• Presentation at the Bruno Kreisky-Forum
  • What SYRIZA Will Propose to Europe

  • Αλέξης Τσίπρας | 04 Dec 13 | Posted under: Transformative Strategies
  • Europe is presently threatened by a dangerous social and political time bomb rooted deep in its foundations – a time bomb which we can and must defuse.

    As you know, I am not a social democrat. However, I am deeply aware of Bruno Kreisky’s greatness and of the importance of the social democracy that he believed in and which he practised with honesty and dedication during his lifetime. And I have huge respect for his achievements.

    The reason I start by saying that I am not a social democrat is not, of course, because I want to raise an ideological barrier between you and me. Dialogue and political alliances are at the heart of the culture, the DNA, of my party, SYRIZA, as an essential part of the democratic road to socialism with freedom and democracy. I am sure that with most of you I share the same or similar values. However, I cannot hide my surprise and disappointment at the political turn that most European social democratic parties have taken in recent years.

    As I am sure you are aware, in Greece we have lately been experiencing an appalling revival of Nazism. The atrocious political murder of an anti-fascist musician, Pavlos Fyssas, committed in a Piraeus neighbourhood, indicates what Greek Nazism’s goals and methods are.

    In 1967 Bruno Kreisky was one of the leaders of the various European solidarity movements for the restoration of democracy in Greece. Greek democrats will forever be grateful to him and his Austrian comrades for demonstrating their friendship to the Greek people at critical times.

    However, I am afraid that the re-emergence of Nazism is connected to the harsh austerity policies imposed on Greece by the lenders and successive Greek governments – notably the one currently in power, which is a coalition government of the conservative New Democracy and PASOK.

    Today’s PASOK is in eclipse because it failed to perceive the consequences both of the crisis per se and of the neoliberal management of the crisis for a deficit country, such as Greece, participating in an architecturally flawed monetary union subjected to an asymmetric shock.

    There is a lesson to be learned from the crisis for all of us but especially for the social democratic parties. In the 1990s, most European social democratic parties gradually divorced themselves from policies intended to regulate capitalism. However, there were times in the post-war period in which courageous and inspired European socialists, such as Bruno Kreisky, marched on the path of social democratic values, principles and policies.

    In a recent Spiegel article, the Financial Times columnist Wolfgang Münchau commented: ‘The SPD finally gave up on Keynesianism when the last Keynesian in the party, Oskar Lafontaine, quit in 1999, and left the field open to Gerhard Schröder, who later pursued his supply-side reforms. Today, the SPD is just another conservative supply-side party, where the differences with the CDU are reduced to discussions about distribution, but no longer about fundamental issues. This is why the debate between Merkel and Steinbrück has been so lame – a duet as some newspapers called it.’

    I absolutely agree with this view. If social democrats had followed the legacy of statesmen such as Bruno Kreisky, Willy Brandt or Olof Palme, Europe would not have turned into today’s neoliberal desert.

    Let’s all recall the 1929 crash.  Allow me to encapsulate what happened at that time in two sentences:

    • The ‘common currency’ of that period, so to speak, that is, the Gold Standard, which was a system of fixed exchange rates, crashed and burned.
    • The governments denied that there was an architectural fault in the whole design and insisted on austerity and the policy of exiting from the crisis through net exports.

    This was a set of economic policies that historians associate with the rise of fascism in southern Europe and Nazism in Central and Northern Europe. Do you notice the similarities with the present situation in Europe?

    The Eurozone resembles the Gold Standard with a difference that makes things worse: Instead of fixed exchange rates among currencies, there is a single currency from which it is impossible to escape at a time of severe crisis. But, because it is so badly designed, that common currency did two terrible things to us – two things that make the analogy with the Gold Standard very, very apt:

    First, it caused massive capital movements during the first years of its existence from the surplus of the developed Eurozone countries toward the periphery. Surplus countries have capital-intensive oligopolistic industries that produce capital goods and consumer goods which the periphery cannot produce at all or cannot produce at competitive prices.

    By its very nature, a monetary union between such advanced economies and a less advanced and less capitalised periphery will generate increasing trade surpluses.

    But these trade surpluses immediately create mountains of profits in the surplus countries that far exceed their investment needs.

    The result is that the interest rates collapse in the surplus countries, and for this reason the northern bankers have an incentive to divert their capital to the periphery, where interest rates are higher. This is why capital flows to the periphery in large quantities.

    Why is capital flow to the periphery a problem?

    Because the money that flows into the periphery creates bubbles. In Greece, it caused a bubble of public debt as the state borrowed on behalf of the developer-cleptocrats who then used the money to create all sorts of bubbles indirectly. Then, all of a sudden, but very predictably, Wall Street collapsed in 2008. All this capital that had flooded the periphery left instantly. And those who had never benefitted from any of these bubbles ended up owing all the money.

    Just like Hoover in the late 1920s and 1930s, European conservative and social democratic governments insisted that unpayable debts must still be paid. But how? With new debts that were taken from the surplus countries.

    It was in this way that in May 2010 bankrupt Greece ended up accepting the largest loan in human history which accelerated national income loss.

    The absence of social democrats in the tradition of Bruno Kreisky created the political space for anti-crisis policies which gave rise to a new and invisible economic wall between the creditor surplus countries of the North and the debtor deficit countries of the South.

    I have been speaking for a while now and have not spoken about Greece as much as you may have expected. Let me, therefore, say a few words about my long-suffering country:

    Greece is not a special case. Greece may have been the weakest link of the Eurozone chain. But even if Greece did not exist, the Eurozone chain would have another weakest link. Greece was, to put it simply, the canary in the mine whose death should sound the alarm, telling the miners – the rest of our European partners – that there is something wrong with the mine.

    Instead, the dying canary was nearly starved to death; it was treated like a scapegoat.

    Even if Greece had managed to become far leaner, fitter and modernised before 2008, we would have fallen flat on our faces within a Eurozone that could not sustain the 2008 earthquake. Perhaps we would not have been the first to fall. But we would have fallen anyway. For if Ireland, the country that topped all lists for probable ‘good’ outcomes, fell, Greece was bound to fall too. As was Portugal, Italy, Spain – eventually even France.

    I am not trying to argue that Greece needs no reforms or has no weaknesses. That would be absurd. All that is true. But no reforms can take place if the economy collapses.

    However, there is another truth that you may not have heard of. It is the fact that our cleptocracy has formed an alliance with Europe’s elites to propagate a number of myths about Greece – myths that shift the blame for our country’s weaknesses from the cleptocrats to the common, hard-working Greek people, myths that help them impose policies that are terrible for Greece, awful for Austria and the rest of Europe but excellent for the bankrupt bankers and convenient for the Eurocrats.

    Please allow me to dispel some of these myths:

    Myth 1:   Greek labour is over-protected.

    Myth 2:   The Greeks are lazy.

    Myth 3:  
    The Greek labour market is too rigid. (Do you know that since 2001, every year a third (33,3 %) of wage workers are laid off?)

    Myth 4:  
    Greek unemployed workers are receiving over-generous unemployment insurance payments.

    Myth 5:  
    Between 2000 and 2009 real wages in Greece reached average Eurozone real wages. (Actually, they never got to that level.)

    I could go on and on. But I’ll stop here.

    If you really want to understand why Greece is still in depression the answer is simple: It is caught up in a Eurozone that imposes austerity on Greece and the rest of the periphery.

    However, now that we are in the Eurozone, the cost of dismantling it would be horrendous for all of us. So, even if we think it is a terrible monetary union, one that divides our peoples by means of a single currency, we have a duty to re-design it. Unfortunately, such a re-design cannot be achieved easily. There are huge vested interests in keeping things the way they are:

    • The bankrupt bankers of Greece and Spain, in total cooperation with the bankrupt bankers of Germany and France, do not want to see any drastic changes.
    • The politicians presently in power do not want any radical changes either.
    • The Eurocrats are particularly against any admission that institutions were badly designed.

    Unfortunately, if the bankers, the ruling politicians and the Eurocrats get their way, Europe will disintegrate.

    Do you want a glimpse of what will happen here in Vienna once the disease spreads from the periphery, as it definitely will? Then come to Greece and look for yourselves at the boarded up shops, the empty factories, the fear that immigrants have on their faces as they walk home at night.

    It doesn’t have to come to that. SYRIZA will win the next elections in Greece and will succeed in bringing about a fundamental political change. A left government in Greece will extend a hand to Europe’s social democrats, to Europe’s free thinking liberals, to all Europeans who do not want Europe to slide into a nightmare.

    And we will ask them to join us in a common project: the project of stabilising the Eurozone – a first step towards an open, democratic and cohesive Europe. To do this, we will have to negotiate forcefully with the main levers of institutional neoliberalism in Frankfurt, in Berlin, in Brussels, in Paris.

    To do so, we will need support, and not just in order to achieve a better outcome for Greece, but in order to forge a better Europe, a humane Europe.

    A SYRIZA government will not expect the suffering workers of Germany or Austria to bankroll our recovery against their interests. A SYRIZA government will put a European Marshall Plan on the table, which will include a proper banking union, a public debt centrally managed by the ECB and a massive programme of public investment.

    Above all, we are requesting a special conference on the European debt in the entire periphery, by analogy to the 1953 conference that established the London Agreement on German External Debts, which decided to cut a large portion of it, with a moratorium on interest payment and a growth clause.

    These are the minimum demands of a future SYRIZA government. They can be granted today:

    • without any treaty changes;
    • without any need for the German or the Austrian taxpayers to pay for the periphery; and
    • without any loss of the sovereignty of our parliaments.

    My intention is to look the hard-working German or Austrian worker in the eye and say to her or to him:

    They made us take the largest loan in history from you. But none of that benefitted our people. It was all a cynical ploy to transfer losses from the northern banks’ books onto your shoulders!

    It will not be easy to convince Mrs Merkel, Mr Asmussen and Mr Draghi. We will have to be ready to suffer the consequences of their resistance.

    But I will suffer these consequences.

    The only alternative is to accept the slow death of my nation and the slow disintegration of the Eurozone – which will destroy the European Union itself.

    To conclude, my party, SYRIZA, is intent on promoting a European agenda for the salvation of the Eurozone as a means of giving Greece a chance to breathe. I do not know whether the Austrian Social Democratic Party will join me in this struggle, for saving Europe from itself. But I am convinced that Bruno Kreisky would have wanted it to join me.

    Let’s join forces to do good – across Europe.

     

     

    Presentation at the Bruno Kreisky -Forum, Vienna, 20 September, 2013


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