Managing a debt colony

Having ‘taken the power’, writes Eddie Ford, Syriza is now an agent of the institutions

“Our goal is recovery and reconstruction,” declared Yannis Dragasakis, the Greek deputy prime minister. The recently re-elected Syriza-Independent Greeks (Anel) government claims it will “prioritise” improving the business environment for small and medium-sized enterprises - some 40,000 are expected to go bankrupt by the end of the year, adding to the more than 150,000 companies that have gone bust since the crisis began in 2009.

In reality, the government will prioritise one thing and one thing only - implementing at the behest of the ‘institutions’ a vicious austerity programme that is considerably worse than the original deal, which was resoundingly rejected in the farcical July 5 referendum. Farcical, of course, because Alexis Tsipras had already secretly accepted virtually all of the demands that he was pretending to reject as “humiliation”, “extortion”, etc. Making a mockery of democracy, you were going to get austerity whether you voted ‘oxi’ or not - the entire referendum was a fraud, a bit like the Syriza government itself (rather fancifully, some have speculated that Tsipras actually would have preferred a ‘nai’ vote in the referendum).

No wonder that the turnout for the September 20 general election was a near-record low of 56.6%, demoralised voters coming to the reasonable conclusion that it does not really matter who you vote for - the country is being run from Berlin and Brussels. Greece is now effectively a debt colony under constant monitoring from a swarm of box-ticking, bean-counting officials from the European Union, International Monetary Fund and European Central Bank.

Bad deal

Once the election results were announced, Tsipras told supporters in Athens that Greece would “continue the struggle we began seven months ago”, when Syriza was first elected to government. But the Tsipras government has done nothing to radically extend democracy over these months. The standing army and the old state bureaucracy remain fully intact. There have been no attempts to expropriate the big capitalists or the landed estates of the orthodox church - nor any moves to promote trade unionisation, let alone workers’ control over production. All we have had are some modest reforms, such as free electricity for the unemployed and the granting of citizen rights to the children of migrants born in Greece (which Anel voted against, naturally).1

Rather, Syriza just engaged in a constant round of pointless negotiations with the institutions - which were never going to blink first, not even after being harangued by Yanis Varoufakis, the extremely ‘erratic’ Marxist and possibly the world’s most famous ex-finance minister. Nor were the Spanish, German or the Italian working class, for instance, ever going to come to the rescue of the Athens government. The Tsipras team was not providing a breathing space for revolution or radical democratic advance, but instead just delaying the inevitable capitulation. Syriza was always going to become an agent of austerity, once it ‘took the power’ - as the British left foolishly urged it to do. It was just a question of how and when.

Now we have the new €86 billion bailout package, which for Tsipras was a “bad deal”, but still better than a “disorderly default”, leading to the total collapse of the banking system and Athens being forced to go back to the drachma. The three-year programme includes a hike in VAT to 23%, cuts to public-sector wages and benefits, increasing the retirement age to 67, less generous pensions, massive privatisations (the docks, etc), yet more ‘liberalisation’ of the economy and more ‘reforms’ to the labour market, with new rules on industrial action and collective dismissals - not to mention talk about “quasi-automatic spending cuts in case of deviations from ambitious primary surplus targets” of 3.5% from 2018 onwards and a new fund to manage the sell-off of the country’s state-owned assets. This fund is technically run by the Greek government, but is actually ‘supervised’ by the “relevant European institutions”. Humiliation heaped upon humiliation.

Yet in many respects the bailout agreement has been “designed to fail”, as Varoufakis argued in The Guardian (September 29). For instance, he writes, “illiquid small businesses, with no access to capital markets, have to now pre-pay next year’s tax on their projected 2016 profits” - and households will now need to “fork out outrageous property taxes on non-performing apartments and shops”, which they cannot even sell. Just as night follows day, the hike in VAT will “boost VAT evasion”. Week in week out, Varoufakis continues, the institutions will be “demanding more recessionary, anti-social policies”: pension cuts, lower child benefits, more foreclosures, etc. Constant sacrifices. Whatever debt relief Greece might eventually get, it will be very modest - but still enough to keep Greece in servitude to its creditors for decades.

Indeed, Klaus Regling, the head of the European Stability Mechanism - which will hold more than 60% of Greek debt by the end of the new rescue programme - has gone on record saying that Greece should not expect any large-scale debt relief or write-down, as Athens was already benefiting from generous loan terms that were the most concessionary “in world history” (Financial Times, October 1). Regling’s basic argument is that Greece’s debt should be measured by what Athens currently has to pay on an annual basis rather than the overall stock of debt, because private investors - who must ultimately replace bailout lending - care more about such “debt flows” than the overall debt levels, which remain the highest in the euro zone and are still rising.

The Syriza government has to start implementing some of these measures this month if Athens is to unlock the new bailout funds. In the words of the leftwing daily, Efimerida twn Syntaktwn, the new government has “no time to waste on trials and experiments”, as the third memorandum “leaves no space” for prevarication. It notes that “within three months 56.4% of the measures, or 127 actions, have to be taken”. After which, assuming that Athens passes the very first quarterly review/inspection demanded by the institutions, euro zone leaders will then begin to discuss the ‘rescheduling’ of Greek debt - which as currently constituted is clearly unsustainable and unrepayable, except in some alternative universe.

Inevitably, the nature of this debt rescheduling or restructuring has become the subject of some acrimonious debate. In a ‘secret’ report leaked to Reuters and sent to European leaders on July 13, the IMF argued that Greece needed “debt relief on a scale that would need to go well beyond what has been under consideration to date” from either the ESM, ECB or the European Commission - possibly decades-long extensions of repayment schedules with long “grace periods” of up to 30 years, when Athens would be free of even interest payments. Either that, warned the IMF, or face the choice of either annual transfers to the Greek budget, or “deep, upfront haircuts” (ie, cancellation of part of the debt). The report prompted concerns in official circles about whether the IMF will commit to a third rescue programme at all - something considered essential for Berlin to win approval for bailout payments in the Bundestag (though naturally, the German government is resolutely opposed to debt relief or haircuts).

Anyhow, this rescheduling will take the form - at least in theory - of accessing lower-cost euro zone liquidity and subsequent inclusion in the ECB’s quantitative easing programme. Nevertheless, regardless of the exact shape or nature of any putative debt restructuring scheme, Tsipras told the inaugural meeting of his new cabinet that Greece must “quickly implement” the new bailout deal.2 He is fully committed to the anti-working class austerity programme drawn up for him by the institutions, meaning he is now acting on behalf of the international bourgeoisie.


The financial press approvingly noted that Tsipras brought back the team that brokered the new bailout agreement (third memorandum). The Oxford-educated Euclid Tsakalotos returned as finance minister and Giorgos Houliarakis - the chief negotiator at the talks - was appointed junior or ‘alternative’ finance minister. Giorgos Stathakis resumed his duties as head of the ministry of growth and development, and Dragasakis retained his position as deputy prime minister - friends apparently describing him as “rigid and inflexible in terms of socialist perspective”, but also tactically flexible, because he brings the “realism of everyday life”.3

The FT is also pleased that Tsipras is “seeding” some ministries with Syriza politicians who have recently jumped ship from the once mighty Pasok - they are “considered more competent and more willing than Syriza veterans to implement the bailout terms”. The paper is still worried, however, that Houliarakis might become a victim of the “ideological opposition” that is supposedly “incubating” Syriza’s left wing (September 29). We read that European leaders “like and respect” Houliarakis, whose “technical expertise and media-shy habits” place him in a different world to Varoufakis, who was regarded in euro zone capitals as the “most unbearably garrulous and irritating man they had ever dealt with”. Sentiments echoed by Regling, who thought Varoufakis had “many strange ideas”. Luckily though, he added, Tsipras is “clearly very different” from Varoufakis, because he went to the election campaign “promising to implement” the bailout programme, which is “completely different from the rhetoric before”.

The same issue of the FT also recounts a joke doing the rounds in Athens: the best thing that Alexis Tsipras has going for him is that he will not be under attack from Alexis Tsipras - no critic was more scathing of the Greek government that the Syriza leader when he was in opposition. Expounding on the joke, our FT journalist remarks that it is just as well that the “moderate incarnation of Mr Tsipras has no Doppelgänger on his left flank, impatient to give him a tongue-lashing for hypocrisy and opportunism”.

Perhaps the most interesting comments came from George Pagoulatos in the conservative Kathimerini newspaper.4 In an article acclaiming the “shift to political responsibility”, he writes about the implications of the second Syriza-Anel government - saying that the “mediocre” Tsipras II government is better than the “bad” Tsipras I government. At least the country is “being spared Tsipras in the opposition”, he quips. Pagoulatos warns that he “must apply the milestones and reforms for a timely and successful first review”. If so, he remarks, European leaders, markets and investors are ready to “reward Tsipras’s accession to pragmatism” - “eager to welcome the Lula of the Mediterranean”.

He then points out that like so many leftwing leaders before him, Tsipras found themselves in a “similar situation of dissonance between their ideology and the surrounding reality”. But they all had their own “TINA moment”,5 when they “realised that in conditions of free capital mobility, socialism in one country does not exist as an option, and adjusting to globalised competition is the only responsible choice”. Hence, for Pagoulatos, Tsipras’s “shift to realism is the graduation to political responsibility” - just as “other socialist or leftwing leaders underwent the same when having to govern at times of intense globalisation, let alone binding conditionality” (my emphasis).

We in the CPGB share aspects of this analysis, albeit from the opposite end of the telescope. Unfortunately, we were almost totally alone in saying right from the beginning that a Syriza government would be a disaster - it would have absolutely no chance of carrying out its own reformist programme, let alone a Marxist one (impossible in one country, or even a series of countries, if left isolated and uncoordinated). Such a government would by definition be committed to managing capitalism, hence - sincere intentions aside - would be forced by the logic of capital to attack the working class. For this very reason, we always strongly counselled against Syriza ‘taking the power’. True, alternatively, it could have gone for Grexit, as advocated by Left Opposition/Popular Unity and the KKE - catastrophically taking Greece down the road of national socialism and utter impoverishment in a bid to ape the Albania of old. No, it would have been far better if Syriza had become a party of extreme opposition, trying to dig deeper roots in society, building up its own forces to the point where it had become genuinely hegemonic within Greece and attempting to organise on an all-European level with other working class and socialist parties.

But, showing their philistinism and lack of historical memory, the left thought we were mad for coming out with a perfectly orthodox Marxist position. ‘Common sense’ dictated, instead, that the left must form a government in Greece, even though it had won the election on only 36.3% of the popular vote (on a 63.6% turnout) with an artificially inflated number of MPs thanks to the anti-democratic 50-seat ‘top-up’ rule - absolutely no mandate for the transition to socialism, no matter how understood. Marxists should criticise such a government, not glorify it.

Yet almost everybody on the soft/reformist left enthusiastically identified with Syriza - the Greens, Sinn Féin, Podemos, Jeremy Corbyn, Left Unity, etc. For the latter, Syriza was a “sister party”, whose programme LU would emulate if given half a chance. Comrade Andrew Burgin even told us that Syriza had formed the “first workers’ government elected in Europe since the Popular Front took office in Spain in 1936”, and so the “challenge” to left critics of Syriza is “whether they will support the formation of such a government and whether they will fight to defend it” - seeing how it “constitutes the front line in the struggle against the system which will destroy us all unless, collectively, we resist”.6

Funnily enough, we now get a loud and conspicuous silence from LU about its “sister party” in Greece - significant in its own way. Maybe the LU leadership will enlighten us at some stage by issuing a definitive statement or article as to its views on the current Tsipras government - come on, comrades, don’t be shy.



1. www.keeptalkinggreece.com/2015/07/09/parliament-approves-bill-granting-greek-citizenship-to-migrants-children.

2. https://youtu.be/E86rO1qdAPY.

3. www.grreporter.info/en/who_hiding_behind_economic_programme_syriza/7063.

4. www.ekathimerini.com/202206/opinion/ekathimerini/comment/tsipras-ii-the-shift-to-political-responsibility.

5. Referring to Margaret Thatcher’s infamous ‘There is no alternative’.

6. http://leftunity.org/why-we-must-support-a-syriza-government-in-greece.