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.
The calling of the referendum reveals both weakness and strength in Syriza’s position. The weakness is revealed in its purpose being to strengthen Syriza’s negotiating position with the Troika, although even a successful negotiation will mean ‘left austerity’ rather than its ending. Weakness has previously been revealed repeatedly in Syriza’s series of concessions. It is not necessary to invoke the moral fibre of Tsipras to explain this.
The other aspect of a deal required is some debt relief – the central objective of Syriza in negotiations. The IMF has just revealed the extent of the debt relief required. That debt relief is required will not come as news to the leadership of the EU who seek the imposition of draconian terms before any relief is afforded and seek firstly the removal of Syriza from government.
Weakness is revealed in that a deal without debt relief will at best only ameliorate austerity and will lead to the more or less slow erosion of support for Syriza as austerity bites.
Weakness is also exposed in Syriza’s vacillations around a new deal even after calling the referendum.
On the other hand strength is revealed in the fact that Syriza has not reversed its call for a referendum despite threats from the EU, unlike the previous Government in 2011 under Papandreou. The very act of calling one is an act of defiance. Syriza understands this and so do the EU leaders.
However none of the strategic questions in the conflict are answered by its calling – how to successfully resist austerity, achieve a deal, build an alternative – and if opinion polls are to be believed the Yes vote is catching up on the No vote and may succeed when the referendum takes place.
As I have said, far from facilitating regime change the referendum is an instrument of resistance which may, or may not, be successful. If it is then Syriza is strengthened. If not it would be better to call elections than to continue in office imposing the diktats of the Troika; risking voluntary ‘regime change’ as you put it.
It would be a mistake however to consider only one side to the conflict. Imperialism is divided on how to respond to Syriza’s demands and debt default by Greece on loans due, if not a nuclear option, involves considerable risk to those leading the charge against Syriza. It would also involve, at this point in time incalculable, damage to the financial system around the world.
Above all, rejection leaves both sides with uncomfortable choices still to be made. Preparing for these will make a lot of difference, if indeed some preparation has been made. For socialists this always involves preparation and mobilisation of the working class, internationally and in Greece, although in this particular crisis, in this particular time, if you don’t get beyond this level of abstraction then you don’t really have an answer.
What do you think of Syriza winning a general election on an anti-austerity platform then not having the courage of their convictions to take responsibility for the key decisions. Instead they throw it back on the people to decide the matter in a chaotic referendum? They now say they will vacate the seat of government if the vote goes against their formal recommendation on Sunday. What else do they expect from the people after a week long of rumours, fear and panic than a vote for a reluctant yes to more austerity? Most people will likely opt for the devil they do know than the devil they don’t. The crazy political non-leadership shown by them will probably demoralise the entire broad left right across Europe for years to come. So we will end up with even more austerity government than we hoped for or maybe even expected. The current fiasco offers only a bad example to and prospect for the broad left in Ireland in the near future. A left wing that does not really want to take charge of things, this is what Syriza looks like in my eyes at least. Some suggest it is all part of a tactical master plan, really!
Well now this the big one, I was wondering when you were going to get around to what is to be done about the utopian- imperialist concern for a single Euro-capitalism. Back in the days of the Maastricht negotiations I wrote the chapter against the whole business for the then Socialist Democracy fraternity ; The Promise of Socialism chapter 2. To quote ‘The socialist alternative starts from the understanding of exactly what is going on, Such an understanding points in only one direction. The whole Maastricht process designed to create and strengthen a EUROPEAN imperialism must be rejected. As we have said the move toward a single currency is not a neutral technical exercise and the move toward a united European imperialism is neither inevitable or progressive….a single currency union requires a stable currency which in turn requires a central bank, a State, an army, a common foreign policy and so on.’
The above did not to the whole business justice. The analysis overplayed the economic factors forcing the pace of political change in favour of a new European imperialism to rival the other imperialist blocs. The analysis borrowed its conception from E.Mandel’s Europe versus America.
I would point out that the so called convergence criteria or rules preferred by all of the neo-liberal economists at the time were breached not by Greece or Ireland but by Germany and France. The fact that the so called core countries could get away with breaching the economic rules while the so called peripheral countries got penalised for doing the same thing speaks less about hypocrisy and more about membership of an imperialist club. In the club of imperialism some members still manage to rule and give orders even though the members are all in theory equal.
If the imperialist part of the analysis was sound what was absent was any understanding of the European utopianism driving the Union. This is evident in all sorts of ways, the most extreme case being the proposal to admit Turkey into the Union. There is no historical case for saying that Turkey by tradition is a European nation, for many centuries Turkey was the Ottoman Empire, the much feared enemy of Europe. The best definition I can offer of utopian political thinking is the one that advises political actors to ignore all of the past histories of things and be guided solely in their decision making by the political ideal of the present. The political ideal of the present is the open democracy or the open society, the State without closed national borders and single minded cultures, on this basis Turkey definitely can belong as can all of the North Africa countries. For though these countries may not be fully democratic today, tomorrow under the supervision of the democratic European Union their potential can be realised. This is what the European Union did already did for Greece, Spain and Portugal, beginning in the 1970s, they became anchored to democratic institutions and ideals. This is the utopian dimension that I chose not to mention.
As for the economics of today, it would be more practical for almost everyone that Germany and maybe a few of its neighbours left the Euro zone and established their own hard currency. You can’t maintain a currency union between national economic units that are so dissimilar in kind. The notion that the unevenness and inequality of the current arrangement can be fixed by means of fiscal transfers carried out by a more centralised or socialised Euro State is pure wishful thinking, The German people not to mention the British and French will not consent to it. Decades of English tax transfers to northern Ireland has not fixed its economy, it has just reinforced its utter dependency.Greece should be out of the Euro currency zone, but should not be isolated. Greece should be part of another Euro zone along with its primary trading partners and neighbours. I think what is likely to happen is that the financial markets will bring into being two, three or even four Euro- currency zones over time. The Irish economy is now so combined with the British one, that it belongs to a common currency-zone. The British technocrats also know how closely tied two economies are, this is why they were quick to offer the Irish that 7 billion lone. It is only the twin legacies of Irish nationalism and British imperialism that compelled Ireland into the Euro currency-zone in the first instance. But the Euro-currency zone is not an optimal one for Ireland, it allowed the Irish banks to go on a borrowing binge that almost destroyed the country. It should not be beyond British political skill and imagination to widen the horizon of its own economic thinking and to create a new British anchored mini Euro- currency by welcoming others into a revised institutional framework based on a fairer and more democratic deal than existed in the self interested past of that single minded British imperialism.
You ask me what I think of the Syriza Government asking the Greek people in a referendum what their answer is to the Troika demands for more austerity. You describe this as an abdication of responsibility, demonstrating that it does not have the courage of its convictions and showing that it does not really want to be in charge of things. This will lead to a vote to accept austerity, just like in Ireland.
In replying I would first of all say that if the Greek workers and general population are not prepared to vote against austerity then there is not much basis for any generalised more radical approach. If they vote Yes to austerity then it would demonstrate that the Syriza Government is in a fundamentally weak position and that pretending to hide this by not holding such a referendum would provide little protection.
On the other hand, and by the same token, a vote against austerity would strengthen the opposition to austerity, robbing it firstly of any legitimacy nationally and also internationally, and would thereby strengthen Syriza opposition to the deal.
The vote in Ireland clarified the weakness of an alternative and if, as stated in my post, many didn’t learn any lessons from this in terms of appreciating the weakness of the alternative, it left them no excuse for failing to do so.
As for abdicating responsibility; this would only be the case if Syriza did not campaign vigorously for a No vote. As I also stated in the post, what would be worst would be if Syriza did put itself in charge, in charge of austerity – taking responsibility for it and abandoning opposition to it.
If it wins the referendum it has a mandate to reject austerity and if it doesn’t it can take responsibility for, and take into its own hands, opposition to austerity in new elections and in opposition thereafter, if it does not win a majority.
Syriza has no plan to campaign vigorously for a No vote. It has indicated it might actually scrap the referendum. Mason tells us that the mass media is dominated by scare stories and rumours aimed at promoting as yes to ansterity outcome. He also says that the television news media in Greece makes no pretence to objectivity and news reporting as happens in Ireland and Britain. It is utterly partisan like the British newspapers and controlled hands on by the super rich. The referendum is at best a negotiating ploy, but it is more likely a last ditch attempt to kept the broad left coalition that Syriza is together. The socialist part of it will likely leave or be forced out.
There can be no rational referendum in such fraught circumstances, compare it to the two years of calm preparation for the referendum in Scotland. The new government already had a clear mandate given to it only five months ago to oppose austerity, why does it need another another one so soon? Why give the pro austerity powers inside and outside of the country such an the easy chance
to bring about a regime change. If there is to be a regime change let them wait for the full term to the next general election. I fear that Mr Tsipras is made from the same moral fibre as Ramsey MacDonald.