Greece: fight the blackmail!

Submitted by Matthew on 6 June, 2012 - 9:32

In the run-up to Greece’s election on 17 June, the left-wing coalition Syriza and the conservative New Democracy are still neck-and-neck in the polls. But the EU leaders are trying to blackmail the Greek people into voting for the pro-cuts parties.

A barrage of blackmailing has been directed against Greece from representatives of the capitalist class, both national and international, both elected and unelected.

From the social democrats comes soft blackmailing — “comply, and we can sort out some concessions; but defy, and that means disaster”.

That is the soft-cop accompaniment to the hard blackmailing and threats of immediate expulsion of Greece from the eurozone by the mujahedeen of neoliberalism.

Recently Daniel Cohn-Bendit, who was “Danny the Red” in France’s May 1968 movement and is now a sort of pink-Green, added himself to the list of those blackmailing the Greek people.

Cohn-Bendit had previously been “pro-Greek”, and he switched when a left political alternative in Greece became a possibility. Now he says, as brutally as German finance minister Schäuble or more so, that the eurozone and EU will stop cooperating with Greece — i.e. stop bailing out Greece and push Greece into bankruptcy — if Syriza sticks with its promises to cancel the memorandum and reinstating people’s wages to the 2009 level.

French president Francois Hollande refused to meet Syriza leader Alexis Tsipras when Tsipras visited France, stating as an excuse that Tsipras is not an elected prime minister. However, Hollande did meet Pasok leader Evangelos Venizelos — who came third in the 6 May elections — in a desperate attempt to give life to the dead body of Pasok.

From the social democrats, the magic words are Eurobonds for development projects. But even if these come, the major developments proposed are in areas of “low employment intensity”:

1. Energy (which will involved further privatisation of the Greek energy sector, more redundancies, and a looting of our collective wealth and infrastructure)

2. Transportation and “big projects” in motorways. Many such projects remain unfinished; now they will be financed by European bonds and presumably handed to German and French companies

3. Oil pipelines (subject to the resolution of the conflicts and decisions on which pipelines will pass via Greece).

The projects will have a nil impact on improving the majority of the Greek population’s living standards and working conditions, as they are not in areas such as industry, agriculture, clothing, food, etc.

With the social-democratic carrot comes the stick from the mujahedeen of austerity: Schäuble, Merkel, Barroso, Draghi, Provopoulos, Lagarde.

They equate Syriza getting elected with inevitable Greek exit from the eurozone, with Greek bankruptcy, and with further deterioration of the Greek people living standards and working conditions.

They terrorise the Greek people by pretending that they are fully prepared, with a plethora of plan Bs, Cs and Zs in the event of a Greek euro exit.

Reuters has “revealed” that the eurozone finance ministers are preparing plans for a Greek exit. Lagarde and other IMF representatives have stated that IMF is prepared for a Greek exit from the eurozone. Schäuble has stated that both ECB and Bundesbank are drawing up a contingency plan, and claimed that Greece exit would not have a major impact on Germany and the losses will be manageable.

German Chancellor Angela Merkel has proposed a five-point shock therapy, similar to the one applied to East Germany, as her version of growth and development for Greece. It includes:

1. More privatisation and selling-off of Greek assets

2. Elimination of remaining business regulations, abolition of remaining trade-union rights, and “labour market reforms” to make it easier to fire workers

3. Lower corporate taxes (than the rates already reduced to 22%)

4. Setting up of special economic zones, where employers are exempted from those taxes and social laws that remain

5. Creation of privatisation agencies and abolition of labour-protection laws

George Provopoulos, Governor of the Bank of Greece, has offered a string of suspiciously precise statistics on the effects of Greek’s exit from the eurozone: 65% devaluation of any additional currency issued by the Greek government (restored Greek drachma or “Greek Euro”); 55% further reduction in wages; 22% negative growth; 32% inflation; 37% interest rates; 12% deficit; 373% increase in the Greek debt.

What is on offer from the pro-memorandum parties, Pasok and ND, despite their promises to renegotiate the memorandum, is more of the same: austerity measures and attacks on people’s living standards and working conditions.

The economic programme of ND leader Antonis Samaras could be summarised as “memorandum, memorandum and more memorandum”. He is very fuzzy and vague about the “social measures” and “social relief that ND is intended to implement and very precise on the anti-working class measures that “need to be implemented”.

Pasok and ND can promise the following:

1. Cuts have already been agreed and planned, worth 11.5 billion, from pensions, welfare benefits, closings of schools and hospitals.

2. Salary reductions and the dismantling of labour relations.

3. Increases in electricity bills.

4. Dismissal of 150,000 public sector workers and privatisation of 50 billion euros’ worth of public assets (infrastructure, water, energy, natural resources).

5. Creation of a special fund abroad where the country’s revenues will be directed to cover obligations to bondholders. Only if anything is left over will our diminishing wages, pensions and social services be paid.

They offer ideological terrorism and a bludgeon of fear to get people to accept the memorandum Greece of:

• over one million unemployed

• over 50% unemployment for under 25s

• one third of the people living below the poverty line

• being (according to Unicef) 21st out of 29 old-industrialised countries for child poverty

• shut-down hospitals and shortages of vital medications

• over 25,000 people homeless in Athens

• an alarming increase in suicide rates

• 350,000 of small shops shut

• almost a third shrinkage of Greece’s GDP since 2008.

Despite the deficiencies, the hesitancies, and the reformist character of the programme which Syriza has presented for 17 June, it should be applauded when it says clearly that Syriza will scrap the memorandum, restore trade union rights, etc.

Syriza’s commitment that not even a single penny should be given to the creditors if the people’s needs of decent wages, pensions, welfare state provisions have not been met should be applauded.

Despite the pressure put on Syriza to water down their defiance against the memorandum and come to terms with a renegotiation, it has not surrendered. It has maintained its links with the people and movements that have been actively supporting it.

Syriza leader Alexis Tsipras has pledged to immediately remove the Cabinet Act which reduced the minimum wage by 22% (32% for under-25s).

He has also pledged to to restore unemployment benefits to previous levels and extend their duration, to restore and extend sickness and maternity, to restore the power of collective bargaining agreements, to cancel the debt of heavily indebted households, to repeal the regressive property tax for the poor working classes.

These policies need the support of each worker, each trade union and neighbouring community movement activist, each unemployed person, each worker in precarious or part-time flexible employment.

Syriza’s program can be summarized into three main points:

• people before Greek bond holders and market forces — cancellation of the memorandum;

• write off of most of the debt and freeze interest rates and debt payments for the remaining renegotiated debt

• expansion of democracy and safeguarding of Greece’s threatened sovereignty – Troika out of Greece.

The programme has triggered a wave of criticism from different sections of the left.

The criticism varies. Xekinima presents comradely criticism. It advocates a vote for Syriza and support for the formation of a Syriza-led left government, but criticises Syriza for not adopting a full socialist program.

KKE and Antarsya reject Syriza’s program as a limited reformist effort far behind the needs of the Greek working class. They declare that Syriza’s promise to cancel the memorandum is a hoax and allege that really Syriza is proposing a soft renegotiation of the memorandum.

They say that Syriza’s political role is to be a new Pasok to replace the centre-left vacuum and provide a left face for the memorandum politics. They denounce Syriza for its pro-EU stance.

They claim that the left should advocate the cancellation of the debt tied up with an exit from the eurozone, and EU, which should be “anti-capitalist” (for Antarsya) or “under popular power and control” (for KKE).

The problem with these attitudes is not that we can trust Syriza’s leaders and be sure they won’t buckle under increased pressure (they may), or that we can be sure that Syriza’s tactic of calling the bluff of the EU leaders will work (it probably won’t).

The trouble is that, under cover of left rhetoric, KKE and Antarsya are declaring defeat in advance. They are giving up on the battle to hold Syriza to its promises, and they are helping the EU and ECB leaders by sparing them the political firestorm they will have to ride through in order to expel Greece from the eurozone.

Syriza has a serious reformist programme which, if implemented, would bring gains for the Greek and European working class.

The “Euro-Keynesian” programme for Greece is limited, and naive about the realities of class struggle, but it is not utopian in the sense of being unworkable even in principle. The resources of the eurozone are large enough that the eurozone governments could concede important relief to Greece if pushed to do so by strong enough mobilisations.

The cost to the eurozone governments of a Greek exit, let alone of a eurozone break-up, would be much greater than the costs of a real “bail-out” for Greece.

The “Euro-Keynesian” programme is reformist not because it proposes something impossible but because it is limited and naive about the ferocities of class struggle.

Revolutionary Marxists should point that out. But there is no sense in demanding that Syriza adopt a socialist programme. Syriza is what it is. Demanding it adopt a socialist programme cannot transform it into a revolutionary party. All it can do is, to some degree or another, encourage illusions among workers that a “socialist programme” is no more than the Syriza policy pushed a bit more to the left by pressure.

On the other hand, Antarsya and KKE are abstaining from the class struggle, which at this point has been transferred from the industrial sphere to the political stage. They do this by distancing themselves from Syriza and the prospect of a government of the left — in fact, a version of what the Communist International in its revolutionary period termed an illusory workers’ government which could nevertheless become a starting point for a battle to create a real workers’ government.

Tsipras says he doesn’t want to scrap the bail-out fund. All Syriza’s spokesmen claim that they will renegotiate the payment of the debt (writing off most of it). but they will carry on receiving the instalments of the second bailout fund.

Syriza’s claim is fragile as the bailout funds from the Troika have as precondition the implementation of the second memorandum.

92% of the memorandum money only passes via Greece on its way to the pockets of the Greek bond holders. Europe is “bailing out” Greece, but the money is coming straight back to the Troika and its friends in the form of interest and repayments on bonds. But Troika says it will cut off the funds.

Syriza’s programme is based on calling the bluff of the eurozone.

They say memorandum not only attacks workers, etc., but doesn’t even work for the eurozone. Syriza’s line of defence to the national and international blackmail is that the memorandum policies have been leading Greece to negative growth and stagnation and are accelerating the probability of the Greece’s exit from the eurozone.

A lot of respectable economists are implicitly backing Syriza’s stance. Nobel prize winning economist Paul Krugman put it succinctly the other day when he told Radio Four that “it is deeply destructive to pursue austerity in a depression”. Another economist has stated that the worst choice that Greece could follow is the continuation of the memorandum policies, even with an addition of some anaemic growth measures.

A further ten years of austerity would lead the Greek economy into deep stagnation and negative growth and thus inevitably to a Greek bankruptcy, exit from the euro, and possibly the destruction of democracy by a military coup.

Syriza claims that the cost of a potential eurozone breakdown outweighs the cost to EU governments of bailing out Greece and scrapping the memorandum. There is a real basis for this attempt to call the EU leaders’ bluff.

The eurozone is ill-placed to resist further disintegration if Greece falls out, and the cost of a euro break-up would be huge (between 10% and 13% of GDP according to the Financial Times, 17/05/12).

Estimates of the effect of a Greek exit on the eurozone differ, but, with Spain and Portugal in a bad way already the effect would be large. The contagion of the debt crisis and the potential of a euro-disintegration is gaining momentum with talk of Portugal and Ireland having to go for a second bailout funds.

Cyprus is on the brink of joining the “memorandum” club. Spain, the fourth-biggest eurozone economy, has to pay sky-high 7% rates to borrow and is experiencing a massive bank run and outflow of capital.

The third-biggest eurozone economy, Italy, is also in trouble.

In principle the ECB has the resources to offset the disruptive effect. The chance of it moving fast enough to do that seems small.

A Greek euro-exit and bankruptcy would compromise the whole concept of the eurozone and would further devalue Spanish and Italian bonds. A domino effect, leading to the end of the eurozone, would become likely.

There is also a real basis for the EU leaders’ attempts to blackmail Greek voters. A Greece expelled from the eurozone would suffer economic chaos even if led by a workers’ government.

The eurozone political leaders cannot be trusted to act in an objective or rational way. They could decide to force Greece out of the eurozone, driven that way by the desire to set and example and punish Greece for misbehaving and not sticking to the memorandum. Or they could stumble into it.

It is the political responsibility of Syriza and the revolutionary left to alert and politically prepare the Greek working class for the effects of Greece being forced out of the eurozone.

The key issues then will be the development of European working-class solidarity; comprehensive workers’ control in Greece, including over the distribution of food and other essentials; and the development of workers’ self-defence groups to deal with the threat of the Golden Dawn fascists and of a possible future military coup.

Model motion on Greek solidarity here.

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