Saturday, July 11, 2015

Greece After the Referendum

We reprint this article for the interest of our readers. It was originally published on the Socialist Network Website. Facts For People is not Affiliated to the Socialist Network.

EG-AE336_edp040_G_20150401142419Published: 11 July 2015
Author: Jonathan Clyne (Socialist Network Sweden)

‘No’ Vote a Major Victory
The widespread mobilisation expressed in the Greek referendum achieved with a single blow what months of negotiations without popular mobilisation had failed to do. It immediately caused a major split within the ruling classes of Europe. On one side, Italy and France are leading the compromisers. Donald Tusk has swayed wildly, but now seems to have fallen into line after pressure from the USA. On the other side, Germany leads a motley coalition of EU bureaucrats and politicians from Spain, Portugal, Ireland and some smaller Eastern European countries that have staked their careers on austerity. They and the self-righteous German leaders, who unlike most European countries have not practised much austerity at home, egged each other on into hysteria.

The issue was never really the repayment of debts. The IMF did not believe that it was possible as a recent document reveals. Most economists did not believe that either. Not even Angela Merkel, as revealed in her private telephone conversations tapped by the NSA and publicised by Wikileaks, believed it was possible. The whole negotiation was just a method of trying to push Syriza into disintegration and out of government.

European Integration in the Balance
In the past thirty years, European integration has proceeded at a pace few people on the left expected. Each crisis has not created disintegration but greater unity. This was possible while the price of greater unity could be passed on to the workers of Europe. It did not have to be at the expense of any capitalist class. It was bonanza time even for the hopelessly weak and corrupt Greek capitalist class. As long as there was no serious opposition, unity reigned. Now everybody is blaming somebody else after the Greek people punched a hole through their strategy. The stakes have been raised tremendously and it could mark the beginning of the end of the euro. And possibly the EU too.

The second consequence is less visible, but at least as important. A broad swathe of those that have suffered under austerity for years, or even decades, were thrilled by the referendum result. It is possible to say no! Marine Le Pen and Nigel Farage have been quick to pick up on the mood and try to exploit it for their nationalist policies. They can succeed only by distorting the result of the vote. It was not a no to either the EU or the euro. Above all it was a no to austerity, something they also stand for.

Turning the Referendum Result on Its Head
So, what did Tsipras and his government do in this favourable situation? They backed down completely. They have turned a massive ‘No’ into a ‘Yes’. Overnight. The historical analogy that springs to mind is August 1914. After years and years, and decision after decision, that in the event of war they would not support their own bourgeoisie and lead workers into mass slaughter in the struggle against another country’s bourgeoisie, the most important leaders of the European labour movement backed down overnight. I had the same sensation as Lenin had when he first heard the news: this cannot be true. It must be a fabrication by the enemy to sow confusion. Now Tsipras’s turnaround has been confirmed.

However, there is a major difference between 1914 and 2015. The Greek government’s action will obviously not lead to a world war. Indeed, we are still on a rising curve for the left as they advance the struggle against austerity. Nevertheless, we have to be clear that this is a serious setback for the international working class. And especially for the vast majority of Greeks who will continue to get hammered into the ground.

Antarsya, the KKE, and others who already cried betrayal when the government signed a temporary agreement will puff themselves up and proclaim that they were right all along. They have great expectations that they will grow by leaps and bounds. But they will not. The working class has been defeated, and that is far more important. Those that cry betrayal at all times regardless of the situation will attract only a few.

Why did this happen?
Well, the prime responsibility rests of course with the European leaders, especially the German ones, and the European Central Bank. Hell-bent on pursuing the same policies that have led Greece (and other countries like Ireland and Latvia) into disaster for most of its people, they gradually strangled the Greek economy. First, they refused to pay out the remains of the loan that had been promised to Greece during an earlier bail-out. Then in February they stopped accepting Greek bonds, effectively making it impossible for the Greek government to borrow money anywhere else. Finally, once the referendum was announced, they stopped emergency funding of the Greek banks, closing them down which in turn started to shut down the economy.

However, the intransigence of the European ruling class should have been expected. They have never yet bowed down to intelligent arguments, friendliness, and willingness to compromise. On the contrary, like all bullies it enrages them. They hated Varoufakis beyond reason, precisely for this. Yes, bullies are prepared to throw a few crumbs to those that bow down in front of them. However, if one, like Varoufakis, appeals to bullies’ sense of reason, that is the last thing they can tolerate. This is true even if one encourages them to look after their own material interests. Because there is no surer way of exposing them as a bullying mob, a mob that is driven by its lust for prestige and power and nothing else. All bullies have to pretend to themselves, and others, that they are bullying for the right reason or simply because the victim deserves no better.

Syriza Did Nothing to Prepare
Syriza did nothing to prepare for this bullying, even until the very last moment, and then in a half-hearted way. It was as if Tsipras expected to lose the referendum and was just looking for an excuse to get out gracefully. A number of reports seem to confirm this. The strategy was never to use the referendum for anything else but to reopen negotiations and hope for the best. Being locked into that perspective made failure inevitable.

Response of the Left
So far the Left Platform in Syriza has been unable to effectively respond to Tsipras’s abandonment of the Party’s anti-austerity programme. With their backs against the wall, the Left have understood they had an alternative that was neither feasible nor had popular support. This alternative contained three main points: nationalisation of the banks, deficit financing of reforms, and a Grexit leading to the replacement of the Euro with a Greek currency and through that an effective cancellation of the debts. While nationalisation of the banks is obviously the right thing to do, as is cancellation of the debt, neither a Grexit nor deficit financing can solve anything in a meaningful way. It is not dealing with the fundamental problem that has dogged Greece since capitalism was established in Greece and led to a series of defaults.

Greek Capitalism Offers No Way Out
Greek capitalism is a weak player on the world market. Tourism, shipping, Coca-Cola bottling and a few minor industries are competitive, but that is it. Unable to compete, Greek capitalists fritter away money on speculation, buying favours from the state, and luxury, rather than investing. The only way Greece can go forward is by creating a few more industries that can compete. But the programme of the Left Platform will not manage that. They will just cause chaos and a declining living standard, in a somewhat different way than by accepting the Troika’s terms.

The question which poses itself starkly is: should this just be seen as a heroic defeat which hopefully will eventually inspire a struggle for full-blown socialism in the whole of Europe? In my opinion, the answer to that question is most emphatically no. The alternative to the present mess is neither accepting the dictates of the Troika nor screaming betrayal and empty slogans about socialism. Nor putting one’s hopes in a turn towards socialism on a European scale.

The Change Must Start at the National Level
Inevitably, the struggle for power will be played out within a national framework, despite the relative integration of the EU. Although workers’ struggle internationally is always inspiring, power has to be gained by winning national elections and mobilising nationally. Every national government will face the Greek problem if it tries to go beyond austerity. Of course, an increasing level of support can be garnered as more countries radicalise, but there will always be one or perhaps two governments that will be ahead.

Such a country will be forced to find a way to invest itself out of the crisis, if living standards are going to be raised. And this has to happen before the rest of Europe catches up and can implement full socialism. As explained in greater detail in my previous article (which led to a long discussion at a ‘half-socialism’ has to be implemented if one is not going to be forced into a humiliating retreat in the way that Syriza has been forced into by the bullies of the ruling classes of Europe. Investment can only get going if the Greek oligarchs are expropriated and Greece defaults on the debts to the Troika and uses the saved resources constructively. No amount of deficit financing can achieve the same effect.

The success of such an investment and export strategy depends to a large extent on Greece being able to export. The EU would be the easiest place to export to, if Greece is a part of it. And being part of the euro makes it even easier. To a certain extent, Syriza’s strategy has undermined this possibility. As long as the ECB refuses to act as it is mandated to do, to be the lender of last resort, Greece cannot avoid starting to introduce another currency. It has to start by printing IOUs, or scrip as some economists call it, to pay wages and pensions. It would be a first step towards a new currency. It would be a handicap, but a necessary step as long as the ECB continues to hold Greece to ransom.
(Even this might not mean that Greece has to leave the euro. There is no formal way of kicking Greece out of the Euro. It needs to be discussed if it possible to have two currencies for a period of time. Switzerland has that in some sense. Croatia had it in practice for a period of time.)

Would the Troika accept ‘half-socialist’ measures? Well, it would not like it at all, but if Greece had freed itself from debt-serfdom there would not be much that the Troika could do. Greece could’ve started to improve things and wait until the next anti-austerity government is thrown up in Europe. And the next. Instead of the present setback, that would truly have been the beginning of European socialism.

Now things will take more time. The baton has to be picked up by another anti-austerity government. If it has drawn the right conclusions from the present debacle in Greece, Europe (and the world) will have a bright future. In Greece, there will now be a period of absorbing the lessons of what has happened and trying to survive. The first battle against austerity has been lost, but internationally the war against austerity and for a fairer future has just begun.

If you would like to contact Jonathan about this article you can write to him at:

No comments: