A Second Demonstration Project for Greece
On the Doorstep of a SYRIZA Victory
This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org
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See Mike’s post-election SYRIZA victory blog post here. —Eds.
Five years ago, Greece was still in the early stages of the austerity measures imposed on it by the “Troika” (the European Union (EU), the European Central Bank (ECB), and the International Monetary Fund (IMF)). The other countries of Europe’s “periphery” (the so-called PIIGS—Portugal, Ireland, Italy, Greece, and Spain) watched and waited to see what would come of the confrontations in the streets of Athens and the menace of a new and brutal neoliberalism. At the time, I wrote in these same pages that the intense focus on Greece was arguably over the value of that obscene experiment in a country whose people had a history of standing up for themselves, even against world powers (Greece as a Demonstration Project, D&S, May/June 2010).
Since then, Greece has continued to take the bitter medicine prescribed by the Troika, in the form of severe cuts to the public sector and the social welfare state. Those cuts were initiated through Troika “Memoranda”, known in Greece as the “Mnimonia” (Μνημóνια). And, as even the casual observer knows, the Greek political landscape has witnessed the virtual demise of the center-left party, the Panhellenic Socialist Movement (PASOK), and decreasing support for the center-right party, New Democracy (ND). Those two parties have been the dominant “two-party” rulers of Greece, and have aligned in a coalition since the crisis hit Greece. Greeks have taken to the streets—they are known as the Aganaktismenoi (Αγανακτισμενοι), or “outraged”—in concert with the Indignados (indignant) in Spain. Disgruntled Greek voters have distributed themselves to both the left and the right in newsworthy ways. To the right, we have seen the rise of the hyper-nationalist, neo-Nazi “Golden Dawn” party, which went from obscurity of less than one percent to just under seven percent (6.92%) in the last parliamentary elections. To the left, SYRIZA—the Coalition of the Radical Left—has emerged from a small, marginal parliamentary party, comprised of a wide array of left groupings, to become the frontrunner in this Sunday’s crucial elections. Both phenomena—the neo-Nazi right and anti-austerity left—have garnered significant attention in both theoretical and policy circles. The anarchist and anti-authoritarian movements have also made their mark in Greek political life during this very difficult time.
Frustrated youth and people disgusted and disenchanted with traditional parties are seeking something—anything—on which to seize.
Memoranda and Austerity: Cutting Up Greece
But, how could this not come to pass? The “demonstration” of brutal cuts and austerity has been—by all accounts—an abysmal failure. Even IMF officials have admitted that there was—and is—no possible way for Greece to escape this vicious cycle without serious, fundamental change.
The conditionality of the “bailout” loans to Greece has been based on severe austerity and theoretical free-market discipline. This has included massive cuts to health care, education, and infrastructure; layoffs of public and private workers, wage cuts (averaging 30%), pension cuts, and the massive privatization of Greek national properties and operations. The results:
- The beloved measure of mainstream economics, GDP, has declined 29% since the onset of budget-cutting austerity;
- Unemployment stands at 25% for the Greek population as a whole, and over 60% for Greek youth. In 2010, I wrote about the “€600 generation” that people worried about. Now, we are literally down to the “€300 generation”(minimum monthly youth wage)—in the name of “competitiveness”, according to the current government;
- There are up to 300,000 Greek households without electricity, due mainly to the fact that the Troika and its Greek government partners tied newly implemented property taxes to electric bills;
- Greek sovereign debt stood at 113% of GDP in 2009 and with the Memoranda’s mandatory austerity program has not reduced that, but has increased that debt to 175% of GDP.
These numbers alone are worse than the depths of the Great Depression of the 1930s in the United States.
Democracy, in terms of rights to protest and fight back, has been curtailed. The government has cracked down on unions, and public broadcasting has been broken into pieces by the oligarch-backed ND-PASOK coalition (along with the small “Democratic Left—DIMAR” party for a short while).
Beyond that, the human toll of despair is characterized by a record number of suicides, and record levels of homelessness and poverty. There are tragic stories of teachers and doctors eating out of garbage cans and of many people abandoning the cities to return to their home villages where even less opportunity exists. Large numbers of unemployed youth have been migrating out of the country, seeking opportunities abroad as their forefathers and mothers did in previous generations. Those left behind are tasked with keeping the country together and rejuvenating the economy and society.
A Second Demonstration Project
The stakes are high in Greece this Sunday. They are also high for the architects of austerity and the neo-liberal project of our epoch. When I first wrote of “Greece as a Demonstration Project,” I posited that it was the demonstration of what big capital could and would do to anyone who dared challenge the program of cuts and confiscation through privatization. This time, the project—and the analogous fear of global capital—is the potential demonstration effect of the election of SYRIZA—an openly anti-austerity, sometimes anti-capitalist party in the EU.
In the run up to this Sunday’s elections, we are witnessing unprecedented outside interference by other governments, global financial institutions, and the EU itself. Most of those interfering are threatening, fear-mongering, and terrorizing the Greek populace about the dangers of a SYRIZA win, about the dangers of going against the Troika, about self-determining their country’s path into the future. In particular, we read and hear about a potential “GRexit”—Greece’s exit from the eurozone and possibly the EU. “Where would Greece get its money, if—once again—it bites the hand that feeds it?” the pundits breathlessly ask.
SYRIZA has long said it desires to remain within the EU and the eurozone. Its leaders argue that Greece needs to bargain in a stronger way, using any leverage it can. Of course, this conversation has included the examples of Argentina and Iceland, who previously defaulted on loans and built upon their own currencies, using fiscal and monetary policies that were not tied to a stronger currency, as is the case with Greece and the euro. Greece cannot depreciate the euro, so the Troika depreciates the lives of Greeks. Then there is neighboring Turkey, which has done remarkably well without EU membership in this time of global economic turbulence. So, it’s not “euro or death.”
Germany’s finance minister, Wolfgang Schäuble, openly says that Greece has no alternative but to obey him and the Troika, embodying the mantra of “There Is No Alternative” (TINA) of Margaret Thatcher and the lineage of Milton Friedman.
Goldman Sachs, which was hired by the Greek government to “cook the books” to secure admission to the Eurozone (see my first article), now openly threatens that if a new Greek government clashes with international lenders (and their terms), it could potentially face a liquidity (cash) crisis, and may be subject to a Cyprus-style “bank holiday” (or seizure of funds from bank accounts). It reminds Greece and the financial community that February 28 is when Greece’s two-month bailout extension expires. This also puts a potential SYRIZA government, led by Alexi Tsipra, on notice about how much he can bark, let alone bite.
Domestically, the attacks on SYRIZA and the fear-mongering have taken on tones of the Cold War, with many anti-communist themes appearing in reporting and in campaign advertising.
ND and PASOK, of the ruling coalition, argue that “Default is Death,” and that the end of austerity is near. Of course, they have been saying this since the beginning. More insulting to the intelligence of Greeks and any thinking person is the argument put forth by the corrupt captains of failure that the reason austerity hasn’t worked is that people like supporters of SYRIZA simply don’t agree and don’t get with the program (!).
For ND, they openly fear taxes—on corporations and the rich. Prime Minister Antonis Samaras equated any new taxes on these “productive strata” equal to “death.” This, while his government has been unable to recoup the vast amounts of tax-evaded euros from those very people of great means, to the dismay of EU leaders and the Troika.
SYRIZA’s alternative stands on the facts of the tragic results of free-market austerity: Gross inequalities, poverty, unemployment, suicides, and continued political corruption. The threat of rising fascist elements, like Golden Dawn, looms in the shadows for a people not known for taking orders from authoritarian leaders. International interference—from both state and financial entities—in domestic politics and Greek self-determination threatens both Greeks and any potential investor who might dare put money into that neo-liberal project of the Troika.
The Threat of a SYRIZA Demonstration Effect
Debt repayment under current structures and conditions is impossible. Greece isn’t the only country in dire economic straits in Europe, as is well known. The combined debt of Italy and Spain is estimated to be about €3.5 trillion. In Spain, Podemos (“We can”), another Left alternative party, for example, has joined SYRIZA’s Alexi Tsipra, in campaigning for an EU-wide response to austerity and Troika heavy-handedness. Sovereignty and any semblance of democracy have been compromised, killing any hope or expectation of a brighter future for the many who are suffering, but are afraid or skeptical of a “left” alternative. But this is a competitive, conflictual capitalist economy, so a truly confrontational alternative should be a built-in feature of the system.
It is clear that governments cannot cut their way to prosperity. The notion that they can has been totally discredited, and is only endorsed by those free-marketeers who have reified “the market” to religious status.
A victory for SYRIZA this Sunday will have great symbolic value for Greeks and for others in Europe and around the world. An anti-austerity left party will have been elected in the rubble of cut-throat capitalism, and in the face of threats and propaganda. People will have been elevated, by their own will, as more important than money. But this will not be the end—this will be the beginning of an untested demonstration project.
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