Will SYRIZA hold the line?

Europe's bureaucrats and bankers think they can crush the SYRIZA-led government in Greece, but the party's left is resisting. Lee Sustar looks at the dynamics of the battle.

Prime Minister Alexis TsiprasPrime Minister Alexis Tsipras

THE EUROPEAN ruling class's latest push for more devastating austerity in Greece could force the left-wing SYRIZA government to choose between capitulation and confrontation--and the party's left wing is calling for drawing the line, even if that means a rupture with the European Union (EU) and leaving the euro common currency.

With a $1.78 billion payment due to the International Monetary Fund (IMF) this month, beginning with $333 million on June 5, the Greek government faces a stark choice between paying its creditors and meeting its obligations to pay wages and cover benefits from the state retirement system.

This moment of truth comes after five years of cuts in social spending and tax increases that have contributed to the Greek economy shrinking by 25 percent over five years--an unheard-of economic decline in peacetime. Unemployment stands at more than 26 percent. Average annual income for all households declined by 22.6 percent between 2008 and 2012, and 40 percent of Greek children live in poverty. And the country slipped back into recession in the first quarter of this year.

After waves of struggles that included more than 30 general strikes, the occupation of public spaces and a movement to challenge Greece's neo-Nazi Golden Dawn party, Greek working people voted the Coalition of the Radical Left (SYRIZA, by its initials in Greek) into office at the head of a new government.

But the pressure of both the raised expectations of Greece's voters and the relentless demands from Europe has intensified debate within the SYRIZA membership. The dispute came to a head at a lengthy meeting of the party's Central Committee on May 23-24, where SYRIZA's Left Platform put forward an amendment to the body's resolution about the negotiations, declaring:

What the ruling circles of the EU, the ECB [European Central Bank] and the IMF are ruthlessly and consistently aiming for in the last four months is to strangle the economy, to milk even the last euro from the country´s reserves and to push an "unprotected" government into full submission and exemplary humiliation.

The Left Platform called for nationalizing the banks, aggressively taxing the rich and big business, and restoring collective bargaining agreements.

In an article based on his speech to the Central Committee, Antonis Davanellos, of the Internationalist Workers Left (DEA, according to its initials in Greek) and a prominent voice of the Left Platform, spelled out the implications: "This alternative path must be supported by any means--governmental, diplomatic, financial--necessary, including a conflict and break with the eurozone."

Although the Left Platform's proposal was defeated by a 95-to-75 vote, the strong showing by the left has put enormous pressure on Prime Minister Alexis Tsipras. If he bows to the latest attacks from Europe, he risks splitting the party. And if he were to follow the increasingly shrill calls from the establishment media and attempt to expel the left from SYRIZA, he would likewise detonate a crisis.

The outcome would likely be either new elections or the expansion of SYRIZA's governing coalition to include pro-austerity parties such as Potami.

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FOR SYRIZA's left wing, a break with the eurozone and the risk of a split in the party are both preferable to the conversion of SYRIZA into another pro-austerity party that capitulates to the demands of Europe's rulers, betraying the hopes of its voters and dooming Greece to even more years of suffering.

The roots of SYRIZA lie both in Greece's far-left traditions over the last century and in the working class and social movements that emerged in Greece over the last decade.

The party easily won elections in January, trouncing the two main parties in Greek politics--the conservative New Democracy and the center-left PASOK--which had used alternating terms in office since the crisis struck to push the austerity program. The two parties were so weak that they had to form a coalition government to stop SYRIZA from taking office after the 2012 elections.

In its move from the political margins to become Greece's most popular party, SYRIZA came to reflect the hopes of Greek working people whose lives were decimated by crippling cuts to public health, education and other social services--as well as the mass unemployment caused by a shrinking economy.

Since the January elections, however, the "Brussels group"--the EU and the ECB, which along with the IMF, made up the "troika" that pushed previous austerity plans in the form of the Memorandums--has been out to break the SYRIZA government.

The politicians and bureaucrats likely believed that SYRIZA could be brought to heel, like mainstream labor and social democratic parties that talk left in opposition, but, once elected, carry out the pro-business neoliberal agenda of privatization, "flexible" labor and free trade.

But SYRIZA has turned out to be different. It is unlike, for example, the onetime left-wing Workers Party in Brazil, which had already run that country's two biggest cities for years before it first captured the presidency in 2002. From the moment it took office under Luiz Inácio Lula da Silva, the Workers Party was prepared to accommodate the needs of capital at the expense of its working class base.

SYRIZA, by contrast, had no experience in managing lower-level government bodies, where it could be pressured and molded into being administrators of the system. Instead, the party was propelled directly from its leading role in popular struggles into government ministries.

But holding office isn't the same as having power. The vast majority of the state bureaucracy is hostile to SYRIZA, and the Greek ruling class is collaborating with Germany and the other main powers in the EU to sabotage and discredit the left.

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TSIPRAS HAS tried to postpone the day of reckoning with a series of retreats from SYRIZA's radical program in negotiations with the Eurogroup. Tsipras and Finance Minister Yanis Varoufakis agreed to an extension of the bailout of the Greek financial system in return for continuing elements of the Memorandum austerity measures SYRIZA had promised to reverse--though Varoufakis insisted the Greek government could create "ambiguity" to have some room to maneuver.

But the "Brussels institutions" wouldn't take yes for an answer. As a precondition for Greece receiving further installments from loans negotiated by previous governments, the rulers of Europe have demanded that SYRIZA carry through privatizations of government assets that it had promised to halt. The government is also expected to cut pensions, weaken labor laws and impose a stiff sales tax--moves that would further drive down living standards.

What comes next is unpredictable. Under the IMF's rules, a missed repayment doesn't automatically lead to a default as long as it is paid in the future. It's also possible that a default wouldn't necessarily lead to "Grexit"--an immediate exit of Greece from the euro currency.

But with the ECB limiting credit to Greek banks and deposits in those banks--already 40 percent below 2010 levels--continuing to decline, it's entirely possible that the banking operations could seize up, forcing a sudden and accidental exit from the euro--a "Graccident."

It could also be the case that Greece scrapes up enough money to appease the IMF and other creditors, and the negotiations drag on. But this limbo--"Grimbo," as some predictably call it--isn't likely to last long, with the European powers determined to force capitulation or confrontation.

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WHY ARE Germany and the other governments of the EU so determined to squeeze every last euro out of a shattered Greek population?

A good place to start answering this question is the old muckraker's motto: Follow the money. Greece's international debt of $472 billon is about 178 percent of the country's annual gross domestic product--and that debt mountain has only gotten higher as austerity programs accelerated the economic decline.

After Greece's two bailouts--that is, loans to shore up the financial system in return for drastic austerity measures--the ECB and Europe's emergency lending fund ended up with about 62 percent of Greek debt, amounting to $221 billion as of early 2015. The U.S.-dominated IMF, which is backed by the funds of member countries, is owed another $25 billion.

Then there's the money the Greek central bank owes to its counterparts in other eurozone countries--an estimated $102 billion, which could go unpaid if Greece leaves the euro in favor of its own currency. That would be a big hit to the central banks of smaller countries.

With interest rates at historically low levels, it would be possible for Germany and the European powers to take the "extend and pretend" approach to Greece--that is, continue renegotiating the terms of the loans with the unstated expectation that the money will never be repaid. Alen Mattich of the Wall Street Journal recently made such an argument, stating that "debt maturities could be extended ever further into the future so that one day, when conditions settle down, Greece's debts might well be quietly retired, when no one's looking."

But Mattich and most mainstream economists miss a critical point. Politics and power, not money, are the main reasons for Europe's unending push for more austerity in Greece.

With far-right parties like France's National Front and the Netherlands' Party for Freedom attacking the EU, the politicians in power in various governments are all posturing that they can be tough on the "lazy" Greeks--who, in fact, work the longest hours in Europe.

In reality, the big European powers want to demolish SYRIZA in order to demoralize and defeat other left-wing anti-austerity forces across the continent--most importantly, Spain's Podemos, which is now the most popular party in that country after less than 18 months in existence.

Driving all this is Germany, which, behind the façade of European federalism, has imposed an imperialist hierarchy that allows it to not only dominate small countries like Greece, but push around bigger ones like France, Italy and Spain.

Greece's agony serves Germany's economic and political goals splendidly. Because the euro trades on the market for much less than what the old German deutschmark would, the common currency gives Germany a tremendous advantage as an exporter, both within and beyond the eurozone and the EU. In 2014, Germany ran a current accounts surplus--the net value of all goods and services traded and financial flows--of $244 billion. That's a big jump from $206.75 billion the previous year, despite the depressed European economy. The 2014 total amount is the equivalent to 7.4 percent of German GDP--and much bigger than China's $193 billion surplus.

Thus, for Germany and its closest allies, the eurozone setup is highly beneficial. In their view, if the mass of the population in Greece has to endure endless misery in order to discipline the rest of Europe, than so be it.

Such policies are nothing new in developing countries in Africa, Latin America or Asia, where IMF-sponsored "structural adjustment" programs have periodically imposed austerity in order to facilitate debt repayment and free-market "reforms." What's different today is that these programs have come to Europe itself.

What's also different, of course, is that SYRIZA was elected by one of the most combative and radicalized working classes of Europe, with an experience of huge struggles against just such policies.

Now comes a critical moment in that living history. The stand by SYRIZA's left wing against further concessions to the austerity agenda urgently needs our support and solidarity.