Greeks Reject Austerity Proposals

In a landmark referendum on July 5, 2015 Greeks have decisively rejected the austerity measures set out by European powers through European Central Bank (ECB) and European Commission and IMF (troika) to continue providing funds under the bailout. According to the reports with all votes counted 61.31% Greeks rejected the proposals. Thus Greeks have given a resounding NO to the terms of creditors. The vote was preceded by what has been called financial terrorism and financial carpet bombing with ECB refusing to provide Greek banks with liquidity and creating maximum mayhem to warn Greeks from voting NO. But Greeks were not to be deterred as they have been through a lot worse for last five years of austerity when this high per capita income country has been reduced to middle level income country.

Greece Govt. is saying that this vote will strengthen its position in the negotiations with its creditors. Prime Minister of Greece Tsipras has said that it was a referendum on the specific question of terms set out by creditors on June 25. He has also moved to replace Finance Minister Yanis Varoufakis who has come to be detested by creditors. However it is not Varoufakis but the Greece Govt’s refusal to follow the troika’s prescription on austerity that is detested by International Financial Institutions. Tsipras claimed that NO vote would strengthen the bargaining position of his Govt. But it takes a minimum two to bargain and the real question is whether the troika would be ready to give up its insistence on austerity measures. Tsipras has invited the opposition parties to decide the bargaining position of Greece Govt., the very same parties which campaigned for a YES vote to accept the bailout terms offered by the troika. It is to be seen whether it is only to further broaden the base of rejection of bailout terms or a way to seek a compromise with the creditors, is to be seen. Till now the protracted nature of negotiations have worked to convince increasing sections of Greek society about the real intentions of the creditors. It helped in rallying a large chunk of middle class voters to reject the proposals of the creditors while consolidating the overwhelming majority of working class.

Referendum was the easier part of this struggle. Now comes the hard part. It is unlikely that the creditors would be willing to concede more, except some tokens, after the referendum. They are acutely aware of its repercussions on the other countries of South Europe where pro-austerity forces are facing increasing challenge from anti-austerity forces and where increasing sections are rallying around to reject austerity and even Euro.

The main question facing the working people of Greece is reorganizing their national economy. Evidently, the revolutionary forces are weaker than the scale of the rejection of the troika’s conditions. There is a large section which has nebulous idea about how this will play out or who wish that they could remain in Euro while rejecting the austerity. It is clear that any settlement of Greece’s credit would require a substantial waiving off of the debts. An internal study of IMF has also concluded that it would be impossible for Greece to pay off its debts. But the creditors have refused to entertain Greece’s demand for waiving off of a substantial part of the debt. The austerity policies have only worked to further deepen the crisis with economic decline sharper than the reduction in Govt. expenditure. Austerity cannot rescue Greek economy. Greece has reached a stage when people have to take up the task of fashioning their economy along different lines. Greece faces a choice of either decline and decay under capitalism or socialism and renewal.

Syriza is a conglomeration of diverse left forces united by their rejection of austerity measures imposed on Greek people. Such a unity has delivered well so far. But now higher unity is needed on economic restructuring, on doing away with capitalism, on marching towards socialism. Obviously such a situation will create greater schism in Syriza whose wider mass base rejects the present situation but has to be mobilized for a specific vision of the future.

Revolutionary forces committed to this course are obviously weak at present. But such historical junctures produce sharp changes when relative strengths of the political parties. Support for the supporters of the bailout has further gone down since January 2015 elections. People of Greece are opting for a change. But this change would come only through thoroughgoing struggle, through social upheavals. Coming time is going to be even more tumultuous, even more trying for the people and particularly for the revolutionary forces.