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Greece Against the Eur-Owe Zone

Stanley Aronowitz Mar 10

Greece has been in an economic death spiral since 2009. Saddled with huge foreign debts, it was forced by the European Union to adopt a draconian austerity program of hefty tax increases on working people and deep cuts in public spending. This has choked growth and caused the economy to contract by 25 percent. Unemployment has soared above 25 percent and more than a third of Greeks now live in poverty. For many the best chance of finding their next meal lies in picking through garbage.

Radical economist Yanis Varoufakis famously described the EU-backed austerity program as “fiscal waterboarding.” For all their troubles, the Greeks have watched their country’s debt to GDP ratio actually climb to 175 percent due to a shrinking economy.

Faced with more pointless and punishing austerity for the foreseeable future, on January 25 Greek voters revolted and swept the radical left party Syriza into power on the basis of its vow to break with the policies that brought the country to ruin. Key campaign promises included restoring the country’s minimum wage to pre-crisis levels, reversing privatizations and reviving the country’s battered health and education systems.

Winning 36 percent of the popular vote — good for two parliamentary seats short of a majority — Syriza was able to form a new government when it forged an alliance with a small right-wing populist party on the basis of a common anti-austerity platform. Prime Minister Alexis Tsipras quickly named his cabinet. Foreign Affairs, Finance, Education and other major cabinet positions are firmly in the hands the party’s intellectual leaders. Only internal security fell to Syriza’s right-wing partners, who delivered 13 parliamentary votes to bring it to power.

The rise of Syriza — the name stands for Coalition of the Radical Left — from a marginal party that garnered only 4 percent in the 2009 elections to its current commanding heights was fueled by Greece’s ongoing economic tragedy as well as by the existence of a vibrant, deeply rooted left culture that is rare today in most Western countries.

The party is made up of social movement activists, a segment of rural groups, a breakaway faction of the Greek Communist Party and a wide range of independent leftist intellectuals. For the past decade its practice has been in the social movements: in housing, against unemployment, especially among youth, and in street protests against the government’s cuts to education and health budgets.

Syriza’s triumph was the most exciting and hopeful development on the political scene in decades. It marked a first-ever breakthrough of an avowed anti-capitalist party against Europe’s pervasive austerity regime, dictated by Germany through the troika of the European Commission, the European Central Bank and the International Monetary Fund.

Yet, after a tumultuous first month in power that saw its domestic approval ratings climb to 80 percent, the Syriza government found itself struggling to wrest concessions from the troika and the haughty figures of German power that stand behind these institutions: Chancellor Angela Merkel, Finance Minister Wolfgang Schauble and Foreign Minister Frank-Walter Steinmeier.

Tense Negotiations

When Tsipras and Varoufakis, now Greece’s Finance Minister,  took office, they started out seeking a reduction in Greece’s 240 billion Euro debt ($273 billion), an end to the bailout and the austerity conditions attached to it. They also sought a four-month bridging loan that would enable the new government to pursue Keynesian policies that would stimulate the economy and begin to put people back to work. Varoufakis floated the idea of converting part of Greece’s debt into new “growth bonds” to be paid off from the increased revenues that would materialize once the Greek economy began growing again. The latter proposal won approving comments from many progressive economists. However, when Greece’s new leaders visited European capitals in February, they received a few feeble words of sympathy from French and Italian officials but otherwise ran into a wall of opposition from European governments.

Faced with an end-of-the-month deadline for making a key debt payment and the prospect of a bank run if Greece was kicked out of the 19-nation Eurozone, on February 20 the Syriza government blinked. It received a four-month extension of the bailout based on the same terms accepted by the previous Greek government.

The Greek government was also required by its creditors to spell out how it would resolve the country’s debt crisis. The long list of reform measures put forward by Varoufakis on February 23 has been derided by many on the Left as a further surrender. However, with the exception of the promise not to roll back completed privatizations, this is a general statement for efficiency, anti-corruption and fiscal responsibility. Syriza has sought all along to improve tax collection from the wealthy in Greece, who have traditionally paid little or nothing in taxes. An attack on corruption — much of it perpetuated by Greece’s traditional political parties — is long overdue.

To say that Syriza has caved shows that while many of Syriza’s critics on the Left are well-meaning and have lofty ideals, they lack a serious understanding of how power works in the real world and what negotiations entail. This is an opening round in a much longer drama that will unfold over the coming months.

There are still three potential outcomes for the Greeks: capitulation, partial victory within the framework of the Eurozone or exit. At this moment none can be excluded, although the first option is not really possible if Syriza wants to stay in power. Greece has a militant tradition that simply is not present in the United States: Communist-led armed resistance to Nazi occupation during World War II, the subsequent civil war between communists and local fascists, the overthrow of a U.S.-backed military junta by student-led protests in 1974, the real mass movement that brought Syriza to power and a radical wing within that movement that is determined to pressure the government to move to the left.

Why Stay in the Eurozone?

Given everything, why is Syriza trying to stay in the Eurozone? Why doesn’t it revert to printing Greece’s traditional currency, the drachma, and make a go of it free from the stultifying grip of neoliberal austerity?

The question brings to mind the debate that preoccupied Soviet leaders in the first years after the Russian Revolution: Was it possible to create “socialism in one country”? Lenin and Trotsky thought not. Starting in the late 1920s, Stalin embarked on just such a program through forced collectivization of the countryside and relentless industrialization based on the subordination of the working class. Though this regime carried on for decades, it never succeeded in meeting the vital needs of its people.

This speaks to Greece’s capacity to really be self-sufficient. Its best-known exports are olive oil, cheese, yogurt and wine, which can hardly sustain a population of 11 million or provide the taxes needed for public goods. In this epoch of global capitalism, Greece remains a minor, dependent player in both the European and world economies. Syriza’s activists and intellectuals are keenly aware of the risks of taking power under these circumstances. As Varoufakis wrote in a 2013 article, the Greek Left can rely on an updated Marxist analysis to help clarify the situation they face. But, he argued, its goals and program are obliged to take account of the limits forced upon them by relative isolation and by the country’s dire economic crisis. Polls of Greek voters showed a strong preference for remaining in the Eurozone even while wanting to break with austerity. On some level, the average Greek also seems to understand that their country is in a poor position to strike out into the world.

Syriza’s Best Hope

Syriza’s best hope lies in being a catalyst that helps to bring other anti-austerity parties to power in Europe. In Spain, where unemployment hovers around 25 percent, the leftist Podemos party has vaulted to second place in the polls in one year and will make a strong bid for power in elections this fall. The post-2008 legacy of onerous debt and austerity also hangs over Ireland, Portugal and Italy. Only if and when Syriza can participate in a broadened series of anti-austerity alliances with like-minded governments in Southern Europe and perhaps Latin America will it be possible to pose the prospect of radical transformation. In politics as in life, having the best of intentions is never enough. Good timing and the right set of circumstances are also essential for one’s plans to come to fruition, as Syriza and its supporters are being reminded.

Stanley Aronowitz is a professor of sociology at the CUNY Graduate Center and the author of more than two dozen books, including The Death and Life of American Labor: Toward a New Workers’ Movement (Verso, 2014). He hosted the leaders of Syriza when they visited the Graduate Center last year during their pre-election tour of the United States.


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