Greece : Challenge is also an opportunity

Europe is facing political earthquakes. European Union, a project of big capital of Europe, is facing existential crisis. The existing framework of EU is being threatened by conflicting claims of different economies of Europe which are facing downturn and even frank recession. Economies of the some of the European countries have shrunk. Unemployment is on high level. World financial economic crisis which exploded in 2008 continues to shake the European countries though different European countries are being affected to different levels and in different ways.

Victory of Pedemos in recent local body elections in Spain, fifth largest economy of European Union, in major metropolitan centres has shaken the ruling establishment of that country. Pedemos supported candidates have won in Barcelona and capital Madrid. Powerful showing of Pedemos came five months after victory of Syriza in Greece. Syriza is embroiled in bitter struggle with German controlled European Central Bank (ECB) and US controlled IMF who are demanding further implementation of austerity measures. Greek people’s opposition to these measures had propelled Syriza to power but powers of Europe are refusing to recognize this mandate of Syriza. Towards the end of May 2015 local body elections were held in Italy where again anti-austerity parties gained in elections. These results in the crisis ridden Latin Europe were a vote against economic policies aimed at pushing the burden of the economic crisis onto the shoulders of labouring sections. Political landscape of Latin Europe is shifting to the left with neo-liberal economic policies along with concomitant corruption and increasing riches of the wealthy being targets of people’s wrath in all these countries.  Working class of these countries is making common cause with other sections including middle classes against austerity measures. Struggles of workers are taking increasingly political character though yet confined within the parliamentary arena.

Performance of Syriza govt. in Greece on this score is going to be important for the further course of working class movement not only in that country, but also across Southern Europe. Dominating powers of European Union, particularly Germany, are demanding what is essence is Syriza going back on its election promises which had propelled it to victory. Big capital is demanding that people’s verdict has no role in shaping economic policies of the countries which are in need of financial assistance from international financial assistance sending a clear message that capitalism stands in opposition to democracy at least in these countries.

The current negotiations between Syriza Govt. and troika of European Union, European Central Bank and International Monetary Fund are stuck on the issue of further cut in the Govt. expenditure and further increase in Govt. tax collections. The troika is demanding that Syriza Govt. further cut pensions and wages of public sector employees. Concretely they are demanding that pension burden which is currently 16% of the Govt. expenditure should be brought down to 15% immediately. Syriza Govt. is expressing its inability saying that over two third of the pensioners are at the level or below poverty line and hence further cut is not possible. The troika is further demanding that Greece Govt. should increase VAT on medicines and electric supply. The disastrous effect on this on the people whose income is any way depressed can easily be imagined. The negotiations between troika and Greece Govt. is continuing on budget surpluses i.e. difference between tax collections of the Govt. and its expenditure. Troika is demanding budget surplus of 1% of GDP in the current year, 2% in the next year i.e. 2016 and 3% in the year 2017. Greece Govt. has presented proposals in this regard of targeted budget surplus of 0.8% in the current year and of 1.5% in the next year. This difference is not very significant but troika is demanding that Greece agree to concrete measures of cutting expenditure i.e. on pensions and of increasing tax revenue as mentioned earlier.

The impasse in the negotiations between Syriza Govt. and European powers particularly Germany is not easy to resolve. European powers want Syriza Govt. to accept the troika conditions which Syriza cannot accept without totally going back on its election pledges to the people of Greece i.e. of terminating austerity measures. For European powers it is not only the issue of Greece but adherence to its neoliberal prescriptions by all the countries facing economic difficulties. If Syriza Govt. succeeds in having its way, it will have wide repercussions on all the countries being subjected to austerity measures, particularly Spain, Portugal and even Italy. Not only that, it will have wide impact on the politics of these countries where bourgeois parties have betrayed their election promises and have heaped enormous burdens on their people at the behest of European powers. It would greatly undermine the prestige of the established ruling class parties and even the big capitalists of these countries tied to European and American big capital. Hence whatever the postures of European powers about helping Greek people, they are not going to oblige Greece without extracting painful measures. European powers had earlier rushed with the bailout funds to pay to the investors. In fact all the bailout funds till now have gone to such investors only increasing the debt burden of the Greece without helping its economic recovery in any way. On the other hand their policy prescriptions have only depressed the already crisis ridden economy. With private investors largely compensated, European govts. wish to drive harder bargain.

People of Greece have undergone tremendous hardships since the sovereign debt crisis deepened in the aftermath of world financial economic crisis. The measures imposed by international financial sharks have further deepened the crisis and increased their hardships. Since 2010 the GDP has shrunk by more than a fifth (21%) and the debt has increased to over 340 billion US $ which is more than 177% of its GDP. On the other hand pensions and wages have been depressed, govt. departments and services closed down while wages in the private sector have also gone down. However, despite 16% reduction in the wages there is no improvement in the competitiveness of products from Greece which was given the reason for affecting this reduction. Rather than helping the Greek economy to recover and employment situation to improve, these measures have led to over one quarter of Greeks being unemployed while unemployment among youth is over fifty percent.

Ever since the sovereign debt crisis had erupted in Greece, the established bourgeois parties had been making a pretense of opposing the austerity measures imposed by the troika while implementing them while in power in the name of there being no other way. On the other hand people of Greece had been agitating against these policies with large sections of the people actively participating in these agitations. It is in this situation that Syriza, the coalition of radical left, came to enjoy wide support among the people and was voted to power in January 2015 elections.

Syriza twin stance of rejecting austerity and staying in the Eurozone in fact represents the array of forces grouped under the banner of Syriza. While old Euro-communist and reformist sections are keen on a compromise, the militant sections including the revolutionary left are standing firm against surrendering before the troika. The clash between different sections in Syriza came to the fore in the recent national convention where left platform garnered big support while revolutionary forces also made their stand clear. Protests are being held in Greece daily and with large participation of the people against the conditions being imposed by foreign creditor institutions. These demonstrations while targeting the troika, particularly German imperialists, are also a warning to Syriza Govt. not to go for undue compromise sacrificing the its main election promises. The question is not only whether dominant leadership of Syriza will compromise but also whether the troika will offer any compromise in the first place.

Situation on this front is developing fast. Greece has refused to pay its installment of over 300 million $ to IMF and has grouped it along with others to be paid at the end of the month i.e. by 30th June 2015 when 1.6 billion $ payment will become due to IMF. There are big repayments coming up in near future and Greece cannot afford to make them without further bailout funds from the lenders. And they are refusing to make the payment without commitments by Govt. of Greece. This is all building up to big show down in the offing by the end of June 2015.

Whatever course the current negotiations take and various zig zags in this course, Greece is coming to face a clear choice between subservience to international lenders and taking an independent course free of them. This would definitely entail reorganizing the economy on different lines. The future is definitely painful for Greece in the near term, with its default and consequent flight of capital despite capital controls, exit from Euro and adoption of its own currency, Drachma, with its value going steeply down. But in this course lie the prospect of building a better future. Whatever decision Syriza takes, the crisis is bringing increasingly larger sections into protests against dictates of troika and is strengthening the revolutionary forces in Greece. They will undoubtedly seize this opportunity to lead this ancient civilization to once again play a pioneering role in the Western Europe. This “fear” has also been expressed in an article in the Economist published recently. 

While Latin Europe is travelling leftward, there is rightward shift in Northern Europe. In Poland, the ruling party lost to its rightist rival despite claims of economic recovery. In Denmark, the ruling ‘centre-left’ coalition has lost to opposition ‘centre-right’ coalition. There is growth of anti-immigrant, neo-Nazi forces in European countries. In UK, Conservative party has secured a majority of its own. This contradictory shifts in the political landscape of Europe have been facilitated by decline of social democratic “centre” which supported neo-liberal policies albeit with human face, i.e. with less adverse effects on workers. However, with deepening of economic crisis donning this ‘mask’ was no longer possible and different sections of its mass base moved in different directions.

In UK, collapse of Liberal Democrats has propelled Conservatives to majority. Shift of Liberal Democrat votes to other parties made this possible in the first past the post electoral system. However, this would not have been possible without shift of ruling Conservatives to Eurosceptic position. Prime Minister Cameron promised “In Out Referendum” before 2017 to win over supporters of U.K. Independence Party (UKIP). However bigger event there has been a near complete sweep by Scottish Nationalist Party in Scotland winning 56 out of 59 seats there. Besides collapse of Liberal Democrats, British elections also saw a polarization in Scotland in favour of SNP and in England against Scotland getting increased powers.  So much was the polarization in England that the main opposition party, Labour, ruled out any truck with SNP after elections in order not to antagonize voters in England. Though Labour gained some votes but these were not enough to carry its leader to 10, Downing Street.

After the results Prime Minister David Cameron has toured the European countries for changes in European treaty to present it to the British electorate before the referendum. Of particular importance is the right of people from EU countries to go to UK as a member of the European Union. Cameron is trying to stay in the reformed ‘Union’ i.e. change the character of European Union itself. U.K. has had a very difficult relationship with EU dominated by continental powers – Germany and France. U.K. Conservatives are also dealing an important blow at the European Union which is any way struggling to contain fall out of the impact of world financial economic crisis, divergent priorities of west and east European states or what is also called old and new Europe. All this contradictions are added to the machinations of US imperialism to keep Europe under its control whose priorities are at times at variance with US imperialists.

This contradictory political movement in northern and southern part of Europe is rooted in the structure of their economies. The North European states are rich in manufacturing particularly of advanced machines (capital goods), in technology and in financial services as compared to southern part. France stands at the junction of these two parts having features of both and also having problems of both. As has often been the case in history, even this battle will probably be fought most decisively in France. While France lags behind Germany and the Netherlands in industrial base, lags behind U.K. in financial services, it has relatively large agrarian sector. While French ruling bourgeoisie are trying to increase their role in aggressions against third world countries, are trying to emerge to increase their space given relative decline of US power and willingness to intervene, they are also hamstrung by domestic factors. While anti-immigrant and neo-Nazi forces are on the rise in France, it also has powerful democratic traditions and working class movement. Torn between predominantly Anglo-Saxon north and Latin south, with both of whom France shares historic bonds and has deep economic ties with both of them.

The present juncture opens vast possibilities for the revolutionary forces particularly in south European countries where working masses are being galvanized into action in defense of their jobs, their standard of living and their national pride. Their national humiliation is rooted in their economic ruin, their inability to defend their values is rooted in their subservience to north Europe and America in economic life. Working class enjoys vast support in their struggle and it is time that revolutionary forces accept this challenge.