Syriza, The EU Institutions & Struggle For Democracy

On the night of June 26th, following several days of dead end negotiations with EU creditors, the Greek Prime Minister Alexis Tsipras convened an emergency cabinet meeting of the SYRIZA lead governing coalition and announced in the early hours of June 27th, that the Greek government would not cave in to blackmail and ultimatums.  In fact, what prompted the emergency meeting was that the Greek government was offered a final take it or leave it proposal authored mostly by the IMF.  The deal that was offered completely reneged the little progress that had been made up to that point with major concessions from the Greek side and instead called for even worse austerity measures than what was asked of the previous  pro-austerity government that was tossed out of office on January 25, 2015.  The Greek government said that it could not sign such an absurd proposal that would destroy an economy already in shambles and a society facing a humanitarian disaster.  Yet, given that its mandate was to reach a deal with the creditors and not a rupture, it said that it would give the final say to the people that have not been heard in the last 5 years of economic neoliberal barbarity:  the Greek population. To the shock of the EU and Greek establishments, Alexis Tsipras announced that he would put the final proposal to a referendum on July 5, 2015.

A defiant Tsipras asked that Greeks vote in accordance with their history, their sacrifices, their struggles and their democratic values, i.e. NO!

The Greek mainstream media that has been terrorizing Greeks into submission and fear in the years of the crisis went into overdrive and Greeks queued up at ATMs drawing as much money as they could.

The Finance Minister, Yannis Varoufakis requested from the Eurozone partners and the Troika or Institutions (IMF, ECB and EU commission) that the current bailout program be extended beyond its June 30th deadline in order to provide cash flow to the Greek banking system leading up to the July 5, 2015 referendum, thereby allowing Greeks to vote in peace.  The EU partners refused and met behind closed doors without Greece.

Fearing a bank run and a collapse of the Greek banking system, an angered Tsipras went back on television claiming that these were still tactics to bend the Greek people so that they continue swallowing more austerity against their will.  He announced that the government would place capital controls and keep banks closed until the referendum calling for calm, unity and in a direct jab against the mainstream media, he quoted FDR’s “the only thing we have to fear is fear itself”.

The pro-austerity opposition, dubbed by SYRIZA as the “Internal Troika”, namely New Democracy (conservative), To Potami meaning The River (liberal), and PASOK (social-democrat) claimed that the referendum was actually on whether or not Greece should remain in the Euro.  The leader of To Potami (a former media personality suspected to be backed by his “former” bosses), went as far as asking Tsipras to a debate on the Euro vs. the Drachma, a cynical move to create a strawman dilemma given SYRIZA’S repeated support of staying within the Euro and the Eurozone.  In fact, membership is not on the table, as there is no clear process to actually kick a member out of the Euro.  The fear tactics of the Internal Troika were taken up by other European leaders.  When pressed to respond to why European leaders are now claiming that a No vote is a No to Europe, Tsipras responded that other European leaders are going to have to explain themselves to their electorate if Greece’ anti-austerity stance is in any way triumphant.

A Greek victory, however minor, against EU imposed austerity will shake a European establishment to its core.  As such, Greeks are being openly threated with a Grexit.  SYRIZA cadres are busy explaining that a Grexit also has dire consequences for the stability of the Euro and the European banking and financial system, and such scenarios are unpredictable and uncontrolable.  Moreover, Greece’s geostrategic position is not insignificant.  Washington would not want a situation in which it eventually lost Athens to Moscow.

Nevertheless, the threat of a Grexit has been used in the last 5 years to terrify Greeks into submission.  This threat is repeated by the Internal Troika and the Mainstream Media on an almost daily basis and now has been taken up by EU leaders actively campaigning for the Yes side.

But how did things get here and so quickly after a promising Eurozone meeting on the previous Thursday, where a mutually agreed upon deal was imminent?

Greeks, after 5 years of worsening austerity, poverty, unemployment and suicides without any hope of getting out of the crisis finally had enough and voted for the anti-austerity Coalition of the Radical Left (SYRIZA). In the 5 months since being elected, the Left wing Greek government has been making reasonable yet non-recessionary proposals to the EU creditors in order to get a viable deal so that badly needed funds, which have been due to Greece since last year, be released.  It has also argued that its debt is unsustainable and some sort of write down using a variety of possible technical methods should be made.  During this time, it has not reversed the austerity measures imposed by the last government and has continued making its payments to the creditors.  This government, and the society it was elected by, has been under financial asphyxiation.  Yet, it did not bend; it maintained its red lines of no new cuts to social spending, pensions, salaries or additional regressive taxes.  After weekly pronouncements of Greek default and Eurozone expulsions, Greek Prime Minister Alexis Tsipras sent on June 21st, 2015 a watered down proposal to the EU creditors that was considered a major compromise.

In fact, the proposal still did not contain cuts in social spending but rather distributive tax increases.  Varoufakis had argued that given that the Greek economy had shrunk by one-fourth, what was now needed were expansionary investments and policies to get the economy towards growth. In essence, tax overhaul and social investments that would increase demand and produce jobs for a society, where the majority is now at or under the poverty line, where almost 60% of young people are unemployed and where another 200,000 young people have lost hope and simply left.

The Greek side, facing an intransigent technocracy and in order to avoid a crisis went as far as it could with a difficult proposal it was admittedly not happy to put forward but that it preferred to the immediate alternatives.  The EU creditors maintained their position regarding budgetary surpluses, yet this was negotiated down to 1% of GDP rather than the 3+% originally demanded by the Institutions.  The Greek authorities showed that they could raise 8 billion Euros with a variety of tax increases on corporate profits, higher incomes, gaming and luxury items.

The Tsipras proposal was going to be a hard sell at home; many SYRIZA parliamentary deputies were openly criticizing the major departure of the proposal from the Thessaloniki Program which the party ran on, which was actually a mildly Keynesian program that moderate European social democrats and even traditional Christian democrats should have applauded.

With a Greek offer including many concessions now on the table, it seemed that it was all but done; only the signatures on the dotted line were missing.

Not so fast.

After initial glee and relief across Europe but especially in tortured Greece at the Tsipras proposal, the imminent deal was torpedoed by the IMF.  The IMF came back with the same demands in pension cuts, layoffs, social spending cuts, but also requested that the moderate tax increases on higher incomes be scrapped.  There was no discussion on the viability of the Tsipras plan. The IMF simply reversed the policy from a distributive proposal to one that had more punitive tax measures and cuts for an already impoverished population.  In short, more austerity as if the January 25th election never took place.

The Greek side showed that it can meet the financial demands of the lenders but by using other means.  The lenders were not just interested in the results, they were very interested in the means as well.  Yet, what business is it of the creditors which method a supposedly sovereign state meets its obligations with, it’s the results that should count right?  Yes, if it was about economics, but it’s not.  It’s about politics, class politics. Europe is essentially governed by an unaccountable technocracy supported by the converging interests of financial institutions, oligarchs and state planners from the larger European economies.  The European technocracy wants to impose a single neoliberal model on the European continent effectively neutralizing elections.

And so Tsipras was summoned back to Brussels, to be offered what he called an absurd proposal.  He stated that either the creditors don’t want an agreement or they are serving special interests in Greece.  He was kind; they are serving special interests in Europe. He later admitted that the EU partners have simply wanted this government to capitulate, accept austerity or simply collapse and be replaced by a new more obedient administration.  Greeks had elected the wrong party and an example needs to be made before Spain gets infected and elects PODEMOS and then others will follow.

Democracy is a threat to the European technocratic order.

Therefore, the IMF and its partners in the European establishment wanting to crush the SYRIZA government, offered it an impossible agreement.

During the long negotiations, Varoufakis had been continuously ridiculed in the media, in an attempt to undermine his efforts.  The media kept on focusing on stories of resigations of ministers, or splits within SYRIZA, which time and time again turned out to be unfounded,

As Greek ministers and officials were negotiating, the Internal Troika were also in Brussels making plans with the creditors and undermining the Radical Left government.  In fact, former PM and New Democracy leader, Antonis Samaras openly asked (as the Greek government was in heated negotiations) for the formation of a new government without Tsipras as PM, but of a broad pro-European axis in parliament, namely the Internal Troika and as many turncoat SYRIZA MPs they can muster for a majority.  The leader of To Potami was also in talks with President of the European Parliament, Martin Shulz, who made it no secret that he wanted To Potami to be a part of the current Greek government.

The SYRIZA lead coalition has been sandwiched between an extremely hostile EU establishment that is in cahoots with an equally hostile pro-establishment opposition at home. It this was not hard enough, it is also trying to govern a state with long entrenched bureaucracy whose loyalties lie with old political system it was elected to challenge.

In the eyes of the EU centers of power and the Greek establishment, SYRIZA has committed many unpardonable crimes, it has challenged a neoliberal economic order, it has called for building a new European Union in which institutions of European governance are taken out of the hands of technocrats and placed in the hands of European peoples.  Moreover, it had the audacity of auditing the Greek debt and proving that 90% of it is odious, illegal and unsustainable.  The debt truth commission presided by the fiery speaker of the Greek parliament, Zoe Konstantopoulou has exposed how various European and Greek politicians and bankers broke EU rules as well as the Greek constitution to save German and French banks as well as to enrich European industrialists with a variety of public expenditures.  This was what the bailout agreements were all about.  European taxpayers were forced to lend money to the Greek state so that this money flows back into European banks, deepening the black hole of Greek debt and imposing deeper and deeper recessionary measures on the Greek people.

Thus, the Greek negotiators did not want any new loans, the idea was to get out of the loan-debt spiral, have the tranches of bank bailout money released into the Greek banking system thus buying time to negotiate the elephant in the room, the unsaistanable, illegal and odious debt.

SYRIZA has embarrassed a very powerful establishment.  It must be punished before other “syrizas” are elected.  SYRIZA has made no secret that it wants to spearhead a European revolution. It does not want to leave Europe it wants to change it.  The European establishment has taken this threat seriously and has in essence, frustrated any possibility of a signable deal and finally offered an ultimatum with the president of the the European council, Donald Tusk arrogantly telling Tsipras it’s “Game Over”.  Tsipras balked back that unemployment, poverty, and suicides are not a game, a foreign concept to the technocrats who called for still more austerity and a 48 hour take it or leave it deadline.

Tsipras left the “negotiating” table, met with his government ministers and called a referendum.

The word “ultimatum” (telesigrafo in Greek) has deep historical significance for Greeks as it is equated with Mussolini’s ultimatum of unconditional surrender or war, which was according to the national historical narrative was answered on October 28, 1940 with a single word: “NO!”.  The Greeks beat the Italian Fascist invasion but were subsequently defeated when the Wehrmacht came to Mussolini’s rescue.  During the Axis occupation, a large resistance movement was organized, the National Liberation Front or EAM and included a military wing, the National Peoples’ Liberation Army or ELAS.  Even though EAM was built around the Communist Party of Greece (KKE), it was much broader than the KKE; it was in fact a convergence of all left wing and democratic forces in Greece.   EAM grew rapidly and became the largest political organization in Modern Greek history.

EAM not only fought to liberate the country from the foreign occupiers and the scourge of Fascism and Nazism, but it also did not want the return of the discredited Greek Establishment and Monarchy who were simply vassals of the Great European Powers.  EAM was a movement of the popular strata i.e. workers, peasants, shepherds, artisans etc. and its goal was the establishment of a new political and economic system called Laokratia, or people’s rule.  In fact, in the territories (known as Free Greece) that EAM-ELAS managed to liberate from Hitler, an early stage of Laokratia was already taking shape with village assemblies, elected councils and judiciaries as well as cooperative forms of economic organization.

Even though EAM eventually defeated the NAZIs, the British and the American forces, re-installed the old Greek establishment and with the enthusiastic aid of the collaborationists hunted down Leftists in what became the Greek Civil War.  The death of 167,000 Greeks and the imprisonment and torture of tens of thousands in island concentration camps convinced the population to remove the term Laokratia from collective discourse if not memory.

The shadow of EAM stands over the entire Greek Left and SYRIZA is no exception.

Greece is again at war against a neoliberal anti-democratic economic agenda, masquerading as a bailout program.

So what next?

The SYRIZA and ANEL (Independent Greeks Party) government has said that a massive No vote by the people on July 5th would be a huge negotiating weapon for the Greek side.  They may be right, as a Grexit can spiral out of control.  Yet, the creditors have a lot to lose by backtracking, they would be showing the first signs of weakness of the European technocratic and neoliberal order, and they face the threat of PODEMOS in Spain in December and who knows what in 2016.  This is why they desperately want SYRIZA to lose this referendum.  This is why the ECB has substantially cut off liquidity to Greek banks and is even hinting of a complete bank collapse and this is why EU leaders are equating a No vote to an imminent Grexit. On both accounts, Varoufakis has threatened to take a court action against the EU institutions at the European Court of Justice.

A massive No demonstration has been held, but many Greeks are nervous about the safety of their bank accounts.  It is on these fears that the European and Greek establishments are betting on.  It is these fears that SYRIZA must overcome.

SYRIZA’s long term program (not recent electoral platform) calls for the eventual socialization of the banking system.  Unlike mere nationalization, socialization calls for direct citizen involvement within nationalized institutions.  There are calls within the left flanks of SYRIZA to move on this immediately.  Such a move may be provocation against the EU establishment, but it may be a way to offset a further attack.  Since, the current bailout program ends on June 30th, and Greece will not pay the IMF its next payment also due on June 30th, there is a strong chance that the Greek banking system might fall under the supervision of the European Financial Stability Facility (EFSF), hence, bringing Greece’s banking system under the creditors’ control.  Moreover, the ECB can completely cut off the tap to Greek banks, collapsing the entire banking system and seizing the holdings of Greeks.  This of course, is another desperate move that can send a tidal wave of dire eventualities within the whole European banking system prompting a major crisis.  Nevertheless, the Greek government should be prepared to save the holdings of its citizens by immediately nationalizing the banking sector if any such moves are contemplated.

Nationalization would not solve the liquidity issue but it will protect the deposits already there.  Greece cannot return to the markets and it will not be under the protection of EU programs. Only the Greek state would be able to protect the banking system and protect the savings of its citizens in Euros.   In such a turn of events, severe capital controls would have to continue and new sources of cash flow would need to be found. These new sources would not be able to provide the cash flow of the ECB but would be able to relax capital controls.  Greece would be in for a long and difficult period but it would also be an opportunity to quickly re-appropriate the assets, building, land trusts and mortgages of the public banks it privatized during the last years of austerity.  Of course, in this case, it would immediately default on the debt and stop making any more loan payments.  Hence, the moneys it collected from the economy could go straight into growth programs.  Without substantial cash flow, such programs would not be able to have much impact and the Greek state would be forced to print a temporary alternative currency artificially pegged to the Euro that Greeks would be able to cash in at some point in the future.  In tandem, Greece would use its entire legal, political and geostrategic means to fight a Grexit.

Even though much of this may have little chance of success and would require high levels of unity and solidarity within the Greek population, these may be some temporary measures to weather the storm until allies like PODEMOS can win elections and join SYRIZA’s struggle for democracy.

The longer the Greeks resist and at least attempt by any means at their disposal to survive the assault of the European technocratic order, the more likely it will inspire other Europeans to rise up as well.  Nothing less than the end of a cruel neoliberal order may be at stake, which opens a space for alternative bottom up economics in a life after austerity.

Let us hope that the Greeks find the strength to say NO on July 5, 2015 with the same determination that they said NO in 1940. Another world may indeed be possible.

Tom Vouloumanos is part of the World Institute for Social Change (WISC) faculty and teaches a course on Syriza’s history and prospects for social transformation.

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