraordinary pressure from the markets, and would be relentlessly demonised by the media domestically and internationally. Under such circumstances would its leadership not be tempted to make all sorts of unprincipled compromises?
The chances are then that a Syriza-led coalition would be face a counterrolutionary crisis from day one. Of course, every socialist, every communist would defend such a government against the EU bureaucracy, council of ministers, ECB, etc. There are other dangers too. Just look at relatively recent history in Greece - in April 1967 the colonels took over. Would the generals not intervene to bring a Tsipras government to a swift end? Then there are extra-state formations like Golden Dawn.
We argue in the strongest possible terms that as a general principle the left should avoid the temptation of prematurely taking power. Till we have a clear majority, till there is the strong likelihood of the working class in other countries forming their own governments - ie, the conditions where we have a realistic possibility of fulfilling our entire minimum programme - then it is best to constitute our forces that those of being the extreme opposition. In other words we fight to enlarge the democratic space available to us in society. Under these conditions our forces can organise, be educated and further grow. In Greece the left needs to be demanding an end of the 50 MPs ‘top up’ rule, not expectantly looking forward to exploiting this anti-democratic travesty. The left needs to be demanding the cancellation of all of Greece’s foreign debt and a withdrawal from Nato. The standing army must be replaced by a people’s militia. Nor should the left ignore the privileged position of the Orthodox church. It is the country’s second largest landowners and yet the priesthood costs taxpayers €230 million per annum. Separating church and state is an obvious demand. And, of course, Greek orthodox bishops are notoriously anti-Muslim, anti-gay and anti-left, ie, it is a potent bastion of counterrevolution.
Notes
1. www.bloomberg.com/quote/GGGB10YR:IND.
2. http://greece.greekreporter.com/2014/12/16/opinion-polls-syriza-leads-over-nd-in-general-elections.
3. www.ft.com/fastft/248021/greek-stock-market-slides-most-since-2010.
4. http://leftunity.org/why-we-must-support-a-syriza-government-in-greece.