Greece – euphoria over football, but the economic and social situation is grim

Last night Greece was one huge party after the victory in the European Cup. No doubt workers and youth feel the need to celebrate, for the social and economic situation gives them no reason to be cheerful. Fred Weston looks at the situation in Greece as it is developing after the defeat of the PASOK and the election of the right-wing New Democracy government

Yesterday the whole of Greece was one big party. Their national football team, the underdog, the outsider, that was given an 80 to 1 chance of winning, achieved what to many must have seemed a miracle, victory in the final of the European Cup! They were the underdogs that were supposed to be knocked out early on. This time however the big-timers, Germany, France, Spain, Italy, England had all gone.

Ordinary working class Greek workers and youth do indeed need something to cheer about for their daily lives are a million light years away from yesterday's fireworks display. No doubt many an unemployed youth or low paid worker must have been delighted at the idea that they had outdone all these much more powerful countries. However, together with these there was also the newly elected prime Minister of Greece, Kostas Karamanlis, cheering along with the rest of the Greek supporters. He was sitting in the seats especially reserved for the elite and was no doubt thinking that this result would be very useful in distracting the attention of the masses from the real problems of life.

We don't want to dampen the mood, and we hope that the people had a good damn party last night, but we can't avoid pointing out that this also has a very reactionary side to it. Modern day football is the equivalent of the ancient Roman panem et circensis (bread and circuses), where the rich paid for a big show to keep the lower classes happy, the idea being that happy people don't complain!

For now Karamanlis and the Greek ruling class may be feeling they are on a high. In six weeks' time they will also have the Olympic games. But none of this will serve to remove the real situation facing the Greek working class. The euphoria may last for a few weeks, but then the real situation will come back to haunt them, one of growing social and economic problems, unemployment, low wages, inflation and so on. So while the party is still going on let us look at what is happening in the real world of Greece.

The defeat of the PASOK in recent elections

In the general elections that took place earlier this year the PASOK was finally ousted from power, paying dearly for its adherence to anti-working class policies. Simitis, the PASOK Prime Minister, was seen as the Greek Blair. So the situation in Greece has some important lessons for British workers, but also for the Germans and for all those countries where we see the Social Democracy in power carrying out right-wing policies.

The leadership of the PASOK tried a last minute face change with the removal of Simitis and his replacement with George Papandreu. George is the son of the more famous Andreas Papandreu who launched the PASOK back in the mid-1970s on a very left and radical sounding programme. The idea was to try and cash in on that memory. Unfortunately for them the memory of the very recent past was much stronger, so the change of leadership did not save them

The recent European elections in Greece confirmed the result in the March general election, but with an even bigger gap (+6%) between the PASOK and the ND (New Democracy) led by Kostas Karamanlis, the nephew of the more famous Karamanlis of the past.

This result was partly to be explained by the very low voter turnout (for Greek standards) in the European elections of only 62%. The huge levels of abstentions were almost completely due to the PASOK voters not turning out, i.e. the working class vote. Many analysts in Greece have commented on this, pointing out that it was a way of  "punishing" the PASOK. Working class people in Greece are not happy at the conduct of what they perceive as their party, but are not prepared to support the New Democracy either. They were unhappy with the PASOK in government and now they are unhappy with its mild opposition to the new ND government.

To make things worse we see the zig-zagging of Papandreu over a very short period. In the build up to the elections he was making all kinds of contradictory statements, which went from reforms for the workers to out and out "neo-liberal" policies, i.e. plans to privatise and cut back on social spending. To make things worse Papandreu publicly collaborated with prominent bourgeois politicians and these were then placed at the top of the PASOK list of candidates. He went even further, in openly declaring that his model for the PASOK is the US Democratic Party. Papandreu in fact studied in the USA, speaks very good English, has many links with prominent US bourgeois politicians, and is very much liked by the American administration. Colin Powel has been full of compliments for him.

Even part of the ND vote came from PASOK voters who had clearly expressed in the opinion polls that they were doing this to "punish" the PASOK, not so much to reward the ND. In the working class areas the left vote continued to be strong, in spite of the abstentions, with 60-68% voting for the PASOK, the KKE (Communist Party) or the Synaspismos (an alliance of left parties, the bulk of which originated in the KKE).

The PASOK lost votes mainly among the pensioners, its middle class electorate and the peasants. Of course, the ND saw a massive increase in the very wealthy areas, where it got 10-15% more than it had previously. This is a clear indication that the rich are lining up for a fight with the working class.

This confirms what we have said in previous articles: the workers of Greece are not moving to the right. Only a superficial onlooker could draw this conclusion. In reality what is taking place is a deep and widespread process of radicalisation.

Polarisation between the classes

In fact what we see are the outlines of a polarisation of society, both to the left and to the right. We see this in the results of the small LAOS party, led by Ghiorgos Karatsaferis. This was a right wing split away from the ND. Initially it had little success. It is still a small force, but had a small success in the March general elections and has now managed to get into the European Parliament. For now it poses no risks for the ND, but in the future as the ND inevitably disappoints its supporters some of them can move over to the LAOS. Thus we see the future battle lines being marked out for major confrontations between the classes.

For now however we have to remember that the New Democracy has been in power for only a very short period of a few months. It has not yet shown its teeth to the workers of Greece. On the contrary, it has promised all kinds of improvements, the main one being the promise to guarantee temporary and casual workers a permanent job contract. It has recently toned this down by saying that only 10% of the 250,000 workers who are in these conditions will now get a permanent contract. Originally it had promised this would be for all temporary workers. In this manner the ND were able to pick up some votes from the more politically backward layers of the working class and middle classes. But this cannot last for long. The ND will have to move quickly and reveal its real intentions. Then we will see how ephemeral its electoral support really is.

At the moment a lot of people are being employed for the forthcoming Olympic games and the economy is still growing, but those who have eyes to see can sense that the situation will change dramatically in the near future. The New Democracy government will not be able to deliver any of its promises. It is in fact the party of the Greek bosses and it is under pressure to move quickly to the offensive and take on the Greek workers. It is called on to do what the PASOK government was unable to finish.

There is one very important detail that differentiates the New Democracy from the PASOK. The PASOK, in spite of its right-wing leaders, is seen by many as the party of the workers. It has organic links to the trade unions, and was thus able to use this when it was in government. It also proved to be its undoing. Although it tried to implement the programme the bosses were demanding, it could only go so far. Its links to the unions also forced it to compromise on certain measures. This was seen when it was forced to reach a compromise on pensions after a massive general strike. And it explains why the Greek bosses decided that the moment had come to dispense with the services of Simitis, Papandreu and co. What was the point of keeping the PASOK in government if it could not hold back the unions sufficiently and get their programme adopted?

As we mentioned above, Papandreu thinks that the solution to this is to transform the PASOK into a fully fledged US style bourgeois Democratic Party. The problem is that the PASOK is embedded in the working class. It has strong links with the trade unions. Therefore in the coming period the party will come under opposing pressures. Internal conflicts are inevitable, with the working class base attempting to reclaim the party.

Grim economic future

So what is going to happen next? To understand this we need to look at the general economic and social situation in the country.

Up until quite recently, in spite of some important movements of the working class, there was a relative stability. This can be explained with the fact that over the past ten years the annual average rate of growth was 3%. Last year it even reached 4%. But this hides the real processes taking place.

The main source of growth of the Greek economy was in the services sector. This now represents 71% of overall GDP. Industry only accounts for around 20%, while agriculture is still relatively high contributing 9% of GDP. This is not the structure of a strong economy. It is true that agriculture has come down from the 20% figure of a few years ago, and that the target is to get it down to 6%, but this is at the cost of creating more unemployed who have been flocking to the cities in search of work. And agricultural produce as a percentage of GDP is still much higher than in the more advanced capitalist countries. This is an indication of the less developed nature of the Greek economy.

Greek agriculture is very primitive and low in technological input, with still many small peasants working the land in a very unproductive manner. The tendency now is for the land to be concentrated into the hands of large landowners. There is also the phenomenon of the middlemen who buy products from the peasants at low prices and sell at inflated prices to the workers in the cities.

The official unemployment figures stand at 9%, but everyone knows that the real figure is probably double that amount. The figure of 9% is similar to that of many other EU countries, but if we look at another figure we see the real situation. The EU average level of people actively working is 64%. In Greece the active population is only 57%. What is worse is that a large part of the unemployed are becoming structural, or permanent. Now 60% of the unemployed are in this position.

There is in fact an obvious contradiction between the apparent growth in wealth, growth in the economy and in purchasing power and the growing levels of poverty. Now 22% of the population lives below the poverty line, and a further 14% are only just above it. That means that 36% of the population has become marginalized.

However this apparent contradiction soon disappears when we look at the figures for bank lending. We see the same phenomenon developing in Greece that is more associated with countries like Britain or the United States, the huge growth in personal debt. The total figure for personal loans, excluding mortgages, now stands at 47billion euros, or 8.2% of GDP. This is huge by Greek standards. It means families have been maintaining the level of their standard of living by getting into debt, not because of growing real incomes.

Greece in reality is a weak capitalist power. Its industrial base is very weak. We already mentioned that it represents only 20% of GDP, which is an indication of its backwardness. But Greek industry is going from bad to worse. Many factories have been closed. This is due partly to its inability to compete with far more powerful companies in the main European countries, such as Germany and France, but also countries like Italy or Spain. In fact many consumer goods bought in Greece come from outside. This means that the Greek economy is very vulnerable and depends heavily on what happens in the world economy, in particular the economy of the European Union.

There has also been a partial shifting of production to Greece's neighbouring countries, such as Bulgaria, Macedonia and Albania. The reason for this is the extremely cheap labour that is available in these countries. Greek capitalists have invested in mining, the petrochemical industry and in the retail sector in these countries.

Greece can be classed as a weak imperialist power within the region. One important indication of its backwardness is the size of its service sector and agriculture. But its services are not like the financial centres such as London. The largest part of the services sector is taken up by tourism.

It is also not enough to simply look at the growth figures. Taken by themselves they look quite impressive, but when you take a closer look another picture emerges. Three of the four percentage GDP growth points last year were due to the money being spent on the Olympic games and other infrastructural works, such as the massive bridge near Patras which links the western Peloponnesian peninsula to mainland Greece. A lot of this money came in the form of aid from the European Union, which is about to dry up.

Now most of these works have reached near completion. But while this has stimulated the economy for a period it has also contributed to a massive increase in the public debt, which now stands at 102% of GDP. They are also expecting to make a loss on the Olympic games. There are still many unsold tickets. There is a lot of publicity about being patriotic and supporting Greece by buying tickets and going to this summer's events. And many of the structures that have been built will prove expensive to maintain, and may prove to be more of a burden in the future than a source of income.

When this public spending dries up we will see the real state of the Greek economy. Added to this a slowdown in the economy is expected over the next two or three years. And of course any serious slowdown in the world economy will also seriously affect Greece.

The bosses' offensive

Everything we have outlined above clearly indicates that the next period in Greece is not going to be like the last few years. The situation is changing dramatically. Even the serious bourgeois analysts can see this. Their solution however is to continue down the road of privatisations, deregulation, casualisation of labour, etc.

Under the PASOK government there was a partial privatisation. They managed to sell quite a few state-owned companies, but in most cases this was not directly to private companies. There were some exceptions, such as the shipyards, where one was sold to a German company and another to a Greek company. In the utilities, such as water and telecommunications shares have been sold, but the state still has a majority of them in its hands and thus still has overall control.

The ND want to move forward and sell off all the state-owned companies to private companies. This is the main part of their programme. They want to move from the PASOK's partial measures to fully-fledged Thatcherite "liberalisation". This will involve a major conflict with the workers concerned, and will reveal the real face of the new ND government.

They would also like to cut back further on pensions. Back in 2001 the PASOK government tried to attack the pensions but was faced with a general strike and had to reach a compromise deal. The ND were very careful in their electoral propaganda not to touch the question of the pensions. But they will be under pressure to return to this. The bosses will not wait long. The same goes for education. The PASOK was able to avoid making serious cuts in the education system because of cuts in military spending – a by-product of the improved relations with Turkey over the past period. Turkey has been under pressure to improve relations with Greece if it wants to start the process of entering the EU at some point in the future. Now, however, the ND will inevitably impose sever cuts in education and also move towards further measures of privatisation in this sector as well. So we can expect big movements of the students, both in the high schools and the universities, in this new situation.

All this means that Papandreu's plan of transforming the PASOK into a US style Democratic Party will be a mere pipe-dream. This does not exclude possible splits to the right from the PASOK in the future, but the bulk of the party will come under enormous pressure form the working class. The situation we have outlined above is preparing the ground for a period of intense class struggle. Already under the PASOK government we saw several general strikes. This will be nothing compared to what we will see under this new ND government. The unions will come under pressure to fight back. The union leaders must be dreading the situation as it is developing. With the PASOK they could use the excuse that "we mustn't rock the boat, we mustn't create a situation where the ND can get back into government". Well now the ND is in government, and so there are no excuses. The workers will demand that their leaders fight back. If they don't then we can expect battles inside the unions where more left leaders will emerge.

In the meantime the PASOK is continuing to lose elections. The only way the PASOK can recover the ground it has lost will be to move to the left, at least in words. The present right-wing, social democratic leadership of the PASOK will come under enormous pressure. Some of them are open representatives of the bourgeois. When these elements see they cannot use the party to carry out their programme they may decide to move elsewhere. The situation will be created for a massive swing to the left inside the PASOK at a certain stage. It is still early days yet, but this process will emerge at some point in the future.

Thus the PASOK in opposition is going to come under enormous pressure from the working class. At the same time the ND will reveal itself to be a very weak government in spite of its electoral majority. As we have said it did not present its real programme to the electorate. The ND even tried to pretend that it is in some way a pro-worker party! It promised big pensions, permanent labour contracts, etc.

As we said, it very quickly had to tone down its promise of permanent contracts. But this question of casual labour is a big one in Greece. In a country of just around ten million people the number of temporary and casual workers is 250,000. A large number of these will lose their jobs in the coming period, especially with the end of the works for the Olympic games. Already in the last couple of months there have been three very big and militant mobilisations of these workers. In some cases the workers have forced the bosses to give them permanent contracts, but in general the bosses resist with all their might. It is going to be a bitter battle. This question will be at the centre of the conflict between the working class and the ND government.

The ND government wants to maintain social peace at least until the Olympic games are out of the way. But the temporary contract workers cannot wait. That explains why they are mobilising now. The irony of the situation is that according to EU directives there should be no temporary workers in permanent services. But in Greece 90% of the temporary workers are in these jobs.

Whether it is ready or not, very soon the ND government will have to attack the workers. The Greek bourgeois are already complaining that the ND government is not taking serious measures, that it is wasting time. The Greek bosses' confederation is demanding immediate action and a whole series of counter-reforms. They want all the state-owned companies to be sold off, they want a fresh offensive on the question of pensions, they want laws that make it easier to employ temporary workers, they want the sacking of workers to be made easier, they want a general cut in social spending, etc., etc.

Therefore the ND government will not be able to sit around for long. The pressure from the bosses is already there. They must go on the offensive. But, as we said, the ND government is not strong. It was not elected on this programme. It is a weak government that does not have the support in society for such a programme.

So once it starts the job it has been called to do it will provoke a confrontation with the working class. This will provoke divisions within the government and within the ruling class itself. There is already one small example we can quote. The deputy Minister of Health recently raised the idea that the taking of bribes by doctors in the health service should be legalised and transformed into a kind of fund! This shows the real intentions of this government, their real class character. But the Minister of Health had to quickly intervene saying that this was ridiculous, a clear indication that he is more sensitive to the real opinions of the masses on such issues than his deputy.

What is happening in the labour movement?

This brings us to what has been happening inside the Greek labour movement. Again, a superficial glance would not be sufficient to understand what is going on. The last major mobilisation of the working class was seen in Autumn 2003. We saw mobilisations in the public sector and the building workers, and more recently the temporary workers. Strikes were mainly called by ADEDI (the public sector union confederation). Incredibly the GSEE (private sector confederation) leaders came out openly against the strike of the public sector workers saying that it was aimed at bringing down the PASOK government. This confirms what we said above about the relationship between the union leaders and the PASOK. In the end the public sector workers only achieved a partial victory because of the ineffective mobilisation on the part of the union leaders.

There was an attempt on the part of the PASOK government to privatise the banking sector of the Post Office. The bosses would be keen to get their hands on this as the Post Office has branches in every neighbourhood and village, and many people deposit their savings there. But the PASOK government was forced to back off in the face of working class reaction.

There was the struggle of the Olympic Airways flight staff. This was a three-month long strike, which started in November and ended on February 12. The company was demanding increased working hours from its staff, and was forced to compromise as a result of the strike.

This level of militancy is a consequence of the reawakening of the working class, of the huge general strikes that we have seen. In the coming period, the level of mobilisation will become much higher. We had the general elections on March 13, and already by March 31 there was a general strike called by the GSEE over wages. The leaders did not mobilise seriously for this and it was not a big success. But it is very early still. What is significant is that so early into the life of an ND government we have had such a mobilisation. It is merely an indication of what is to come.

One problem that has been seriously affecting the Greek labour movement is the serious division within the unions between the PAME and the PASKE within the GSEE. These are two wings of the same organisation, the PAME being the KKE dominated sector and the PASKE being that of the PASOK. The PAME has been adopting an ultra-left stance for some time calling out its forces separately from those of the PASKE, on many occasions organising separate rallies on the same day of action. What is significant about the March 31 mobilisation is that PAME and PASKE called their forces to the same rally. Unfortunately on May Day PAME reverted to its divisive tactics with a separate rally. Under the PASOK government the PAME leaders could justify their separatist tactics, but now the pressure will mount for unity against the ND government.

This approach of the PAME leaders explains an interesting phenomenon on the left. In the March general elections the KKE grew by only a very small amount, a mere +0.3%. This is very low if we consider the general disillusionment among PASOK voters and the clear indication that a process of radicalisation to the left is taking place in Greece. With its ultra-left tactics on the trade union front the PAME (KKE) has alienated many potential supporters it could have won from the PASOK. What makes things worse is that the KKE while adopting ultra-left tactics in the trade union field often takes on an opportunist position on other questions. For instance in the past on some occasions it has even aligned itself with the ND against the PASOK! This failure of the KKE to pick up what the PASOK has lost has caused some questioning inside the party, especially among the youth.

In spite of this the KKE remains one of the two historical traditional mass organisation of the Greek working class. There is a long and deep rooted Communist tradition in Greece, going back to the Civil War in the 1940s and earlier to the days when the ideas of Lenin dominated the movement. For this reason the KKE, and especially its youth, the KNE, have attracted an important layer of workers and youth who want to fight against capitalism. They were heavily involved for instance in the anti-war movement in the build up to the US led intervention against Iraq. This explains why in the European elections the KKE fared somewhat better than it had done in the general elections.

As we have explained many times, the process of radicalisation of the working class will begin first in the trade unions. It is worth noting that in the period 1998-2004 the unions have undergone a certain growth, from 760,000 members to 840,000. In the next period we can expect this to continue with even bigger numbers joining the unions. This will be a new generation of young workers who want to fight and they will put the union leaders to the test.

Therefore the perspective for the labour movement over the coming period is one of a big move back to the trade unions which will unleash a struggle against the present conservative leadership. We can expect a change in the leadership in one union after another, with each successive wave of struggle.

This in its turn will have an effect inside the PASOK. At a later stage the struggle we will see inside the trade unions will be repeated inside the PASOK itself. However, this will take some time. At the moment the PASOK is not attracting the radical youth and the militant workers. It is still too early. The PASOK was in government only a few months ago, carrying out the wishes of the bosses. It is seen by many youth especially as one of their enemies. The vote for the PASOK in the European elections indicates that at least for another period we can expect the party to decline further. There is also the additional factor that in spite of everything, Papandreu still has popular support in the ranks of the PASOK and among a wide layer of its hardcore electorate as well. It will take time for all sectors of the working class to see through Papandreu.

There is a left wing in the PASOK, which is known as the "Left Initiative". It gathers around it those members of the rank and file who are opposed to privatisation and do not accept anti-working class policies. But at the same time this wing is very confused indeed. For instance they support the European Union and the setting up of a European army, but at the same time they have the tendency to fall into Greek nationalism. The truth of the matter is that this is a very soft left. The real left of the PASOK will come in the future under the hammer blows of the class struggle itself.

Apart from the PASOK and the KKE there are also smaller forces on the left. The Synaspismos is one of these. It comes from a previous split from the KKE and the coming together of smaller left forces. It also had a left wing and a right wing. The right wing split away recently and moved towards greater collaboration with the PASOK. This means that the left wing has become the majority of the party. In spite of losing its right wing – or rather thanks to this – the Synaspismos suffered no loss in public support. However, it remains true that the Synaspismos generally stands to the right of the KKE on many issues. Because it is seen as less bureaucratic, less Stalinist, by some youth it does attract a layer of young people, but it has failed to emerge as a strong mass alternative to either the KKE or the PASOK. There was also the DIKKI, which was formed a few years ago from a small split to the left of the PASOK, led by Tsovolas. Its vote had been reduced to around 1.5% and now its leader has decided to close the party down and return to his career as a lawyer. The DIKKI was a premature split, and without any real principled differences with the PASOK. It could have played a role in building the left inside the PASOK. Instead it went off on a small adventure. Furthermore, it could only have had any reasonable success if it had developed a genuinely revolutionary socialist programme, something its leaders were incapable of doing.

All these splits from the PASOK and the KKE in the past were anticipations of what is to come in the future. They reflected the mood among a smaller more advanced layer of the working class and youth that was looking for an alternative to the opportunist policies of their leadership. The problem was that the masses remained linked to the PASOK and the KKE. The masses do not break easily with their traditional organisations. They learn from events. The defeat of the PASOK is one important lesson for them. Another big lesson will come from the experience of the ND government. They will be forced to fight back against this government. In the process they will put their trade union leaders to the test.

The period we have entered in Greece is one of intense class conflict. The workers and youth will mobilise over and over again. This will open them up to the genuine ideas of Marxism. Once these ideas become the ideas of the masses no force on earth will be able to stop the Greek workers. Capitalism offers a grim future to the Greek workers. The only way out is socialism. That is what the Greek workers have been waiting for for decades. Then Karamanlis will no longer be cheering.