Leo Panitch is the Senior Scholar and Emeritus Professor of Political Science at York University. He is the author of many books, the most recent of which include UK Deutscher Memorial Prize winner The Making of Global Capitalism: The Political Economy of American Empire, In and Out of Crisis: The Global Financial Meltdown and Left Alternatives, , Renewing Socialism: Democracy, Strategy and Imagination and The End of Parliamentary Socialism: From New Left to New Labour. He is also a co-editor of the Socialist Register, whose 2017 volume, which will be released in time for the Labour Party Conference and launched in London in November, is entitled Rethinking Revolution.
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.
Amid workers protests in Greece, demanding an end to austerity, the Syriza government agreed to a deeper examination into more structural reforms. The Eurozone finance ministers made these demands to advance releasing the next installment of the 86 billion in bailout funds. Greece faces a 7.4 billion-debt repayment bill in July. The second installment of the current bailout will be used to repay that debt.
On to talk about these evolvements with me, is Leo Panitch. Leo is Professor Emeritus, and Senior Scholar, at York University in Toronto. He is co-editor of the Annual Socialist Register, the 2016 Volume of which was on, The Politics of the Right. Leo is also co-author of the U.K. Deutsche Book Prize winner, “The Making of Global Capitalism: The Political Economy of American Empire”.
Thank you so much for joining me, Leo.
LEO PANITCH: Hi, Sharmini.
SHARMINI PERIES: So, Leo, nearly seven years of austerity and bailouts have not really provided any better conditions for the people in Greece. In fact, poverty has spiked, and so what’s going on? What are the conditions on the ground that people are faced with? Let’s start there, before we get into the negotiations that are going on.
LEO PANITCH: Well, indeed, the situation remains as it’s been. In fact, although there was some optimism about growth last year — in the last quarter of 2016 — there was a slow-down. And the statistics just came out saying that there was the largest net loss in jobs in January, of any month, over these last seven years.
Some 30,000 net loss of jobs, and the jobs that have been created are part-time, etcetera. Although people, of course, conceal, in order to avoid paying taxes that are so burdensome. Whether they’re working a full week, or two days a week, etcetera. That’s nothing new in Greece. And the intent to do so, is all the greater.
But the situation is very grave. And a piece just was published in a very mainstream newspaper, Kathimerini, that is the, kind of, flagship newspaper of the country, which is very moving, in terms of the food banks serving more and more people, and people who never thought they’d have to rely on them. Deeper and deeper tranches of people are relying on food banks. So, the situation is very serious.
SHARMINI PERIES: That particular article estimated something like, 17,000 to 26,000 people, using the food banks in Athens alone, to feed them. And these numbers have been growing over the last few years.
LEO PANITCH: Yes, although that’s a low number. If that’s all it is, I’d be surprised. As more people rely on their extended families, and so on. Yeah.
SHARMINI PERIES: So, Leo, I guess the big issue is these new structural reforms that the troika wants to examine. What are these structural reforms they want to, that they want to take a look at?
LEO PANITCH: Well, what’s going on is that they’re still holding this carrot of the 86 billion euro that was agreed a year and a half ago. When Tsipras was forced to back down, after winning the referendum, saying they wouldn’t accept anymore. And essentially the Europeans said, either get out of the Eurozone — and implicitly, I think the EU — or accept a new round of cuts. And it’s indicative, both of the resistance of the government, and the frustration of the Europeans, with the — what they consider a communist government still — to accept many of the conditions.
And the very hard-nosed, monomaniacal, insistence on the part of the Europeans on sustaining austerity, a 3.5% primary surplus — that is after they pay off debt — it’s a 3.5% primary budget surplus, which you can’t conceivably do. And the IMF’s insistence that, no, austerity’s not so important, and there ought to be some debt relief, in addition to the 86 billion euros. They ought to cancel some of the debt, but their insistence, much more than the Europeans on these structural reforms, which is, that there be no return to free collective bargaining. I think that’s the most important one.
Plus, that the pension system, which often is supporting, not only pensioners, but the extended families of pensioners, be significantly reduced. It’s been the case already, mind you, that the government has reduced the size of the pension payments that people make into the pension plan, which has been a bit of a relief. But those are the kinds of games that are being played.
And to some extent it’s a matter of them not trusting the Syriza government to do what they say they would do, or the Syriza government resisting even saying that they would do these things, and the others being bloody-minded on either side.
I have to say the Germans, in particular, still are doing what they’ve done the last 35 years — what they did to the Mitterrand government in the early ’80s — which is ensure that there will be austerity, by saying, “Either you agree to this three and a half percent budgetary surplus, or we’ll break up the Eurozone.”
And any of these social democrats, indeed any of the radical socialist parties, whether it’s Pedamos, or Syriza, or Delinka(?), have no intention of, never had any intention of — as you know from the conversations we had before Syriza was elected, Sharmini — never had any intention of leaving the European Union. Nor would they have been elected, had they expressed such an intent.
SHARMINI PERIES: Okay. And Leo, let’s talk about the conflicts within the troika itself, in terms of the demands they’re making on Greece. Now, IMF has taken a position of advocating on behalf of Greece, saying that there should be a cancellation of debt, some level of it.
So, what are those divisions? How much power does the IMF have, and what kind of debt cancellation would make sense for Greece?
LEO PANITCH: Well, any debt cancellation would make sense for Greece. And there’s nothing new about this, documents that were leaked in recent weeks, which actually were originally uncovered by the speaker of the previous Syriza government, as part of her debt reassessment investigation. Which showed that way back in 2010, when the first crisis first hit the IMF, not only reports, but divisions inside its border were all around.
Look, when we see this kind of a debt load, we go for debt reduction, which does mean that some of the private banks — some of the private lenders, not the IMF itself — would take a hit. But in exchange for that, the IMF is much, much, more vociferous than anybody else, on neo-liberal reforms. On doing away with social protections, on flexibilization of the labor market, etcetera, etcetera.
So, you’re drinking poison either way, Sharmini. And the government has decided, on balance — and it’s hard to argue with this — that although they desperately need the debt relief audit, in the longer run, they want to be able to resist this kind of extreme neo-liberalism, in addition to resisting the austerity. So, as I say, you’re drinking poison either way.
SHARMINI PERIES: Now the finance ministers, and some spokespeople for the finance ministers, have indicated that there’s an end in sight. That the Greek people must be told, and convinced, that there is light at the end of the tunnel, to use their term.
What does that mean actually, and how are the Greek people going to get there?
LEO PANITCH: Look; the question is whether they will disperse this 86 billion, and if they do disperse these 86 billion euros, that will take the pressure off. And the IMF, and the Europeans, would be worried then, that this government — which is not a neo-liberal government ideologically, however much it’s been forced to cave under the thumb of these disciplinarians of financial markets — that this government would drag its heels, and not introduce as much of them as they would like. Would not restore business confidence, etcetera. So, there is a light at the end of the tunnel, should this be released.
And it was said in the Greek media today, that there’s some talk that the Europeans want to get it done by April 7th, even though no payment needs to be made, as you said, until July. And the reason for that is, they don’t want another Greek drama, hanging over these very, very important elections that are taking place in Europe this year.
First, the French election in April and May, and then the German election, in the fall, they don’t need a Greek drama hanging over this. Especially with Marine Le Pen saying that she wants to get out of the European Union, the thing can’t hold together, etcetera, etcetera. And there’s some fear, I think, you know, there’s some hope on Syriza’s part, probably naive hope, that Schulz, the new leader of the German Social Democrats, who has, you know, shot the Social Democrats up in the polls, since he has been nominated as the new chancellor candidate. There’s hope on their part that there would be a softening of the German position, in a German election.
So it’s, I think, not unlikely, that in fact, that disbursement is going to take place. It may involve a lot of toing and froing, and the IMF claiming that what they wanted is going to be done. The Germans claiming what they wanted is going to be done. The Greek government claiming what they wanted is going to be done. The New Democrats in Greece, and we need to talk about where the political situation is. Of course, screaming that nothing’s been done, or things are getting worse, and we want an immediate election.
And they’ve been doing everything they can, to complicate the life of the government, in every respect. So, I think it’s not impossible that a deal is going to be done, and everybody will claim victory.
SHARMINI PERIES: And what’s happening in Syriza itself. Now Alexis Tsipras has come out and said that he will not accept one euro, in terms of more austerity. But how is all of this transpiring within Syriza?
LEO PANITCH: Well, that phrase of Tsipras’, comes from a central committee meeting of the party that was held two weeks ago. Where a statement was released with that exact phrase. “We will not accept one more euro.” So, what Tsipras has announced, not only Tsipras, the government, is that if they do have to make commitments, long term commitments, going all the way to 2019 and after, on cuts on pensions, that they would compensate for that, by changes in the tax system.
So, that no one would be paying. There wouldn’t be an additional euro of austerity. And that is reflecting exactly what the central committee demanded. Mind you, Tsipras didn’t allow a central committee meeting to be called for the last five months, until this one was called. And this one was called, no doubt, in order to show the Europeans that he’s under pressure from the party. And he is under some pressure, although by no means enough.
And there is some sense, you know, the polls are showing, the latest three polls in the last week, are showing that Syrizas is again back up, at over 20%, two of the three polls show that. They were down at around at 18. And although New Democracy is well over 30%, you know, generally about 25 to 30% of people say they’re undecided. And those people who are undecided are, for the most part, not supporters of new democracy. And you hear more and more, that people are fed up with the European Union. And there is some pressure from inside the party for a new strategy, on the part of the leadership, Tsiperas leadership. How strong that is, is unclear.
My position, and we’ve talked about it often, Sharmini, is that the government could do very little, given the enormous discipline of the European Union. Given its own lack of interest in leaving the European Union, and given the lack of popular support for leaving the European Union, even if people are prepared to support the government in resisting it. What you would hope, from the party, would have been that it would continue to be a party of education, and mobilization, and radicalization, of the population. The kind of creation of alternative forms of production, and consumption, at regional, local levels.
And of course, waiting for a shift in the balance of forces internationally, that might give them some room to maneuver. For the most part, the real tragedy of Greece, is that that has not happened, in the party. And if there’s going to be a sad obituary written for the radical left, in the face of the rise of the right, and the ramping up of neo-liberalism, it’s going to be that not only Syriza, but also Pademos, and the Sanders’ wing of the Democratic Party, and the Corbyn wing of the Labour Party, are not going to be able to do what they are promising, in terms of demobilization of socialist capacities.
And that’s been the real tragedy of the Greek situation, that the party has not been able to do what it should have been doing, what the government was forced to do, what it could avoid doing, given it wouldn’t leave the European Union. And that relates to the fact that the Greek situation, the people situation, would have been worse, these last two or three years, had they left.
If the European Union breaks up, with the election of Le Pen, for instance, what good would have that sacrifice done, had they chosen to leave? So, it would have been a terrible sacrifice. Because they don’t have oil, the drachma would have been devalued, they would have needed import controls, and that’s not to say it might have been worth it. I’m no aficionado of the European Union, but the amount of sacrifice for being driven out of the global economy, would have been much worse.
SHARMINI PERIES: And, Leo, finally, do you think the sentiments of the Greek people, given that there’s more unemployment, more sacrifices being made, more austerity, that there’s been a shift in terms of their mindset on the Grexit?
LEO PANITCH: I doubt it. I don’t see a lot of evidence for this, unfortunately. Were that the case, you wouldn’t see so many people undecided, and you would see some support for that wing of Syriza, that was pushing this, and went off to form a new party called LAE, and they are at 2%, at best, in the opinion polls. And that’s their one position. So no, I’m afraid that’s not the case.
There’s also a right-wing version of getting out of the European Union, a neo-fascist version, which is the real danger, and that’s Golden Dawn, in Greece. And they are not making a breakthrough either. Thank heaven. And that does still speak to the extent to which one has to look, with admiration on the Greek people who, while they haven’t been keen to leave the European Union, certainly want a European Union that is not neo-liberal and egalitarian, in the great majority.
But they will not turn to the neo-fascist option, and that’s very important in the context of the rise of the New Right.
SHARMINI PERIES: All right, Leo. We’ll be back to you shortly, I think, in the next couple of weeks as this new team arrives in Athens. And they’re going to be looking at deeper structural reforms for Greece. We hope to have you back then. Thank you for today.
LEO PANITCH: Well, we’ve been doing this a long time, Sharmini. Be good to say finally, we’ve got to stop meeting this way.
SHARMINI PERIES: That’s right. (laughing) Thank you so much, Leo.
LEO PANITCH: So long.
SHARMINI PERIES: And thank you for joining us here on The Real News Network.