cyprus_euro_2012

What future for Greece and Cyprus?

The Euro was bound to be a disaster for the weaker economies of the Eurozone. Without the ability to control their own fiscal policies these economies were catastrophically exposed to the vagaries of the world economic situation. As long as the going was good heavy borrowing could sustain their economies and provide a reasonable growth rate. This in turn provided near-full employment and a rising standard of living for the general population. However, as the world capitalist bubble burst and borrowing was turned off, these economies could not be sustained anymore. Unable to devalue their currency, they had to succumb to the harsh terms of the Troika (the EU Commission, the ECB and the IMF) in order to secure more loans.

The Troika?s policies have proved a disaster for Greece. Despite untold suffering by the people, the Greek economy shows no sign of recovery. The Greek Government has been repeatedly forced to enforce new austerity measures, every time facing the increasing anger of the population. Pasok, the Greek Socialist Party, has seen its electoral force dwindle from more than 40% to almost 10%, while Syriza, a centrist coalition of the radical left, has seen its share of the vote catapulted from around 5% to almost 30%, only narrowly missing the first place in the latest election which would have given it the opportunity to form a government. Ominously, the neo-nazi formation of Chrysi Avgi (Golden Dawn) has increased its strength to become the third biggest party in the Greek Parliament.

Greece?s problems are manifold. Greek capitalism has never really become a viable productive system. Despite the stereotype of the lazy Greeks, Greek workers work longer hours than anybody else in the world, except the Korean workers. Greek wages are the lowest in the EU, except for the ex stalinist countries. Productivity on the other hand, is also the lowest, again excepting the ex stalinist countries. During the Cold War, Greek capitalism survived thanks to massive loans and handouts from the West and especially the USA in order to bolster it as a bulwark against the Soviet Union. Greece entered the EU in the wake of the fall of the Colonel?s dictatorship, not in an act of economic wisdom but as a political safeguard against a new coup. It joined the Eurozone after extensive manipulation of its economic indices, helped by the officials of the ECB and the services of Goldman Sachs. Public debt soared uncontrollably, fuelled by exorbitant defense budgets and unbelievable corruption. Scandals involving public officials, ministers, monks and foreign companies have been surfacing for years with virtually nobody being called to account.

It would be grossly unfair to off-load all blame to Greece. Greece?s borrowing was part and parcel of the general mode of world capitalist functioning in the decades before the 2008 crash. Greece?s loans financed not only Greece?s ephemeral prosperity but also German and European economic development. This was most graphically demonstrated by the Siemens scandal in which the German multinational bribed Greek politicians and Government officials in order to secure contracts. To this day, Germany refuses either to extradite or prosecute the man alleged to have been instrumental in dishing out the bribes.

The injustice and vulgarity of European, and especially German, behaviour towards Greece has rendered the possibility of leaving the Euro attractive to many Greeks. Syriza is flirting with the idea, although for the moment this is expressed only as call for a much more robust stance towards European demands. Some left economists argue that the way forward for Greece is to default and revert to the drachma thus regaining control over its fiscal policies. A commission should be set up that would review all foreign loans and decide whether some of them can be considered ?odious debts? and thus non-repayable. Heavy cash injections to the economy should be made in order to reduce unemployment and kick-start growth again.

It is doubtful whether such policies make economic sense. Reverting to the drachma would still leave Greece with a huge amount of foreign debt. The Greek loan ?haircut? is of such proportions that would probably be many times greater than any amount of ?odious debt?. And, most importantly, the inevitable heavy devaluation would still hit hard the general population and especially the most vulnerable. Would such a policy lead to recovery? Most probably not. Greek manufacturing exports are insignificant and tourism is unlikely to make much difference in a world climate of recession and austerity. On top, Greece would have to face the anger and hostility of the EU which will not take kindly to a rogue member.

Syriza?s policies made sense in the run-up to last year?s twin elections. The party was riding on the back of huge popular anger and an unprecedented wave of change in consciousness. Mobilisation of the working class was almost continuous and vast sections of the middle class were looking for radical change. Mobilization and shifts in consciousness were also taking place in most of the European south. Huge demonstrations were taking place in Italy, Spain, Portugal and elsewhere. Interestingly, the demonstrators were linking in their minds their struggle with the struggle of the other countries. This was expressed in banners and slogans like the ?we are all Greeks? slogan which appeared in a number of countries. Had Syriza won the elections it would have sparked a huge wave of renewed protest, not only in Greece but in the whole of Europe.

Whether Syriza or the European left was politically and theoretically prepared to manage such a situation is another matter. Revolutionary politics is not mainstream in Syriza and, as post-election developments have shown, the party?s development could go either way. Pasok style Reformism or Revolution could have been equally likely futures for Syriza in the wake of a winning campaign in 2012. But with popular hopes raised and ruling class confusion reigning, a revolutionary situation could easily develop, drawing in other European countries too, opening up tremendous opportunities.

Today, for the moment at least, the situation is radically different. Having won the elections, the New Democracy party, with the support of Pasok and the Democratic Left, managed to impose the harsh Troika austerity and create a semblance of stability. Popular mobilisation has diminished drastically and a mindset of fatalism is being established. Protest in the rest of Europe seems to have subsided too or deflected into other forms. The independence of Catalonia or Scotland, the question of Britain leaving the EU and other side issues seem to replace anti-capitalist protest. Whether this will be the end of revolutionary possibilities for the present, will of course depend on whether the capitalist crisis will recede, something highly unlikely. It is much more probable that it will return with renewed ferocity, engulfing not only the poor countries of the European south but also the rich north, including Germany itself.

Cyprus found itself in the eddies of the Greek collapse. Heavy investment in Greece and the Greek debt ?haircut? has landed Cypriot Banks with huge losses. The Government nationalized one of the banks to save it from bankruptcy at the cost of ?2.5 billion and recapitalization is thought to cost another ?10 billion. The AKEL (Communist Party) Government of Demetris Christofias had to negotiate an austerity deal with the Troika in order to finance this and is bearing the brunt of popular discontent. Despite fervent support and even pressure on the Government to sign the deal from all the opposition parties, Christofias stands accused of ?delay in taking measures? in order to save the economy. The opposition is even accusing Christofias of calling in the Troika to negotiate a loan.

As in Greece, the radical left in Cyprus is staunchly against the memorandum. Its programme includes the nationalisation of the Banks, defaulting on international loans, increasing corporate tax and taxing immovable property. Leaving the Eurozone, although not explicitly spelled out, is implied in most of its analyses. There is, however, no worked-out policy for handling the economic crisis. Despite its radical language and vicious criticism of AKEL and the Trade Unions leadership, it failed, up to now at least, to articulate a convincing alternative to the Government policy of accommodation with the capitalist system. In fact, by concentrating solely on an anti-memorandum platform, is in danger of fuelling nationalistic sentiments. Racialism is already on the increase targeting immigrants, both from the EU and third countries.

It is no accident that neither the Greek nor the Cypriot left managed to work out a convincing programme in the face of the economic crisis. Internationalism has for a long time been discredited and nationalist politics has been dominant in the programmes of the parties of the left. Communist Parties understood internationalism as subjection to the Soviet Union and were completely disorientated after its collapse. Social Democratic parties treated internationalism as an academic and theoretical exercise not to be confused with real, national politics. Trotskyist and other revolutionary sects preached internationalism but never really made an impact on society. As a result they came to believe less and less in the potential of internationalist politics. As a result, the left is very reluctant to map an explicitly revolutionary exit from the crisis and tries to find an alternative phraseology and alternative campaigns to replace the stilted slogans of the preceding era.

The truth is there is no national solution to the crisis for either Greece or Cyprus. It may have been a folly for both Greece and Cyprus to join the Eurozone in the first place but an exit now would be catastrophic. Reverting to national currencies would lead to economic collapse and, in all probability, to authoritarian dictatorships. Revolutionary change in an isolated country would be crushed economically, if not militarily, by a hostile world. Only if the Revolution spreads to the rest of Europe can it hope to survive and flourish. Syriza?s near-miss last year was pregnant with such possibilities.

What then should be the left?s policies in the face of the crisis? First, we must be clear that speaking of the left we mean a left with mass support, not isolated individuals or sects. A revolutionary programme can succeed only if it gains mass support and fires the imagination of the workers and other oppressed strata. To do that it must offer clear solutions to real problems ? not slogans and pies in the sky. Syriza was such a formation. It had a long standing tradition, rooted in the years of struggle against the military dictatorship of 1967-1974. What started as a majority split from the Communist Party, the KKE Esoterikou (Communist Party of Greece of the Interior) went on to gather around it personalities of the wider left transforming itself to the Synaspismos tis Aristeras (Coalition of the Left) and managed to retain roughly the same electoral support as the mainstream Communist Party (KKE). A few years ago Synaspismos joined with a number of leftist groups to form Syriza (Coalition of the Radical Left), turning the party sharply to the left.

Syriza was strategically placed to exploit the economic crisis in Greece. It did so masterfully tuning in to the angry mood of the people. When the youth started to demonstrate and clash with the police Syriza, contrary to the rest of the political parties, refused to condemn them explaining that the outbursts of young people were a result of the dire position where they were led by the system. And when the people were striking and demonstrating against the austerity imposed by the EU and Papandreou, they joined the demonstrators. In contrast, KKE was calling for elections, condemning violence as provocation and saying that demons?trations would lead nowhere and would only let off steam in order to dull the anger of the people.

Ironically, when elections were called, KKE was not impressed, saying that they would only perpetuate the alternation of capitalist puppet governments. On the contrary, Syriza fought a campaign based on opposition to austerity and a promise to renegotiate the memorandum if elected. Despite vicious attacks from all sides, Syriza nearly gained power while KKE saw its electoral support plummet to new lows.

Whether Syriza was ready to govern Greece is, as mentioned above, doubtful. It certainly had no worked out programme to deal with the counter-revolutionary forces a Syriza win would unleash. However, revolutionary situations tend to be great schools for revolutionaries and Syriza certainly contained plenty of revolutionary talent. As one of its cadres put it, Syriza is not ready to govern but must govern. Following its failure to win power, the leadership of Syriza is trying to transform its programme into a ?responsible? programme with a view to win the next elections. Such a turn will of course be disastrous. The voters who turned to Syriza for a different policy will be disappointed and the groundwork will be laid for a final defeat of the workers in the face of the capitalist attack.

The attempt to turn Syriza to the right has not gone down smoothly inside the party. During its last Conference a small but important left opposition has argued for continuing the party?s radical stand, although it is not clear on what programme they propose to base Syriza?s policies. In any case, working out a programme in the present brief period of lull in the class struggle will be crucial for the future not only of Greece but also of Cyprus and the rest of Europe. Such a programme should consist not of a nationalistic programme of ?saving Greece? but of a radical programme of changing European policies in close alliance with the workers of other European countries; a programme that will attempt to link up the struggles of the workers of all the countries of Europe into a viable alternative path; a programme that will prepare the movement for the next round of mobilisation that in all probability will come sooner rather than later.

In Cyprus there is no Syriza-type formation. AKEL dominates left politics with basically social-democratic reformist policies despite paying lip service to communism. The Social Democratic Movement EDEK is a radical socialist party that went through periods of sharp turns to the left before expelling Marxists and other Socialists, retaining only its ultra-nationalist platform from its radical past. Radical left groups fail to realise the importance of AKEL and its followers in the coming period. With the thread of neo-nazi emergence looming, only AKEL and the Trade Unions can form a serious barrier to racism and ultra-nationalism as well as capitulation to the wishes of the Cypriot bourgeoisie. Again, only a programme of European scope can unify the Cypriot left and hope to protect the workers from a savage drop in their living standards.

Themistokles

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