Austerity in the colours of Syriza
Athens inevitably blinked first, writes Eddie Ford - and Greece will continue to suffer ever more poverty as a debt colony
“We won the battle, not the war,” declared Alexis Tsipras on February 21 after the euro group decided to extend the bailout deal for another four months. This was conditional upon the Syriza-led government submitting economic and other ‘reforms’ deemed acceptable to its creditors (especially Germany).
Neither part of the Greek prime minister’s statement is true, of course. Athens blinked first, as was always going to be the case, and decisively lost the battle. And you can confidently predict that the isolated Syriza government will lose the war as well: the enemy is too big. Yes, the new deal may have averted immediate bankruptcy and a potentially catastrophic ‘Grexit’, but the country remains locked into austerity. Still at the tender mercies of the despised European Commission-European Central Bank-International Monetary Fund troika (even if they are now officially called the “institutions”).
Now that the deal has been signed, with the troika (sorry, institutions) due to deliver a more detailed verdict by the end of April before the last tranche of €7.2 billion can be paid out, only the most deluded can fail to see that the agreement constitutes a headlong retreat from the Thessaloniki programme first presented last September - which itself represented a significant watering down of Syriza’s original radical goals (eg, nationalisation of the banks was dumped). The manifesto or “national reconstruction plan” was based on four central pillars: “confronting” the humanitarian crisis; “restarting” the economy and promoting tax justice; a “national plan” to regain employment; and “transforming” the political system to “deepen democracy”.1 At the wider, European, level, the programme demanded a European “New Deal” of large-scale public investment by the European Investment Bank, extending quantitative easing by the ECB and a conference for the reduction of Greek and southern European debt modelled on the London Debt Agreement of 1953.
Rather unfortunately, Tsipras stated at the time that the programme is “not negotiable” - when in reality it has been negotiated out of existence. Relatively minor concessions aside, such as a possible reduction in the primary budget surplus2 and some theoretical leeway to propose his own fiscal/economic policies (which can be rejected at any time), the Syriza government has agreed to conform to the bailout, not buck it - let alone reverse or overthrow it. If that is a victory, then one dreads to think what a defeat would look like.
Pie in the sky
Thus the six-page letter signed by finance minister Yanis Varoufakis rowed back on virtually all the campaign pledges - he may be erratic, but he is definitely not Marxist. What Syriza originally wanted (there is no reason to doubt their sincerity) was the complete overhaul-cum-cancellation of the bailout and its onerous austerity terms; no more ‘supervision’ from the hated troika; reduction in the debt owed to the rest of the euro zone and a profits transfer from the ECB’s sovereign bond purchase programme; substantial easing of the requirement for Athens to indefinitely run large budget surpluses; an increase in the statutory minimum wage from €530 a month to €751; and, of course, an end to all privatisation programmes.
What Syriza actually consented to, however, was an extension of existing bailout terms and conditions; some minimal reforms to supposedly address the humanitarian crisis (like food stamps), so long as they have no “negative fiscal effects”; a commitment to work in “close agreement” with its creditors (ie, the troika/institutions); maintaining current privatisations and “improving” the terms of privatisations that are not yet launched; the reduction/rationalisation of benefits, whilst keeping the public-sector wage bill to its current level; no debt repudiation or write-off, but a conditional promise of future transfer of central bank bond purchase profits to Athens; reduction in the required 2015 budget surplus from 4.5% to 1.5% (still harsh in a depressed economy); and the reintroduction over time of some form of collective bargaining, and no “unilateral” or “one-sided” changes to economic policies and fiscal targets - meaning minimum wage and other spending pledges are up in the air. Syriza also agreed to abandon plans to use some €11 billion in leftover European bank support funds to help “restart” the Greek economy.
Then, of course, we have the vague and maybe unfulfillable promise to ‘crack down’ on the oligarchs and criminals - drawing up a €7.3 billion ‘hit list’. In this manner, we are told, the Greek government hopes to gather €2.5 billion in tax receipts from the fortunes of powerful Greek tycoons - and a similar amount, apparently, would be drawn from back taxes owed to the state by various individuals and businesses. A clampdown on illegal smuggling of petrol and cigarettes would yield another €2.3 billion for government coffers, we discover.
Frankly, this is wildly optimistic. Obviously, such measures - assuming they ever happen - would not generate anywhere near the revenue expected or hoped: the oligarchs’ money has long left the country, relocated to London or New York. The only option, if you were serious about getting the money, would be to confiscate their assets - but clearly that would be to violate EU law and therefore will not happen. The Tsipras leadership would not risk getting kicked out of the EU.
Anyhow, the EC called Varoufakis’s letter “sufficiently comprehensive” to be a “valid starting point” for a “successful conclusion” of its review and on February 27 the Bundestag will be voting on the new deal. The Rheinische Post newspaper has reported (February 25) that up to 60 “deviant” government MPs belonging to the Christian Democratic Union could rebel, alarmed by the widespread talk in Berlin that Greece will require a third bailout this summer worth at least €20 billion - does the German taxpayer have infinitely deep pockets?3 A “simple extension of the aid programme without effective terms would mean that we are knowingly throwing further good money after bad,” claimed the head of the CDU committee, Kurt Lauk, and its secretary general, Wolfgang Steiger, in a letter to German lawmakers.
But it is extremely unlikely that the German parliament will scupper the deal, even if it does remain unclear - putting it mildly - as to how Athens will make it through to the end of April without further financial assistance. Running hard, getting nowhere. Wolfgang Schäuble, the finance minister who has taken the toughest line in the negotiations, has stated that Grexit is “not an option”; writing to the speaker of the lower house, he said that the government would be in favour of the proposed extension, provided Greece “avows its obligations”. However, the euro group chairman and Dutch finance minister, Jeroen Dijsselbloem, has strongly hinted that Athens will need a further aid programme when the four months are over. The euro zone would consider extra debt relief measures, he said - or threatened - if Athens meets “all the criteria” specified in the second November 2012 bailout, “which hasn’t happened yet”.
What we now have is austerity in the colours of Syriza, which was inevitable, once Tsipras et al agreed to form a government (unless they wanted to ‘do an Albania’, of course). Germany and its close allies were never going to consent to any form of debt relief or repudiation, as that would set a dangerous precedent - sparking rebellion across Europe. Expressing this worry, one of Schäuble’s senior officials told the Financial Times: “If we go deeper into the debt discount debate, there will be no more reforms in Europe. There will be joyful celebrations in the French presidential palace and probably in Rome, too, if we go down this path.” In other words, what Germany is really worried about - quite understandably from its own point of view - is that the austerity regimes imposed on Ireland, Portugal, Spain and Italy could unravel. The latter country, it goes without saying, is too big to fail - if it did, that would be the end of the euro zone.
Now, you might have dreamed that Tsipras and Varoufakis were playing a highly sophisticated and devious game - master chess players. Knowing full well that they could not scrap or reverse the bailout deal, they actually had another secret plan up their sleeve: Grexit. They would revert back to the drachma, erect stringent capital controls and nationalise almost everything, whilst developing trade links with Russia, China, Venezuela, the Brics and Mint economies4, etc. After all, only a few weeks ago, Panos Kammenos, defence minister and leader of the Independent Greeks - coalition partners to Syriza - openly mused about a “plan B” to get “funding from other countries”: eg, Russian and China.5
True, in order to do this the Syriza government would have to effectively seal off Greek society - dig deep trenches, plant endless anti-tank mines, build millions of bunkers, massively expand the secret police and construct an enormous East German-like wall around the country to stop people fleeing: about two million have already left, after all. So just imagine how many more would want to leave after drachmaisation, which would see a considerable plunge in living standards: a ‘middle class’ exodus of doctors, lecturers, lawyers, etc. Tough, sure, but at least it would have been an act of resistance.
Pure fantasy, of course. Those grouped around Syriza’s leadership never had a plan B, or even much of a plan A - apart from getting what crumbs they could from ‘renegotiating’ the bailout and doing whatever they had to do to remain within the euro/EU. But the Socialist Worker headline correctly sums up the situation: ‘New Greek deal turns the screws on Syriza’ (February 24). Unhappily, Syriza’s problems are only just beginning.
Whilst the EC was quick to support the Greek formula, both the ECB and IMF are a lot more ambiguous about the bailout extension. Christine Lagarde, head of the IMF, and Mario Draghi, ECB president, have expressed strong reservations to Dijsselbloem. Lagarde thinks the Greek proposals are not sufficiently concrete, singling out “critical” undertakings such as VAT, pension and labour market reforms and privatisation - in these and other areas, the Greek letter is “not conveying clear assurances”. For his part, Draghi complained that the pledges outlined by the Tsipras government “differ from existing programme commitments”, meaning that the ECB will have to assess whether any possible new measures or policies are of “equal or better quality” - ie, are sufficiently committed to austerity and neoliberal reforms. The troika might come back later for yet more flesh.
In his own way, Schäuble hit the nail on the head when he said that Syriza “certainly will have a difficult time to explain the deal to their voters”. He reminded radio listeners that the Greek government had told the people “something completely different in the campaign and afterwards” - hence the question now is “whether one can believe the Greek government’s assurances or not”.
Many within Syriza are far from happy. Manolis Glezos, MEP and anti-Nazi resistance veteran - who famously in May 1941 climbed on top of the Acropolis and tore down the swastika - was one of the first to slam the deal. In a withering statement he wrote: “Renaming the ‘troika’ as the ‘institutions’, their ‘memorandum of understanding’ as an ‘agreement’ and the ‘lenders’ into ‘partners’ doesn’t change the situation.” He has called for urgent opposition inside the party on the grounds that there can be “no compromise between oppressor and oppressed”. Sofia Sakorafa, another MEP - the first MP to quit Pasok over its support for austerity - and leading Syriza economist John Milios quickly endorsed Glezos’s statement.
Similarly, Costas Lapavitsas, Syriza MP, professor of economics at the School of Oriental and African Studies - and a prominent member of the Left Platform tendency - wrote a scathing open letter on his blog, outlining how “difficult” it is see how the Thessaloniki programme (which includes writing off the biggest part of the debt and scrapping the memorandum) “can be implemented through this agreement”. He went on to say that it is necessary to “give substantial answers immediately to these questions” in order to “retain the large support and the dynamism given to us by the Greek people”.6
Perhaps even more damning was the reaction from Stathis Kouvelakis, member of the Syriza central committee. He bluntly stated that “going on this way can only mean defeat”, as under the deal the Syriza government will have “no choice other than to administer the memorandum framework”.7 In turn, this will “disappoint the hopes and expectations” of those who voted for the party. He warned that Syriza could “disintegrate” and that there could be a “reconfiguration” of the current political alliances, as there is no longer any reason why pro-memorandum forces “should go on refusing to collaborate” with Alexis Tsipras. It is far from impossible, he contended, that To Potami, Pasok and even a wing of New Democracy could end up getting into bed with Tsipras - and it was “precisely” the latter that Syriza was “giving a nod and a wink to” when it chose to support Prokopis Pavlopoulos, a leading figure from ND’s centrist wing, for president (with 233 votes in favour).
Unsurprisingly, the ‘official communist’ KKE - which now looks certain to gain more votes in the next election (unlike Syriza) - was not keen to express sympathy for ‘comrade’ Tsipras, who was, after all, caught in an obviously impossible position between the Scylla of the troika and the Charybdis of the anti-memorandum masses. No, it denounces Tsipras as a reformist sell-out and Syriza as the “left reserve force” of capitalism.8 Indeed, a Syriza-KKE battle is looming - whether over the privatisation of the Piraeus docks, a staunch KKE base, or the future direction of the country in general. In fact, Tsipras will soon face his first protest rally since becoming prime minister, given that the KKE has called for a demonstration on February 27 against the bailout agreement. The Syriza leader stands accused of caving in to the euro zone leaders and trying to deceive the public about the results - which “contain all the anti-popular policies” of ND and Pasok.9
As for Golden Dawn and other far-right formations, their attitude is totally predictable - Tsipras is a national traitor like all Marxists and communists: look at how they have betrayed the country. Greece will continue to be polarised between the far right (maybe including sections of the Independent Greeks) and the far left: the centre cannot possibly hold. Under such crisis conditions, it is not entirely inconceivable that the EU will sponsor some sort of coup - whether militarily or constitutionally. Perhaps attempt to get a technocratic government installed, as in Italy.
All this demonstrates the folly of tying yourself to the Syriza flag, as Left Unity stupidly did - making it a sister party and so on. Even worse, forces within LU are now talking about an “anti-austerity alliance”, using Syriza as their model. Complete madness, when you consider that the Syriza government is now committed to implementing its version of austerity - lite or otherwise. Talk about shooting yourself in the foot.
By contrast, we have the approach of the Bolsheviks to taking power - how did they justify it? On the scales of history the main justification for taking power in such an appalling backward country as Russia was that it would spark the European revolution (a realistic expectation at the time), which in turn would come to the aid and rescue of the isolated Bolsheviks - the working class being a small minority within the country as a whole.
Look at how they viewed the Treaty of Brest-Litovsk, which meant accepting huge territorial losses - not to mention becoming the objects of vitriolic denunciation by forces to their left and right. But they did not do a Alexis Tsipras and blithely declare it a ‘victory’. Rather, they viewed it as a regrettable necessity, which bought some time, whilst they waited for the German socialist revolution - which tragically never came, thanks to the treachery of social democracy. Syriza, on the other hand, has no such vision or hope.
If you find yourself in a situation where there is absolutely no reasonable or viable prospect of carrying out your full minimum programme, then you should remain a party of extreme opposition - something that stands full-square in the Second International tradition, to which Lenin and the Bolsheviks fully subscribed. Regrettably, sections of the left think the Weekly Worker is mad for raising these issues - showing how they have lost their historical memory. But there are objective, material factors that cannot be overcome by an act of will or even a big popular vote. Greece, at the end of the day, is a small and economically weak country that does not produce much in terms of industrial production and, if placed under siege, would be unlikely to be able to feed itself: essentially it is a tourist and shipping country.
What Syriza should have done, if it had being any sort of a genuine Marxist party, is resist the temptation of government (‘taking power’) - let the pro-memorandum parties take responsibility for the shit they created. It should have concentrated instead on building up its own forces and digging deeper roots in society, to the point where it became genuinely hegemonic within Greece. Most importantly of all, it should have aimed to develop and deepen its European connections and contacts, with the eventual aim of taking power on a continent-wide basis alongside other working class parties.
Instead, like others before them, Syriza fell for the trap of government - leaving itself in a lose-lose situation, with extraordinarily limited room for manoeuvre.
2. The excess of revenue over spending when debt-servicing costs are excluded.
4. ‘Mint’ is an acronym referring to the economies of Mexico, Indonesia, Nigeria and Turkey, invented by Jim O’Neill of Goldman Sachs, who also thought up the term ‘Brics’.