Once the Syriza government in Greece caved in to the creditors’ demands for further suicidal austerity cuts so as to obtain a new 86 billion euro loan from its existing lenders, one might have thought that was it for the time being. It turns out, however, this is by no means the case.
Agreeing once again to “extend and pretend” – extend the loan while pretending that Greece is still solvent – has its repercussions, economic and political.
There was for a time a chance that Greece would be saved from the spinelessness of its political leaders by German intransigence. Germany’s finance minister, Wolfgang Schäuble, and many other leading political figures in Germany, seriously considered that it would be better that Greece should leave the euro, from which position in could then default on its debts. Curiously, from Germany’s point of view, with the German public dead opposed to allowing Greece any debt relief, a default on Greece’s part could be a lot easier for the electorate to accept, even though none of the debt be ever repaid, than a voluntary agreement to reduce the amount claimed. Schäuble was even in a position to argue that the German government had always taken the view that it was only willing to participate in such ‘rescues’ if the IMF were also a party. As in fact the IMF had made it quite clear it would not join in the new ‘rescue’ because it was against its rules to lend money unless repayment was virtually certain, there was some expectation that Angela Merkel would not be able to get the loan proposals through the German parliament since after all, in the view of the IMF at least, “even if he [Tsipras] does everything European leaders are asking him to do – a list that includes cutting pensions, simplifying regulations, privatizing state-owned businesses – the country will still not be able to pay back the 300 billion euros it owes ” (‘Listen to the IMF and restructure the Greek debt’, New York Times editorial, 18 August 2015).
As it was, however, she was able to prevail notwithstanding the fact that making a new loan violated all the norms of commercial common sense, and therefore as a result the Greek people are doomed to years of economic degradation, as well as loss of sovereignty over Greece’s economic affairs. It is thought she may well have paid quite a heavy political price, however:
On 19 August, one day before the final deadline for reaching agreement, ” The Bundestag voted 454 to 113 in favour of the deal, with 18 MPs abstaining and 46 staying away.” Nevertheless, “… Chancellor Angela Merkel suffered the biggest parliamentary rebellion of her decade in power with 63 members of her Christian Democratic Union and Bavarian sister party, the CSU, voting against and three abstaining.” (Stephen Wagstyl, ‘German parliament backs latest Greek bailout’, Financial Times, 19 August 2015).
The economic consequences of accepting the terms of the third bailout are grave indeed. It is not only that pensions will be still further reduced and retirement age raised, taxes increased, etc., but furthermore safeguards against home repossessions will be removed, which will put thousands of Greek families out on the streets. In addition, just about everything will be up for privatisation:
“Debt laden Greece has been forced to sell the family silver in an all too familiar tale with ancient history repeating itself.
“The Hellenic Public Asset Development Fund has been published by German Green MEP Sven Giegold who said the Greek people ‘hardly know’ what will be sold off and that they have ‘the right’ to know.
“The selling of Greek assets to raise $56 billion (€50bn) was demanded by Greece’s creditors, the Troika. The document reveals that 66 percent of a gas distribution and processing firm will be sold to Azerbaijan; 35 percent of Greece’s first oil refinery firm will be sold off along with 17 percent of its electricity distributor and 65 percent of gas distributor Depa.
“All rail and bus services will go under the hammer – along with the Greek telephone and postal service.
“Even before the bailout deal was completed and the money arrived safely in the Greek banks, the Germans had won their bid to take over 14 Greek airports for the next 40 years, paying $1.36 billion (€1.23bn) for the privilege.
“ FRAPORT [Frankfurt Airport Services Worldwide] will own and operate Greece’s most popular tourist island airports.” (‘After the bailout the spoils of Greece are bound for Germany’, Sputnik, 21 August 2015).
How is Greece supposed to recover if the bulk of its assets are owned by foreign capitalists and run for the financial benefit of these foreign owners? Greece’s income from tourism, one of its major economic activities, for instance, which currently for the most part remains in Greece will largely disappear into the pockets of foreign profiteers.
Of course, those who back the bailout claim that it will be just the thing to return Greece to financial health, but ” many experts say the plan is predicated on an unrealistically speedy turnaround in the Greek economy. After shrinking 2.3 percent this year and 1.3 percent in 2016, according to the plan’s forecasts, the Greek economy is supposed to rebound sharply, rising 2.7 percent in 2017 and 3.1 percent in 2018 .” However , “‘I am a little bit stunned because those numbers have no relationship to reality,’ said Ashoka Mody, a former economist at the International Monetary Fund who is now a professor at Princeton University. He said the growth estimates were incompatible with the strict spending limits that creditors are imposing on Greece. Greece’s two previous bailouts, whose lack of success has made a third one necessary, ran afoul in large measure by making growth forecasts that the austerity-sapped economy could not meet.” (Alison Smale, Jack Ewing and James Kanter, ‘A less defiant Germany seems prepared to clear a path for a third Greek bailout’, New York Times, 13 August 2015).
Experience suggests that Ashoka Mody is very unlikely to be wrong about this.
(a) the departure of Yanis Varoufakis
The first consequence of the Syriza capitulation was the dramatic resignation of the Greek finance minister Yanis Varoufakis on 6 July. Harry Lambert of the New Statesman interviewed Varoufakis to find out the story behind the ‘resignation’:
According to Mr Lambert, Varoufakis had a plan and was “prepared to do three things: issue euro-denominated IOUs; apply a ‘haircut’ to the bonds Greece issued to the ECB in 2012, reducing Greece’s debt; and seize control of the Bank of Greece from the ECB.
“None of the moves would constitute a Grexit but they would have threatened it. Varoufakis was confident that Greece could not be expelled by the Eurogroup; there is no legal provision for such a move. But only by making Grexit possible could Greece win a better deal. And Varoufakis thought the referendum offered Syriza the mandate they needed to strike with such bold moves – or at least to announce them.
“He hinted at this plan on the eve of the referendum, and reports later suggested this was what cost him his job. He offered a clearer explanation.
“As the crowds were celebrating on Sunday night in Syntagma Square, Syriza’s six-strong inner cabinet held a critical vote. By four votes to two, Varoufakis failed to win support for his plan, and couldn’t convince Tsipras. He had wanted to enact his ‘triptych’ of measures earlier in the week, when the ECB first forced Greek banks to shut. Sunday night was his final attempt. When he lost his departure was inevitable ” (‘Yanis Varoufakis opens up about his five month battle to save Greece’, 13 July 2015).
It should be noted that Varoufakis was, for all his ‘Marxist’ reputation, in no way talking about socialist measures. His aim was purely to ensure that Greece should be able to recover within the confines of capitalism. It was a risky policy, of course, but the alternative – namely, capitulation to the creditors – was and is certain doom. As it was, Tsipras and the majority on the central committee simply could not face the difficulties that the attempt to carry out that policy would entail:
“After Syriza took power in January, a small team had, ‘in theory, on paper,’ been thinking through how [a Grexit might work]. But he [Varoufakis] said that, ‘I’m not sure we would manage it, because managing the collapse of a monetary union takes a great deal of expertise, and I’m not sure we have it here in Greece without the help of outsiders.’ More years of austerity lie ahead, but he knows Tsipras has an obligation to ‘not let this country become a failed state ‘.” (ibid.) Or, in other words, ‘Tsipras lost his bottle – thank goodness!’
No further proof is really needed that Varoufakis is no Marxist, even if the apologists for Greece’s rapacious creditors call him that in order to frighten the feeble-minded, and even if he himself may fancy having the term applied to himself. But just to ram the point home, here are quotations from Varoufakis himself that definitely settle the issue:
“‘I don’t believe that the time of depression is a revolutionary time’, he says. ‘The only people who benefit are the Nazis, the racists, the bigots, the misanthropes. Let’s be honest about this. Our left, our radical party, did reasonably well, not because we were left but because we managed to capture the imagination about the importance of ending the extending and pretending, not because those who voted for us wanted socialism.’…
“He comes from radical traditions on both sides of his family, yet unlike many anti-capitalists, he is clear-eyed that leftwing revolutions have an appalling track record. ‘The idea that you allow capitalism to collapse under its own contradictions and we storm the Winter Palace and take over… well, we’ve tried that and the result was a dystopia. ‘” (Andrew Anthony, ‘Yanis Varoufakis: “If I’m convicted of high treason, it would be interesting”‘, The Observer, 23 August 2015).
His characterisation of the Russian Revolution, and by implication every other socialist revolution, as a ‘dystopia’ arises out of his typical petty-bourgeois dislike of the dictatorship of the proletariat. Yet ” Only he is a Marxist who extends the recognition of the class struggle to the recognition of the dictatorship of the proletariat. That is what constitutes the most profound distinction between the Marxist and the ordinary petty (as well as big) bourgeois. This is the touchstone on which the real understanding and recognition of Marxism should be tested.” (Lenin, State and Revolution). It has to be admitted that when push comes to shove Varoufakis, for all his militancy, does not even embrace the class struggle, let alone the dictatorship of the proletariat.
(b) the split in Syriza
The result of a referendum on whether to accept the creditors’ terms for a bailout in which over 60% of the electorate voted against, leading to euphoric celebrations throughout the country, was unceremoniously disregarded by the very government which had called it. In these circumstances it was inevitable that those in Syriza who had always opposed the EU and the euro and therefore favoured the Grexit option, if they had a shred of sincerity about their beliefs, would have no option but to attempt to ensure that the acceptance of the bailout be rejected by the Greek parliament; and when they failed to achieve that then to leave. So the so-called ‘Left Platform’ did just that.
When the ‘Memorandum’ of capitulation to the creditors came before the Greek parliament, it was passed by an overwhelming majority of 222 to 64, with 11 abstentions and 3 absences, since Tsipras was supported by all the major Greek parties. Even within Syriza, over two-thirds of their MPs, i.e., 106, voted for the deal, with a mere 31 voting against, 11 abstaining and one absence. Therefore, under the leadership of Panagiotis Lafazanis, a former energy minister dumped by the government after voting against new austerity measures, 25 MPs defected from Syriza to form a new social-democratic party labelling itself ‘Popular Unity’. The Times tells us that “ Backed by 25 MPs, Popular Unity will make up the third-largest camp in the 300-seat parliament. The radicals include Marxists, former communists and a sprinkling of Maoists and Trotskyists.” (‘Hard left splits from Tsipras and calls for drachma’, 22 August 2015). What is sickening about this is that even after their experience in Syriza all these supposed Marxists cannot bring themselves to admit their mistakes and join the KKE, Greece’s Communist Party, rather than expecting a different result to emerge from forming yet another left-wing social-democratic alternative.
(c) Resignation of Tsipras and new elections called
Nevertheless, between defections and other forms of rebellion, it seems that Syriza has lost control of the Greek parliament and, that being the case, Tsipras decided that it was time for new elections. He therefore resigned as prime minister on 20 August and new elections have been called for 20 September. Cynics might say, and they do, that he needs to call the election quick before the electorate get hit with the worst of the hard consequences of his capitulation. At the moment, incredible though it may seem, Tsipras is still riding high in the opinion polls – though obviously not as high as before. Syriza is likely to win if elections are held on 20 September as planned. Since it remains so popular despite its declared intention of implementing swingeing austerity, Syriza government is the best hope that the international bourgeoisie has, short of a resort to naked fascism, of keeping a lid on the explosive anger that the Greek people will undoubtedly feel as their already much-diminished standard of living plunges yet further – it is also the best hope of diverting the Greek masses away from communism.
The KKE has quite rightly pointed out that for all its apparent militancy, Syriza at the end of the day is merely a tool of international capital:
“As was demonstrated in a few months of managing capitalism, the “left” SYRIZA, which governed together with “right” nationalist party ANEL, not only did not abolish the 2 previous memoranda and most of the 400 anti-people application laws of the previous governments, but implemented them and passed through Parliament a third even more painful agreement (memorandum) with the imperialist powers. This agreement had the support of the other bourgeois parties and was voted for in Parliament by them: ‘rightwing’ ND, ‘Social-democratic’ PASOK, the ‘centre’ party ‘POTAMI’. This new agreement massacres any rights that have remained, imposes new reductions in wages and pensions, abolishes social-security rights, imposes even more intense taxation of the popular strata, promotes the policy of privatisations etc.
“In addition, the ‘Left-patriotic’ government consistently operated during these months inside the framework of our country’s participation in the imperialist unions of NATO and the EU, of the ‘strategic alliance’ with the USA. It participated in every NATO mission and exercise, it organized military exercises even with Israel, it promised a new base for the USA and NATO (on the island of Karpathos), it voted in the EU for the extension and reinforcement of the trade war against Russia etc.
“So, in practice it has been demonstrated that the SYRIZA-ANEL government is another anti-people government, which with ‘left’ slogans served in an equally faithful way the bourgeoisie, the EU and NATO as the previous governments had done.” (‘In the face of early elections’, 24 August 2015).
Another detail that could have been mentioned is that the Syriza government, in all its time in power, never lifted a finger against any of the 2,000 super-rich Greeks who were exposed by the IMF 5 years ago as having spirited between them some 50 billion euros out of the country to deposit mostly illegally in the HSBC in Switzerland.
Nevertheless, if Syriza had stuck to its guns to the point of Grexit, thereby laying the basis for disintegration of the imperialist European Union as other EU countries crippled by debt followed its example, it might, for all its anti-communism, have performed a favour for the international working-class movement. As the EU is a crucial part of the backbone of Nato, that fascistic body would also have been weakened. It was not to be, and all the hard work has been left to the communists. May they rise magnificently to the occasion!
As it is, intelligent representatives of the bourgeoisie, such as Jim Yardley of the New York Times, are confident that Syriza is good news for capitalism. He writes:
” Europe spent months trying to crush Alexis Tsipras. But now that Greece’s leftist prime minister has called a snap election and is seeking a mandate for the tough new bailout program he negotiated with his country’s creditors, Europe, oddly enough, may find itself invested in his success.
“Greece never fails to surprise, and Mr. Tsipras’s turbulent eight-month tenure has proved he is rarely predictable. But the man many European leaders once regarded as a populist wrecking ball is now presenting himself as a figure who can deliver pragmatism and stability – and carry out the sort of austerity program he once inveighed angrily against.” (‘ In a Twist, Europe May Find Itself Relying on Success of Alexis Tsipras of Greece’, 21 August 2015).
What a fitting obituary for a scion of social-democracy!
According to Varoufakis, quoted in The Observer of 23 August (‘Yanis Varoufakis brands Alexis Tsipras the “new De Gaulle” as election gets ugly’) ” Tsipras made a decision on that night of the referendum not only to surrender to the troika but also to implement the terms of surrender on the basis that it is better that a progressive government implement terms of surrender that it despises than leave it to the local stooges of the troika, who would implement the same terms of surrender with enthusiasm .” It would seem that the loving care with which he proposes to administer the creditors’ orders to torture are for the moment still endearing him to much of the electorate. How long that will last if he does get re-elected and the torture begins in earnest remains to be seen. All we can say is that, clearly, the road to Hell is paved with good intentions.