Greece: any deal must be opposed

Submitted by Matthew on 10 June, 2015 - 10:27 Author: Theodora Polenta

As we go to press, the Greek government and its EU lenders are still crossing swords over the terms on which Greece will get further bailout funds from its IMF-EU lenders.

The details of the reform wanted by the lenders and what the Greek government is saying it will concede are more-or-less clear. Whatever version of reform is agreed, the character of previous memorandums between Greece and its lenders, with strict commitments to deficit reduction etc., will remain intact.

The EU lenders want the following: higher government budget surpluses; cuts in public spending; watering-down or withdrawal of the commitment to reinstate sacked public sector workers; dramatic restrictions on collective labour agreements; privatisation of public organisations; the regressive property tax (ENFIA) to stay; increases in indirect taxation even on water, electricity and food; pension cuts; massive debt repayments (since 25 January €7.5 billion have been paid to the creditors without the Greek government receiving a penny from the pending bailout instalments); abandonment of the €12,000 taxation threshold; abandonment/freezing of the increase of the minimum wage.

While both sides have verbally upped the ante at each stage of the negotiations, especially after Tsipras took a direct role in them, each time there has been another defeat for the Syriza government and a further back tracking on the commitments made in the Thessaloniki declaration. Each time an adjustment in the expectations of the Syriza’s rank and file, trade unionists, social movements and supporters.

We have seen regression from a programme of bank nationalisation, abolition of the majority of the debt, worker’s power and control, to the Thessaloniki declarations and the abolition of the memorandum, then recently to the government’s so-called red lines on collective bargaining agreements and further reductions on wages and pensions. Now to the gradual fading of these lines.

What do the lenders want?

Lenders want a primary government budget surplus equivalent to 1% of GDP in 2015, 2% of GDP in 2016, 3% of GDP in 2017 and 3.5% of GDP in 2018. Although lower than the previous memorandum targets these are higher than those proposed by Athens (0.6% of GDP this year, 1.5% of GDP in 2016). Further cuts of €3 billion are required for this year.

Lenders want two rates of indirect taxes — of 11% and 23%. 11% will cover drugs, food and hotels, while 23% all other products including the tariffs on the utilities (electricity-telephone-water). The government will be asked to choose which categories of food will fall under the 23%. The “partners” have demanded changes in VAT which would increase revenues by €1.8 billion.

The lenders want the government to maintain a zero deficit on the pension pot and the abolition of EKAS (a social security supplement for poorer pensioners). They also want pension spending to be cut by 0.5% of GDP (up from 0.25% of GDP). A further reduction of 1% of GDP (€1.8 billion) would be made in 2016.

The lenders want to stop an increase in the minimum wage back to the pre-memorandum levels as promised by Syriza.

The lenders want the privatisation of ADMHE (Independent Operator of Transmission of Electrical Energy), and the privatisation of 14 regional airports and the ports.

Finally it appears as if the lenders will not tolerate any proposal on the restructuring or reduction of the debt.

The intention of the “Institutions” are clear: the annulment of the popular electoral mandate and Greece’s sovereignty, and to punish the Greek people who chose a government of the left (not a “proper” political party in the view of Jean-Claude Junker, President of the European Commission). They want to erase the Greek rebellion, a spark that could light a fire against austerity policies around Europe (especially Podemos).

The Greek working class movement could deal with the “institutions” in the way it has been doing for the last five years – with strikes etc. But the “complication” is the stance of the Syriza government.

A leaked government proposal is not at all painless for the Greek working class people and the popular strata. Proposals include VAT increases, solidarity taxes (on luxury goods). There are also detailed plans for privatisations, from regional airports to ports, with projected revenues, not only for this year but for years to come. Included are details on increasing the retirement age, detailed measures on the “liberalisation” of the market in the transport sector, pharmacies etc.

The measures demanded by the lenders are far more vicious against the working class but the government proposals will not comfort Syriza’s supporters. The final agreement, at best, will be located somewhere between the two texts. The political shift is staggering — the popular mandate was clear and uncompromising: abolition of memoranda and all its relevant laws.

The Greek government’s decision not to pay the €298 million installment due to the IMF on Friday 5 June appeared to be a threat or an act of “rupture” with the lenders and an escalation of the conflict. They said they would consolidate three installments into one and repay this on 19 June with the hope that a new agreement would have been reached and Greece’s lack of cash would have been resolved.

The truth is this move was not a unilateral action by the government, made without informing and consulting the lenders; despite statements by the IMF’s head Christine Laggard that they had been taken by surprise. The ECB President Mario Draghi had already signalled that the ECB has no problem with such “initiative”. It was an administrative–technical act that has been done in the past.

Draghi’s assurance was deliberate, designed to avoid new turmoil in the international markets — timed especially for the meeting of the G7 in Ellmau Vavarias and to avoid misunderstanding about whether Greece’s “decision” not to repay the first tranche to the IMF was a rupture with the creditors and signalled defaulting on servicing the debt.

It is blatantly obvious that the “partners” and lenders do not even want an honourable compromise and seek to lead us into complete submission. But such an agreement should not even be a basis for discussion.

We all remember (the anything but “maximalist”) Thessaloniki declarations and the 100 day implementation program, which would be carried out regardless of the progress of the negotiations. We have not yet forgotten the policy statements, let alone the decisions of the founding congress of Syriza.

The “irrational” demands of the institutions, are a great opportunity for the Greek government not to “step back” from its electoral commitments. The Syriza government needs to speak the language of truth to prepare the Greek working class and popular strata for default and conflict with the lenders who are requesting the renewal of the popular mandate through elections and mobilisations, for a road that leads out of the memoranda of austerity, unemployment, and servitude.

Whether or not a rotten “compromise” can be reached between the Greek government and the international loan sharks, it is clear that the “final or bridge” agreement cannot be a viable solution from the perspective of the working class. It cannot take Greece out from the vicious cycle of continuous borrowing to pay the debt or the recession and and sustained crisis that has destroyed small property and had condemned workers, youth and pensioners to poverty and destitution. The Syriza government should not accept a new, third memorandum straightjacket.

An agreement on current terms is not politically manageable from a government that is supported by Syriza. In both of the scenarios — subjugation to the lenders’ ultimatum or Syriza’s austerity-lite version — the government will very soon be confronted by the rank-and-file of Syriza, its electoral base and supporters as well as the revolutionary left in and outside Syriza, the unionised workers, the unemployed, the battered middle class, the movements against privatization.

A possible agreement cannot be approved by the Syriza party, especially under current internal dynamics, with the Left Platform inside Syriza gaining momentum.

The Syriza leadership’s “threat” of “party discipline” if its MPs refuse to vote for the government’s negotiation document, is aimed directly at the Left Platform, testing its “loyalty”. The possibility of an agreement, which would seal “a strategic and tactical defeat” for the government should not cow the left and lead it to act in a way which seeks postponement of confrontation with the bourgeois and imperialist powers.

The Greek ruling class and their political representatives are now looking to the formation of a “national salvation” government, formed to implement a new memorandum agreement, a government which excludes Syriza’s Left Platform. But a call for new elections does not serve ruling class interests given the state of the two main parties, PASOK and New Democracy. There is no mainstream political alternative for the ruling class.

The choice of defaulting on repayment instalments while demanding an abolition of most of the debt, linked with a pro-working class redistribution policy, is urgently required. This can turn the possibility of a moratorium default and the threat of GREXIT from being a bogeyman for the majority in Greece, into a weapon against the blackmail of the creditors; it can become an alternative perspective.

Despite the mistakes and failures of the Syriza government, the road for developing the left alternative remains open. Syriza should not be afraid of political developments but should speed up and be the instigator of political developments. The negotiations and the payments of instalments should stop immediately, the government should make no concessions to the “institutions” and speak clearly to the people on the following basis.

Lead the country to elections with more “maximalist expectations”.

Fight once more for a transitional “government of the Left”. It is time to concretise, via the bitter experience Syriza’s forgotten slogan of “No sacrifice for the Euro”. .

Syriza must declare inside and outside the country that the left will not be subordinated to neoliberal dogmas, does not implement austerity policies or sign memoranda.

Syriza is fighting for the direct redistribution of wealth and power in favour of the workers, the unemployed, the popular strata and all marginalised sections of society.

Syriza is prepared to collide and confront through rupture the Greek ruling class and its institutions, while claiming its independence from all sorts of imperialist impositions, either inside or outside the Eurozone.

This message can activate and embolden the only “revolutionary subject” and agent of change: the working class and the social movements in Greece and throughout Europe. It can shape the conditions for the left throughout Europe.

Only a revolutionary workers’ government can see through such a course of action, with a programme of transitional demands, nationalisation of the banking system and large enterprises of strategic importance, without compensation and under workers’ control and management.

Simultaneously we need a battle for a pan-European working-class mobilisation to overthrow all governments, to fight for workers’ government and a unification of Europe on new socialist basis.

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