After unleashing a social and economic catastrophe, the ongoing Greek crisis has now also produced a political earthquake. The Greek political system has been turned upside down as the Socialist PASOK party and the conservative New Democracy party, which have dominated Greek politics since the end of the military dictatorship in 1974, saw their support collapse in the May 6 election. At the same time, in the June 17 election that became necessary after no party was able to form a coalition that would enjoy majority support in parliament, the Coalition of the Radical Left (SYRIZA) transformed itself from a minor political player to a serious contender for power.
This development is of great significance not only for Greece but for the entire European continent and beyond. Greece is a paradigmatic case of the attempt by capitalist elites around the world to make ordinary workers and citizens pay for a crisis they did not cause. The austerity program that was adopted in Greece after the eurozone debt crisis first surfaced more than two years ago constitutes a brutal attack on the living conditions and standards of most ordinary Greeks. It has led to the liquidation of basic labor and collective bargaining rights, torn apart a safety net that was never strong to begin with and caused skyrocketing levels of unemployment, homelessness, hunger and suicide. Even Greeks who were solidly middle class just a couple of years ago now find themselves in desperate straits. Although the austerity program responsible for this catastrophe was adopted in the name of fiscal stabilization, it has failed to attain even that objective; the economic depression it has produced has the Greek economy expected to shrink by more than 25 percent and has predictably led to a collapse in tax revenues.
The failure of the austerity medicine is now increasingly felt around Europe, where the generalization of austerity is also producing a double-dip recession, further destabilizing the banking sector. This has brought on record levels of unemployment and generated public resistance both in the street and at the ballot box. The spread of the crisis around Europe negates simplistic attempts to treat Greece’s problems as mere results of a dysfunctional political system. The ruling parties do bear responsibility, notably in their failure to adequately tax those in Greek society with the most wealth. This unwillingness to tax wealth was why the attempt to build a rudimentary welfare state in the 1980s led to budget deficits and growing debt. In this sense, one of the choices facing Greek voters right now is whether to protect the Greek welfare state by raising tax revenues to levels comparable to those in other European countries (the position of the left) or to eliminate the deficit by reducing state expenditures to levels characteristic of Third World countries (the preferred option of pro-austerity parties and the European and Greek capitalist elites they serve).
Beyond this, however, the problems of Greece and the European periphery have been aggravated by the neoliberal architecture of the European project, which has benefited economically powerful countries such as Germany at the expense of peripheral countries such as Greece, which have seen their productive base wiped out under the pressure of German competition. This is why the long-term viability of the eurozone project may very well depend on establishing mechanisms to redistribute the gains from economic integration more evenly across Europe.
In any case, given how Greece has prefigured the evolution of the European crisis up to this point, it is not surprising that recent political developments there have captured the attention of journalists, politicians and citizens the world over. The fact that a formerly obscure party with an anti-austerity program and a platform of bringing together the various political forces of the left could, in a matter of two-and-a-half years, increase its support from about 5 percent in the fall of 2009 to 17 percent in May 2012 and, according to recent polls, to more than 20 percent today is a reminder of how time becomes compressed in times of acute social and economic crisis.
SYRIZA’s recent success bears witness to Greek citizens’ growing realization that the austerity medicine has not produced the promised results (see sidebar, left). This understanding had grown steadily over the last two-and-a-half years and produced political crises even before the recent election. As early as last summer the socialist government that introduced the austerity program faced growing difficulties convincing even its own deputies to continue supporting the successive waves of austerity measures, which in turn produced major waves of social protest.
By last November the socialists had become a spent force, so the negotiation of a new rescue loan for Greece, as well as the debt restructuring and new austerity measures accompanying it, was entrusted to a coalition government that included the socialists, the conservatives and a smaller party of the racist, anti-immigrant extreme right. This government was headed by Lucas Papademos, an unelected former banker who enjoyed the confidence of the financial sector. Clearly aware that ordinary Greeks opposed continuing the failed austerity policies and would not support the terms accompanying the new rescue loan under negotiation, European capitalist elites pressed for the formation of such a government as well as for a complete about-face by the conservative party that had up to this point opposed austerity. In a clear demonstration of their determination not to let democracy interfere with their plans, they even forced the leaders of both the socialist and the conservative parties to assure them in writing that they would stick to the agreed-upon policies even after the elections that were to follow once the negotiation of the loan agreement was complete.
In this respect, the upcoming election in Greece is not just about austerity but about the very future of democracy in Greece and beyond. European capitalist elites have made it clear that for them the European project requires a continued restructuring of European societies in the direction of the neoliberal model behind the current capitalist crisis. The forces of the European left, including SYRIZA, are fighting for a vision of Europe that is fundamentally at odds with the ongoing effort to replace political democracy with the most naked dictatorship of financial capital.
An added threat to democracy is the meteoric rise of Golden Dawn, a neo-Nazi political formation that doubles as a criminal gang, indiscriminately assaulting and terrorizing immigrants, anyone who doesn’t look “Greek” (whatever that means) and even Greek activists and political groups showing solidarity toward immigrants. Capitalizing on people’s disenchantment with the crisis and the established political parties, Golden Dawn has quickly managed to transform itself from a political non-entity to a party receiving 7 percent of the vote. In the process, it has had a pernicious impact on political discourse, as more established parties, such as the conservatives and the socialists, have tried to jump on the bandwagon of scapegoating immigrants for the deep crisis of Greek society. On a positive note, recent polls suggest that support for Golden Dawn may be ebbing to some extent, as people become more aware of its true nature. This development is further reinforced by the general trend for voters of smaller parties to converge toward New Democracy and SYRIZA, the two parties that are leading in the polls.
In any case, the battle over the future of democracy in a time of crisis is not unique to Greece, and its outcome is by no means determined. The very fact that elections took place in Greece is a victory of the popular movement, since the pro-austerity forces would have been happy to continue with their catastrophic policies if popular resistance in the street had not made it imperative for them to regain legitimacy. Surprised and scared by the outcome of the May election, Greek and European capitalist elites, with the assistance of the media they control, are now threatening ordinary Greeks with predictions that a SYRIZA government would drive Greece out of Europe and lead to unprecedented chaos and misery.
It is not clear whether such ideological terrorism will work. Already, in May, SYRIZA came in first in Greece’s urban areas and in all the age groups between 18 and 60. Mirroring the social and political polarization in Greek society, SYRIZA is also the most popular party among both public-sector and private-sector workers. The situation it will face if it wins will, however, be very difficult indeed. Its success will depend on its continued ability to rally popular support, as well as take advantage of the fact that any attempt to drive Greece out of the eurozone will likely produce a global financial tsunami and a possible breakup of the eurozone itself.
Instead of using this leverage in negotiating an exit strategy with the Europeans consistent with the welfare and interests of ordinary Greeks, Greek pro-austerity forces have instead sought to terrorize Greek citizens into accepting policies that are as advantageous to domestic and European capitalist elites as they are catastrophic for ordinary citizens. Were the pro-austerity forces to win, they would likely resume their effort to rule not through results and hope but through fear. Tragic as such an outcome would be for people in Greece and around the world, it would not mark the end of the continuing battle between democracy and capitalism.
Costas Panayotakis is Associate Professor of Sociology at the New York City College of Technology of the City University of New York and author of Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy.