Which road for Greece? (part 2)

Published: 2 April 2013
Author: Pat Byrne

In Part 1 of this two-part assessment we explained some of the factors behind the rise of the left-wing SYRIZA movement in Greece to the point where it is now the most popular party in the country and could lead a future government. Here Pat Byrne highlights some important weaknesses in SYRIZA’s programme and proposes constructive changes that could determine its success or failure.

But what programme are SYRIZA offering and is it capable of solving Greece?s economic crisis?

Certainly, the election manifesto that SYRIZA stood on last year was extremely radical. This was to be warmly welcomed and received mass support among the population. But there are already signs that the majority of the Party leadership are moderating their proposals under the heavy pressure of the mass media and capitalist society. This was evident at last December?s Party Congress debates over the Party?s programme and in various contributions from leading figures since.

For example, in the recent speech that Party Leader Alexis Tsipras gave in London (15th March), he declared that ?Our aim is to change the dominant capitalist paradigm?. However, this falls way short of SYRIZA?s radical election commitment last June which read:

We are endorsing a new model for the production and distribution of wealth, one that will include society in its totality. In this respect, the large capitalist property is to be made public and managed democratically along social and ecological criteria. Our strategic aim is socialism with democracy, a system in which all will be entitled to participate in the decision-making process.

Similarly, in place of the previous pledge of public ownership of the banks Tsipras only promised that: ?We will secure the viability of the banking system by introducing social and public control of banks? which of course can mean many different things. Compare this to SYRIZA?s much clearer election pledge: ?Nationalization/socialization of banks, and their integration into a public banking system under social and workers? control, in order to serve developmental purposes?.

Public ownership of the banking sector is obviously a key policy for any government hoping to tackle Greece?s public debt crisis and economic decline. But it needs to be put forward as part of a detailed programme of what could be done with a publicly-owned financial sector to deliver local and national economic growth, along with low cost finance for small businesses, farmers etc., support for innovation and so on.

Public ownership of the banking sector is obviously a key policy for any government hoping to tackle Greece?s public debt crisis and economic decline. But it needs to be put forward as part of a detailed programme of what could be done with a publicly-owned financial sector to deliver local and national economic growth, along with low cost finance for small businesses, farmers etc., support for innovation and so on.

Tsipras is clearly aware of these issues. In a recent interview he eloquently expressed the alternative:

The crisis will be resolved only if there is a plan for reconstructing the economy?s productive engine from below. From the labor market and the welfare state, where wages and pensions must be supported, to small businesses that demand credit lines and access to investment funding. Instead of imposing increasing tax rates on the poor and those who simply can no longer pay, what we need is an increase in public investment. Instead of tax relief for the rich, we need a just tax system. Instead of pressing the economy in the service of bankers, we need a banking system that serves society at large, that supports development. Only in this way can the vicious cycle of austerity and recession be broken, so that the social economy begins functioning again.

These points are exactly the broad outline of what is needed and complement the firm stand that SYRIZA has made against the austerity programme. But they need to be fleshed out in detail if they are to be turned into credible proposals for transforming Greek society. The absence of this process has led to charges by the bourgeois parties and the media against SYRIZA that they are demagogic and populist ? opposing the austerity programme without providing a credible alternative for solving the financial crisis. Promising restoration of benefits to the population without showing how these can be paid for.

Working out a credible plan for Greece is is not a luxury but a burning necessity if SYRIZA is to hope to further develop its public support and turn it into the means to successfully end the crisis. Indeed, the more vague and less coherent SYRIZA?s ideas, and the more that Tsipras is unable to effectively answer direct questions on the details of its alternative, the more likely its radical policies are to be watered down under the searchlight of the mainstream media and public debate, a process that appears to be already taking place.

The central question is obviously the issue of debt and the need for halt the disastrous economic slide. In this context the debate about whether to stay in or leave the Euro that many other left-wing commentators focus on is a complete diversion and keeps the discussion within bourgeois monetary alternatives. As Tsipras stated in a recent online interview: ?It is not our intention to enter into a competitive devaluation contest with other European nations.?

Leaving the Euro would not solve anything. In fact, changing back to the old Greek currency would probably make things worse as the Euro debts would remain alongside a rapidly shrinking Drachma unable to repay them.

Nor is it any more credible to argue that remaining within the Euro prevents decisive action being taken – current events in Cyprus have shown that governments can remain within the Eurozone while freezing movement of money and imposing massive taxes on richer account holders if they so wish. In this sense SYRIZA has been correct to put forward a programme within the Euro context and concentrate on the key issues.

However, the recent call by SYRIZA for a European Debt Conference, like the US-organised 1953 conference that led to the write-down of Germany?s debts, is very much the wrong way to go. It is just a new way of pleading to the richer countries for help, similar to the Jubilee appeal from Africa a decade ago. The rich countries will not assist Greece to recover in a way that benefits its population. Appeals to their better nature will fall on deaf ears and would then most likely provide an excuse for a SYRIZA-led government to backtrack on its programme.

Instead, SYRIZA should be redirecting attention to solving the crisis to the many resources already available in Greece, while freezing repayments to the banking creditors until it is ready to start paying back those that can be justified.

Democratic Public Ownership of the Banks

To this end, any solution must begin with the bringing of the banks into democratic public ownership. But it is not enough to issue this as a general slogan as SYRIZA have already done. Details are the key. Too often the Left put forward public ownership as a solution in its own right rather than as a means to to an end ? failing to explain in concrete terms the benefits that a publicly-owned banking system could bring and how it would be made democratically accountable.

A democratic public banking system can provide the means to successfully plan and develop the Greek economy. But who would do the planning and for what ends? Here SYRIZA should not be asking the Greek people to give it power to solve their problems. Rather it should be about enabling the people to grasp the power to solve problems for themselves. To achieve this SYRIZA needs to reach out to the trade unions, consumers and small to medium sized businesses. With their new-found electoral credibility SYRIZA should be organising sectoral conferences that bring these forces together in order to give voice to their needs and collectively agree plans for the development of the main industries in Greece whether they be agriculture, construction, shipping, tourism, energy, transport and so on. These can be coordinated with the Solidarity Networks that SYRIZA has been supporting.

Such a democratic process can produce a clear programme for the the economic future of the country and show a medium and long-term way out to the population with their full involvement. It will demonstrate why democratic public ownership of the commanding heights of the economy including the financial sector are absolutely necessary to resolve the current crisis. It could also help to win over significant layers of the rural population and the middle class.

Image courtesy of [image creator name] / FreeDigitalPhotos.net
Image courtesy of [domdeen] / FreeDigitalPhotos.net
More specifically, democratic public ownership of the financial sector would put the banks under the accountable direction of the public at large with banking staff and bank customers playing a key management role in increasing efficiency and ending the widespread corruption at the heart of the current system. This would end the siphoning off of billions of Euros from productive investment into the pockets of the super-rich, produce more beneficial rates for savers and borrowers, and make loans for expansion and construction easier. It could also be used to link up with taxation departments to end tax evasion and criminal money laundering.

On administration alone the amalgamation of all the private banks into one public bank would deliver huge savings which are now wasted in running thousands of unnecessary bank branches and expensive marketing campaigns all designed to convince us that this bank rather than the other is better. Bank staff could then be redirected towards providing real practical support and advice to small businesses, potential homeowners etc. This could assist in reviving local commercial life and begin to tackle the growing problem of homelessness.

Similarly, a public banking system could be linked to a system of local and national innovation centres to encourage a flourishing of new ideas and technologies and help bring them to productive fruition.

International Solidarity

Obviously, Greece cannot solve all its problems in isolation from the international economy. However, rather than a European Debt Conference of the EU governments, we need a European Development Conference that brings together all the progressive movements in Europe to discuss what needs to be done to solve the debt crisis and design an alternative future for Europe. If SYRIZA was to call this it could create an important momentum for such an alternative. Towards this, SYRIZA?s electoral popularity for radical change is already an important achievement, something we must help them extend and deepen.


Pat Byrne

1 thought on “Which road for Greece? (part 2)”

  1. Pat, I agree that the Greek government should have handled their newly-gained power in an offensive manner and that many of the suggestions you put forward on how they should have done that are correct. Syriza has now lost the momentum they had after the election to engage broader layers of people in the process of change and the time for any measures to avoid capital flight and broaden democratic control has run out. In my view Syriza was elected on an illusive program of replacing austerity with a growth strategy, regaining fiscal and political sovereignty while remaining tied into the EMU at the mercy of the EU institutions where political and creditor interests have melted together. The path they set out on when they formed that strategy inevitably led to where it ended last Sunday night. With staying inside the EMU being their top priority, what else could they have done? In a perfect world with massive mobilization of solidarity abroad and reformable democratic EU institutions autonomous of capital interest they may have been able to carry through a socialist program for restructuring the Greek economy. Under the ruling circumstances they had no leverage and the outcome was obvious. I cannot in my wildest fantasies imagine a scenario where the EU leadership would have even listened to proposals about public banks and workers control over anything. I do not know what the social consequences of a Grexit would have been. Neither do I know what they will be of the agreement now in the making and the next ones to follow, but I think that under the current circumstances, those are the alternatives and only the latter leaves any space to implement what you are suggesting. Neither Iceland nor Argentina have turned into failed states and maybe the worst horror scenario for the EU is that Greece would not turn into one either.


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