Conditions in Greece are becoming
desperate as unemployment continues to rise, wages and pensions are
slashed, many small businesses close and the country slides towards a
likely disorderly default. The pressure on ordinary working people is
relentless.
Conditions in Greece are becoming
desperate as unemployment continues to rise, wages and pensions are
slashed, many small businesses close and the country slides towards a
likely disorderly default. The pressure on ordinary working people is
relentless.
While
all this goes on the EU, the European Central Bank and the IMF continue
to pile on the pressure, demanding more and more “sacrifices” from the
people. With their policies they are pushing the country inevitably
towards revolution. The question is not one of “if” but of “when” the
Greek revolution will begin. Anything could spark it off.
Greece is in deep depression, having entered into the fifth year of
recession. Many shops have closed; others are holding sales with
discounts aimed at selling their stock in a situation where people are
having to tighten their belts to survive. On the streets one sees poor
people rummaging through refuse looking for morsels of food to stave off
hunger. The number of homeless people is growing. Now among the
homeless are to be counted people who until not so long ago had a
reasonable standard of living and would never have imagined they would
end up in such a desperate situation.
The social and health care services are breaking down, as supplies in
hospitals and clinics dwindle due to the lack of funding. So bad has
the situation become that those working class families that have lost
their jobs, having also lost the healthcare cover that goes with them,
in some cases are not having children vaccinated as they cannot afford
to do so any longer.
And last Sunday’s parliamentary vote in favour of the latest
Memorandum has merely added to this suffering. In effect it has cut
average annual incomes by the equivalent of three months’ wages. What is
now adding insult to injury is that after all the tensions caused by
the latest round of austerity measures, demanded by the infamous Troika
(EU, ECB and IMF), the European Union has placed in doubt whether Greece
will in fact be bailed out. Thus the people after being threatened with
the spectre of an uncontrolled and disorderly default unless they
accepted severe austerity, are now looking at the prospect of default
anyway, and in the very near future at that!
The troika had demanded that the Greek government should find an
additionl 325 million euro worth of cuts. These have now been “found” in
the form of a 10 to 20% cut in so-called “special wages” (of police
officers, doctors, diplomatic staff, etc), 50 million euro additional
cuts in the health service, and probably around 75 million euro
additional cuts in pensions.
if this was not enough, written assurances were demanded from the
leaders of the two government parties that the terms of the Memorandum
are going to be respected after the elections. Papandreou and Samaras,
like trained circus dogs, faithfully obliged and when asked to jump,
they did a double back-flip across burning hoops. But even that is not
enough!
The EU has delayed coming up with the latest €130billion bailout,
which indicate that the European bourgeoisie no longer believes Greece
can meet the requirements of such a package. Some sections of the
European bourgeoisie are openly talking of not granting the bailout and
allowing Greece to sink. Others are prepared to consider a further
bailout but under very stringent conditions. They are proposing to give
Greece only a part of this amount (15bn euro) in order to allow Greece
to pay over 14bn euros worth of bonds up for renewal on March 20th, and
holding back the rest until after the elections which are expected
sometime in April. In this manner, they believe they would have greater
leverage over any government that would emerge from such elections.
The Dutch Finance Minister Jan de Quiche Gegker has said it openly:
"Ideally, one would have to deal with a leadership that knows that it
will support the aid package after the election. For this reason it is
preferable to wait until after the election. Then you can negotiate this
commitment with the new government.”
This is basically holding the country to ransom, telling the Greek
voters to elect a government prepared to carry out the measures in the
Memorandum or else! Even then, any bailout money that is provided would
have to be placed into a special account, which would only be used to
cover Greece’s debt servicing and not for any normal public expenditure.
The troika is also demanding some sort of mission in Athens with
executive power to supervise the implementation of the austerity cuts.
Eurogroup chief Juncker has talked of the troika maintaining a permanent
presence in Athens to “strengthen the surveillance of the program,”
The idea that Greece should leave the euro – and possibly even the EU
itself – is gaining ground among the European bourgeoisie, in
particular the German and its satellites such as Holland, Austria and
Finland. The reason for this is that they believe that a) Greece will
not be able to sort out its finances and b) they have put in place the
means and mechanisms – the so-called “firewall” – to avoid contagion
from a Greek default. As many European banks, in particular French and
German, are heavily exposed to Greek debt, any default on the part of
Greece would mean a serious banking crisis across Europe.
Further to these measures, in the agreement voted by the Greek
parliament last Sunday, there is a clause that states that the Greek
state must provide stronger guarantees to its creditors should it
default. This has been done by agreeing that the new bonds that
creditors would receive in exchange for a substantial haircut would be
governed by English Law. What this means in practice is that creditors
could demand repayment of what is owed to them by taking slices of Greek
public assets. This means destroying what little was left of Greece’s
“sovereignty”. Its assets would be scavenged by foreign banks and
investors and the people would be left with nothing.
The irony of the whole situation is that the austerity measures
imposed by the troika are the main contributing factor to pushing Greece
into a deep depression and thus an increase in the debt to GDP ratio.
As we explained, Greece has been in recession now for five consecutive
years. In 2011 alone GDP fell by 6.8%. Before the latest round of
austerity measures were announced the forecast was that the Greek
economy would contract by a further 3.5%, but the memorandum voted in
the Greek parliament on Sunday will add another 3 percentage points to
the fall, leading to an overall contraction of close to 7% in 2012.
With GDP contracting so sharply it means all the projections for
Greece to get its debt to GDP ratio down cannot be realised. The more
they cut, the less the state gets in revenues and the smaller the GDP,
the greater the debt in relation to it! In 2009, at the beginning of the
crisis, debt to GDP ratio was 113%, it is now over 160%. This means
that there is no way that Greece can avoid bankruptcy.
Even the €130 billion loan that they were preparing to grant the
Greek government was not for public spending, on such things as
pensions, public sector wages, healthcare and education. The whole
amount was to go straight into the hands of the banks, €39 billion to
the Greek banks, €30 billion to the foreign banks and the rest to cover
repayment of expiring Greek bonds.
What we are moving towards very quickly is a collapse of the Greek
economy. With this will come a collapse of state revenue over the next 2
or 3 months. Yesterday the research institute of the GSEE (private
sector trade union confederation) published figures that indicate that
by June of this year the Greek state will have no money to pay for
pensions and it will have to cut pensions overall by a further 30-40%.
The irony is that the more austerity is applied, the less the state can
collect in income. Tax revenues are falling all the time, as people lose
their jobs. The social security system that workers pay into is
expected to lose a further €2 billion as more workers lose their jobs!
The German bourgeoisie, observing this scenario, can see that the
Greek economy is being destroyed and there is no prospect of recovery.
It therefore sees no real guarantees for any further loans and is
seriously considering pushing Greece out of the euro in the next few
months. The pressure in this direction is especially strong from
Germany’s satellites, such as Holland and Austria.
They believe they can do this now as they have put in place those
mechanisms quoted above to safeguard against a European banking crisis
breaking out as a result of Greece exiting the euro. However, they are
playing with fire as such optimistic perspectives are not based on the
reality of the situation. A default by Greece would soon see Portugal in
the firing line, followed by Ireland, and then Italy and Spain. Then
there would be no “firewall” that would hold back the tide of national
defaults engulfing large parts of Europe. The problem they have is that
leaving things as they are is also not an option, as Greece will default
anyway, whether it be in the coming months or just a little further
down the road. The thinking is: why provide even more loans that we will
not get back, if Greece is going to collapse anyway?
This shift in opinion, particularly within the German bourgeoisie, is
provoking also a shift within the Greek bourgeoisie. The statement of
Greece’s President about Germany insulting the Greek nation is a
reflection of this. So long as they thought the major European powers
would help them, the Greek bourgeois sang one song, but now the tune has
changed. The Greek bourgeois media is full of talk about the Germans
“pressurizing” a “proud country” like Greece.
The anger of the Greek bourgeoisie is justified, in that they feel
that the others are pushing Greece towards revolution. Karatzaferis, the
leader of the right-wing LAOS party, who until very recently was part
of the Papademos government, has stated that with Merkel’s policy Greece
will set the first stage of the “European revolution”, adding that
“Greece will set alight the fire of the European revolution.” And he
explained that that is why he pulled out of the government coalition.
This also reflects the fact that he wishes to win back the votes he has
been losing to the openly neo-Nazi “Golden Dawn” as a result of his
presence in the Papademos government. Golden Dawn in fact is now
standing at around 3% in the opinion polls.
All the parties that have been part of the Papademos government have
in fact been losing electoral support. Papademos himself is now seen by
80% of the population, according to a lest poll, as merely serving the
interests of the bankers. The PASOK is down in the polls to around 8-9%;
New Democracy is down to 27% from last weeks’ 31%. The PASOK is in fact
in the process of splitting. Last Sunday 22 of its MPs voted against
the Memorandum and were duly expelled from the party. But among these 22
there are two of the candidates for the presidency of the party after
Papandreou offered his resignation.
This means that the parties that have made up the coalition
supporting the Papademos government would not necessarily win enough
votes in the forthcoming election to form a government. That explains
why now the Greek bourgeois are placing all their bets on Kouvelis, the
leader of the Democratic Left. This party, which has no real presence in
terms of mass membership, was a minority right-wing split away from the
Synaspismos party. Its leaders were hoping to offer the PASOK its MPs
in exchange for a place in government. As it turned out, the PASOK did
not need their MPs and thus the Democratic Left remained in
“opposition”. Thanks to this it has been doing rather well in the
opinion polls, anything between 15% and 18% according to different
opinion polls. The pressure is now on Kouvelis to be “responsible” and
offer the Greek bourgeois help in this moment of need.
Elections are supposed to take place sometime in April, but there is
even talk of possibly delaying them. Schäuble, the German finance
minister, is asking what the Left in Greece would do and not being sure
of being able to get a full commitment from the Left that it would
continue with the austerity measures, there has been speculation that
elections should not be held. Instead what some of the bourgeois are
considering is a fully “technocratic” government like the one in Italy,
which should take over until the end of the year and carry out all the
demands of the troika.
Other sections of the bourgeois, however, understand that the longer
elections are delayed, the stronger the Left will become, as there is a
sharp polarization taking place in society as a result of the very same
measure the troika is demanding.
In these conditions the masses want the elections to take place as
soon as possible. They want to kick out the present gang, who they see
as representing only the interest of the bankers and foreign investors.
In this situation, should the elections be delayed we could see a
spontaneous uprising, marking the beginning of that revolution that
Karatzaferis has warned about.
If the elections go ahead, which seems the most likely perspective –
and Greece is still in the euro – we will see an election campaign in
which the media will attempt to terrorise the Greek population with the
idea that if they vote for the Left they will be voting for an immediate
default, bankruptcy and collapse of the economy. By these means they
hope to minimize the growth of the Left and push enough people into
voting for the various parties they hope to use in a future coalition
government. Because of the weakness and confusion of the position of the
Left this might work for a period, and they could patch together some
form of weak bourgeois coalition.
New Democracy could have between 25% and 30%, the PASOK possibly
around 8-9% if it holds together as one force, LAOS around 5-6% (which
would also be pressurised to return to government), and Bakoyanis’ small
Democratic Alliance, if it musters enough votes to get into parliament,
would also add its small force. It is not clear whether new parties
based on the expelled MPs from PASOK and ND would get any
representation. Based on these forecasts it seems clear that the
Democratic Left would also be pulled in. Such a government, however,
would be weak and unstable.
Given the overall financial position of the country, such a
government would be called on to organise Greece’s exit from the euro,
with a return to a much devalued Drachma. This would be presented as a
temporary measure, for a few years, while Greece “improves its
competitivity” and crawls its way back into the world market. In reality
it would condemn Greece to a long period of economic depression.
What we are looking at here is a major economic collapse, with many
companies going under, with a massive further increase in unemployment,
accompanied by a run on the banks which would provoke a major banking
crisis. In such a situation it is clear that the bourgeois would push
for the nationalisation of the banks as well as some private companies,
in order to try and keep the system afloat.
It would be like Germany in 1922 and would most likely be followed by
a mass uprising of the people. We would be in a revolutionary
situation. The working people would draw the conclusion that they have
been asked to accept huge sacrifices to avoid bankruptcy, but in the end
that bankruptcy would come anyway, and the whole burden would be on the
shoulders of the masses.
All this will have a huge impact on the labour movement as a whole.
Already we have seen how the PASOK, under the immense pressure of the
moment, is fragmenting, and a section may not be prepared to take part
in any future coalition government. De facto there would be two PASOKs, a
right-wing version in the government and a left wing outside. The trade
unions would be shaken from top to bottom, with left leaders coming to
the fore, while at the same time there would be a springing up of all
kinds of rank and file bodies, factory committees, neighbourhood
committees, etc.
This would also shake up the two major Left forces, the KKE and
Syriza. Many workers and youth are looking to these two parties as a way
out of the present impasse. The problem is the position of the KKE
leaders, who refuse to offer any prospect of unity on the Left, and who
continue in their sectarian stance of organising separate rallies from
the rest of the Left and the mass movement in general. They reject any
idea of unity with Syriza, denouncing them as mere left reformists and
people who cannot be trusted. The KKE leaders call for an “alliance of
working and poor people”, a “social alliance” that would struggle for
“people’s power”.
This is all very abstract, as the workers in Greece are seeking an
alternative to this government, and with the growth of both the KKE and
Syriza in the opinion polls, the possibility of the two parties coming
together in an alliance and challenging the present status quo is no
longer seen as something unrealistic and distant. The figures show that
there is a massive swing to the left taking place in Greece and if the
Left were to unite and stand in the elections as a united bloc, that
much longed for left alternative would become a reality, and a Left
government would be possible. Instead, because of the stance of the KKE
leaders, the Left is seen as paralysed and incapable of offering an
alternative. This is reflected in the confusion among the bulk of people
demonstrating on the streets. They do not support the austerity
measures, but they cannot see what the alternative is. The position of
the KKE to many appears as unrealistic and abstract.
However, if the KKE and Syriza were to form a United Front based on a
serious socialist alternative to the present mess, and aimed their
propaganda at the workers and youth who are supporting the Democratic
Left and those still backing the PASOK, and if they combined this with
unity on the trade union front, they would win far more support than the
two parties are getting separately in the polls.
What has to be explained clearly to the Greek workers and youth is
that on the basis of capitalism there is no way out of this crisis. If
Greece remains within the euro and the EU it faces economic collapse. If
it exits the euro it also faces economic collapse. The idea that Greece
outside the euro and with a devalued Drachma could become competitive
again is a utopian pipe dream. For Greece to become “competitive” it
would have to slash the real cost of labour, which means lowering wages
further, pushing down conditions and increasing working hours. It would
mean slashing social spending, cutting back on education, healthcare and
pensions. But this is precisely what is being done now with the excuse
that this is what is required to stay in the euro.
The only answer is a Left government, committed to cancelling the
debt, nationalising the banks and commanding heights of the economy and
placing these under the democratic control of the workers. The
reformists say that Greece would be isolated if it were to adopt such
policies. But that is utterly false. What is being done to the Greek
workers, will be done to the workers of the whole of Europe in the
coming period. A clear socialist response from the Greek working class
would offer an alternative way out of the crisis to the workers of
Europe. Karatzaferis is not wrong in saying that what is being prepared
in Greece is revolution, and that this would be the spark that would set
ablaze the whole of Europe.
