Greece - after Syriza's victory, towards a confrontation?

Yazdır
Spring 2015

We reproduce here extracts from an article published by our French comrades of Lutte Ouvrière in their monthly journal (Lutte de Classe 166 - March 2015).

Some of the questions raised by this article, which was written on 18 February, have been answered since. In particular, on 23rd February, the new Greek government has shown the limits of its capacity to resist the pressure of the European leaders, in a letter of intent concerning its plans which had been requested by EU leaders in return for a 4-month extension of the current bailout programme.

This letter outlines the measures that Syriza is planning to take in the coming period. However, only a few of Syriza's election pledges are explicitly listed in this letter, except emergency measures such as a programme of food vouchers for the poorest - along with a commitment that they will not increase public expenditure. Regarding Syriza's other pledges, the letter remains cautiously vague or even silent. For instance, the increase in the minimum wage will be phased in, at a rate which "will be controlled by the social partners and the international institutions" and which "will take into account the progress made in terms of productivity and competitiveness".

Syriza's prime minister, Tsipras, described this letter of intent as a strategic move designed to "avoid falling into the enemy's trap". Nevertheless the Greek capitalists seem to have taken it as a positive sign, since the Athens stock exchange jumped instantly by 9%.

What remains to be seen, however, is how those who voted Syriza into office will react to this. Will they allow Tsipras to renege on the measures contained in its election manifesto and accept that this can be justified by the pressure of Greece's international lenders? Or, on the contrary, will they choose to stand up for these measures, taking upon themselves the task to force Syriza to deliver the goods and to impose them on the Greek and international capitalist class? The evolution of political situation in Greece over the coming months depends on the answer to these questions, including whether, in the absence of an organised fightback, the far-right Golden Dawn will be able to take advantage of a climate of deep disillusion and reinforce itself.

Syriza's 25th January victory is the first instance of an electoral shift to the left caused by popular discontent, since the outbreak of the crisis in 2008.

Syriza is a coalition of a dozen groups, all coming from a left or far left tradition, which was formed in the early 2000s, mainly for electoral reasons. Most of these groups originally came out of a "eurocommunist" split of the Greek Communist Party (KKE), which was initiated by activists who, in the name of shaking off the grip of Moscow, were seeking a way back towards some form of social-democracy. Alexis Tsipras himself, the present leader of Syriza, had got involved in politics through joining the KKE youth organisation.

In the 2009 general election, Syriza only won 4.6% of the votes. The Greek Socialist Party, PASOK, came first, with 44%. Shortly afterwards, Greece became mired in the debt crisis. The new prime minister, PASOK leader George Papandreou, turned his back on all his election promises by agreeing to comply with the austerity measures demanded by EU governments in return for their "aid". Papandreou's increasing discredit forced him to resign in 2011, while at the same time, his party was making approaches to the main right-wing party, New Democracy. This was with a view to forming a coalition government, so as to implement the same austerity policies that Papandreou had been unable to carry through. For the next 4 years, right up until this January's election, Pasok and New Democracy co-operated in government, together with smaller right-wing parties, to turn the screw on the working masses.

Despite its leading role in these coalition governments, New Democracy, managed to cut its losses in this year's general election. With 27% of the votes, it only lost 2%, compared with the previous election. By contrast, PASOK's collapse - with only 4.6% - showed that it had been massively abandoned by its traditional popular electorate. With 36% of the votes, Syriza came a clear first, including in many constituencies which, so far, had been PASOK strongholds.

An anti-austerity vote

Syriza's election campaign had focused on the austerity and privatisation measures and the "humanitarian crisis" faced by the Greek population.

With its 11m-strong population, this small country has been completely ravaged by the crisis. According to official figures, more than a quarter of the population is unemployed. Nearly one household in six has no member in work. But fewer than one in ten among the 1.4m registered unemployed in 2014 received any kind of unemployment benefit. Those who did, got just £60/week for about 8 months on average. But most of the jobless have been out of work for more than 2 years and have thus lost their entitlement to any form of social provision. According to the NGO "Doctors of the World" a growing section of the population has no option but to seek its help in order to get the most basic healthcare, which hospitals are less and less able to provide due to an acute shortage of funding and staff.

In February 2012, the minimum wage was cut by 22% - and by 32% for the under-25s. According to IKA (the country's largest health insurance fund, which is state-run), the average private sector wage fell from £181/week in 2009 to £146/week in 2013 - a 20% cut. In September 2014, official statistics reported a 25% fall in the average wage over the previous 4 years. In the private sector, more than half of the workforce is paid late, with delays ranging between 3 and 15 months. On the other hand, in the so-called "black" economy, the crisis has generated an explosion in the number of casual, unregistered jobs.

A parliamentary report estimated that more than half of the Greek population (6 million out of 11 million) "lives below the poverty line or is at risk of being affecting by poverty", including 40% of all the country's children. So yes, this is indeed a "humanitarian catastrophe" as well as a social one!

It was this dire situation which Syriza's election campaign addressed. It specifically targeted the austerity measures introduced by the previous right-wing administration. In particular, it pledged to reverse the 2012 cut in the minimum wage, to raise pensions and to restore the jobs of some of the public sector workers who were recently sacked.

By voting for Syriza, voters thus said that they had had enough, expressing their rejection of austerity. But this vote also meant that they were not cowed by the blackmail of the rich countries' governments, the Greek capitalists and their media, which had all predicted that a Syriza victory would open the floodgates of chaos. As if the bankruptcy of an economic system which has proved unable to meet the most basic needs of the population was not chaos enough! The many who voted for Syriza did not fall for this blackmail and they were right not to do so.

The Greek debt - getting the population to fill the banks' coffers

Whether they were conscious of it or not, the working masses initiated a power struggle by bringing Syriza into office. They have rejected austerity policies which were designed to make them pay for the crisis. But the capitalist class is not likely to give in, unless it is forced to do so - something that no election has ever achieved.

This power struggle started with making a stand against the EU governments, over the issue of the Greek debt. Tsipras and his finance minister, Yanis Varoufakis, went on a tour of European capitals, only to find that they would get no help from any of the EU leaders. Whatever the language they used, they all meant the same thing: they expected Greece to fulfil its "commitments" and to pay its debt in full.

Today, the country's total debt is close to £250bn. 54% of this debt is owed to European institutions set up following the eurozone crisis, 16% is owed to European governments and another 10% or so, is owed to the International Monetary Fund.

But originally, most of this debt was owed to the big banks - large international banks and domestic Greek banks which, in many cases, were local subsidiaries of the international giants. And these banks had made huge profits out of the Greek debt for several years.

After the 2007 subprime crisis, the states of the rich countries provided their banks with colossal amounts of fresh cash in order to avoid a complete financial meltdown. Within just 3 years, the public debt of the world's 10 richest countries increased from 76% to 106% of their GDPs, because of the cost of their bank bailouts.

In the large, affluent European Union, the banks used the regular supply of fresh cash offered both by the EU's richest countries and its institutions, to oblige any state in search of loans. Such investment was considered "safe" by the banks, even in the case of the weakest economies, since it was assumed that they would never be allowed to go bust by the rich EU countries.

By 2008 already, cracks were beginning to appear in eurozone economies - first that of Latvia and then of Hungary, Iceland and Ireland. This sparked off a wave of speculation which drove down the price of the bonds issued by the countries which were considered most at risk of defaulting on their debt. But by the same token, the banks were able to charge extortionate interest rates on the loans taken by these countries, thereby making the lending business even more profitable.

So, far from slowing down their lending binge in response to the first cracks in the eurozone, the banks stepped it up. What did it matter to them that this profiteering frenzy was weakening these countries even more?

Finally Greece was hit in 2009. By that time, it was having to pay up to 20% interest on its new loans, compared to only 4% before. This could not last for long and, eventually, Greece found itself on the verge of defaulting on its debt. This potential danger for the whole eurozone prompted the EU to intervene, by directly lending Greece the funds that it could no longer borrow from the banks or market at an affordable cost.

However, by acting in this way, EU leaders were not trying to bail out the Greek economy, let alone to help its population. They were only bailing out their own banks, by allowing the Greek state to pay the interest on its debt. Eventually, in October 2011, the leaders of the rich eurozone countries decided that the Greek debt needed "restructuring", so as to ensure that their own banks would lose as little as possible, if anything at all.

In this operation the richer European governments bought back the mountains of Greek bonds lying in the vaults of their own banks - thereby relieving their banks from the burden of the Greek debt, but at the expense of their own populations, of course, which were to pay for the additional public debt of their own governments.

But this did not stop the banks from complaining bitterly about the so-called "haircut" which was imposed on them - the fact that they "lost" between 50 to 70% on the theoretical value of their bonds. Except that they would certainly have "lost" a lot more by selling these bonds on a market where they were at a record low. What's more the banks had made such a fortune out of Greece's interest payments that they had really nothing to complain about!

After that, two similar so-called "aid packages" were cooked up for Greece - one in 2010 and the other in 2012 - this time under the famous "troïka" formed by the EU Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). In return for these, the Greek government had to comply with a series of austerity measures designed to get the Greek population to foot the bill. The funds that Greece was to receive from the EU were divided into quarterly slices and as a condition for receiving each slice, experts representing the "troïka" had to give a positive assessment of the progress made in implementing these measures.

The "troïka" put ruthless pressure on Greece, without any concern for the consequences. The Greek economy went into recession and its GDP fell by 25%, compared to 2008. In order to pay back and service its debt, Greece had to keep borrowing more and more and its debt went through the roof: at the beginning of this year, it had reached 176% of its GDP compared to 113% in 2009.

If anything, the case of Greece illustrates the extreme level of parasitism reached by finance capital - to the point of virtually sucking the blood of its victims until they die. In Greece just as much as in every other country, it is this parasitism which is responsible for the public deficit and debt which are being used to justify the "need" to turn the screw of austerity on the working class.

What are Syriza's objectives?

Tsipras and Syriza do not claim that they want to fight the capitalist order, let alone to overthrow it, nor do they even question it. However, they are not part of the political establishment which has long-standing material and personal links with the Greek capitalist class. If only for this reason, they are considered with suspicion by the Greek and imperialist capitalist classes - as was shown by the fact that, in the run-up to Syriza's predicted victory, £15bn worth of deposits were withdrawn from the Greek banks and transferred abroad.

What is different about the Tsipras team, compared to its predecessors, is that Tsipras pledged not to abide by the diktats of the "troïka" - in other words to refuse to act as bailiff for the imperialist institutions against the Greek population, at least within the limits of what was possible.

In the history of imperialism, many non-imperialist states - both poor and semi-industrialised - have tried to resist the law of the imperialist order in order to have some breathing space, or just in order to survive. But this imperialist law is the law of the jungle. In the end these countries have had no choice but to be subjected to the economic stranglehold of the imperialist multinationals and banks, to the looting of their resources and to the diktats of the rich imperialist powers. Indeed, the forms of domination which have replaced yesterday's colonialism may be more subtle, but they are just as ruthless.

As to the governments of these countries, they are meant to act as puppets, and to repackage the decisions dictated by their imperialist masters, so that they appear to be their own.

In fact, most of these governments are perfectly happy to play this role in so far as imperialism allows them to use their position to take their own share of the loot which is made on the back of their own people. But some refuse to play along, including regimes which have no intention of harming the imperialist order, nor even of challenging its laws, but which just want to try to prevent their countries from becoming its victims.

In a few poor countries, from Mao's China, to Cuba under Castro or Vietnam under Ho Chi Minh, regimes which had come to power thanks to powerful mass movements - peasant revolutions or national liberation movements - managed to escape from the direct domination of imperialism, at least temporarily. But others, like Mexico under Lazaro Cardenas, in the 1930s, or more recently, Egypt under Nasser or Venezuela under Chavez, proved capable of putting up a degree of resistance to the diktats of imperialism.

Of course, all these cases are very different from one another. Some of these regimes came to power as a result of more or less democratic elections, while others were the result of a military coup. Some adopted a paternalistic attitude towards the exploited masses and proved capable of introducing measures which improved their conditions, while seeking the support of the reformist working class organisations. Whereas others were ruthless dictatorships against their populations, while at the same time expressing their aspiration to a certain degree of national sovereignty.

The integration of countries like Greece into the EU did not change the relationship between imperialist and semi-industrialised countries - it only provided a new framework for this relationship. The EU is still dominated by a gang of imperialist powers - with Germany, France and Britain its ring-leaders - imposing their rule on the eastern part of Europe and other countries such as Greece and Cyprus.

There is no way to tell how far Tsipras will want, or be able, to go, even in terms of forcing the EU leaders to respect the decisions of his government. Nor is there any way to predict how far he is prepared to go, in order to implement the measures included in Syriza's election manifesto in favour of the impoverished majority of the population.

For the time being, the main argument used by Finance minister, Varoufakis, in order to convince the EU leaders to make some concessions, is to explain that the eurozone is an unstable castle of cards and that, therefore, withdrawing the Greek card could cause its final collapse.

In a sense, he is right, in that the only factor that feeds a certain moderation among the imperialist leaders of Europe, is their fear that a Greek debt default might result into an uncontrollable wave of speculation which would affect the whole eurozone and cause a re-run of the 2010-11 euro crisis - if not something worse.

Syriza and the capitalist classes

Before getting into office, the Syriza leaders had proclaimed their determination to deal with the "Greek oligarchs" - by which they meant the privileged minority which controls most of the country's large companies and has managed to take advantage of the crisis in order to increase their wealth.

The Latsis family, for instance, which is said to be the richest in Greece, is estimated to be worth £2.3bn. This family of shipping magnates has managed to put its fingers in many pies. Thus, Spiro Latsis controls the country's largest refinery. He also controls Lambda Development, which has just bought part of the site of the former Elliniko airport, in the south of Athens, where a large leisure and tourist centre is meant to be built, compete with hotels, luxury housing and a casino. He is also a shareholder of EFG Eurobank, one of the 4 big banks which, between them, control 90% of the Greek banking sector, after absorbing former rivals which had been weakened by the crisis. Having been recapitalised to the tune of £37bn, which was taken out of the European bailout funds, these 4 big banks certainly have no reason to complain about the "troïka"!

Ever since its first major electoral successes, back in 2012, Syriza has always made a point of appearing as a party which was capable of presenting a credible alternative and which was ready to form a government. In particular, it gave up its past demand that the Greek debt should be cancelled altogether. Instead its "Thessalonica Programme", which was made public in September 2014 during the Thessalonica festival, replaced this demand with one in favour of debt reduction, which would make it more "viable".

In this document, Syriza talked about things like "rebuilding the economy" and "returning to full employment" by means of public investment - none of which is particularly radical. Nor did Tsipras put into question the EU institutions. In most cases he confined himself to criticising Germany's dominant role, blaming "Merkel's Europe" for the austerity imposed on the EU population. Using such language in a country whose population paid a heavy price for the German occupation during WWII, amounts to Tsipras choosing to raise the banner of nationalism and national independence.

It was this choice which allowed Tsipras to justify his alliance with the Independent Greeks - a party which is openly xenophobic, anti-Semitic and homophobic - whose main leader is now Tsipras' Defence minister.

But this does not mean necessarily that Tsipras is prepared blindly to implement the diktats of the imperialist powers against the Greek population. It is for this reason that revolutionaries would side with him, if and when he refuses to abide by these diktats in order to devote more funds to healthcare and social housing, for instance.

Tsipras announced that he wanted to "get out" of the current bailout plan, even if it meant forfeiting its last slice of funding, worth £5.3bn, which was due to be paid at the end of February. In order to regain some room for manoeuvre, he said he wanted to renegotiate a new bailout plan, without the conditions which led to previous governments' drastic cuts and privatisation.

In his confrontation with the imperialist capitalist classes which dominate the European Union, Tsipras has been seeking to reach a compromise. For instance, on the one hand the privatisation programme was officially cancelled and the head of the privatisation agency sacked, while, on the other, Finance minister Varoufakis did his best to reassure private investors by repeating that "it would unwise to reverse the privatisations which have already been completed". In an interview with a French newspaper, Varoufakis described the "investment" of the Chinese group Cosco - which bought a share of Pireus harbour - as "very positive for Greece". And Varoufakis concluded his interview with an appeal to foreign investors, promising that they would find "open minds" in Greece.

Tsipras is not asking for the moon. But neither is he trying to damage imperialist interests. In the past, many countries have had their debt reduced, or even written off, once it had become obvious that paying it back in full would be impossible. After all, it is not in the interests of a usurer to kill his debtor. The debtor has to be kept alive in order to be able to carrying on paying something.

The European leaders could easily agree to stop using their past language - phrases like "troïka", "memoranda", etc. However, the last thing they want is to be seen making concessions to Tsipras, for fear that this might encourage others to question the repayment of their debt - and, above all, for fear that this might lead their own populations to think that they can successfully challenge their authority.

It was for this reason that the ECB decided to turn off one of the sources of funds used by the Greek banks. They will no longer be able to borrow money from the ECB in order to lend it to the Greek state. The aim of this decision was not to bankrupt the Greek banks, since they still have access to ECB loans, although at a higher interest rate and not for the purpose of buying Greek state bonds. The aim of the exercise was to put pressure on Tsipras, by reducing the ability of his government to raise funds.

The EU leaders do not want to push Greece out of the eurozone either, as it could severely destabilise the EU as a whole, at a time when the European capitalist classes need stability. The Greek leaders are aware that they have this trump card in their hands.

The European imperialist leaders are being cautious. They know that they are incapable of controlling their own capitalist classes - especially their irresponsible financial speculation - so, many of their statements and gestures are aimed at "reassuring" investors. And this has worked so far, judging from the fact that there has been no turmoil on the European stock markets, neither after Syriza's victory, nor as a result of the negotiations with the new government. Even the Athens stock exchange has only experienced one or two feverish days. But whether things will remain this way is an open question.

Tsipras proclaimed his determination to fight against tax evasion. Put in such general terms, the European leaders would not disagree. Since the beginning of the crisis, they have been arguing - with the help of the media - that one of the main causes of Greece's difficulties was the fact that its population refused to pay taxes. Never mind that, while this is true for a section of the country's rich bourgeoisie and Church, it is not true of the Greek exploited classes who, for instance, are made to pay a VAT which has risen from 19 to 23% as a result of the "memoranda". Nor have Greek waged workers any way of evading income tax since they have a PAYE system. What's more, a land tax - paid together with electricity bills - is severely affecting the working class in so far as there is a majority of home-owners in the country.

For the time being, Tsipras is being very moderate towards the country's rich capitalists, despite their hostility to his government, as shown by, among other things, their massive transfer of funds abroad. And yet, in December 2012, the Bloomberg agency estimated that tax evasion was costing the government £41.5bn a year and that 2/3 of this loss was due to just 1,500 taxpayers.

Nor has Tsipras mentioned, for the time being, the possibility of ending the tax exemption enjoyed by the Greek shipping industry, despite the fact that it runs the world's largest fleet. Nor has there been any mention of getting the Church to pay taxes, despite the fact that it owns a huge real estate empire.

Superficially, the conflict between the Syriza government and the international institutions may appear, for the time being, as a kind of poker game. But in substance, it is a real power struggle. The imperialist powers have been treating Greece as a semi-colony. Despite this, the Greek capitalists choose to side with the imperialist capitalist classes, with whom they have multiple links. Neither the Greek capitalists nor their imperialist counterparts will do the Syriza government any favour.

The key question for the coming period is whether Tsipras will have the political courage to stand his ground against the capitalist classes - Greek and imperialist - by impinging on at least some of their interests and whether, to this end, he will use his credit among the majority of the Greek population which has suffered most from the policies imposed by big business - and also how far he will be prepared to go down this road.

The working class must become an independent political force

If, in this power struggle, the working class wants its interests to be taken into account, it will need to intervene on the political scene, as an independent force, in particular by defending its specific interests.

The "Thessalonica programme" included several measures which were designed to "deal with the humanitarian crisis" and to "build a shield to protect the most vulnerable social layers". It pledged to introduce free electricity for the poorest, a programme of subsidised meals, the guarantee of a roof over their heads, free healthcare and medicines. It promised to repeal the new land tax and to "suspend evictions indefinitely".

There were other measures in this programme which directly affected workers. For instance, it included a pledge to reverse the cut in the minimum wage introduced in February 2012, thereby raising it from £104 to £134/week. Another pledge was to reverse all the breaches made in the employment legislation over the previous period, especially by restoring collective agreements.

It would be in the interests of the Greek working class not to wait passively for the Tsipras government to deliver on its promises. Tsipras may consider that these promises are not his priority. In one of his first speeches as Prime Minister in Parliament, Tsipras talked about "a progressive return" of the minimum wage to its previous level. There is no guarantee for workers that the government won't tell them to be patient and wait until it has found the necessary resources - assuming it ever finds them! There is no guarantee, either for the working class that the compromise reached by Tsipras with his international lenders will not be made at the expense of Syriza's pre-election pledges to the working class.

In addition, even if Tsipras delivers on his commitment to raise the minimum wage, Greek bosses will not take this lying down. Workers will need to find ways of imposing this decision on the bosses and of controlling its implementation.

It would be presumptuous - in fact, impossible - to predict how a mobilisation of the exploited classes might take place, whether it will have the necessary depth and scale, or even whether it will happen at all. In particular, it is impossible to tell from the demonstrations supporting the Tsipras government, whether they were motivated by the illusion that it is up to the government to deliver, or whether they reflected a certain level of militancy.

Only one thing is certain - the need for an independent mobilisation of the victims of the past austerity policies. What form will it take if it happens? Will it take the form of committees set up to control how the minimum wage increase and other measures favourable to workers and pensioners, are implemented? In the past, the mobilised working class has invented many forms of organisation in order to use its collective energy in its struggles - from simple strike committees and rank-and-file action committees, to workers' councils.

Even if they give Tsipras some credit and are willing to support him, workers will have to organise themselves in order to counter the likely opposition of the capitalist class and its politicians and their attempts to mobilise various sections of the petty-bourgeoisie against the government, with the help of the country's many reactionary currents. These forces may well have all sorts of links with the state machinery, its police and army. But thanks to its numbers and role in society, the working class can constitute a far greater force. It has already made a show of its strength through the many mobilisations and general strike days organised since 2010 against the austerity measures. Workers in public transport, healthcare and other public services, sailors, etc.. demonstrated their militant capacity by fighting the police who were sent to break their strikes, after the government had ordered the strikers back to work.

It is in the interests of the workers who expressed their anger by casting their votes for Syriza, to carry on making their voices heard. This is an objective necessity, in order to support the government's action as long as it delivers on its pro-working class measures and to fight against it if it reneges on its promises. In any case, this is the policy that those who are determined to defend the political and material interests of the working class should be putting forward.