The decision of the Syriza Government to call a referendum on the proposed austerity proposals of the Troika (European Commission, European Central Bank and IMF) in return for another ‘bailout’ programme reminds me of the Irish austerity referendum three years ago. It gave rise to one of the first posts on this blog.
The Irish people voted by a large majority to support austerity. Will the Greeks do the same?
The Irish voted reluctantly to accept austerity (how else could you do so?) because there was no alternative at hand. The arguments of the Left that the Irish State could lead a growth agenda of Keynesian stimulus hardly convinced when that State had just bankrupted itself bailing out the banks.
Both the reason for the defeat and its effects have not been appreciated. Of the latter it is enough to ponder the proposals of the trade unions behind the largest sustained opposition to the austerity agenda – the Right2Water proposals for ‘A New Fiscal Framework for a Progressive Government’, which proposes additional State expenditure of €9.4 billion over 4 years. This would amount to less than 4.5% of the 2014 level of Government expenditure.
The Right2Water’s ‘Policy Principles for a Progressive Irish Government’ contains a section which proclaims the need for additional investment in the water and sanitation system of “between €6 and €7 billion”, which leaves just around €2.5 to €3.5 billion for education, health, investment and everything else. This is not so much an alternative to the current Government’s strategy as a variant of it. So much have horizons been lowered.
According to the authors of this document the rules of the EU will be adhered to while seeking flexibility within them and negotiating additional scope for spending. But the case of Greece exposes that the rules of the EU, ECB and IMF can be bent to suit.
So the claim that joining the Euro was irrevocable has been discarded by the leading powers in the EU to be replaced as the biggest threat to the Greek Government and people – vote against our austerity plan and you are voting to leave the Euro.
The propaganda campaign by the EU leaders includes European Commission President Jean Claude Juncker, who says he feels ‘betrayed’, and complains about a lack of “good faith” and “sincerity” from the Greeks. This from a man who presided over the building of Luxembourg into a tax haven. Yet he sees fit to question the Greek Government and people over their right and capacity to raise taxes. Has the tax evasion facilitated by Luxembourg not contributed to the Greek predicament?
Christine Lagarde of the IMF proclaims she wants “adults in the room” with whom to negotiate, attempting to infantilise the Greek Government representatives and by extension the Greek people. This is the Lagarde who has been placed ‘under investigation’ in a fraud case. One can’t help but recall the behaviour of the previous head of the IMF, Dominic Strauss-Kahn. Getting fucked by the IMF is a pleasure for no one.
In the current case this involves Troika demands for drastic reductions in the pensions of some of the poorest Greek pensioners and increases in VAT that will hit both those who will pay increased prices and the small businesses compelled to charge them.
On the Left these demands of the Troika are likewise treated as in effect an ultimatum which should lead to exiting the Euro – as the only effective response to the unceasing demands for austerity. What for the leaders of the EU is a threat which the Greek people should retreat from is for some on the Left a major part of the solution. What for the former is a recipe for chaos is for the latter the way out of it.
In my view the former are correct. Exiting the Euro would lead to a new Drachma that would involve massive devaluation and a large reduction in Greek workers’ living standards. Cutting one’s own throat is not preferable to having someone else do it. If Greece is thrown out of the Euro it naturally has no choice but that is not a choice it should itself make.
It is clear however that the choice at the end of the day is not Greece’s to make. It is not in a position to compel a significant reduction in austerity or debt relief even while many commentators who support the austerity demanded admit that debt relief is inevitable. The reason that they demand austerity nevertheless, even while recognising that it has failed, is that they seek the removal of the Syriza Government.
The EU leaders tried it last week and now seek it this week through refusing to accept Syriza’s huge concessions, refusing to extend the ‘bailout’ and through freezing ECB liquidity provision to the Greek banks.
The Greek workers should reject the austerity plan from the EU and reject the non-solution of leaving the Euro. Only on the basis of fighting austerity and refusing a go-it-alone nationalist solution can it minimally seek to build a movement that would stem the demands for austerity. What the Greek crisis shows is that such austerity can only be fought at an international level.
What does this mean?
Well, let’s look at what the Channel 4 journalist Paul Mason, who is covering the crisis, had to say. Exit from the Euro may be inevitable he says because of democracy – the population of Northern Europe would not support the transfers required to reverse austerity inflicted on Greece while the Greek people may no longer accept it.
In this he is at least partly right. Only an international campaign of solidarity with the Greek people, which explained that the bailout was not for them, but for the German and French banks and hedge funds who invested in lending to Greece, could explain the real function of austerity and lay out the grounds for convincing those outside Greece to reject it. On this basis it might force a retreat from the austerity demanded by other EU Governments, including the repulsive Irish one.
Within Greece it would require not just an ‘OXI’ vote but a mass movement that would compel implementation of a Syriza programme to tax the oligarchs through occupations to open the books of these businesses and in doing so help put in place a rigorous system of tax collection.
In itself this would only form the starting point of a workers’ alternative – one that is based on development of worker owned production. Such workers’ cooperatives are the alternative to the weak and crony capitalism from which Greece suffers. It offers practical proof of the socialist alternative and is a basis for its growth this side of political revolution. The latter in turn will gain credibility from practical demonstration of a socialist programme.
The lack of such international and domestic conditions caused defeat for Irish workers in their referendum. A very different vote in Greece would be a step forward for Irish workers now.
On the other hand the very worst result would be defeat in the referendum and a Syriza Government implementing austerity.
While the Dutch hatchet-man Jeroen Dijsselbloem again reveals the Euro leaders agenda of getting rid of the elected Greek Government – “ who are we trusting” he says if Syriza promised to implement the austerity it had just rejected, Varoufakis is quoted as saying that Syriza would do just this. “If the people give us a clear instruction to sign up on the institutions’ proposals, we shall do whatever it takes to do so – even if it means a reconfigured government.”
Such an approach would discredit any sort of Left alternative and pave the way for a hard right Government to eventually push through austerity on a demoralised workers’ movement.
The long resistance of Greek workers to austerity has given hope that we are not yet at such a result and that the struggle against austerity will continue.