The Greek inferno: First the unravelling, then the rupture

by · May 13, 2012

SYRIZA leader Alexis Tsipras at a pre-election rally in Athens

Read mainstream accounts of the massive electoral realignment in Greece and you notice a strange use of terminology. The pro-austerity parties — especially conservative New Democracy and centre-Left PASOK — are called “pro-bailout” and “moderate”, while the parties that oppose austerity are called “extremist” and “hard-line”. And there’s a tendency to portray the rise of new forces on the Left and Right as part of exactly the same phenomenon — an electorate driven to irrational choices by austerity.

So here is the “moderate” path, of “necessary” restructuring, that the “extremists” and “hardliners” are getting in the way of:

Just short of two years after the Greek government signed its first memorandum of understanding with the so-called “troika” (IMF/EU/ECB), the radical restructuring programme accompanying it has had some cataclysmic effects. In April 2010, the month before the signing of the first memorandum, the official unemployment figure stood at 11.7 per cent. Less than two years later (Jan 2012) that figure had risen to 21.8 per cent. In the same month, the National Statistical Service (ELSTAT) reported that youth unemployment had for the first time tipped over half of the entire population group (age 15 to 24). At 50.8 per cent, the figure had more than doubled in three years. And these numbers fail to portray a much wider landscape of informal/part-time employment, wild precarity, a rapid decrease in wages and pension payments (the national minimum wage was decreased by approximately 20 per cent alone). This condition is complimented by a spectacular increase in state taxation (numerous new taxes along with sharp increases in existing ones) and — rather unsurprisingly, then — a major wave of emigration that has so far been largely undocumented in official statistics, in part due to the unrestricted migration allowed to citizens of Schengen countries within the entire area. Last but of course not least, Greece has seen the highest rate of year-to-year suicide increase in the EU.

Greece is now in its fifth year of recession, exacerbated by a series of “debt-reduction” measures imposed by the Troika in exchange for a “bailouts”. Yet only 12 percent of the latest tranche of the bailout actually goes to paying the Greek government to reduce its debt, the rest to its creditors (banks, insurance companies and the European Central Bank). The bailouts, supposedly designed to hold off creditors making a run on Greece, are tied to measures that will make balancing the budget ever more impossible.

This has been justified ideologically in a number of ways. Early on there was a mass of propaganda about how Greeks were lazy, overpaid and inveterate tax-dodgers. Needless to say, such arguments have little basis in reality, but it hasn’t stopped some suggesting there is something inherently dysfunctional and corrupt about the country, one Forbes magazine writer recently going as far as arguing, “The brute fact is that Greece has not succeeded in demonstrating that it can and should exist as a sovereign political entity.” It is now much clearer that this is all about protecting the single currency as a project of the European ruling elites, led by Germany and France, to create a new world money to compete with the US dollar.

As Left Flank has explained before — drawing on the analysis of Costas Lapavitsas and Research on Money and Finance — the tensions in creating a single currency while keeping public spending policy at the level of nation-states remained manageable until economic crisis hit from 2007. This led to differences in competitiveness between core and peripheral Euro members to widen, with the core economies effectively pushing the burden of restructuring onto the weaker periphery. The main reason for Germany’s strong position is not that its workers’ wages are lower or working hours longer in absolute terms than Greece’s. The opposite is true. Rather, the Red-Green coalition government of the early 2000s succeeded in driving through a significant attack on labour costs, thus increasing Germany’s relative competitiveness. Despite its connection with woolly appeals to progressive transnationalism, the Euro project has always had neoliberalism and imperialism hardwired into it.

Before the rupture

While the crisis has caused political problems in the core countries (with the recent French election reflecting discontent with austerity) it has led to a dramatic ratcheting up of problems for political elites in the periphery. Why have European state and business leaders nevertheless pursued this course when they would normally rely on stable governance by those elites to implement their agendas? The immediate motivation — pushing the burden of economic crisis onto the working class and poor — is easy enough to grasp.

But in Greece and Italy parliaments have ceded to technocratic governments, and bureaucrats from Brussels have been installed in key ministries to ensure “compliance” with bailout terms. It all seems like willful political suicide for local elites, especially now that Greece’s brief period of technocratic governance has been followed by a massive rejection of the parties that voted it in.

The real reasons go to the nature of the Euro project itself, for both core and peripheral capitalist classes. For European capitalists, a Greek default and Euro exit would not be disastrous in itself — Greece is a small economy — but it would threaten further fragmentation of the Eurozone (with perhaps Portugal or, more worryingly Spain, next to go). For the Greek elites, loss of Euro membership may ease immediate pressure for austerity, but it would also leave them outside a powerful economic and political bloc. Their calculation to date has been that it’s better being pissed on inside the tent than to be forced outside, still getting pissed on.

Further, the political institutions that managed previous waves of austerity within mainstream channels have been greatly weakened in their ability to play that role again. Marxists often talk about the great struggles that shook the advanced capitalist countries in the 1960s and 70s, and of the backlash that restabilised the system from the late 1970s (the “Thatcherite”, “economic rationalist” or “neoliberal” turn). In both periods, traditional trade union and social democratic organisations faced disruption but also played a role in containing discontent and managing retreat. The price was the erosion of their social bases (for the Australian case see here and here).

In Greece PASOK managed to hold together a mixed working class and small business constituency while to becoming one of the main exponents of Blairite, pro-neoliberal “Third Way” politics in the 1990s. Alternating PASOK and New Democracy governments had to face down periodic, short-lived social upheavals, but for a long time no obvious political force to the Left of PASOK emerged. The Stalinist KKE held its industrial and activist base through a sectarian approach to the rest of the Left. The KKE’s former Eurocommunist wing Synaspismos related to new movements but also pragmatically accepted large chunks of pro-market ideology, building a significant but still electorally marginal presence in the 2000s (it now forms the core of the SYRIZA coalition).

This was the period of unravelling of Greek official politics, which was a precursor to the current rupture.

When PASOK won the 2009 election on a soft anti-austerity platform, it did so with a mass base but one much less “rusted-on” than in the past. One has to go back to before the 1981 election when PASOK first became the party of the Greek Left following the end of military dictatorship in 1974, to find its vote below 38 percent. Last week it got just over 13 percent, beaten into third place by SYRIZA. Not that its traditional conservative opponent, New Democracy, fared much better. And on the far Right the openly fascist Golden Dawn has made big gains with its ultra-nationalist rejection of the EU, helped in part by having a massive following among Greek police. One only needs to look at the opinion poll trends between the two general elections to see the scale of the rupture.

Opinion polls 2009-12


Political possibilities reshaped

Two things happened in 2009-2012 to blow the political situation wide open. First has been the class war from above. But second has been a big rise in social resistance. Because of the earlier unraveling this has not always had a clear Left-Right polarity. There has been generalised fury at the entire political class, perhaps most visible in the eruption of a “Squares” movement akin to the Spanish Indignados, which posed itself as transcending old polarities. Yet the return of mass strikes — even if most have still largely remained under the control of union bureaucracies — has also shaped things. There have been 17 general strikes since the 2009 election. In various places workers are going beyond traditional limits, with workplace occupations, rank-and-file action committees, etc. There have also been serious efforts by some on the radical Left to bridge the divisions between different arms of resistance. To build links from youth rebellion against the state to union struggles to the Squares movement, above all trying to overcome arguments that worsen divisions (e.g. defending anarchists against state repression, opposing fascist violence towards immigrants and the homeless, etc.).

The class polarization and growth of workers’ resistance have thus given direction to what could have been inchoate developments. SYRIZA has played an important role in cohering anti-austerity sentiment in the electoral sphere, but what is happening on the ground is of greater importance. SYRIZA, despite the presence of various radical and Marxist currents within it — is really not much more radical than old-fashioned Left social democracy, as Paul Mason explains in this excellent backgrounder. SYRIZA seeks to keep Greece in the Euro while negotiating a default. It backs social protests but its main leadership is not arguing for a revolutionary strategy in the workplaces.

Nevertheless its breakthrough and 5-point program for a Left government opens space for more radical arguments. Specifically, the political question is how workers and the Left can be mobilized themselves to take action to point a way out of the social crisis. SYRIZA’s argument is that, at least as a first step, having a Left government run the Greek state is the key. In essence this is about restabilising Greek capitalism on terms more favourable to ordinary people (which explains why some business leaders see more future in cooperating with it than the spent parties of the “centre”). Yet, barring an unlikely economic turnaround, the crisis is likely to cruel such hopes if the Left manages to form a government (which is feasible after an almost certain new election, as SYRIZA is getting 25.5 percent in the most recent polling).

This is why the idea of uniting all the Left to get SYRIZA into government is problematic (see the comments of this excellent post by Richard Seymour for a taste of the debate). Historic divisions within the Greek Left are serious and problematic but the question must be “unity around what?” The election of a Left government could open a new phase of more radical struggle from below, but that depends on how activists on the ground respond to it, not something inherent in electing such a government. In particular, it is hard to see how the issue of Euro exit can be avoided (some banks are already preparing for such an outcome) because the entire continent-wide political crisis is exacerbated by elite commitment to rescuing monetary union.

The argument put by Antarsya (coalition of the anti-capitalist Left) for unilaterally cancelling the debt, breaking with the ECB by exiting the Euro, and nationalizing the banking system (under workers’ control) has been important in shifting debates on the Greek Left about what is possible, even if Antarsya’s electoral impact remains much lower than its influence among radical activists. The issue is not whether the Left can form a government but whether it can articulate politics that show a clear way out of the social crisis, politics that can mobilise the mass of ordinary people behind them. The strengths and weaknesses of the various currents on the Greek Left will continue to be put to the test in the struggles to come.

Discussion4 Comments

  1. “SYRIZA has played an important role in cohering anti-austerity sentiment in the electoral sphere”

    I more think SYRIZA has played an important role in confusing and disorienting anti-austerity sentiment than cohering it. By pretending that it is possible to stay in the Euro while ignoring the terms of it, SYRIZA neutralises the opposition to the consequences of staying in.

    Look at their 5 point plan. What exactly is SYRIZA proposing as a solution? Rejecting the baillout terms (then what?) and an international enquiry and an “investigation”. Who will be running this? For what point?

    There is supposed to have been a major political realignment, but to what? Surely political collapse would have been a better description. It would then lead to a more tempered enthusiasm. Collapse is not progress. In this case, it just means more power to the bureaucrats, whether in Athens or Brussels.

    • Dr_Tad says:

      You’re having an argument with that sentence in isolation from the rest of the post. I do think it’s good that SYRIZA has been able to cohere the sentiment, but I’m hardly uncritical of its politics, which I see as “not much more radical than old-fashioned Left social democracy”. I think the social resistance has shaped debates in a positive direction, and this is a major political realignment. But it is a fragile and unstable one. How could it not be?

  2. I guess we may see how much good comes from SYRIZA’s “cohering” of sentiment soon enough.

  3. Jim Rose says:

    You would think that this is the first ever sovereign default? They are dime a dozen as is exiting from currency unions both in normal times – one an average a year since 1945 – and the ruins of war and empire too.

    When a debt stabilization has significant distributional implications, different socio-economic groups attempt to shift the burden of stabilization to other groups.

    The process leading to a stabilisation becomes a war of attrition, with each group finding it rational to attempt to wait the others out.

    The political battle over monetary and fiscal policy was not over the need for reducing large budget deficits, but over which groups should bear the higher taxes and expenditure cuts to achieve that end.

    Successful stabilizations are usually preceded by several failed attempts; often a previous program appears quite similar to the successful one. Stabilization occurs only when one group concedes and is forced to bear a disproportionate share of the burden of fiscal adjustment.

    The passage of time and the accumulation of costs leads one group to give in and make a previously rejected program economically and politically feasible.

    When fiscal stabilization occurs it coincides with a political consolidation. Often, one side becomes politically dominant.

    The Greeks have done a fine job in gambling for redemption. Squeezing huge subsidies and write-offs! The left party is their latest prop in this war of attrition.

    The Irish played by the rules, guaranteed bank bond holders to which the government had no obligation, and despite bank fraud, and got screwed.