Greek parliament votes Troika-imposed “prior actions”, government loses majority, rebellion in Syriza ranks

It was after midnight on July 15 when the Greek parliament finally approved an omnibus law containing all of the “prior actions” demanded by the institutions. The vote was met with strike action, demonstrations, a rebellion by 38 Syriza MPs and the opposition of the majority of the party’s Central Committee members. Tsipras survived but he had to rely on the votes of those parties which passed the previous two Memoranda which Syriza was elected to oppose.

The 24h general strike had been called by civil servants union ADEDY, municipal workers POE-OTA, as well as the Athens subway workers and the railway workers nationally, against the new proposed Memorandum which the Greek government agreed at the European Summit on July 13 and which represents a humiliating capitulation.

The demonstration in the evening was large, though still much smaller than the huge rally for the NO during the referendum ten days earlier. There were a few thousand people at the rally outside parliament, with an additional tens of thousands marching with the Communist Party trade union front PAME.

protestThe demonstration was met with a security operation reminiscent of the ones launched by previous governments when they were trying to pass the previous Memoranda. Syntagma Square metro station was closed from 6pm and the government used the hated riot police (which it had promised to disband) and tear gas to attack the demonstrators, using as an excuse a small group of anarchists throwing molotov cocktails.

Opposition to the agreement had been growing amongst the ranks of Syriza, with many party organisations issuing statements against it, asking the party leadership to rectify it, and the members of the parliamentary group not to vote it through. Amongst the party district organisations issuing votes against the new Memorandum were those of the industrial town of Piraeus, Athens South, Thessaloniki A, Achaia and others. Syriza’s Youth organisation, as well as the Left Platform, KOE and the Communist Tendency all came out in opposition. There are no reports of any party district having voted in favour.

The pressure was such that it even affected the 11-person Political Secretariat of Syriza. It was reported that the majority of members of the PS think that the agreement is "politically unmanageable and socially unsustainable" and that it should not be implemented by the Left. The PS has also called for a meeting of the CC to be convened immediately and rejected the talk of expulsions and resignations of those who disagree with the deal.

Even more importantly, this pressure crystallized in a statement signed by 110 out of the 201 members of the party’s Central Committee which opposed the deal and called on MPs not to vote for it ( Although opposition to the line of Tsipras has been growing since the party came to power in January, this was the first time that the current leadership lost control of the party.

When finally the parliamentary debate started, the speaker Zoe Konstantopoulou (who had stepped down for the session) made a strong speech against. She denounced the blackmail of the Troika and said the Greek parliament could not and should not legislate against such asphyxiating deadlines. She added that the deal amounted to a "coup", which would have the impact of a "social genocide" and that they had no right to turn the peoples' NO into a YES. "There is no doubt that if blackmail is completed tonight nothing will stop it being repeated and not just in Greece". She added that "they want to humiliate us to the point where we no longer recognise ourselves" as Left. "We sought power not for power's sake but to give it back to the people, comrades" she said.

Perhaps more surprisingly, former Finance Minister Varoufakis, who had been a key architect of the government’s negotiating strategy with the troika but was dismissed days before the agreement, also spoke against. Taking a cue from Keynes, he compared the imposed deal to the Versaille Treaty and warned that it wouldn’t solve anything. He had also published a scathing and detailed attack against the deal on his own website. In it, amongst other things, he describes the return of the troika to Athens in the following terms: “The Troika strikes back and demands that the Greek government invite it to return to Athens as Conqueror – the Carthaginian Peace in all its glory”.

Tsipras originally announced that he was not going to speak in the debate, having already defended the agreement in a TV interview in the state broadcaster ERT the night before. It was left to Finance Minister Tsakalotos to defend the capitulation deal. He did it without any enthusiasm and looking like a broken man: "I don't know if we did the right thing. But I know we felt we had no choice. We never said this was a good agreement." Earlier he had declared that he didn’t know if the deal was going to work, “that remains to be seen”.

Finally, after the midnight deadline had gone, Tsipras himself addressed parliament, after the leaders of ND and Pasok had demanded that he should take responsibility for it. His defence of the deal was also unenthusiastic: "I'll admit that the measures we are tabling are harsh and I don't agree with them. I don't believe they will help the Greek economy, and I say so openly. I also say that I must implement them, that is our difference." In essence, his only argument for the agreement was that there was no alternative: "I had a choice between a deal I did not agree with, or a disorderly default, or Schauble's choice of euro exit".

Finally, the vote was 229 YES, 64 NO and 6 abstentions. Amongst Syriza MPs, 32 voted NO, 6 abstained, and 1 was absent. The deputies from government partners ANEL all voted in favour, which probably spells the end for this formation which was created as an anti-Memorandum split of the right wing New Democracy.

latuff-greek-memorandumThe result of the vote means that the government parties lost their majority but the bill was passed with the support of ND, PASOK and To Potami votes. The total number of Syriza MPs who did not vote with the government was 39. Last Friday the rebellion was only 17 (2 voting NO, 8 abstaining and 7 being absent) with another 15 who voted YES but made a statement against.

The size of the rebellion amongst the ranks of the parliamentary party was therefore significant, particularly considering the enormous pressure and blackmail exerted on the MPs. The Syriza leading group had been agitating to demand that any MPs voting against the proposals should resign their seats. The argument was put forward (including by Tsipras himself), that since there is a German plot to remove the Syriza government (true), anyone voting against the proposals is helping them bring it down.

Amongst those who voted against the government were former Finance Minister Varoufakis, parliament speaker Zoe Konstantopoulou, and Syriza Parliamentary spokesperson Thanasis Petrakos. Energy Minister and Left Platform leader Panagiotis Lafazanis (who abstained on Saturday) also voted NO as did Vice Ministers Stratoulis and Isichos.

Former Deputy Minister for Finance Nadia Valavani also voted against having previously resigned and sent a strongly worded letter of protest to Tsipras. Despite the fact that she had been a member of the negotiating team, she described the agreement as a “capitulation”: “This ‘capitulation’ is so overwhelming that it will not allow a regrouping of forces. With your signature there will be a deterioration in the status of an already suffering population, and this will be a tombstone around their necks for many years with little potential of redemption.”

Both the Left Platform and the Communist Organisation of Greece (KOE) MPs voted against, but still, Lafazanis made a statement saying he was voting against the measures but continued to support the government (the same government which has signed them and committed to implement them).

The "prior actions" demanded by the troika have therefore been approved. They including increases in VAT (for instance processed food will go from paying 13% to 23%), sweeping pension cuts and counter-reforms, as well as "introducing quasi-automatic spending cuts in case of deviations from ambitious primary surplus targets".

Tsipras has survived another day, but at the cost of splitting his own party, with a majority of CC members having signed a statement against the deal.

Still, there is no guarantee that there will be a deal in the end. The whole situation can unravel very quickly both for political and economic reasons, in Athens and in Brussels and in Berlin. The passing of these “prior actions” opens the way for the beginning of a discussion on a new loan, but there is no guarantee that a successful conclusion will be reached.

An IMF report leaked on Tuesday put more spanners in the works, saying that the deal means Greek debt-to-GDP ratio will jump to over 200% making it completely unsustainable, that the Europeans must therefore give Greece substantial debt relief, hinting that the IMF will not get involved otherwise.

At the same time, German Finance Minister Schäuble continued to insist that his prefered option was Grexit (or rather, a “temporary, 5-year time out period from the eurozone”). He argued that since the level of Greek debt was unsustainable a haircut was necessary, but that since that is not legally possible within the euro, Grexit was the more advisable course of action.

So here we have a deal, signed mainly by Greece and Germany, but the Greek Prime Minister doesn’t believe in it, and the German Finance Minister says he would prefer the opposite.

Even beyond the political will of Tsipras and Schäuble, the new Memorandum faces a whole series of other obstacles. First of all, the Greek economy has ground to halt. The introduction of recessionary measures will only make the situation worse, as all actors admit. That will blow a massive hole in the economic forecasts that the deal is based upon. It is not the same to aim for a budget surplus of 1% on the basis of a slight economic recovery, than to do the same on the basis of a deep contraction (which some economists put at anything between 5 and 10%).

It is one thing for Tsipras to get these measures passed in parliament (with the votes of the opposition). It is very different to then actually work through their implementation when your own party is against. There is also the not-so-secondary detail of how the bridging loan of 7.7bn euro which the “institutions” need to find to tide Greece over while the new loan is being discussed. And then most important of all is the question of the new loan itself, worth over 82bn euro, which needs to be discussed over the next few months and agreed by a lot of actors who are not really convinced.

All that has happened is that the final, almost inevitable, outcome of this crisis, Greece’s default and exit from the eurozone, with the implications that will have on the fragile equilibrium of the European and world economy, has been delayed. Whether the delay will be a few hours, a few days or perhaps a few months we cannot say with any certainty.

What is clear is that workers in Greece and across Europe are drawing political conclusions from the debacle of a government which came to power promising an end to austerity and was in a short space of time forced to accept a humiliating capitulation. Yes, this was done through blackmail, extortion and financial strangulation, but in the end Tsipras gave in. The crucial reason behind the capitulation, as he himself has admitted, was that he did not have any alternative. Or put in a different way, that he limited himself to operating within a crisis-ridden capitalist system. KKE secretary Koutsoumbas told Tsipras: “you said that you did everything possible to fight the blackmail of the troika. You lie. You did not present an alternative”, and he was right.

Within those limits, there is certainly no alternative. The only alternative would have been precisely to break with the capitalist system, by declaring the unilateral repudiation of the debt, nationalising the banking system and the big companies in order to start to reorganise the economy under democratic planning, workers’ control and in the benefit of the majority of working people.