Syriza tested as noose tightens around Greece

European governments and financial institutions have kept their stranglehold on Greece after the new government agreed to an extension of the bailout, reports SocialistWorker.org editor Alan Maass.

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Leaders of the new Greek government face a deadline of today to come up with a program for implementing harsh austerity measures that the radical left-wing party SYRIZA came to power promising to end.

That’s the grim outcome of an agreement struck last week between the government and Eurogroup finance ministers for a four-month extension of the international bailout of the Greek financial system – plus the accompanying conditions that have produced years of state spending cuts; mass layoffs and labor law “reform”; wholesale privatisations; and increases in regressive taxes and fees and fares for government services.

A month ago, SYRIZA won parliamentary elections by a wide margin on the strength of its commitment to reverse these measures. Its leaders who formed the new government in Greece went into the critical negotiations with Europe’s political and financial elite insisting that they wouldn’t extend the bailout, and that they wanted to undo the fiscal and political policies that have plunged Greece’s economy and society into a deep crisis.

But the deal that Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis proposed and that the Eurogroup ministers finally approved last week – after extracting yet more concessions – is nothing of the sort. It is much closer to the uncompromising position of the European elite, led by Germany’s hard-line government, that there can be no deviation at all from the austerity agenda agreed to and implemented by past Greek governments.

On most issues, the Eurogroup’s extortion – delivered with typical take-it-or-leave-it contempt for the suffering and opposition of the people of Greece – prevailed.

The Greek government is allowed to come up with a program of measures to meet the targets established under the so-called Memorandum – the commonly used name for the terms accepted by the Greek government five years ago in return for the financial rescue organised by the “Troika” of the European Union, European Central Bank and International Monetary Fund.

But the Troika – though that despised name is no longer used – will have veto power over those proposals. Varoufakis has a deadline of February 23 to put forward the government’s plan. There is media speculation that the Eurogroup ministers will press their advantage and demand still more, setting up another showdown.

A further commitment by the SYRIZA government “to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability” is also subject to being “assessed by the institutions”.

Thus, many of the immediate measures that SYRIZA had vowed to carry out once in power, regardless of negotiations with the Troika – restore the previous minimum wage of 751 euros a month, stop and reverse the privatisation of state enterprises and agencies, provide free electricity and food subsidies for 300,000 poor households – could be shut down by the “institutions”, if the government does attempt to carry them out.

The deal with the Eurogroup explicitly maintains close oversight by “foreign advisers” who will be on hand in Athens – “in other words, a cadre of privatisers present at every level of the Greek state, imposing advice on the elected politicians and reporting back to the eurozone on any non-cooperation with policies of intensified austerity”, as socialist blogger David Renton put it.

By comparison, what are described as concessions by the Eurogroup ministers are less significant – and in some cases, merely a recognition of reality. For example, the Greek government will no longer be bound by a requirement, negotiated back in 2012, to run a primary budget surplus of 4.5 percent for this year – a target so absurd that even the previous pro-austerity government wanted it rescinded.

This will, indeed, give the government some financial resources to fund basic measures for coping with 25 percent unemployment, desperate poverty, electricity cutoffs for hundreds of thousands of homes, and other symptoms of the crisis. Varoufakis will also propose measures to increase government revenues by curbing corruption and changing the tax system to make companies and the rich pay more.

But even if the EU extortionists don’t veto these, the fact remains that the agreement with the Eurogroup leaves Greece squarely under the rule of the hated Memorandum – which is exactly what SYRIZA promised to change.

As Antonis Davanellos, a Greek revolutionary socialist and well-known figure in the Left Platform within SYRIZA, put it in an article published at the A l’encontre website last week, as the outlines of Tsipras’s agreement with the Eurogroup were just becoming clear:

“[T]here is, on the one hand, a type of compromise that could be considered honest if it enables SYRIZA to lay out its anti-austerity program. On the other hand, there are compromises that amount to political suicide – if, for example, the Memorandum is simply renamed the ‘program’, and the Troika is renamed for some other monitoring mechanism.”

The odds were always heavily against Varoufakis and Tsipras moving the Eurogroup ministers from their uncompromising attitude. The pressure on the government grew last week when a slow motion run on Greek banks started moving faster – by the end of the week, withdrawals by depositors had hit more than 1 billion euros a day.

Tsipras and Varoufakis built their strategy around the hope of exploiting divisions among EU governments – especially discontent with German leaders’ insistence on all-austerity-all-the-time policies – but these divisions turned out to illusory or exaggerated.

The alternative to complying with Eurogroup blackmail would have been accepting a Greek default and likely exit from the euro currency, returning to the drachma. Most people in Greece would prefer to stay with the euro, and not for sentimental reasons. The economic impact of “Grexit” on ordinary people would be devastating, leading to an immediate currency devaluation that would make workers’ wages – for those who have jobs and actually receive wages – worth less, not to mention depriving the government of resources needed for the most basic programs.

But the question is whether staying with the euro has an even greater cost. The last weeks of negotiations with the Eurogroup make it clear that Greece will only be tolerated in the eurozone if it follows the dictates of Europe’s bankers and bosses and submits to the tyranny of their bureaucrats with veto power over every aspect of government policy.

Voices on the left inside SYRIZA and outside it argued that while a “Grexit” would have dire consequences, this uphill battle with the EU was inevitable – and SYRIZA needed to prepare itself, its supporters and Greek society for breaking with the eurozone if the new government wasn’t allowed to carry out its central commitment to overturn the Memorandum and reverse the austerity program.

As SocialistWorker.org summarised the conclusion of an editorial , published as the election campaign began, on the website of the Red Network, one of the pillars of the Left Platform:

“Tsipras and the others must stop saying that a left government won’t take unilateral action about the debt or other questions. If and when the Troika refuses to accept SYRIZA’s proposals, in part or in whole, the new government must be prepared to take stronger counter-measures, like taking control of Greek banks – and not just ‘by adding representatives of the state to the board, but real control by taking them over as state property’.”

Instead, during the campaign and in the Eurogroup negotiations afterward, Tsipras and Varoufakis stuck to their position that the rulers of EU could be persuaded to loosen their grip. To the puzzlement of even mainstream commentators, they didn’t even use the threat of “Grexit” – and its negative consequences for the EU – as a negotiating tactic.

No one can seriously dispute the case that Varoufakis and Tsipras made for the EU to take responsibility for the catastrophic crisis it inflicted on Greece and admit the disastrous effects of austerity measures that turned a recession into a full-blown depression.

Since the EU “rescued” the Greek financial system with its bailout, unemployment shot up to more than 25 percent of the population, real wages fell by 30 percent, and the country’s overall economic output has been cut by 25 percent. “And as the Jubilee Debt Campaign recently pointed out, more than half of the bailout funds went not to keep schools and hospitals open, but to repay the private sector speculators, in many cases German and French banks”, reported Guardian economics editor Heather Stewart.

Varoufakis was also right in pointing out the hypocrisy of the European Central Bank practically abandoning austerity policies for the eurozone overall with its decision for to begin a 60 billion euro-a-month quantitative easing program, while demanding that Greece keep taking the bitter pills of neoliberalism.

But to paraphrase an old saying, it’s hard to get politicians to understand something when their political standing and the profits of their country’s banks and corporations depend on them believing something else.

That was true across the EU. The German government of Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble certainly led the campaign against Greece, but there was no support for Varoufakis and Tsipras among any of the finance ministers, including countries like Spain and Portugal that have had the same Memorandums imposed on them because of the debt crisis.

These countries may be victims of austerity, too, but the governments running them today have accepted the demands of the Troika, just as previous Greek governments did – so it would be a political humiliation if Greece managed to win concessions. Plus, SYRIZA leaders have rightly made no secret of their support for radical left alternatives like Podemos, which could defeat the current government in Spain in elections later this year.

So the relentless and unanimous hostility of the Eurogroup – combined with the threat of the banking crisis becoming an outright meltdown by early this week – left Tsipras and Varoufakis with very few cards to play, so long as they refused to raise the specter of a “Grexit”.

What makes their acceptance of a rotten deal worse, however, is Tsipras’s attempt to spin the agreement with the Eurogroup as a victory. “Yesterday, we took a decisive step, leaving austerity, the bailouts and the troika behind”, Tsipras said in a nationally televised speech this weekend.

It’s hard to believe that Tsipras really thinks any of those three has been “left behind”. He knows full well that Germany’s loathsome Wolfgang Schäuble gave a more accurate portrayal when he smirked to the media: “The Greeks certainly will have a difficult time explaining the deal to their voters.”

The Greek left, inside SYRIZA and outside it, is under no such illusions.

One of the most powerful criticisms of the government’s capitulation came from 92-year-old Manolis Glezos, a national hero for scaling the Acropolis and ripping down the Nazi flag during the Second World War, and now a member of the European Parliament representing SYRIZA.

In a statement posted on Sunday, Glezos sounded the same themes that Antonis Davanellos had previously about not believing that the Troika and the Memorandum have been “left behind” because they were renamed. He wrote:

“For my part, I apologise to the Greek people for having assisted in this illusion. 
Before the wrong direction continues, before it is too late, let’s react. 
Above all, the members, the friends and the supporters of SYRIZA have to discuss and decide, in urgent meetings at all levels of the organisation, if they accept this situation.

“Some people say that in any agreement, you must make some concessions. In principle, between the oppressor and the oppressed, there can be no compromise, as there can be no compromise between the slave and the conqueror. Freedom is the only solution. 
But even if we accept this absurd idea, the concessions that have already been made by the previous pro-Memorandum governments are beyond the limit of what we should accept.”

Where this kind of challenge from the left can lead – and how to organise it – will certainly be the subject of discussion on the left in the days to come.

There is a strong left inside SYRIZA, the product of years of struggle. It has plenty of disagreements, including about whether and how to participate in the SYRIZA-led government, but also a determination that the party must stand 100 percent against the Memorandum.

Beyond that is a wider left and workers’ movement that has mobilised some of the biggest class battles of the past decade – more than 30 general strikes, the movement of the squares to occupy public plazas, “Won’t Pay” campaigns and other forms of social resistance. The size and scope of those struggles has ebbed since 2012, as the Greek left acknowledges, but there have been ongoing fights, and the example of the high points of resistance to the Memorandum can inspire future confrontations.

In its first days in power, the new government rescinded the layoffs of cleaners at the Finance Ministry, who fought a months-long struggle for their jobs, and promised to reopen the ERT radio and television station occupied by workers after it was closed under by the previous government. If the SYRIZA-led government or the EU overseers – or both – try to take this back, it could be a flashpoint for the struggle from below to rekindle.

Plus, there is the international dimension – the political and financial institutions of Europe have been exposed once again for their cruel pro-banker priorities and utter contempt for democracy. There is strong solidarity with SYRIZA for finally confronting the austerity agenda in Europe, but that sentiment needs to be organised into a real alternative.

Such a resistance, inside Greece and elsewhere in Europe, won’t automatically re-emerge in the coming days or even weeks. But we know that there’s more to come after this first test of the SYRIZA government.