Demanding the right to breathe

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50days

If there had been any doubts about the meaning of the agreement reached by Syriza and the Eurozone, they were resolved by the publication on Tuesday morning of Greece’s proposals to reduce its deficit.

Panagiotis Sotiris has subjected them already to a detailed analysis and I will do no more than endorse the points he makes that Syriza has agreed to an absolute cap on the public sector wage bill (and therefore a wage freeze), the agreement weakens Syriza’s previous commitments not to allow the auctioning off of homes which are in debt, and it concedes in principle to the continuation of the privatisation programme including of workplaces which are central to the Greek union movement such as the docks at Piraeus

If anything, there are still more criticisms could be made. For example an English-language audience will be attentive to the implications of promises to “develop the existing scheme that provides temporary employment for the unemployed”, or to “strengthen the independence of the General Secretariat of Public Revenues” (ie. the Greek equivalent of George Osborne’s Office of Budget Responsibility) “from all sorts of interference (political or otherwise)”, in other words from attempts by an elected Syriza government to control its own economic policy. And in addition Syriza has given the troika, now relabelled “the institutions”, an unwelcome, express veto over any future increases to the minimum wage.

One writer who wishes Syriza well has cautiously welcomed the agreement saying that it “cancels the previous Greek government’s planned cuts to pensions”, which may be true, but the proposals tabled by Syriza still involve cutting pensions by reducing early retirement, and index-linking of payments in future. In any event, the right comparison is not with the plans of the previous government, but with Syriza’s own Thessaloniki programme on which it was elected. This had promised to restore the Christmas bonus for pensioners, and increase pensions thereafter (along with public sector wages) as a means to increase demand in the economy. Both of these promises appear to have been quietly shelved.

The most important part of the Thessaloniki programme were the starting principles of Syriza’s policy in regard to the Eurozone, ie that it would “write-off the greater part of public debt”, obtain “a growth clause in the repayment of the remaining part so that it is growth-financed and not budget-financed”, and “include a significant grace period in debt servicing”.

Now, of course, you can only reach a fair agreement in negotiations with someone who is willing (or compelled) to bargain fairly with you. And, Syriza’s negotating position was reduced even beneath any foreseeable position of weakness by Greek savers’ removing £12 billion from their bank accounts.

To grasp the enormous pressure Syriza was under, imagine a trade union which is trying to negotiate a pay increase from a hostile employer, while at the same time, its savings are separately being withdrawn from the union’s main bank account at the rate of about 10% of all its money every single day. Whatever other difficulties Syriza may have had, it simply did not have the ordinary negotiator’s option of stringing discussions along in the hope that something better would emerge.

Without falling into the ritualistic language of “sell-out”, it is not hyperbole to accept that the Greek government is being “strangled” or to compare it to “a debt colony with a bit of ‘home rule’”. Those, including 20 Syriza’s MPs, the speaker of the Greek parliament Zoi Konstantopoulou and Syriza’s chief economist John Milios, who have criticised Tspiras for trying to portray a defeat as a victory when it is in Milios’ words “suffocating” are right; no healthy politics, reformist or revolutionary, can start except from stating the facts truthfully.

How then might the harm of the last week be undone?

A return to the movements (with two notes of caution)

There is an almost universal desire on the Greek left, from the leadership of Syriza as far as Greece’s anarchists, to see a shift from the government to the social movements, so that it is the latter which initiate policy and the latter which control the former. How this change is conceived depends on the politics of the different groups.

Syriza itself to some extent supports the idea, and included within its Thessaloniki programme promised to “empower the institutions of representative democracy and introduce new institutions of direct democracy.” The detail of the programme included legislation to allow referenda, removal of MP’s immunities from prosecution, and a democratisation of radio and television broadcasting.

But there is potentially a much more inspiring version of the same vision in which the balance of forces within Greece is changed by the emergence within Greece of powerful social movements demanding a return to the sorts of politics which won Syriza the election.

This would the best next step. But I do have two notes of caution. First, merely seeing the best hope does not conjure it into being. Among socialists in the English-language world, there is still often a conception that Greece has enjoyed a continuous five-year period of open struggle, with widespread workers’ strikes, occupations, etc, and that therefore it is inevitable that any moment now, a social movement will emerge which will have interests clearly opposed to both those of their own government and those of the Eurozone. And yet the pages of indymedia Athens, or of the major Marxist organisations in Greece, whether pro-Syriza or anti, do not give an outsider the impression of a society on the verge of open ferment.

Second, it is important that the re-emergence of social movements is not abstracted from their politics. The last occasion when a social movement “broke through” to challenge austerity was during the revolution which took place in Egypt from 2011. This was a movement which for two years, like the great revolutions of France or Russia, seemed to constantly renew itself. It had a similar effect to Syriza’s election in terms of raising hopes internationally. At its peak, workers were involved in around 1000 strikes or protests every month. Yet, at the end of the revolution, the fatal moment was the emergence of a counter-revolutionary force “Tamarod” which portrayed itself, plausibly, as just another reform campaign. The form which the counter-revolution took was a series of public protests which were widely (and inaccurately) described as the largest demonstrations in history.

Socialism means democracy; it means the abolition of the present state and its replacement by one governed by the mass of producers. Any process which tends in that direction is always better than one that does not.

Yet in a context where very many Greek unions are linked to the political parties which been voting together in parliament against Syriza (ie New Democracy, Pasok and the KKE) more politics is needed than the simple analysis which says that we have had too much of government and now we need a syndicalistic return to the movements.

What Greece needs is something more specific a local counterpart to the huge numbers that rallied in support of Chavez against the 2002 coup and then radicalised and transformed his government, in other words a mass movement with a democratising dynamic.

Breaking with the Eurozone (but)

Syriza’s survival as a government will depend on it taking measures which could be seen as the beginning of Grexit, i.e. the introduction of capital controls, and limits to withdrawals from personal and corporate bank accounts. If it does not introduce them, then in four months’ time, Syriza will be faced with the same difficulties it faced in the last week, ie it will be nearing the end of negotiations with hostile powers, while money drains out of its banks leaving its negotiators without any leverage at all over Greece’s creditors.

Accordingly, increasing numbers of activist in Greece would not just agree with this analysis but go further, arguing that Syriza must take Greece out of the Eurozone altogether. If nothing else, the politics of Syriza’s isolation in Europe seem to compel this approach. At present, it is in a minority of one, and even in if Podemos wins the Spanish elections in November of this year, the radical left will continue to be a tiny minority among the governments, and will lose repeatedly.

But the vision of a Grexit without a change in the underlying social relationships was criticised by Antonis Davanellos of Syriza’s Left Platform, in an article from 2011:

“a return to the drachma, if it happens under the direction of capitalists and their state, would have devastating results for the Greek population. The drachma would be undervalued from the start and would instantly lose even more value when it is introduced. This would wreak havoc on the value of everything that is important to wage-earners (their wages, pensions, housing, etc.) and also farmers (the value of cultivable land). On the other hand, the capitalists–who would retain over 600 billion euros deposited abroad, more than twice the sum of the Greek debt–would be able to grab for just pennies public enterprises, hospitals, land and more”.

Those who know their history will recall how the solution to the German debt crisis in 1923 had exactly the dynamic that Davanellos cautions against, ie that inflation enabled a massive concentration of wealth within Germany, with the largest businesses buying up their dozens of their smaller counterparts on the cheap.

It also involved the impoverishment of Greece’s savers who then turned to the far right, which is not something that the leadership of Syriza, motivated as they are by the fear of Golden Dawn, will countenance lightly.

And the assumption that Davanellos makes that Grexit would lead to devaluation (and therefore inflation) is, notably, accepted by Grexit’s supporters, for whom devaluation is of course the mechanism to encourage increased foreign trade. A devalued currency is intended to sell its goods abroad for less, kick-starting the economy – but even to formulate the policy in these terms is already to see Grexit as a strategy for defending Greek business, rather than Greek workers.

Moreover a Greece equipped within an independent currency would not lose the economic problems which are weighing presently on its workers. Greece would still have a debt larger than its GDP; merely announcing “we will not pay any more” would not make the debt disappear unilaterally. It might be for example that an independent Greece would seek to trade occasionally with the European states which surround it. They, of course, would attempt to make trade conditional on the payment in full of the debts they are now enforcing.

The problem is not Grexit but the failure to attach it to transformation from one kind of society to another – from one ruled by its bosses to one ruled by its workers. Socialists often make this invocation, sometimes ritually, but this really is a situation where seemingly the same possibility (the departure from the euro) can have a wide range of different outcomes, from the most hopeful to the most desperate.

The vision has to be not the restructuring of capitalism, but its defeat.

So, there are two solutions, albeit neither is straightforward. Yes, Greece needs a return to the movements, but one which arms Syriza (and its left critics) rather than its opponents in the parliament or the Eurozone and one which changes the relationship between the government and the streets.

Yes, Greece needs to take steps towards Grexit, and possibly Grexit itself, but one based on a changing dynamic between classes within Greek society, rather than the mere exchange of capitalism in one continent for capitalism in one nation.

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4 responses »

  1. David – A decision by the Syriza government to walk out of the Euro and re-adopt some version of the Drachma would a/ Increase Greece’s isolation and make the building of a European wide anti-austerity coalition even more difficult b/ Would open the way to an even more dramatic collapse in Greek living standards and employment. The government has admitted that what it has negotiated is a VERY tough compromise. But it buys time – and time is what this government needs to further prise opening the cracks in pro-austerity political front.
    Is there an alternative? One could I suppose follow the advice of the Weekly Worker and say Zyriza should have refused to take office and allowed the right to hold onto power. Given the value even of the minor concessions Syriza has obtained (on delaying some privatisations, re-employing some public sector workers etc) – I think not.
    When Greek-Euro-area negotiation reopen, the Spanish election will almost be on us. Meanwhile the leader of the Portuguese opposition (and Mayor of Lisbon) has said that if elected, he will negotiate an end to austerity. For as long as Syriza can see the prospect of new allies joining the struggle, it should persist and exploit the time it has won. THAT is what Schauble et al are so worried about!

  2. Thanks for your comment, John. I agree that exit followed by devaluation bears a risk of a catastrophic decrease in working class living standards. It would be a gamble, with none of the possibilities from the most benign (Argentina in 2002-3) to the most catastrophic (Germany in 1923) excludable at the outset. You must surely have noticed that within a British left where exit is most often portrayed as a simple, technical reform – the equivalent say of turning a tap on or off – I have been unusual in reminding readers repeatedly that exit is a risk, both a) because actually it is a risk, and b) to help to explain the balance of forces within Syriza, where Grexit remains a minority position (for example, even DEA, which is now opposed to the recent agreements, has not called for it).

    I am not dismissing the importance of time, but it has to be time for a purpose, and it’s not a matter of choosing between Syriza explaining to its voters or making allies abroad. It seems to me rather that the two have always been intertwined – a government which states honestly how limited its scope has become and yet keeps on fighting, will attract support both on its streets and beyond.

    On the other hand, I also think Syriza faces the reality that it has been completely isolated within the Eurozone. It is not enough to say that Spanish will almost be upon us – the next round of negotiations will end in June, still 5 months before the Spanish vote.

    If you look back to Thessaloniki, it seems clear that underlying its rationale (debt write-off to pay for fiscal stimulus) was an assessment that significant debt write-off was achievable. And that this could be done – in turn – because there was enough support from social democratic parties of the centre left (ie the governments in France and Italy). That has not materialised. Indeed, the chorus of active hostility to Syriza has been even greater than could reasonably have been predicted involving a wider range of forces than just Germany (or the most right wing countries, or the smaller states, or the ones who have suffered most from austerity and are now ironically pledged to continue it).

    The other factor which can’t be ignored is Greece’s vulnerability to further bank runs. I struggle to see how Syriza can escape another ground of negotiations with any last scrap of its economic programme intact, except by saying that it is going to begin to limit currency withdrawals.

  3. Fair points David. However it is worth thinking about why Schauble and the others are so worried about anti-austerity “infection.” Look, for example, at the further concessions given to Italy and France regarding their deficit reduction timetable (France) and debt reduction (Italy). The next phase of the negotiations with Greece will see a far more complex balance of forces come into play. One reason – we should acknowledge – is the evidence of a significant likely improvement across the European economies (see the upgrading of the recent OECD growth forecasts – reflected in the financial markets.
    So there is no misunderstanding, if I am wrong and Greece is effectively driven out of the Euro (notably by a sudden withholding of liquidity for Greek banks) – then there should be a reserve plan B to make the best of a very bad lot. I think that is unlikely because one Grexit and default is certain to raise fears and speculation about who might follow (Portugal?). Each exit/default adds to the astronomic losses now mainly born by the German state. Incidentally you raise the question of capital controls. But this can be achieved within the Euro system. That is after all what the Cyprus government is doing (under external pressure). – http://www.vox.com/2015/2/20/8076993/greece-capital-controls

  4. Thanks David for your thoughtful comments and I appreciated your previous contribution as well. You appear to have shifted your position from a few days back when you were more willing to look for a defence of the new agreement but nothing wrong in that – I was in the same pl;ace for a short time ( I think its called wishful thinking).People who are prepared to change their minds in the light of events are what we need right now. But that includes those like John Palmer who for good reasons have disagreed with the Lapavitsas analysis and the Grexit strategy. John has been arguing for what Kouvelakis calls the ‘good Euro’ strategy for many years along with many other left economists in the Euromemorandum group whom I respect (and for the reasons you’ve summarised well above and before). But they have always seemed to ignore or at best donwplay the underlying balance of class forces which have been pushing the EU as a whole in an increasingly neo-liberal direction. If I have one criticism (influenced as I am by Kouvelakis on this) it is that Dave gives too much credence to the idea that the Syriza leadership have anticipated all the possible scenarios. For all their expertise they really do seem to have been a little naive over the likely response of the German government ( and all the others) and blinded Kouverlakis suggests by confidence in the ‘rationality’of their own arguments about the economic devastation inflicted on Greece and the impossibility of repayment etc. The ruling elites simply don’t care about that – or if they do it matters far less than the danger to them politically of conceding anything Syriza could claim as a success. There may be some divisons over how ‘tough’ they should be but their side is led by seasoned class warriors and they will be ruthless whne necessary.
    Looking forward to the possible election of Podemos and other left governments in Ireland or Portugal is all very well – but they are not in the next year or so going to shift the direction of the ECB or prevent it exercising the financial terror it has recently directed at the Syriza government (for me this is so reminiscent of Latin America in the 1980s but being inside the Eurozone constricts the options for any government even more than it did for Mexico etc at that time – and Argentina and Ecuador show that default can be managed without isolation from the global market although that hasn’t been easy)..
    Dave’s reply to John above gets it right in my view both on the question of time (what does Syriza do with the breathing space?) and the ongoing vulnerability to bank runs (why not capital controls already is a q I’ve posed and not had a satisfactory answer except that now it would need to be agreed by the ‘institutions’ which is what happened in Cyprus).
    We can only expect the ruling elites within Europe (and the IMF) to turn the screws further if the Syriza goverment is deemed to have failed to meet the conditions required for actual disbursement of funds at the end of April. It seems likely that if it doesn’t get those funds Greece will be in a de facto default situation given the debt payment schedule I’ve seen.
    What should the left in Greece argue as we approach the next deadline – meet the conditions and capitulate ( and lose all political credibility within Greece itself)?. Or simply refuse to make payments on the debt, take over the banks impose capital controls and bring in a parallel currency if necessary (an option Varafoukis has himself considered)- and then go back to the negotiating table? If they are honest with the Greek people as Kouvelakis rightly insists is a political necessity they can survive the resulting disruption and we are in a completely different space politically (as Argentina was for a period).
    I am not inclined to make premature judgements about which route will be taken. But I know what I would be arguing for if I was in Greece and a supporter of the left platform within Syriza. Meanwhile engaging in solidarity should not mean abandoning our critical faculties.

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