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.
As 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 Kees de Jager 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.