The Greek Crisis          

There must be some way out of here!

The following is an edited version of a  speech presented at a forum organized by KAOS Radio and Economics for Everyone in Olympia, Washington on October 20, 2015.

I was reminded how important what is going on in is Greece when a Vietnamese friend who was very involved in the anti-Vietnam war movement called me in July.  He said,  “Just like in the 1960’s and early 1970’s, organizing in solidarity with the Vietnamese people was the right and most important thing to do for  people around the world interested in liberation and creating an alternative to United States, capitalism and imperialism; and acting in solidarity with the revolutionary movements  in El Salvador, Nicaragua and Guatemala was central and right in the 1980’s. Today learning about and standing up in solidarity with the struggle against austerity and for an alternative in Greece is equally important.

Greece: Recent past, present and possible future!

Greece has been part of the European Union (EU)—the Eurozone—since 2002. This means it is one of 19 nations who use the Euro as their currency; they cannot print their own money.

Greece is one of the poorer nations in the Eurozone and among those with the greatest unequal distribution of wealth. Its income per person today is similar to that of African-Americans in the United States although Greece’s average income was significantly higher five years ago.

On December 6, 2008, 15-year-old, Alexis Grigoropolous was killed by police while graffittiing in central Athens. In response, a rebellion erupted all over the country, mainly by youths. The underlying issues included high youth unemployment, increasing temporary and low wage jobs,  the low quality of education, police harassment and with not a promising future. This activism and rebellion by youths sparked a larger rebellion that has continued.   The December 2008 uprising is a major factor in the growth in Greece of an anti-authoritarian political current.

By 2010, because of the evasion of taxes especially by higher income people and its growing debt, Greece had problems financing its government deficit and in borrowing to pay its debt even at increasingly higher interest rates. The Greek government signed its first austerity agreement in 2010, consenting to cut wages of public sector jobs, lower the minimum wage and make it easier to fire people, and raise taxes that particularly affect poor and working class people.  This is what is called austerity: balancing the government budget and lowering wages so that Greek goods will be cheaper to produce which will increase Greek exports while decreasing imports and spur foreign firms to invest in Greece.  In return, Greece received a loan of 110 billion Euros (about $140 billion in U.S. dollars) at moderate interest rates. Most of these loans went to pay off private banks in Europe who had lent money to Greek businesses, Greek private banks and the Greek government. The loan was extended by the troika—the European Union (EU), the IMF and the European Central Bank (ECB)—who had negotiated the agreement.   In 2012, Greece secured a second loan of 130 billion Euros ($160 billion dollars) for an economy of only 11 million people.

Austerity doesn’t work, at least for the large majority of the population. Reduced government spending and raising tax rates leads to less income for consumers, who then cut back on spending, which leads to less spending by businesses on new equipment and  construction.  All of these cutbacks increase unemployment. So income and therefore tax revenues fall further meaning an increasing government deficit requiring yet further tax increases. It is like a dog chasing its tail.

Note: Austerity policies have been followed in the United States although not as extremely as Greece but there are ongoing attempts to cut government spending here, especially for social programs and infrastructure at the Federal, State and local levels.

Austerity policies, similar to what have been called structural  adjustment policies  in Latin America and Africa since the late 1970’s  have also been followed by Portugal, Spain, Ireland and Latvia and others with results almost as devastating as Greece. Greece today has over 25 percent unemployment and an unemployment rate of  60 percent for people under 25–rates equal to or worse than the 1930’s depression in the United States. These numbers do not begin to explain the devastation in the quality of life in Greece. Much of the employment is part-time with reduced benefits. Poverty is becoming the norm. There are severe cuts in pensions for older people and people are losing their homes in large numbers as they can’t pay the mortgages and the growing property and utility taxes.

The rise of SYRIZA

In 2012, a relatively new political party, SYRIZA, the Coalition of the Radical Left, campaigned on raising employment by increasing necessary government spending, ending privatization and government layoffs, and cancelling much of the debt owed by the Greek government to foreign lenders and also cancelling the debt of low income people. They came in a close second in the elections getting 27 percent of the vote where a few years earlier they had received only 4 percent. SYRIZA was a merger of various Greek groups including those active in the European and World Social Forum—Euro-communists, independent socialists, smaller Marxist groups, etc. The two major parties, which had dominated Greek politics, saw a decline in public support following of their advocacy for austerity. One of the two, PASOK, had been the major party in Greece since the ending of the military dictatorship in 1974.

A lesson for us in the United States is how quickly political parties that seem dominant like PASOK can fall. PASOK had claimed to be the major progressive party and an anti-austerity one.  The same decline could happen to the   Democratic Party here in the United States.

What had initially excited me and given me hope for Greece was that the far-left politics of SYRIZA was connected to many of the social movements, e.g., the solidarity clubs, who are primarily poor people organizing to meet their needs.  SYRIZA had also supported  immigrant,  women’s and labor rights. This added to the efforts of other leftist groups have the potential to revolutionize Greece. Anarchists, autonomists and anti-authoritarians were building alternative institutions–non-market production and distribution of needed goods and services, free health clinics, social centers to meet and build community, alternative media. These groups were also involved in militant anti-austerity, anti-fascist and anti-mining actions, and putting direct democracy into practice.   To me, this inside–outside, electoral-social movement from below strategy was very promising and seemed to be growing in the period 2010-2014, even if both perspectives were somewhat critical of each other.

By late 2014, the continued decline in the Greek national income, employment and tax revenues caused by the continuing policies of austerity meant Greece again needed additional loans to finance its deficit and its government debt, which was growing as a percent of the declining national income.  Most Greek banks had closed because  businesses and individuals has defaulted on their loans.  The ruling coalition government collapsed and new elections were called for January 25, 2015.

In this election, SYRIZA ran on a strong anti-austerity although not an anti-capitalist program. It got a plurality of the vote, 36.3 percent, and, under the leadership of Alexis Tsipras, formed a government  in coalition with a small, nationalist and conservative but anti-austerity party. From January until  October 20, most of its energy was spent negotiating with the Troika, the IMF, and the EU—especially the German government and the European Central Bank—for  debt relief, delays in payments, and permission to increase government spending to stimulate employment. Meanwhile, ittle was done by the Greek government to improve the lives of Greek people or to deepen democracy.

The negotiations were led in the winter and spring of 2015 by the Greek finance minister, Yanis Varoufakis, who was met by an unbending and neoliberal European Union. The EU demanded even more cutbacks in government spending, especially of pensions for older workers, more privatization and further increases in taxes before they would extend new loans to Greece in order to keep the remaining Greek banks from collapsing.

No to austerity but then yes!

In late June of this year, Prime Minister Alexis Tsipras called for a referendum on whether Greece should accept the terms offered by the European Union and European Central Bank. He called for a no vote against further austerity demanded by the European Union.  In spite of a near unanimous mass media hysterically promoting a yes vote for austerity claiming that a no vote rejecting the European offer would spell economic collapse, over 61 percent of the Greek people stood up and voted no on July 5. This was truly inspiring.  Sadly and surprisingly even after this massive rejection of austerity policies and the proposed agreement, Prime Minister Tsipras and most of the SYRIZA leadership said they had no choice but to accept the new austerity package for the promise of a $95 billion bailout that they had campaigned so strongly against.

The European Union then demanded an even more austere package than they  had originally offered—more privatization, more control over the Greek government,  larger increases in tax rates, greater cuts in government pensions. The European Union then made an ultimatum of either accept this new offer  or leave the Eurozone.  The European Central Bank (ECB) had already stopped sending Euros or making loans to private Greek banks and the banks were close to collapsing.  Alexis Tsipras then  forced this new, more restrictive  deal through the Greek parliament saying Greek had no choice but to accept it even as he called it blackmail.  It passed on July 13, aided by the vote of the more conservative parties.

Over 30 SYRIZA members of parliament voted no and formed a new party, Popular Unity. It called for cancelling payments on most of the government’s debt, stimulating the economy, ending the use of the Euro by creating a new Greek currency, the drachma, which was  the name of Greece’s previous currency.

After the Greek parliament passed this new austerity legislation, in spite of major protests, Tsipras resigned and called for new elections to be held in September.

Voter turnout  for the September 20 election fell from the 64 percent in  the January vote to 55 percent. While SYRIZA receive almost the same percentage vote, 35.4 percent as they had in  January, enthusiasm for SYRIZA, as well as the turnout, were sharply down. SYRIZA is still in charge of the government, but the European Union has the real power.

Popular Unity, led by Panagiotis Lafanzis the former Environmental  minister, had only 2.9 percent of the vote and did not qualify for the recently elected parliament. Hopefully Popular Unity will grow. It needs to connect with grass roots movements particularly with those involved in building a survival economy such as barter groups and cooperatives.   Fortunately, the fascist party, Golden Dawn, and the recently formed yuppie oriented neoliberal party, POTAMI, the River, did not gain support.

The future of SYRIZA!

SYRIZA seemed to be hopelessly compromised by its acceptance of more austerity after campaigning against it in the January 2015 election and again in the July referendum. Its youth wing has now left the party, at least temporarily. It will be very hard for SYRIZA to regain people’s trust. Even though it retains impressive individuals with a histories of principled struggle and resistance, SYRIZA has not kept its word and its promises to oppose austerity; it has become another electoral, compromised political party. While it is less corrupt than other main parties in Greece and more concerned about the poor, SYRIZA has lost its way.

Afraid and unprepared to take the anti-austerity leap, SYRIZA will probably go the opportunist ways of other social democratic parties. To regain its legitimacy and progressive role will require  strong and honest self-criticism of its turn to the right in addition to the resignation of its leadership, a democratic internal structure, and  repudiation of the austerity agreements and a commitment to overturn the accompanying austerity legislation.

It is my belief thatGreece should have left the Eurozone and ended the use of Euro as its national currency in combination with defaulting on most of its debt, stimulating domestic production especially in agriculture and food, nationalizing private banks and supporting worker cooperatives. Controls over imports would have been necessary to balance exports as would have and the use of a new currency.

Neither  SYRIZA, nor other groups, did the necessary educational work with the Greek population to explain what these alternatives such as leaving the Eurozone would mean and why they are necessary. From my observation, the majority of the Greek people strongly opposes austerity yet do not support leaving the Eurozone or the European Union. Without popular education, what is called Grexit—Greece replacing the Euro with its own currency and leaving the Eurozone—becomes another technocratic policy from the top. These alternatives will again be relevant in the near future.

Many in SYRIZA, other Greek activists and left academics outside of Greece believe Grexit would be an economic catastrophe; that Greece cannot go it alone. As an alternative they advocate for a European left united across countries to challenge the European Union’s right wing economics and create a more progressive European Union. Currently, the European left is not capable of effectively challenging the right wing economics of the EU and Eurozone.  Greece leaving the Eurozone and having its own money, together with the other reforms mentioned, could have been a start towards a new participatory socialist politics and economics.  And with Greece remaining in the Eurozone, it means continued economic depression, maybe a little more slowly at first than if they had left, but guaranteed to last.

The Future!

There is fear among the economic and political elites, inside and outside of Greece, that Greece could successfully demonstrate  an alternative to neoliberalism and capitalist globalization. This is why the leaders of most countries of the European Union were so unwilling to compromise.

It is easy to accept as a lesson—SYRIZA’s submission to this extreme austerity package—that political parties will always sell out. I still believe it is necessary, desirable and possible to develop visionary and radical and democratic (small d) political parties. Ones that are rooted in people’s daily life and in social movements;  ones that are feminist and ecological and have an electoral component and  are willing to take risks. An alternative to political parties that are primarily or totally electoral, where winning elections and taking control of the government becomes their be all and end all leading to political and moral bankruptcy.

In Greece, there is a lot of despair right now; but as recently deceased baseball player, Yogi Berra said, “It is not over until it is over”.  The cynicism in Greece towards participation in collective social change and political activism has grown for most of the population.  Increasingly, time and focus is being put into individual and family survival but not collective survival. I have also observed a decline of hope of SYRIZA’s members who are deeply angered by both the lack of democracy in   the party and decisions its leadership have recently made.  This pessimism is also shared by grass roots movements and activists, many of whom had hoped for more from SYRIZA after their victory in January. Optimism about the future of Greece has markedly decreased as has activism across the left and radical spectrum. One lone positive sign is the active support for the hundreds of thousands of refugees entering Greece even if the popular ideology is less welcoming,

It is the temporary lull before the storm. There is no way that the SYRIZA-led government can meet the European Union and European Central bank requirements of government surpluses by 2017 and the even bigger requirements for a primary surplus in 2018. So there will likely be new demands in the not too distant economic future by the EU and international economic powers for even further cutbacks in government spending and more selling off of Greece to the highest bidder. There can only be mass resistance, and it is already beginning as the austerity package is being voted on piece by piece at the time of this writing.

This economic depression in Greece is likely to continue for the foreseeable future unless there are new social movements and political parties of a new type building the power and the vision and strategy to cause transformative change combined with needed solidarity from people around the world. The latter has been lacking.

A new mindset

Greek working people and students have an inspiring history of resistance to dictatorship and fascism, e.g., in World War II against the Nazi occupation, to the military junta from 1967-1974, and their recent opposition to austerity.  It can and will happen again.

Si Se Puede!

Peter Bohmer is a member of the faculty at the Evergreen State College in Olympia, Washington  where he  teaches political economy. He is active in  organizing for economic justice and holds Economics for Everyone workshops in downtown Olympia.