I. Presentation of the Economic Program of SYRIZA-EKM
Comrades and Friends,
Alexis Tsipras, the president of the SYRIZA Parliamentary Group already presented a large part of our economic program and primarily the rationale of the program. That allows me to focus on a few specific points. Listening to Mr. Samaras yesterday, and also on other occasions, reading out long lists of measures, I feel the need to explain what we mean when we talk about a program.
The Program and Our Values
1. The program, for us, goes beyond mere slogans and measures, although we know that these are necessary as well. For us program means a set of values, principles, straight-out orientations and diligent positions. Our program is based on the values of solidarity, justice, freedom, equality and environmental responsibility. Based on these values we will manage, if necessary, even the most mundane tasks.
2. Program, for us, also means a way of thinking, a way of analyzing, understanding the problem, and ranking priorities and needs. And for us, it is the needs of the people that are over and above profits and all selfish or partial interests.
3. For us program means a continuous dialogue. A scientific dialogue, a social dialogue, and a political dialogue. A dialogue with the social movements, a dialogue with the citizens. We want to shape our program together, through such a continuous dialogue.
4. Program for us also means a process for the formation of social alliances. The building of consensus from below. Unifying the people is also an issue of the program. Our program then is the foundation, the blueprint of a broad social alliance among the working people, the people of knowledge, the people of culture and the youth. It is a social alliance to ward off any further impoverishment of society. To avert any further decomposition of the productive fabric of our society. To find the way toward recovery and hope.
5. It is in this sense, that the program for us is a continuous process. It is not a static and timeless text. It is a ceaseless endeavor, open to new ideas and innovative actions.
6. Finally, when we say program, we mean a political process. A process of not simply managing the current conjuncture, but of opening up new paths and this is exactly what our program does. It attempts to cut new paths. It attempts to preclude new dangers. It attempts to face up and to make use of the possibilities.
The second point I would like to refer to, is the political goals of our economic program. As it has been mentioned already, it is not our choice to exit the Euro, but neither can we consent to the continuation of policies that offer no guarantee for the survival of our society and our country. SYRIZA proposes to the Greek people, and also to the people of Europe, the only pragmatic option that consists of a new, honest, and binding agreement with the institutions and the people of Europe, one that will allow us to achieve three goals.
The first is to relieve the people who are suffering, the victims of this crisis. The second is stabilization and recovery. And the third is the implementation of a program of radical reforms and transformations, through which an effective reintegration of our country to the European future and to the international division of labour.
How will we achieve these three goals?
The first goal we will achieve with specific measures that are directly applicable and effective. With these measures we will attempt to ease the pain – to put it this way – of those who have suffered so much from the crisis and the policies of the Memoranda. Such measures are laid out in our program.
Our second goal concerns recovery and stabilization. It is of vital importance and a requirement for the implementation of the other measures. We cannot proceed with serious reforms in an environment of social and economic breakdown. We aim at achieving recovery and stability by freezing the measures that involve further reductions in wages and social expenditures, by halting the violent re-distribution of income against the weakest. This we will achieve by implementing a set of measures aimed at the recovery of investments, public investments in principle but also of all other forms of investment, and at boosting employment, with a new fiscal framework for a just and sustainable reduction of deficits.
As far as our third goal is concerned, that is the restraint of insecurity and the resurgence of hope and perspective for our society as a whole: we shall pursue this target by restoring the sovereign right of the Greek people to choose their own destiny. From the Memoranda we take note of the problems. Yes, we have an issue of fiscal deficit, yes, we have a problem with our balance of payments; yes, we have a problem with corruption – but we need not the Memoranda to know this. Yes, we have problems in the management and running of the state. The solutions, the goals, the pace, and the measures must and will be chosen by the Greek people. By replacing the Memorandum with a plan for the recovery of society, the reconstruction of the economy and an equitable adjustment. With the adjustment of the debt and the terms of the future financing for the development of the economy.
Why a New Type of Reforms and Transformations
The third point I would like to refer to is, ‘why reforms.’ To be sure, we refer to reforms in a completely different context. I listened to Mr. Samaras talking about measures and more measures. Of course measures are necessary. But in this country, the first presidential decree for the establishment of a land registry was issued in 1831 by I. Kapodistrias, the first governor of the country. Even today we lack a complete land registry.
The first announcement for setting up a wealth registry was made by PM Charilaos Trikoupis in 1893. Still, in 2012, we do not have a complete and comprehensive wealth registry.
The first serious attempt to reform public administration was made by Eleftherios Venizelos. Even today we are still living with the halfhearted measures that were finally adopted then.
The first serious discussions about fundamentally reforming the tax regime were launched in 1955 by Varvaressos, a bourgeois economist. The reforms he proposed have yet to be implemented.
So when are we actually going to do all this? If not now, when? And who will implement all this, if not a government of the Left?
The second reason is that the crisis in which we are living is not merely an administrative crisis, but a crisis of the system itself. Consequently, safeguarding the interests of the working people and guaranteeing the rights of the working people, cannot be done by simply conserving or restoring the collapsing old system. This will be done on the basis of a new model of development, a new social model, a new labour model and this is the goal of the reforms we are proposing.
The third is that the crisis has taken the form of a crisis of de-legitimization of politics, as a result of the vicious two-party system and of the harsh and inequitable policies. The crisis has also taken the form of a crisis of trust toward institutions, the parliament, political parties and trade unions. Therefore, it is only through new institutions, democratic institutions of social control, institutions of direct democracy that we can regain the trust of the people in a new plan that will restore hope.
The Momentum of Our Program
I would like to close with one last question: On what does the momentum and the outcome of our program depend? First, it surely depends on ourselves. On the pace and ability that we will manifest through an abrupt maturing to become the political subject of collective and solidarist responsibility that will bring together the wider forces which can implement this plan.
Second, it depends on our society. The ability of society to overcome fear, the ability of each and everyone to turn to a positive perspective, to shape a new relation with politics beyond the logic of ‘contracting’ and of clientelist relations.
The third factor will be developments in Europe. From the outset we have stated that our program and our struggle is at the same time both national and European. From the outset we said that we want to change the blueprint. Both for Greece and for Europe. And that is why our victory on the 17th of June will be a boost for positive changes for the people across Europe. And the path Europe will follow, will in turn influence our endeavor.
Fourth, the momentum of our program will depend on the positions that the other powers outside the Europe Union, Russia, China, the Arab world, Latin America, and countries and people with whom we will strive to create coequal relations. Consequently the momentum of our program will depend on their stance as well.
However, the primary and lead role in this contract of hope that our program represents, lies with us, the Left, and society itself. The responsibility to fulfill it until the end lies with us. It is up to us to turn this realistic utopia that history has presented us with, into reality.
It is up to us to fabricate a spring in this heavy winter of crisis. To put an end to the middle ages, toward which neoliberalism is driving us. To proclaim the end of destruction for a renaissance to begin both here and in Europe. The stakes are high, but it is worth fighting this battle and winning it as a people and as a society.
There is a Way Out!
II. Synopsis of the Economic Program of SYRIZA-EKM
A. The policies of the Memoranda and of ‘internal devaluation’ have proved devastating.
- Two years after the adoption of the policies of the Memorandum and of the policy of ‘internal devaluation,’ not only has recession not given way to growth as the “Memorandum 1” prefigured, but it is out of control and the economy has shrunken 20 per cent in total.
- Not only did the Public Debt become unsustainable, in contrast to what the “Memorandum 1” prefigured, but even after ‘the haircut’ it remains out of control.
- Unemployment is at unprecedented levels for a period of peace, at a rate of 23 per cent of the overall population and 50 per cent of the youth. The standard of living of a large part of society has collapsed, with poverty increasing to a threatening dimension.
- Not only are the long-term structural problems of the Greek economy unsolved, but they are becoming entangled in a vicious cycle and a perpetual deadlock.
B. Repositioning: Basic directions of our plan.
The Memorandum as a ‘remedy’ has proved more devastating than the crisis itself. The policies of the Memoranda built around the ‘internal devaluation,’ have been proved a weapon of social mass destruction. A lethal experiment conducted on the Greek people, which must be halted now, before the devastation becomes irreversible.
We need to put an end to these destructive policies. The vital question, however is, in what way and in which direction will we move?
We maintain that the reasons for the failure, lie at the very core of the initial drafting, in the erroneous diagnosis and ranking of the causes of the crisis. That is why prolonging the same policies will not be adequate. What is necessary is a new diagnosis, a restating of the problem, an entirely new orientation, at the very opposite of the neoliberal paradigm that domestic and international interests attempted to impose on us.
We clearly put forth the new directions that comprise our alternative plan, directions that lie at the very opposite of the devastating Memoranda:
- We reject the theory of the ‘collective guilt’ of the Greek people for the policies implemented by Greek and European governments. We reject perceptions that deliberately conceal the responsibilities of the policies applied and the interests that benefited from these. It is not the ‘genetic makeup’ of the Greek people that is responsible for the fact that we do not have a decent taxation system or an effective social state. Specific policies and interests are responsible for that. It is precisely those policies which must be overturned.
- The crisis in Greece does not constitute a ‘national peculiarity,’ but is part of a broader European crisis, with both endogenous and external causes. It is only within a framework of a common European solution that the particular and existing problems of Greece can be dealt with.
- Fiscal consolidation and sustainable public debt cannot be achieved in an environment of austerity. It is only under conditions of economic recovery that the necessary reforms can be attempted and sustainable solutions found.
- Development presupposes environmental reform, developmental re-distribution, and the fighting-off of poverty, unemployment and social inequalities as components of its content.
- The ‘structural adjustments’ of neoliberal persuasion do not solve social problems, they simply re-distribute assets and rights to the detriment of the weak. Exit from the crisis requires overthrows, a new type of structural changes, radical reforms and restructuring of the state, the economy and the political system, such that will tackle the roots of the problems, reduce inequalities and release idle resources within society, opening new paths and prospects.
Yet no real reforms can be implemented in an environment of economic disintegration, constant blackmail, the curtailment of democracy and the imposition of collective guilt on society.
So here is what is in fact at stake in the next elections: Will the same destructive policy be followed under the pressure of blackmail and the terrorizing of society, or will we follow a path of pragmatic hope, making a leap forward, as SYRIZA proposes with its alternative plan?
C. Goals of our alternative plan.
SYRIZA does not consider an exit from the Euro as one of its options, but neither can it consent to the continuation of the same destructive policies, even with minor adjustments and prolongations, as PASOK and ND have of late been proposing, since these options are not able to support any prospect of survival.
Consequently SYRIZA proposes to the Greek people and to the people of Europe the only viable way out of the crisis, which is a new, honest and binding agreement with the people and the institutions of the EU, one that will permit Greece to implement a plan of radical reforms and transformations in the following directions:
- Avert even more massive impoverishment of large sections of the working-class and the middle classes.
- Avert even greater destruction of the productive fabric.
- Put an immediate end to the forceful reallocation of resources against salaries and social provisions.
- The direct implementation of an alternative set of policies for the relief of the working people and the recovery of society.
- The implementation of a new policy framework for a just and sustainable fiscal stabilization.
- The development of a new paradigm of social, environmental and economic development.
- The substantial ‘reintegration’ of Greece in European developments, in a reliable fashion and based upon terms of mutual respect, equality and dignity.
The collapsing two-party system is handing down empty coffers, a collapsing economy and a fragmented society. Two thirds of the population are living in great insecurity, whilst only a small section of society is prospering. The lower end of society, which is constantly growing and already exceeds 40 per cent of the population, comprises of the victims of this crisis and the policies of the Memoranda. It is the unemployed, those receiving minimal incomes and pensions, bankrupt households, insolvent professionals and small business holders. The social stratum directly above this is still surviving financially, but lives in depressing insecurity. It is comprised of the middle strata of people receiving relatively high wages, professionals and small business holders. They can still make ends meet, but will not be able to do so for much longer if the same policies are continued. The entire society is trapped in a dead-end, with no prospects in sight.
In view of this dire and dangerous social reality, the three immediate political goals of our program are: first, the immediate material relief of the victims of the crisis and the policies of the Memoranda; second, the aversion of an even more massive and deep economic catastrophe, by directly stabilizing the economy; and third, to restrain the generalized insecurity, to revive hope and create new visible prospects.
As far as the immediate material relief of those living close to or below the poverty level, priority will be given to making use of all available means and resources to meet this goal, with interventions concerning their incomes, taxation, credit policy, access to public resources and support to forms of economic solidarity (see specific measures in the Annex below).
Concerning the goal of recovery, this will be pursued in the following ways:
- The freezing of all measures that concern reductions in wages and social expenditure, the forceful re-distribution of income to the detriment of the weak, and all other measures deepening the recession.
- Through an array of measures aimed at the recovery of the economy, public investment, employment and incomes, from the bottom up.
Concerning our third target, namely the reduction of insecurity and the rebirth of hope and prospects, we will pursue this on the basis of a plan, which includes:
- Re-instating the fundamental right of the Greek people to determine their own future.
- The replacement of the Memoranda with a new plan for social recovery, economic reconstruction and just fiscal stabilization.
- Adjust the accumulated debt and the conditions for future funding of development, by writing off a large portion of the accumulated debt, with provisions for servicing of the remaining debt to be linked to the rate of development, and suspensions of payments on the interest until the economy rebounds. This adjustment will be pursued within the framework of a common European solution for the public debt of all EU countries, and in the event that this does not prove feasible, on the basis of bilateral negotiations.
- The implementation of a program of radical reforms and transformations of the state, public administration and the economy, aiming to create a new, sustainable, just and ecologically sound paradigm of development.
As far as the vital issue of fiscal policy is concerned, we commit to follow a program of pragmatic and socially just fiscal stabilization. The structure of this program consists on the one hand of stabilizing public expenditure at a level of approximately 44 per cent of GDP and a reorientation of this expenditure on the basis of social and economic effectiveness, and on the other hand of increasing public revenues, which are currently substantially below the Eurozone average (41% of GDP vs 45% of GDP), by taxing wealth and high incomes. The target is to increase revenues from direct taxation to the average European levels (+4% of GDP) over a four-year period (+1% of GDP per annum), through a drastic reform of the tax regime, so as to identify the wealth and income of all citizens, and to equitably distribute the burden of taxation. Our broader target is to restore the essential role of the state budget, from being a mechanism for transactions between the ruling political and economic groups, to being a tool for income re-distribution, re-distribution of productive assets and a tool of macroeconomic policy (see Annex below).
D. The method: a program of radical reforms and transformations of the state and the political system, with society at the forefront.
The reversal of the descent toward degradation and marginalization cannot be achieved without the implementation of a radical program of reforms and transformations of the state, the political system and the entire ‘body’ of the Greek social formation.
First, because the crisis we are living through is a crisis of the system itself, rather than simply a management crisis of the system. Everything must change: the political system, the state, the relation of the citizen with the state and with politics. Consequently, the way out cannot be found in a return to some version of the past. The way out lies in opening up new paths to new productive and consumption paradigms, to new forms of real democracy, to new social arrangements based on equality and solidarity, the respect of human dignity and the environment.
Second, because important reforms, such as in the tax regime, public administration and the redrawing of the relations of the state with the church, all constitute pending issues from the past, even the distant past. These pending issues of our collective historical life, have become pressing necessities and conditions for survival, and urgent preconditions to avert a catastrophe.
Third, because the administration of the country by a corrupt two-party system over so many years, the chronic inequalities and injustices, and finally the destructive austerity of the last years, have delegitimized and destroyed any sense of trust in the institutions, the parliament, the political parties, the trade union organizations of this country and even in the constitution itself. So it is necessary to form new democratic institutions and reform existing ones, so that they can inspire trust.
The reforms and adjustments we are proposing here, constitute a permanent component of the entire program, they constitute long term changes. But they must, and can, commence immediately. And very soon they can bare their first fruits.
The reforms we are proposing can be separated into three main categories. The first (taxation, wealth registry) has as its target the increase in public revenues. The second refers to reforms (public administration etc.) which relate to the productivity of assets. The third category concerns reforms and transformations which in tangent with the previous ones, aim at increasing the wealth produced, at reinforcing society and the economy.
(i) The wealth registry
The constitution stipulates that Greek citizens have equal rights and obligations (article 4, paragraph 2), and that ‘…they contribute without discrimination to the public burdens, according to their ability’ (article 1, paragraph 5). This constitutional provision has been shredded by the corrupt two-party regime, with institutionalized de facto tax reliefs for the powerful and widespread tax evasion.
The wealth registry will record the wealth of all Greek citizens, both in Greece and abroad, in all its forms as fixed or movable assets. That will allow for the establishment of a single basic tax, upon which provisions for tax reductions or surcharges can be applied, with special diligence observed in all occasions, to avoid double taxing.
The wealth registry will mark the starting point of an entirely new tax regime, one that is just, simple and effective. Once fully developed, it will allow for the substantial tax relief of those receiving minimal wages, low pensions, small property owners and small holders of shares and bonds, while simultaneously allowing for an increase in the total revenues of the state.
(ii) Tackling the ‘black economy’ as a ‘structural problem’
The so called ‘black economy’ is not the result of ‘low tax conscience.’ It is primarily the result of a perverse reaction to the problem of competition from large companies and monopolistic formations faced by small businesses and the professions, and of the absence of a state policy to tackle such issues.
Evading taxes and national insurance contributions substitutes comparative advantages, and ensures the survival and in certain cases the unwarranted accumulation of wealth.
Consequently the ‘black economy’ can be tackled with revenue and taxation measures, as well as sectoral policies and programmatic agreements, in a rubric of targeted productive reconstruction and policies to face cartels and unfair competition. Within the framework of such agreements, mutual commitments will be made, both by the state and by the bodies representing specific sectors.
(iii) Re-examination of all the special tax regimes and creation of a modern tax revenue system
The complete re-examination of all the special tax regimes established after WWII, constitutes the second element of the tax system reform. These special tax regimes have rendered the tax system replete with loopholes and ineffectiveness, and for this reason they must be repealed within the framework of creating a single universal tax regime.
The complete restructuring of the tax revenue system, with extensive application and rational utilization of information technology, the adoption of groundbreaking measures to tackle tax evasion and the creation of Research Centres for issues pertaining to tax policy and fighting tax evasion and especially internationalized tax evasion,
(iv) Public admi