On Thursday 5 March European Central Bank (ECB) President Mario Draghi refused to increase the limits on the Greek government’s issuing of treasury bills. He extended the provision of emergency liquidity to Greek banks via the ELA by only 500 million euros, to €68.8 billion.
Draghi reiterated that “Greece will not participate in the QE program [Quantitative Easing, that is, ECB buying-up of government bonds]... a country in an economic program [i.e. Memorandum] under evaluation cannot be included.
“The ECB cannot until July or August purchase Greek securities under the program of QE since already the securities held by the ECB are beyond the limit set.
Martin Gegker, representative of the German ministry of finance, stated in the run-up to the 9 March meeting of eurozone finance ministers that “the sooner the Greek government implements the program of the so-called reforms the sooner the money will be released... the process cannot last beyond the end of June.”
It is now apparent that the 24 February “Eurogroup agreement”, with the “creative ambiguity” and “fuzziness” proudly described by Greek finance minister Yanis Varoufakis, has strengthened and emboldened the lenders, rather than easing the pressure on the government.
Prime Minister Alexis Tsipras told the German magazine Der Spiegel (7 March) that “the ECB is still holding onto the rope that is around our necks”. Thus he confesses that the four month extension has not granted the government breathing space but in fact has increased the appetite of the EU leaders for further blackmailing and scaremongering about bank-runs, bankruptcy and Grexits.
Now things are absolutely clear. Even a government that has as its cornerstone of its policy to safeguard, at all costs, the position of Greece in the European Union and the euro, a government of the Left (with right crutch), which, however, promised that they would not bring further austerity measurements (invalidating the infamous Chardouvelis e-mail) and that they will remove the memoranda is “stuck in the wall”.
The government has been blackmailed by the leaders in the European Union and the European Central Bank to follow Memorandum policies unswervingly.
It is not allowed to implement its further-chopped-down version of Syriza’s Thessaloniki declaration, despite its election victory and its 70% approval rate. It is stated at all tones, from the softest to the hardest, by the EU leaders that the government must comply with the rules, which are beyond and above parliamentary elections and programmatic pledges.
At the same time Brussels and Berlin are signalling that they are not happy with the “seven points” of the government. They are not enough. They must be supplemented by other measures.
The German government is interested in advancing privatisations in Greece and grabbing the fourteen regional airports. Spain insists on increasing the VAT rates on Greece’s islands (currently 30% below mainland rates) because of tourist-industry competition, and other states are interested in that increase in VAT to get more revenues for loan repayments.
The government has established its line of defence. It has submitted its proposal to the “institutions” reassuring them that it will meet all its financial obligations in a timely way and that all its measures to address the humanitarian crisis will not create a fiscal gap, but will instead be financed by a drive against tax evasion, tax avoidance, and corruption.
The government has not ruled out the possibility of handing over the regional airports and increasing VAT on the islands. But Minister of the Interior Nick Voutsis says that the government and our country are “at war”, “a social and class war” in the negotiations.
Finance Minister Varoufakis has sent proposals to the other 18 eurozone finance ministers, to be discussed at the Eurogroup on Monday 9 March.
Varpufakis’s proposal to recruit informers who with cameras and tape recorders will record tax offences in tourist areas is ridiculous.
The Greek state is owed around €76 billion and the government is hoping to collect around €9 billion. The €76 billion are owed by 3.67 million individuals and 447,000 businesses. 3.7 million debtors, owing up to €5000 each, account for a total of €2.3 billion. The remaining 400,000 have debts of €73.7 bn, and just 6,500 (4,000 companies and 2,500 individuals), owe a total of €60.4 billion, over €1 million each.
The question that faces the government is whether they will try to collect “small amounts” from the 3.7 million debtors or target the 6,5000 big debtors. The government seems to be going for the first line, which presents as a “service”‘ to the many poor debtors “enabling” them to repay their debts.
The government talks about an expenditure of around €200 million to address extreme problems of poverty, and about €500 million to restore the “13th month” of pensions for low-income pensioners on less than €700 euros per months), a total of 700 million. This is one-third of the €2.6 billion projected to be collected by the government from maintaining what is euphemistically referred to as the Special Contribution Solidarity tax in wages (1% to 3%), i.e. annulling the previous government’s commitment to reduce the tax hike by 30%.
This means an internal transfer of resources from the poor to the poorest, leaving intact the upper middle class and of course the capitalist class, media barons, financial oligarchs, shipping capital, military and church property.
The ship-owning section of the Greek capitalist class enjoys numerous tax reliefs which remain intact. The value of the Greek-owned merchant fleet is about €106 billion, while the GDP of Greece does not exceed €180 billion. Greece ranks first in the value of purchases of new ships for 2014: €8.5 billion, with the US second at €3.5 billion. he maximum tax rate for corporations has been cut from 45% to 25% and there is not talk of raising it.
Yet the Syriza government still maintains its connection to the masses and still remains the repository of working class expectations. Also, it still retains a huge potential for taking policy initiatives in Greece and abroad. Syriza’s government has not yet registered a full strategic defeat, through the government falling, or through Syriza undertaking the active management of a new memorandum programme and formally abandoning the Thessaloniki agenda.
Syriza’s leaders have a sincere commitment to their promises to overthrow austerity, but also the illusion that this can happen smoothly, with “security” within the eurozone framework.
The question now is not what space of manoeuvre the government has within the straitjacket of the existing relation of forces within the eurozone, but what program should the government implement despite and against the eurozone deal, and how should the Syriza rank and file mobilise to demand that programme.
The Syriza government’s position should be Syriza’s congress decision: “No sacrifice for the euro”. That would signify a qualitative break from the negotiating practices of the previous pro-Memorandum governments (ND, Pasok, Laos, Dimar), for whom all claims had as their political boundary the representations of the interests of the ruling class codified under the slogan “within the eurozone at all costs”. The political boundary of this government should be: no return to the anti-working class memorandum policies. Instead of “within the eurozone at all costs” — “at all costs get out of the Memorandum”.
In today’s political and economic conditions such a programme may lead to Greece being expelled from the eurozone.
The likelihood of this scenario is debatable. However, actions that may result in a forced “Grexit” will require the government of Syriza to deepen the popular mandate with a referendum question, “abandon the anti-working-class Memoranda or submit to the eurozone leaders’ requirements”.
If Syriza does not develop a dynamic that reinforces the radical nature of its policy and strengthens its bargaining position against the EU neo-liberal forces, then at the next stage the Syriza government will be crushed by the political class enemy. The most likely variant would be the dissolution of the left government and the pro-Memorandum mutation of a section of Syriza into a national coalition with the other ruling class pro-memorandum forces of ND, Pasok, Potami, etc.) That development would be a total defeat for the Greek left and strengthen right-wing forces.
The political context is one where the working class and popular strata have achieved a first and important victory against the reactionary Pasok-ND forces, and it is now necessary and possible for this victory to deepen and obtain a more concrete and coherent radical working-class direction.
It is the duty of the radical Left in and outside of Syriza to organise open general meetings in the unions, in the community, in the neighbourhood, in the popular assemblies, informing the people about the real possibilities that lie ahead.
The radical Left and the Syriza government should be preparing the working class movement and politically, organisationally, and ideologically for the consequences of a Grexit.
Greece has an economy which can provide most of the necessities for survival such as food, housing, medicine, energy, and transport, provided that workers’ control is implemented at all levels of production and distribution.
Without spreading illusions about the benevolent nature of other non-Eurozone capitalist governments, and without disguising the fact that tough negotiations would need to take place, the government should seek alternative credit lines.
As a minimum, the government, before the next negotiations, should install a new Governor of the Bank of Greece and replace the top management of all the four big banks. The government should implement Syriza’s policy of nationalisation of the banks under workers and social control.
The government should be ready to issue special tokens in euros from the Ministry of Finance (without approval from the institutions), with collateral the wealth of the Greek state. It should force the banks to maintain reserves in cash so they can make cash advances of at least €200 per week per family to cover subsistence needs. It should ban bigger cash withdrawals at least 15 days before and after the initiation of the next negotiations.
The government and Syriza have only one way out of the impasse of the neo-liberal European straitjacket: a big drive forward.
It should declare an internal “Memorandum for the rich and the wealth”, while improving the living conditions of the working classes and popular strata. The slogan “Make The Rich Pay For The Crisis” is more timely and appropriate than ever.
In a society where the loss of 25% of GDP and the poverty and destitution of a large segment of the population is only the visible face of the rapid intensification of social inequality in a society that massive unemployment is the complement of an extended medieval working conditions, in a society of multiple contradiction and high expectations, the “popularity” of the government will not be maintained at 87% or 80% for a long time.
For the Syriza government to retain its hegemony on the working class and the majority of the Greek population, it is essential to unilaterally defend and support the working class majority against the EU neo-liberal framework and the national capitalist class. Margin for “nation centred” policies that generally and vaguely defend everything “Greek” or “European” does not exist and they can never be part of the political and ideological manifesto of the Left.
In any case, the forces of the radical left must also lay and reinforce the red lines that define the independence of the Left against national unity scenarios and a new left disarmament.
The left should “confront” the government with demands for decent wages and pensions, decent education, transportation and health care, and also prove through mobilisation that there is “another way” of dealing with the lenders besides capitulation. The call of a anti-Memorandum united-front government of the Left should be re-raised by Syriza activists.
Responsibility also lies with the international and especially the European Left. In Spain, France and Italy, in Germany itself, policy initiatives should be taken which would prevent the “institutions” strangling and overthrowing the government in Greece.
Syriza is a party of the radical left that in its congress voted for a united front and an anti-Memorandum government of the Left as a vehicle to overthrow austerity in Greece and in Europe. It is a party that in recent years has clashed with the Memoranda and the Troika in the streets together with the working class. It is the party of the cleaners and ERT workers.
The party of Syriza should be first and foremost the exponent of the collective consciousness of the working class, the organizer of their “anger and impatience”. The party should not advice the working class to “be patient”, but “to organise together to fight for our demands and advance working-class interests”.
The main task of Syriza is not to welcoming the government’s work and become the government’s spokesman, but the other way around. The party should be the representative of the working class and its guarantor by controlling the government and ensuring that its pro-working class programme is implemented.