Crisis, austerity, and class struggle in Greece

At the Socialism 2010 conference held on June 17–20 in Chicago, Antonis Davanellos, a journalist, unionist, and member of Internationalist Workers Left (DEA), a member group of the Greek radical left coalition Syriza, reviewed the background to the struggle against austerity—and the prospects for a revived workers movement in Greece. Transcribed by Karen Domínguez Burke.

I’LL REPORT on Greece in six points, starting with political life in the country.

Eight months ago—which for me now is a lifetime—we had a right-wing government. The conservative New Democracy party was in power, and Prime Minister Kostas Karamanlis had just won the elections one year before. He had in front of him three years in power with a majority in the parliament. But he knew what was coming. And he knew that his party—which was very hated by the majority of the working class in Greece, and very weak inside the unions—could not do the job.

So suddenly, Karamanlis appeared on television and said that he preferred to go to early elections and demand a fresh government to take all the measures needed to confront the economic crisis.

In reality, he was giving power to the social democratic party PASOK, which stood at the elections with the slogan—one I know you are familiar in this country, one that’s very effective and not at all concrete—“Yes we can.” The result of the elections was a huge defeat of New Democracy, which got something between 34 and 35 percent, its lowest result since the fall of the dictatorship in Greece.

The social democrats, PASOK, got 44 percent and an absolute majority in the parliament. But this time, there was no festival in the streets about the defeat of the right. People could understand that for yet another time in history, the social democrats were coming in power to do the dirty work for the capitalists.

So there were no reasons to be glad. Also, the left in Greece took a very good percentage of the vote—and when we are talking about the left, we are talking about those to the left of social democracy, the old Communist left and the revolutionary left.

The Communist Party of Greece took something like 7.5 percent, and SYRIZA, the coalition of the radical left—in which our organization has worked since the beginning—took something like 5 percent. The far right got 6 percent.

To understand not only this result, but also what you can expect from Greece, I must tell you from the beginning that Greek society is extremely politicized. The explanation for this lies in history. After the Second World War, we had a civil war in which the left was defeated. But after ten years, the left had recovered from this defeat. The ruling class then needed a dictatorship to control developments. That dictatorship was overthrown in seven years by a rebellion from below.

And after that, we had in 1974 what was our delayed May 1968. There were ten years of huge workers’ struggles with many victories. Everything that we have won in Greece was accomplished in this period—better salaries, unions, liberties inside the factories, democratic rights outside the factories, and so on. The major victory of workers of this period was the acknowledgment of the working class as an important power inside society, and nobody could deter it easily. And that still matters.

The scale of Greece’s crisis
My second point concerns the scale of the crisis. When Prime Minister George Papandreou of PASOK came to power, the first thing he said was that “the numbers are worse than I was expecting.” He tried to paint a dark picture to justify his policy.

But the reality is that the crisis is very harsh in Greece. The government budget deficit is equal to 12 percent of the Gross Domestic Product (GDP), which is four times greater than the normal 3 percent that the Stability Pact of the European Union requires. Public debt is something like 120 percent of the GDP, double the norms that the European Union requires. The danger of a bankruptcy in Greece is real. We need an explanation for this.

Greek capitalism is the weak link of European capitalism. And as usual, the weak link has been hit harder by the international crisis of the system. But it is the strong elements of Greek capitalism that have been hit hard by the crisis.

The banks that were the champions of neoliberalism in the Balkans are now in debt, and their future is very uncertain. Also, big Greek construction companies were taking jobs inside Greece, the Balkans and Turkey, and in other places like Dubai—and you know what happened with construction in Dubai [the Gulf state that needed a bailout from neighboring Abu Dhabi]. Then there were the Greek commercial capitalists, who were dominant in the Balkans.

These three strong elements have been destroyed by the economic crisis. That is the basis of the economic problems of Greece.

The second factor in the economic crisis is the cost of the Greek state’s state huge intervention to save the banks—a bailout, as you say here. In one night, Karamanlis gave the banks 28 billion euros. That’s not so much, in international terms. But in an economy like Greece’s, it is huge. Compare that to the 25 billion euros that the finance minister wants to collect with his bitter program of austerity. It’s less than what they have given to the banks in one night. And Papandreou is continuing this bailout.

A third factor in the crisis is the cost of twenty years of neoliberalism. At the beginning of the 1990s, the profits of capitalists were taxed at 45 percent. Now they have 20 percent for industry and 12 percent for the banks. This is a huge decline, but the problem is not just that.

The last few years—during all the years of Karamanlis’s government—rich people, the capitalists, the big enterprises, and the banks weren’t paying taxes at all. They were keeping the money—and not only from their taxes, but also the taxes they were collecting from workers in their enterprises. So you can see that the public finances of Greece depend only on taxes on salaries, which isn’t enough.

A fourth element in the economic crisis is international speculation. I will give you two examples: Goldman Sachs was the adviser to all the Greek governments about how to deal with government debt—and all the governments did what Goldman Sachs said. At the same time, Goldman Sachs was advising huge hedge funds to gamble on the idea that the Greek state, in the end, would not be able to deal with the debt.

Another example comes from the well-respected Moody’s, the bond rating company. Moody’s downgraded all the economies in the south of Europe every week. Two days before the collapse of Lehman Brothers in 2008, Moody’s was advising not only Greek capitalists, but also the Greek people, to invest in Lehman Brothers, saying that its prospects were excellent.

Corruption
The last factor in the economic crisis is corruption. Economically, corruption is not so important. But it is very important politically and ideologically in the fight that we have in front of us.

In Greece, the problem was huge around the 2004 Olympic Games. They built a huge stadium in the middle of Athens for badminton. There aren’t five Greeks playing badminton. Now this stadium is closed, but it cost a lot of money. They also built a huge stadium for Tae Kwon Do and other martial arts. Very few Greeks practice these sports. Now, it’s empty. It’s good for us, because we are using this stadium to organize. But it cost a lot of money.

Another example of corruption is the multinational German enterprise Siemens. It sold to the Greek state a very clever system called C4i—a huge eye in the sky of Athens to watch during the Games if some Arab terrorists—or Greek terrorists—were going to put bombs in the stadiums. Greece spent 100 millions euros on this system—and it was delivered six years after the Games. And it doesn’t work. That’s good for us, because there’s no big eye in the sky of Athens. But it cost a lot of money.

The final example of corruption is armaments. Greece is one of the larger buyer of arms in Europe. It can be compared only with the state of Israel, with which it has very good diplomatic and military relations.

The Greek government has bought two submarines with the latest technology. All the electronic systems of these submarines were made by whom? Siemens. This is last word in technology. They could see every fish swimming in the Aegean Sea. But these two submarines have a problem: they are unstable. They cannot be navigated. The government has bought them, and they are in the Port of Piraeus. But it’s impossible for them to go out of the port.

Official response to the crisis: cuts and privatization
My third point, which is the most serious, is about the plan of the ruling class and the government to confront the crisis. In very simple words, it is to make the workers pay. But comrades need some more information on this, because my feeling is that while all these problems concern the south of Europe today, tomorrow, they will spread to all of Europe and the whole world.

On March 4, Papandreou announced his first austerity program to confront the crisis. He said that between 2010 and 2013, he would freeze salaries and wages in the public sector. He also said he would cut bonuses. We aren’t talking about the bonuses of the golden boys. We’re talking about the overtime bonuses of workers, for instance, if they work on Sunday. He would cut all the hiring in the public sector and lay off all the temporary workers of the public sector.

It was bitter—but it was the soft scenario. The next day, the international markets demanded the hard scenario. By that time, we had learned some English words like spreads and swaps. In simple words, the interest rate for government debt was going to rise to 10 percent—which was impossible to pay in those circumstances.

So in April, Papandreou announced the agreement between the Greek government and what we call the Troika, meaning the European Union, the European Central Bank, and the International Monetary Fund (IMF).

It’s crazy. It’s not about freezing anymore. They cut the thirteenth and fourteenth months of salary for public-sector workers [annual payments that compensate for low wages]. All other salaries have been cut from 7 to 11 percent. They have also imposed a huge increase in taxes—especially the taxes that are paid by ordinary people every day, such as taxes on fuel and food.

They have also carried out huge cuts in social expenditures. The government is saying there is no money for hospitals and schools. The day I left the country, the newspapers carried a small article saying that the government would open the military hospitals to people because the public hospitals have no material nor personnel to do their job anymore. So in a European country in the twenty-first century, if someone must go to the hospital with a heart attack, the doctors there have nothing to deal with the problem.

They are also destroying the public pension system. They are pushing the age of retirement to sixty-five and pushing the years of work needed to get a pension to forty. They are also cutting pensions by 55 percent. But the most important thing is that the state is retreating from all its obligations toward the pension system. If the funds have money to provide pensions, then they will provide them. If they haven’t, bad luck.

This is a turn toward privatization of the public pension system. In Greece, they call it the Pinochet system, because the only country that could implement this system was Chile after Pinochet coup of 1973.

There is also a huge program of privatization. They will sell everything: ports, trains, public land, banks, whatever can be sold. That’s the usual program of the IMF, but now it is being imposed on a European country like Greece. The aim of this program is to reduce the government deficit over the next three years to 3 percent. They also want to give a guarantee that the Greek state and the Greek banks will keep borrowing so as to repay their debt.

The resistance
The fourth point that I want to raise is the resistance. After the announcement of austerity measures, the media was discussing whether people would stay home and not protest. It’s natural. You have one attack coming at you, and before you can even understand it, another seven are coming. It’s not easy to say that we can resist.

For example, I had a message today that they are cutting in half of the money that an employer must give to workers when they’re out of work. That means cheaper and easier layoffs. And this law won’t appear in parliament. It has been decided in Brussels, and the only thing needed after the agreement with the European Union was the signature of the minister of economics.

We are in a new situation. The problem of democracy appears here very clearly. Who decides? These experts, who nobody knows, nobody has elected and nobody can control—took decisions that are very important for millions of workers.

What happened? On May 5, we had a general strike. It was huge. Nothing worked that day. At the same time, we had demonstrations in all the towns in Greece, and in Athens, 150,000 workers came out.

It’s not only the quantity. You could feel that it was a very significant demonstration. It was the first time in years that the slogans of the revolutionary left were taken up by all the workers’ contingents. They were very angry. For three hours, the police were protecting parliament by tear gas and chemical gas—not from anarchists, not from leftists, but from bus drivers, nurses, doctors, teachers, and, of course, the left. For three hours, the center of Athens was real hell.

Today, I was in the discussion about the Industrial Workers of the World, and I heard the questions of comrades about the relations between industrial action and politics. On May 5, we had a hard lesson about that.

One bank—the only bank that was open at the center of Athens—had been burned. Some young anarchists, the nonpolitical, ultra-violent Black Bloc, had thrown Molotov cocktails inside. The owner of the bank locked the workers inside so they could not to go out on strike. But they couldn’t escape the fire, so three workers died. It was a major event.

After that, the media, the government, and all the political parties—with only SYRIZA staying out of it—started a discussion about gang violence. They asked where the country is going if this continues—maybe it will end in a dictatorship. They said things like this openly and publicly.

But they could control the people with all this for just two weeks. Because on May 20, a new general strike was called—and it was also huge. Nobody worked. The demonstration was a little smaller than on May 5. But it was big enough to prove that the shock over the deaths in the bank was over.

The resistance continued. Over the next few days, there was daily action in hospitals, in schools, and in the media against the layoffs and for better salaries. So if anybody has plans to vacation in Greece this year, forget it. But if you want to come for other reasons, you are more than welcome.

These strikes and demonstrations have shown that the potential is there in society to overthrow this policy and its supporters—the government, the European Union, and the IMF. But we have to prove it in action, in a concrete way.

Building a left alternative
My fifth point is about the left. We know that resistance to a policy like this means strikes and political struggle. And the only weapon that workers have to give the political struggle is the left. And the left in Greece is not at the level needed. That’s another problem that we will face in all Europe, because this is a problem across the continent.

The largest group on the Greek left, the Communist Party, has two main characteristics. One, it’s very sectarian. Even in the demonstration of May 20, it refused an invitation to march with all the other demonstrators. The big demonstration of the unions and SYRIZA went from the center of Athens to parliament, something that for years all demonstrations have done in Greece. But the Communist Party went from the center of Athens to some neighborhoods, to be away from the others.

Usually, sectarianism is a left-wing mistake. In this case, it is a right-wing mistake. In all Europe, people know that unity in action is a precondition for escalating resistance. If you aren’t for the unity of action, you aren’t for the struggle.

At the same time, the Communist Party is very conservative. In crucial moments for the system, the Communist Party always remembers its history and what it has done. In the youth rebellion of 2008, the Communist Party stood with all the bourgeois parties against the youth, saying that “in our revolution, not a glass will be broken.” There is no such a revolution.

In fact, the far right has asked the government to give the minister of police position to the Communist Party, saying that the only political party that can control this phenomenon is the Communist Party. I know this is hard to accept, but I’m being completely honest.

In SYRIZA, we are in a coalition with the other big party of the historical left in Greece called Synaspismos, an organization with politics that the older people among you might remember as Eurocommunism.

We are pushing them very hard, and they have become more radical. But they are very friendly towards European Union and “realism.” Even in these circumstances, they are trying to find a realistic alternative idea to how the banks work, how we can pay the debt, how the pension system must be transferred—which is ridiculous in a situation like this. I mean, you cannot negotiate this program. You cannot change details of this program. You can overthrow it or not.

Inside SYRIZA, there is a mass left tendency. And we are pushing hard that SYRIZA must (a) organize the struggle and (b) take the political position of no sacrifice to maintain the euro. That means no sacrifice for the debt, no discipline to the European Union, and no to the European Union’s Stability Pact that requires these cuts.

European dimension
The sixth point that I want to raise is that there’s a European dimension to this story.

The first is the crisis. Exactly the same program is already being pushed in Portugal, Ireland, Italy, Greece, and Spain—the “PIIGS” countries. At the same time, everybody knows that France’s turn is coming, and that Britain’s turn is coming. In reality, in Germany, the working class has the same problems because Chancellor Angela Merkel is pushing the same politics. They are stronger, so they have more time to organize the attack. But in reality, it’s the same attack.

I have already said what kind of economical and social program this attack represents. I want to say again that there is a huge problem of democracy here. The decisions about all these countries are taken now at the head of the European Union. Some weeks ago in Brussels, the European Union decided that 750 billion euros—almost $1 trillion—would be allocated to back up European government debt and save the banks from bankruptcy.

About 30 percent of this money will go straight to the banks, outside the control of governments, parliaments, and all the institutions that we know. In exchange for this, all the budgets of the European Union member states will first appear not before the parliaments of those countries, but before the European Commission, which has the right to change the budgets. State budgets were the first step from oligarchy to democracy. Now we are going in the other direction.

The resistance also has a European dimension. There have been strikes and protests in Hungary, Romania, Spain, and France. You can see it already in the press. Is there any prognosis? Can I tell you what will happen? We must be honest, comrades—the answer is no. What I do know is that Europe is changing. That the fight ahead of us has historic proportions. The potential to win is there. Just imagine what the PIIGS have done in the past—and they can do it again.

If the other side wins, it will be a hard defeat for us. If we win, it will be a very hard defeat for them, because the entire system is united in supporting this policy. If this policy fails, I think that completely new perspectives will open up in Greece, Southern Europe, and the entire world.

 

Issue #65

May 2009

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