How will the EU strike back against SYRIZA?

January 29, 2015

Lee Sustar analyzes the battle lines in the looming confrontation between the rulers of Europe and Greece's new left-wing government.

THE AIM is clear: The big European powers, led by Germany, want to sabotage Greece's new government, led by the radical left party SYRIZA, by insisting that it continue to repay its crushing $336 billion debt to foreign lenders--thereby depriving it of resources to fund its aggressive reform program.

That's nothing new. Back in July 2013, German Finance Minister Wolfgang Schäuble visited Greece to address Greece's parliament and give a pat on the head to then-Prime Minister Antonis Samaras of the center-right New Democracy party for carrying through the sweeping austerity program demanded by the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF), known collectively as the Troika. "You have to stick to what has been agreed," Schäuble said.

I was in Athens then, too--near the vast Syntagma Square outside the parliament building. A large and heavily militarized police presence dominated the scene, enforcing a ban on protests--with armored vehicles wedged into narrow streets lined with sidewalk cafes, where the patrons ignored them, chatting and drinking coffee as if the black-clad, riot-helmeted cops weren't there.

Above, left to right: German Finance Minister Wolfgang Schäuble and Chancellor Angela Merkel; below: Alexis Tsipras at SYRIZA demonstration
Above, left to right: German Finance Minister Wolfgang Schäuble and Chancellor Angela Merkel; below: Alexis Tsipras at SYRIZA demonstration

Protesters had been forced to come to Syntagma a day earlier for their rallies. One was led by teachers challenging mass layoffs. Another featured a local unarmed police force--essentially tour guides and traffic enforcers hired for the 2004 Olympics who were about to lose their jobs, too.

It was another day and another confrontation in what had become a regular feature of the unremitting class war that has dominated Greece since 2010, when the Troika imposed the first of two Memorandums--agreements for the government to impose harsh austerity measures in return for a bailout of the country's banks and financial system.

A few miles away, in the working-class districts of Athens, the picture was grim: Faces pinched by worry and, perhaps, hunger; kids in shabby clothes; graffiti from the Nazi Golden Dawn party on the walls.

Nearly two years later, the suffering endured by the mass of people in Greece has only intensified--but Schäuble's message hasn't changed. "If they don't want any more aid, we won't force any upon them," he said of the new SYRIZA government elected on January 25--pointing out that Greece's current loans-for-austerity deal expires at the end of February.

The threat is implicit--but perfectly clear: Germany is prepared to pull the plug. Greece can go its own way, and even leave the euro, the common currency of 19 European countries, a move that could bring another wave of economic devastation to Greece.

CERTAINLY, SCHÄUBLE has leverage. As the Wall Street Journal reported:

Greece...needs billions of euros in coming months from other eurozone governments and the International Monetary Fund to avoid defaulting on public debts. Greek banks also need continual liquidity from the European Central Bank. Europe's current bailout plan for Greece expires on February 28. A successor can't wait too long.

Previously, in exchange for such loans--which are really just passing through the Greek government treasury on their way back to European governments in the form of debt repayments--the Troika has micromanaged the dismantling of the Greek public sector, putting entire ports and giant utilities up for sale. To take one recent but telling example, a European delegation to Athens last September was tasked with ensuring that Greece met certain "milestones" to qualify for aid--which included passing a new forestry law and introducing "pension stability formulas." Translation: cuts in retirement benefits.

Schäuble and his boss, German Chancellor Angela Merkel, may offer the new Greek Prime Minister Alexis Tsipras some cosmetic changes to this arrangement. They may pull back from the detailed prescriptions of cuts in public services and make a mild adjustment in the terms of debt repayment. But for now, it's a game of chicken, as Stratos Pourzitakis explained in the South China Morning Post:

If Tsipras sticks to his guns, cutting ties with Germany will be inevitable, leaving Greece without access to cheap ECB funding. German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble may not want to "lose" Greece, but they cannot afford to make substantial compromises, as any concessions would be exploited by anti-austerity forces in Europe.

It's possible that Merkel and Co. could decide the time isn't right to bring down an iron fist on Greece. That's because Germany's bitter austerity medicine has not only devastated Greece, but produced such a sclerotic recovery from the Great Recession that Europe is now believed to be sinking into another recession.

The political consequences of economic stagnation have been considerable. Years of misery and high unemployment have destabilized established political parties in numerous countries, especially in Southern Europe, where the impact of the crisis was worst.

In Greece, SYRIZA's triumph came in an election where the PASOK, the main governmental party of the center left, ended up in seventh place with just 4.7 percent of the vote. In Spain, the most popular party is now the left-wing Podemos, which came into existence just a year ago, in the wake of anti-austerity struggles.

The Italian political system was shaken by the sudden rise of the Five Star movement, a kind of libertarian, "anti-politics" party--more recently, the right-wing, anti-immigrant Northern League has grown in influence. In France, the far-right National Front got 25 percent of the vote in last year's elections for the European parliament, and right-wing anti-immigrant and even fascist parties have become established parliamentary parties in several countries.

Thus, European politicians, stunned by SYRIZA's success and faced with declining popularity, must now consider how far they will go along with Merkel's program. It was growing pressure for a new policy that led the European Central Bank, under Mario Draghi, to launch a U.S.-style program of "quantitative easing." That's economics-speak for injecting money into the system by using ECB funds to buy up $1.24 trillion in government bonds. The intended result is to lower borrowing costs in European countries, thereby stimulating economic growth.

The ECB's deviation from Germany's all-austerity, all-the-time program is why Tsipras and the leaders of SYRIZA may believe they have room for maneuver in their dealings with the Troika. But it's telling that the ECB program of buying up government bonds would exclude Greece if it doesn't stick with the austerity program.

SO SIMPLY hoping that Merkel will blink first isn't a strategy, as Tsipras well knows.

The new prime minister is attempting to discipline the influential left wing of SYRIZA, first of all by establishing a coalition government with the Independent Greeks (known by the initials ANEL), a hard-right, immigrant-bashing party that is also anti-Memorandum.

As the Internationalist Workers Left (DEA), a prominent group in SYRIZA's Left Platform, said in a statement: "ANEL's conditions for being part of the coalition government contradict the mood of a large part of SYRIZA's membership. They will also act as a transmission belt through which the system will put pressure on the government of the left."

But Tsipras must also meet the expectations of an electorate desperate for relief and real progress. One of his first actions after taking office was to halt privatization plans agreed to under the terms of the Memorandums--beginning with the planned sale of the port of Piraeus to international investors. The government also promised to reinstate public-sector workers laid off by the previous government, including cleaners for the Finance Ministry who have waged a months-long struggle for their jobs.

SYRIZA's left wing remains powerful. Panagiotis Lafazanis, the best-known figure in the Left Platform, is a cabinet minister in the new government, the head of a "super ministry" of Productive Reconstruction, Energy and Environment.

In his inaugural comments as minister, Lafazanis said exactly what the politicians in Berlin and at the EU headquarters in Brussels don't want to hear: "The debt crisis is not really a debt crisis. [It is] debt that is exploited by the neo-colonial powers in the EU, in order to demolish everything in the country. The real crisis is the productive dissolution and degradation of the country."

He continued: "As of today, two things in the ministry are finished: the Troika and Memorandum and their applicable laws, which gradually but very soon will be canceled." As a first step, the ministry will reverse the breakup and privatization of the electrical power company. SYRIZA is committed to providing free electricity to 300,000 low-income households.

Meanwhile, the new deputy minister for immigration policy, Tasia Christodoulopoulou, announced that SYRIZA would seek citizenship for the children of immigrants born and raised in Greece. She added that citizenship should also be available to "those who were not born, but came very young to Greece, and grew up here."

This doesn't make up for Tsipras' deal with ANEL. Falling just two seats shy of an outright parliamentary majority, SYRIZA could have attempted to proceed as a minority government, based on consistent left-wing policies. Instead, the head of ANEL will take over the defense ministry--which puts a hard right-winger in charge of the armed forces that are the ultimate guarantor of the social order in Greece.

Moreover, Tsprisas' alliance with ANEL shows that the new prime minister is prepared to go over the heads of SYRIZA's elected leadership as he devises his own strategy to govern. There will be more maneuvers like this, tacking both to the right and to the left.

The most important task for the left, inside and outside SYRIZA, will be to mobilize the working class and social movements--to defend the government when it faces the onslaught of the ruling class of Brussels, Berlin and Athens alike, and to challenge it to turn SYRIZA's radical commitments into action and real change.

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