For example, conservative Spanish People’s Party Prime Minister Mariano Rajoy felt he had to go to Greece to support his political brother Samaras in the January election campaign. At the other end of the spectrum, Podemos leader Pablo Iglesias was in Athens for the final rally of SYRIZA, and was given a special spot on the platform by SYRIZA leader, Alexis Tsipras.
Today, as the conservative Spanish media are doing all they can to torpedo opinion poll leader Podemos before the November national Spanish election, their spokespeople are bombarded with aggressive questioning, not just about Podemos’ policies for the Spanish state, but also about the latest developments in Greece.
Importance of SYRIZA victory
It is hard to overestimate the importance of SYRIZA’s win. For the first time since World War II a political force to the left of social democracy has won government in a European state and simultaneously opened the first breach in the great wall of neoliberal austerity.
In Europe “neoliberal austerity” means moulding the European Union and the Eurozone so as to advance the competitiveness of its leading firms—principally German—against US, Japanese and, increasingly, BRICS rivals. Hence the recipe—removing obstacles to business friendliness such as “excessive” minimum wages, labour market “rigidities”, “sluggish” public sectors and any remaining state industries offering a chance for private gain.
There’s nothing unique there, but austerity in Europe operates with extra viciousness deriving from “peripheral” European countries’ membership of the euro currencyand their loss of control of monetary policy (and fiscal policy, too).
This makes the only “adjustment path” for economies running large external and public accounts deficits the infamous “internal devaluation”—brutal cuts to wages and welfare payments carried out in the hope of boosting the export income that will hopefully offset the collapse in internal demand. This dynamic has reached a sadistic extreme in the Greek case, shrinking the economy by 25% and devastating the lives of millions.
The importance of SYRIZA’s win is shown by the popular enthusiasm that it sparked across Europe, especially in Latin Europe and Ireland, expressed three weeks later in the hundreds of February 15 demonstrations in support of the Greek tem negotiating with the Eurogroup (group of Eurozone finance ministers).
It is also confirmed by the utter hostility towards the SYRIZA government from the hard core of neoliberalism, led by the ruling German CDU-SDP [Christian Democratic Union-Social Democratic Party] coalition and the Bundesbank, intent on defending “TINA” and fighting “moral hazard”.
The Angela Merkel government of Germany is supported by Finland and Slovakia, but also by the conservative forces governing Spain, Portugal and Ireland. These have been making their peoples pay the penance decreed by the Troika (EU, European Central Bank and International Monetary Fund) for the economic sins of their bankers and real-estate speculators. They stand to suffer almighty political backlashes if the SYRIZA-led government succeeds in applying its alternative program of social salvation and economic recovery favouring those most in need, based on making the wealthy pay.
One anonymous senior international banking insider put the approach of the EU “core” in these words to Reuters on February 21: “They are squeezing them on everything, it’s part of a system to suffocate them, to make them realise the end is coming, to realise it is time to get on their knees.”
The popular enthusiasm for the SYRIZA victory among peripheral Europe’s working people has inevitably affected the social-democratic parties, but in various ways according to their present position in national and European politics.
At one end of the scale, where social democracy governs in coalition with the conservatives—as in Germany and in the figure of Martin Schultz, speaker of the European parliament elected on a deal with the conservatives—the advice for Tsipras and SYRIZA has been to “come down to earth” and get the Greek people to “face reality”.
Where it is governing by itself, as in France and Italy, social democracy has pretended to be a friendly ally of the new Greek government, pleading with the neoliberal hardliners not to humiliate it too much, yet not risking the ruling consensus.
Where it is in opposition, as in Spain and Portugal, social democracy has even welcomed the SYRIZA victory as the first move in a switch to a softer economic policy in Europe.
Sharpening class conflict
In brief, the election of the SYRIZA-led government has led to a sharpening of class conflict within Greece and across Europe. What forces will determine the result of this fight?
First, the degree of popular support for SYRIZA within Greece. Second, the degree of support for the SYRIZA-led government and SYRIZA-like forces in the rest of Europe.
This begins with Spain, but also extends into the EU “core”, especially Germany, where Greece is becoming a hotter-than-ever political potato, with “What to do about Greece?” discussions increasingly present in the German media.
In this conflict the neoliberals hold nearly all the economic cards, while Greece’s economic position is extremely weak. The SYRIZA-led government faces the permanent threat of capital flight (hence the possibility that it might have to implement capital controls) plus a 2015 debt repayment schedule that will be very difficult to meet without debt renegotiation.
The latest Greek economic indicators also reveal that the country’s miniscule economic recovery is in danger and tax income is falling behind projections.
Nonetheless—as is already clear from the results of the Greece-Eurogroup negotiations—the degree to which the overwhelming economic power of Greece’s creditors and the ECB can be deployed against SYRIZA is constrained by the political price going with over-brutal use.
A recent example of tactical bungling here was the statement by European Commission president Jean-Clause Juncker that “there can be no democratic decision making against EU treaties”. Juncker later tried to compensate with an acknowledgment that the missions of the Troika’s “men in black” were an affront to national dignity.
‘Least evil result’
The February 24 Greece-Eurogroup bridging deal revealed these forces at play. There’s been a huge discussion about it, within SYRIZA itself, and on the European left. At the most recent SYRIZA central committee meeting around 35% voted against the agreement.
My opinion, personal and provisional, is that despite the serious concessions that Greece has had to make -- concessions that may well make it harder to recover the initiative (what SYRIZA economics professors Spyros Lapatsioras, John Milios and Dimitris P. Sotiropoulos have called “the slippery slope” in a recent Links article) -- was that it was the least evil result possible in the circumstances.
The other alternatives, including those that might well become preferable in the context of a different balance of forces, were, at this point in the long war that has opened, greater evils.
Worst would have been a forced, uncontrolled exit from the Eurozone (“Grexit”). This would have produced an even greater bank run than that already taking place, a devaluation of euro-denominated savings (of between 40% and 60%, according to various modelling), and a further depression-intensifying decline in consumption, investment output and employment.
In the situation of dependence on ECB financing of the bankrupt private Greek banking system, the conditions just didn’t exist either for organising a controlled Grexit nor for a controlled default on paying public debt obligations, nor for such other proposals for loosening the bonds of debt obligations and austerity such as the introduction of a parallel currency—advanced by Financial Times commentator Walter Munchau.
Most importantly, none of these alternatives, even if they had been doable, would have enjoyed anything like majority support among the people of Greece. According to the latest Public Issue poll, support of staying within the euro remains at 75%-80%, while the SYRIZA leadership, elected with only 36.4% of the vote in January, is committed to building social majorities in support of its proposals.
Notwithstanding, the Greece-Eurogroup agreement should not be interpreted as representing unconditional and timeless Greek attachment to Eurozone or EU membership.
An indication of where matters may head came in a March 8 interview with the Milan daily Corriere della Sera by Greece’s finance minister Yanis Varoufakis. He said that if there was no acceptable concession from the European institutions on debt and the primary surplus they require Greece to run, then the options of a referendum on EU membership or early elections were always possible.
Going by the most recent opinion polls, such elections would deliver SYRIZA up to 47% of the vote and, under the Greek system of awarding a 50-seat bonus to the leading party, an overwhelming majority. A result like that would have repercussions across Europe, representing progress for what is still the SYRIZA-led government’s preferred option—that of winning the battle against austerity on a European scale.
Greece’s core problem is its debt burden, private and public. Without a lightening of both, any chance of economic recovery and desperately needed job creation will remain very remote.
Yet, the SYRIZA-led government, even as the bridging loan agreement it has signed commits to repayment of existing debt, has called on Eric Toussaint of the Committee for the Abolition of Third World Debt to lead a commission to determine which of Greece’s public debt mountain (175% of GDP) is noxious.
This is a repeat of the work that Toussaint did for the Ecuador government before its partial debt default in 2008. It is also in the perspective of SYRIZA continuing to demand a Europe-wide conference on debt restructuring, along the lines of the 1953 conference that restructured Germany’s debt.
Winning the vital struggle around debt will require an advance for anti-austerity forces in the rest of Europe, beginning with Spain.
While the battle at the governmental level is Greece against the rest, it will be very hard to achieve a breakthrough on debt. However, a victory for the left in Spain (Podemos and the United Left) would shift the balance of forces radically, as the Merkel government’s obsession with the “Spanish problem” confirms.
However, Podemos is not yet SYRIZA, neither in its degree of concretisation of program, its structures, its decision-making methods, nor the clarity of its political line. This is especially the case on the burning question of the right of its nationalities to self-determination (beginning with Catalonia, but also the Basque Country and Galicia).
Supporting and breaking out of the bridgehead against neoliberalism that SYRIZA has created in Greece is therefore a race against time, a race in immediate terms to give breadth, depth and higher degrees of organisation to the anti-austerity alternative in Spain, Portugal, Ireland and France.
In this context, what can we in Australia and other countries outside Europe do? Solidarity with SYRIZA is key. In the understanding that an advance for the struggle in Greece is an advance for everyone struggling against neoliberal capitalism, the goal of international solidarity must be to make Greece a factor in national politics wherever possible.
My personal hope for Australia is that the solidarity movement succeeds in generating a broadly supported movement for justice for Greece, one winning backing within the Greek community and among all left, socialist, progressive and democratic people.
In the words of SYRIZA Political Secretariat member Yiannis Bournos:
The return of politics to the front stage of the European process, the first political schisms produced at a European level after the election victory of SYRIZA and the overall stance of the Greek government of social salvation are encouraging signs for the next period. This specific stance changed the framework of discussion throughout Europe, creating, in parallel, an unprecedentedly large solidarity movement.
From the perspective of reinforcing pan-European social struggles and changing the balance of power in Europe this strengthening of solidarity among the peoples of Europe is a duty of the utmost importance.