Syriza and Anel outrightly reject the commitments the previous government signed up to with creditors – outlined in the onerous bailout accords that Athens agreed with the EU, European Central Bank and International Monetary Fund.
Why the whole world is watching Greece
Lee Sustar Canadian Dimension Canada January 22, 2015
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Why is so much attention focused on the Greek elections?
It may seem surprising that an election in a small country of less than 12 million people could create high anxiety in government ministries in Berlin and Paris and at the European Union (EU) headquarters in Brussels. But as the Russian revolutionary Lenin once wrote, the chain of imperialism is only as strong as its weakest link, and Greece certainly fits that description.
The crisis in Greece emerged in the aftermath of the financial panic of October 2008, when the government was no longer able to make payments on its outstanding debts. The European Commission – the executive arm of the EU – stepped in, along with the European Central Bank (ECB) and the International Monetary Fund (IMF). Known collectively as the “Troika,” they agreed to bail out the Greek financial system, but only if the country slashed government employment and salaries, made deep cuts in social spending, and privatized government services. At the same time, regressive taxes that hit workers hardest were actually increased. The revenues going to the government immediately flowed out of the country to repay foreign debt.
The austerity-mongers insisted that these methods would work by lowering labour costs in Greece, which would, they said, revive investment in the Greek economy. It didn’t work. The first bailout had to be followed by a second. A third bailout was under discussion when the conservative government of Antonis Samaras unraveled in December. The money was needed simply to enable the Greek government to keep its debt payments flowing. Greece’s economy plunged in a way unseen since the Great Depression, even as the amount of debt continued to increase relative to the size of the economy, reaching 175 per cent of gross domestic product (GDP) in 2013 and remaining at 168 per cent today.
In 2012, the specter of Greece’s potential exit from the euro – the common currency shared by 19 countries – created waves of financial panic when Syriza nearly won national elections.
Greece’s economy is fairly small by European standards, with a gross domestic product (GDP) of $242-billion in 2013, compared to $2.1-trillion for Italy or $1.4-trillion for Spain, countries also mired in low growth. A run on Greek banks or a default on Greece’s debt could have had a domino effect on other European banks and lead investors to dump Italian or Spanish government bonds, creating huge problems for those countries.
More recently, the Greek economy has seen a small recovery from its catastrophic collapse, achieving what’s known as a “primary surplus” – economists’ jargon for a government budget surplus prior to the repayment of debt. European banks and their regulators at the European Central Bank now claim that they’re far healthier and thus no longer at risk of a possible “Grexit” from the euro. But the bankers can’t be trusted. This is the same bunch who told the world that everything was sound just before the financial crash of 2008. Given the interconnectedness of international finance, there’s no way to know just how banks would be affected by Syriza’s demand to renegotiate the debt.
There’s another big worry for EU bureaucrats and European corporate bosses: The possibility that Greece could set a precedent for other countries by encouraging further left-wing protest against austerity policies that have seen governments across the EU slash budgets and push the costs of the economic crisis onto working people.
More than six years into the economic crisis, most European economies are stagnating. The political fallout has hit establishment parties of the center left and center right – for example, with the National Front making huge electoral gains amid dissatisfaction with the Socialist Party government of François Hollande. Far right and nationalist groups in other countries have also gained in recent elections by scapegoating immigrants in general, and Muslims in particular.
In Spain, by contrast, the left-wing Podemos party, barely one year old, emerged as the most popular party in that country as the result of popular anger against the conservative government of Prime Minister Mariano Rajoy. A Syriza victory would boost Podemos’ prospects and revive the left across the continent.
As the major economic power in the EU, the German capitalist class and its supporters claim that Greece brought the crisis on itself by lying about the weakness of its economy and failing to live “within its means.” Is this true?
The Greek crisis is the extreme form of a crisis at the heart of the European Union – and, within it, the German capitalist class’s attempt to drive the economic organization of the EU.
The European common currency, the euro, was launched in 1999. German capitalists favoured the move, since it consolidated the continent as an export market for German business and rationalized a fragmentary financial system anchored by the biggest European banks, along with the newly created European Central Bank. As a currency, the euro was weaker than Germany’s former currency, the deutschmark, would have been on its own. This made German exports cheaper to the rest of the world outside the EU. The problem was that the ECB lacks anything like the powers of the U.S. Federal Reserve Bank. While the Fed can basically print money to cover U.S. government debts, the ECB can’t do this – and German officials would be against it if it could.
But if the ECB lacks power, the central banks of the individual EU governments have even less. Previously, a country with big debts to pay would slash interest rates and devalue its currency to make its economy more competitive on the world market. Greece – like other euro countries – lacks that power under the terms of its agreement to participate in the eurozone.
Instead, austerity was supposed to achieve a kind of “internal devaluation” – a drastic cut in living standards that would rekindle economic growth, with lower costs of production attracting new investment.
Just how bad is the social and economic crisis in Greece today?
We know the horror stories of social collapse caused by wars and military invasions in countries like Iraq, the Democratic Republic of Congo and Syria. But Greece has endured an almost unimaginable amount of privation without any such armed conflict.
Although the Greek economy returned to growth for the first time in six years in 2014, the economy remains 30 per cent smaller than it was six years ago. In human terms, that translates to millions of lives shattered – and a whole generation of young people deprived of any prospect of a stable and secure life.
According to researchers for the Greek parliament, some 2.5 million people (in a total population of 11 million, remember) live under the poverty line, with another 3.8 million at risk for doing so. Some 26.6 per cent of people are jobless – and for those aged 15 to 24, the figure is 52 per cent. Wages have fallen by 5 per cent every year since 2009.
Poverty and unemployment are only part of the suffering of the Greek working-class. According to researchers from the British medical journal The Lancet, some 47 per cent of Greeks say they could not obtain medically necessary treatment. Public education has been savaged, too, with a 33 per cent cut in education spending between 2009 and 2013 and a further 14 per cent cut scheduled by 2016. Thousands of teachers have lost their jobs, and class sizes have exploded.
During recent winters, a large number of people died of carbon monoxide poisoning due to the use of wood stoves – since heating has become unaffordable for millions. Countless numbers of people struggle to make do with a barter system, offering whatever skills or services they can in exchange for other services – or merely for food. There has been nothing like this in the economically advanced world since the Great Depression of the 1930s.
What can the left in the U.S. and the rest of the world do in solidarity?
A Syriza government will have to contend not only with the Greek bosses, but with the international capitalist class.
As the elections neared, German Chancellor Angela Merkel and other European heads of state were keeping their cards close to their vest. One can expect a mixture of bribery and bullying, in the hopes of driving a wedge into Syriza and demoralizing its electoral base. According to this scenario, New Democracy will wait for a Syriza government to implode and make a triumphant return, with an even harsher austerity program.
That’s why international solidarity with the Greek left and a defense of the Syriza government will be crucial. From public meetings explaining what’s happening to organizing campaigns against governments and bankers to protest the efforts to bleed Greece dry, the left can play an important role.
At a time when mainstream parties worldwide continue to squeeze workers to protect the profits and privileges of a tiny minority, a Syriza victory will give voice to the left-wing alternative that we urgently need.
Below: Spyros Economides is Associate Professor of International Relations and European Politics at London School of Economics and Political Science. He is cautious and concerned: “If Greece’s international creditors don’t come through with quick concessions, or if radical opposition rears its head against Syriza’s more moderate approach, this could trigger an uncontrollable reaction based on fear of uncertainty. That could lead to an accidental default, which would have disastrous consequences for Greece.”
Syriza sweeps to victory in Greek election, promising an end to ‘humiliation’
Spyros Economides The Conversation International January 25, 2015
As had been widely predicted, the left-wing party Syriza has secured a victory in the Greek election. Having finished with just short of enough seats in parliament for a majority, leader Alexis Tsipras has agreed to form an anti-austerity coalition with the right-wing party Greek Independents.
Throughout the short campaign, it appeared the relative newcomer to Greek politics, led by the charismatic Tsipras, would win. Now it appears he has done so by a significant margin.
Speaking in the wake of the victory, Tsipras said the vote would end years of “destructive austerity, fear and authoritarianism” and that his country could now leave behind the “humiliation” it has suffered.
The last half of 2014, which became essentially a prolonged general election campaign, saw the Syriza leadership (especially Alexis Tsipras) toning down its extreme rhetoric. Instead of pushing for radical reform, it focused on promising simply to abandon austerity and challenge Greece’s external debt commitments.
Syriza has pledged to tackle what it calls Greece’s “humanitarian crisis”. It plans to feed and house the worst affected by the crisis, providing them with free electricity and medication, and reintroducing a higher minimum wage.
Internationally, it has promised to bring Greece’s creditors to the negotiating table, with the intention of thrashing out a deal more favourable to Greece. In essence, this will amount to requesting debt redemption, or a “haircut”.
This toned-down platform may have won Syriza the election by attracting enough of the political centre, but it may not be enough to sustain the support of the more radical elements in the party’s leadership and political base.
The worry is that the whiff of power may not be strong enough to placate radical elements, who really do want radical domestic policies. They would like to see austerity abandoned and replaced by increased government spending across the board, and the restitution of public salaries and pensions. The public sector workers made redundant over the past four years would be re-employed and state property nationalised.
They also want a more confrontational policy towards Greece’s creditors and the so-called troika (the EU, the European Central Bank and the International Monetary Fund). This could ultimately result in the dreaded Grexit.
If Syriza’s more radical elements feel betrayed by watered-down policies, the party faces the prospect of internal division, and Greece could soon see social unrest and demonstrations. That would weaken the new government dramatically, and could further destabilise the country at a very delicate moment.
Despite the scene of triumph, Greece is entering a period of deep uncertainty, and Syriza’s victory may indeed turn out to be pyrrhic. It is confronted by the immense task of governing at a time when Greece may be ungovernable, while also facing a potentially divisive internal struggle. International partners have also made it clear that the new Greek government, whatever its makeup, will have to honour the country’s existing agreements and commitments.
If Greece’s international creditors don’t come through with quick concessions, or if radical opposition rears its head against Syriza’s more moderate approach, this could trigger an uncontrollable reaction based on fear of uncertainty. That could lead to an accidental default, which would have disastrous consequences for Greece.
Greece elections: Merkel has lost, hope has won
Bryan MacDonald RT Russia January 25, 2015
Syriza’s landslide victory in this weekend’s Greek elections has immediately been called a ‘political earthquake’. It’s more accurate to say that Greek voters have gatecrashed the Euro elites’ party and let off a grenade.
Megalomania is a condition characterized by delusional fantasies of power and relevance, combined with inflated self-esteem. There are sufferers all over Europe but they can most frequently be spotted in Brussels, at the EU’s headquarters. There’s something about the institution; contact with it can turn a perfectly decent person into an eminently dislikable sort in short order.
In the aftermath of Greece’s seismic election, I assumed the eurocrat elite would follow the diktat, “if you have nothing nice to say, say nothing at all.” So, I cranked up the Twitter machine and within 5 seconds, I encountered this ‘gem’ from our old friend Carl Bildt. Bildt was the the Swedish Foreign Minster – and one of America’s favourite European poodles – until his own electorate voted him out last year.
Bildt’s Tweet is important because it reveals a mindset among the elite. They extol the benefits of democracy for others, while pouring scorn on the results, if they fail to suit their own agendas. An example was when they forced Ireland to vote again (twice) after initial rejections of EU treaties. Or when they speak of bringing free elections to the Middle East while refusing to deal with Palestine’s elected government, or even recognise the state’s existence.
For decades, the eurocrats had it their own way. Every member state operated a ‘Tweedledee and Tweedledum’ system, where both dominant parties expressed fealty to the EU ‘project.’ Hence, when the former were voted out, Tweedledum would only make superficial changes, largely restricted to domestic matters. As national elites benefited from the Brussels’ gravy train, with its fat pensions and perks, they system was designed so that ‘important people’ wouldn’t rock the boat.
That tradition changed on Sunday. Greece’s establishment parties, New Democracy (ND) and PASOK were knocked off their perch by Syriza, founded only 11 years ago. …
Below: The rise of Syriza can’t just be explained by the crisis in the eurozone. A youthful generation of professionals has had enough of tax-evading oligarchs says Paul Mason, economics editor at Britain’s Channel 4 News.
Greece shows what can happen when the young revolt against corrupt elites
Paul Mason Guardian UK January 25, 2015
This page contains a video report (6:25).
At Syriza’s HQ, the cigarette smoke in the cafe swirls into shapes. If those could reflect the images in the minds of the men hunched over their black coffees, they would probably be the faces of Che Guevara, or Aris Velouchiotis, the second world war Greek resistance fighter. These are veteran leftists who expected to end their days as professors of such esoteric subjects as development economics, human rights law and who killed who in the civil war. Instead, they are on the brink of power.
Black coffee and hard pretzels are all the cafe provides, together with the possibility of contracting lung cancer. But on the eve of the vote, I found its occupants confident, if bemused.
However, Syriza HQ is not the place to learn about radicalisation. The fact that a party with a “central committee” even got close to power has nothing to do with a sudden swing to Marxism in the Greek psyche. It is, instead, testimony to three things: the strategic crisis of the eurozone, the determination of the Greek elite to cling to systemic corruption, and a new way of thinking among the young.
Of these, the eurozone’s crisis is easiest to understand – because its consequences can be read so easily in the macroeconomic figures. The IMF predicted Greece would grow as the result of its aid package in 2010. Instead, the economy has shrunk by 25%. Wages are down by the same amount. Youth unemployment stands at 60% – and that is among those who are still in the country.
So the economic collapse – about which all Greeks, both right and leftwing, are bitter – is not just seen as a material collapse. It demonstrated complete myopia among the European policy elite. In all of drama and comedy there is no figure more laughable as a rich man who does not know what he is doing. For the past four years the troika – the European Commission, IMF and European Central Bank – has provided Greeks with just such a spectacle.
As for the Greek oligarchs, their misrule long predates the crisis. These are not only the famous shipping magnates, whose industry pays no tax, but the bosses of energy and construction groups and football clubs. As one eminent Greek economist told me last week: “These guys have avoided paying tax through the Metaxas dictatorship, the Nazi occupation, a civil war and a military junta.” They had no intention of paying taxes as the troika began demanding Greece balance the books after 2010, which is why the burden fell on those Greeks trapped in the PAYE system – a workforce of 3.5 million that fell during the crisis to just 2.5 million.
The oligarchs allowed the Greek state to become a battleground of conflicting interests. As Yiannis Palaiologos, a Greek journalist, put it in his recent book on the crisis, there is “a pervasive irresponsibility, a sense that no one is in charge, no one is willing or able to act as a custodian of the common good”.
But their most corrosive impact is on the layers of society beneath them. “There goes X,” Greeks say to each other as the rich walk to their tables in trendy bars. “He is controlling Y in parliament and having an affair with Z.” It’s like a soap opera, but for real, and too many Greeks are deferentially mesmerised by it.
Over three general elections Syriza’s achievement has been to politicise the issue of the oligarchy. The Greek word for them is “the entangled” – and they were, above all, entangled in the centrist political duopoly. Because Syriza owes them nothing, its leader, Alexis Tsipras, was able to give the issue of corruption and tax evasion both rhetorical barrels – and this resonated massively among the young.
Alexis Tsipras of Syriza in Athens on January 22. Photo: AGF/Rex
And here’s why. In a functional market economy, the classic couple in a posh restaurant are young and close in age. In my travels through the eurocrisis – from Dublin to Athens – I have noticed that the classic couple in a dysfunctional economy is a grey-haired man with a twentysomething woman. It becomes a story of old men with oligarchic power flaunting their wealth and influence without opprobrium.
The youth are usurped when oligarchy, corruption and elite politics stifle meritocracy. The sudden emergence of small centrist parties led by charismatic young professionals in Greece is testimony that this generation has had enough. But by the time they got their act together, Tsipras was already there.
From outside, Greece looks like a giant negative: but what lies beneath the rise of the radical left is the emergence of positive new values – among a layer of young people much wider than Syriza’s natural support base. These are the classic values of the networked generation: self-reliance, creativity, the willingness to treat life as a social experiment, a global outlook.
When Golden Dawn emerged as a frightening, violent neo-Nazi force, with – at one point – 14% support, what struck the networked youth was how many of the political elite pandered to it. People who had read its history could see a replay of late Weimar flickering before their eyes: delusional Nazis feted by big businessmen craving for order.
I’ve reported the Greek crisis since it began, and what changed in 2015 was this: Syriza had already won the solid support of about 25% of voters on the issues of Europe and economics. But now a further portion of the Greek electorate, above all the young, are signalling they’ve had enough of corruption and elites.
Greece, though an outlier, has always been a signifier, too: this is what happens when modern capitalism fails. For there are inept bureaucrats and corrupt elites everywhere: only the trillions of dollars created and pumped into their nations’ economies to avoid collapse shields them from the scrutiny they have received in Greece.
We face two years of electoral uncertainty in Europe, with the far left or the hard right now vying for power in Spain, France and the Netherlands. Some are proclaiming this “the end of neoliberalism”.
I’m not sure of that. All that’s certain is that Greece shows how it could end.
Below: James Meek is a British novelist and journalist.
James Meek London Review of Books blogs UK January 26, 2015
Syriza’s victory in the Greek general election is a hopeful moment for Europe. It shows how a radical left-wing political movement, brought together in a short time, can use the democratic system to attack three menaces: the rentier lords of jurisdiction-hopping private capital, the compromised political hacks of the traditional parties who have become their accomplices, and the panphobic haters of the populist right.
Nationalist-conservative movements, it turns out, don’t have a monopoly on the anti-establishment wave. The future doesn’t have to belong to Golden Dawn, Ukip, the Front National, Pegida, the Finns Party, Partij voor de Vrijheid or the Sweden Democrats. It could belong to Syriza, or Podemos, or Die Linke, or to an as-yet non-existent British movement – anti-austerity, pro-Europe – which would scoop up votes from Labour, Liberals, the Scottish National Party, Ukip and the Greens.
And these left-wing movements – so it seems now, savour it while you can – don’t have to rely on street protests to get what they want. They can get it through an instrument long considered by socialist radicals to be redundant: the ballot box.
The ascent of Syriza signifies the emergence of a trans-European politics in a way the previous rise to prominence of the likes of the Front National and Ukip haven’t. The eurosceptics want to push the European Union away. They want their politics to be more national. What makes Alexis Tsipras radical is not what he wants to do in Greece, but what he wants to do in Europe.
Tsipras’s programme will work only if he manages to ignite the Syrizification of the entire Eurozone; if he can win the implicit support of voters in enough national elections across the continent to force Angela Merkel and her fellow pro-austerity north Europeans into the position of isolation that Greece is in now.
Related: Who are the Independent Greeks? Party differs on many issues with Syriza, but the two are united by a mutual hatred for bailout program.
Who are the Independent Greeks?
Helena Smith in Athens Guardian UK January 26, 2015
Panos Kammenos, leader of Independent Greeks (Anel). Photo: Michael Kappeler/dpa/Corbis
Syriza just missed out on the 151 MPs it needed to govern alone after Greece’s election, winning 149 seats with a 36.3% share of the vote. The party has formed a coalition government with Independent Greeks, who took 13 seats.
The populist, rightwing Independent Greeks (Anel) would at first sight make for a strange bedfellow for the radical leftists Syriza and the deal makes an unusual alliance, but they are brought together by a mutual hatred for the bailout programme keeping Greece afloat.
The two parties have vastly diverging world views, standing well apart on issues such as illegal migration, Greece’s ever-fractious relationship with Nato rival Turkey, gay marriage and the role of the Greek Orthodox church.
Under their leader Panos Kammenos, who defected from the centre-right New Democracy party to form Anel at the height of the crisis in February 2012, the group has proved to be rabidly nationalistic in foreign affairs.
The politician is particularly virulent on the issue of the need to reclaim war reparations that he argues were never properly dealt with after the Nazis’ brutal occupation of the country. He was accused of being antisemitic when he claimed last month that Greek Jews paid less tax than other citizens.
His party is part of the European Conservatives and Reformists political group in the European parliament, which was founded at the behest of David Cameron.
Both Syriza and Independent Greeks agree on the need to end austerity. And both hold strident views on the especially sensitive issue of Greek sovereignty having been denuded as a result of six years of stewardship under Athens’ hated “troika” of creditors. Anel, like Syriza, says foreign lenders have turned the debt-crippled country into a “debt colony”.
In opposition, the two political forces collaborated to block the election of a new head of state, which ultimately triggered Sunday’s snap polls. With Syriza and Anel outright rejecting the commitments the previous government signed up to with creditors – outlined in the onerous bailout accords that Athens agreed with the EU, European Central Bank and International Monetary Fund – they will make an extremely tough negotiating team when stalled talks resume this month.
Kammenos’s appointment will not be welcome news to Berlin, which has provided the biggest share of the €240bn (£180bn) in rescue funds to Athens.