Creative Resistance

acropolis - blue moon.jpgAfter Syriza accepted a third austerity memorandum for Greece and called early elections, much of its leadership left the party. Some formed Popular Unity, while others are still searching for a new home to continue the fight against austerity.

Andreas Karitzis is among the latter. Until this summer, he was a member of Syriza’s central committee and had been a key figure in the party’s electoral planning process before its triumph in January’s elections. Karitzis was also previously at the Nicos Poulantzas Institute, the research center affiliated with Syriza.

Now outside Syriza, Karitzis recently spoke with Michal Rozworski about charting an anti-austerity path when a left government is responsible for implementing austerity. “The Greek experience,” Karitzis says, “teaches us that we need to go beyond electoral politics, not against it.”

This article originally appeared  in the magazine Jacobin


Greece just held its second elections of 2015 a month ago and Syriza came out on top again. But it’s a very different Syriza than the one from January, one now committed to implementing a new, third memorandum with the European “institutions.” Can a left party implement and work against austerity policies at the same time?

I don’t think it is politically viable or socially useful to engage in a process of implementing austerity while trying to counterbalance the negative effects at the same time. It’s not easy to do this under the strict supervision of neoliberal institutions. An effort like this would require a different approach and a different mentality.

It could be possible only as a way of buying time. If you are inventive and systematic enough and have a strategy of disengagement, it could work for a short period of time. It would be a way of preparing yourself and your society for the duty of a hard conflict with the lenders. But I don’t think that the government will follow such a path, hence I don’t find what they are trying to do politically viable.

At the same time, Syriza is changing due to the fact that the plan of stopping austerity using traditional means — securing an electoral majority and then forming government — has failed. It was based on the idea that elites will not refuse to respect the democratic will of the people. In the absence of a serious discussion for a new, complex, and perhaps more difficult strategy, Syriza is gradually slipping towards a narrative of accepting the neoliberal coordinates of applied politics.

So accepting the bounds that elites place on politics . . .

If you want to have a statistical idea of what happened to Syriza around these latest elections, consider that about 50 percent of the central committee, a third of cadres at the intermediate level (for instance, from regional structures), and about 15 to 20 percent of the general membership have resigned. So, a large portion of the leadership left, while the picture at the local level is different because people tend to be connected with each other also as friends.

However, this doesn’t mean that all those who stayed in Syriza remain hopeful. Many of them are also demoralized. While they do not see prospects for this government, they still hope that something will simply happen. Many do not have a coherent strategy or narrative.

How resilient are the social movements — the health centers, the solidarity networks, and so on? Is this the base out of which something new will be built? My conversations earlier seemed to suggest some tensions between the movements and those engaged in traditional politics.

Yes, part of the “raw materials” for something new are the people who are already engaged in solidarity networks, the cooperative movement and similar organizations. Then there are those who left Syriza searching for a new strategy.

My goal today is to connect these two groups — these two tribes fighting against austerity. I want to connect those who are doing things in the field, already trying to gain some autonomy over spheres of their lives, and those who were committed to traditional politics but are not willing to pursue this anymore.

Both of them have energy, capacities, and determination, and together, they can form a strong backbone for a resilient and dynamic network that can produce the economic and social power necessary to defy the elites’ control over the basic functions of our society. Perhaps from the combination of these two groups, a political organization of a new kind can emerge.

It’s ambitious and in some ways hard to grasp, but in the given situation, what else can you do?

I tend to be optimistic because the situation in Greece remains unstable. If I was in Canada or Denmark, I would be frustrated and pessimistic that the Left could come back. It’s not the same in Greece, however, and we can expect the Left to be cornered once again when the Syriza government falls. This will happen, even if a few years down the road.

Since the next government will be a very conservative one, we don’t have the luxury of not fighting. And since we have to keep fighting, I am optimistic that we will adapt ourselves to the new conditions and emerge better organized, not only because we are very committed but because we cannot do otherwise.

What would the alternative strategy you’re describing broadly look like, especially in a context where elites are unwilling to budge?

We experienced a strategic defeat. Now we need to set up processes that will empower people — for example, by advancing social economy and cooperative initiatives or community control over functions such as infrastructure facilities, energy systems, and distribution networks. These are ways of gaining a degree of autonomy.

No matter how difficult or strange this may sound in light of the traditional ways of doing politics, it is the only way to acquire the necessary power to defy the elites’ control over our societies. We can do this by extracting the embodied capacities of the people and putting them into use for the liberation of society.

Who will do this?

People who are committed to continue the fight against austerity. During the referendum, many engaged in this battle personally for the first time. Many are gradually coming to understand that it’s not possible to change our basic coordinates without exploring new ways of creative social mobilization. There are many in Greece who are ready for this (and I don’t mean only those who left Syriza). What we need is to find ways to make this more widespread within society.

This is the only way to truly liberate ourselves — whether by staying in the eurozone with a degree of autonomy or leaving the eurozone with a degree of autonomy. Independently of what we may think is the right decision in terms of the currency, we must make sure first that we have the power to carry out our plans under the severe pressure of elites. For this, we need new organizational forms, political imagination, and methodology, and that’s what we are trying to invent and figure out.

The first half of 2015 in Greece showed just how strong the interests of capital are across Europe. How do you reconcile your strategy with the crippling power of elites? How do you reconcile the big international forces at the official political level with action at the most local level?

According to my understanding of our situation, it’s not that there isn’t enough space for alternative politics. What we need most is to increase our real power. If we had greater power, we could use electoral politics and a left government to initiate a process of liberating our society.

The Greek experience teaches us that we need to go beyond electoral politics, not against it. We need to have a broader idea of what it means to do politics in the new conditions. We have entered a new era in which our societies are deprived of the right to have access to crucial decisions.

It goes beyond the eurozone, though that is important. Look also at the TTIP and other trade agreements. All these new institutional forms and regulations create a universal problem, but in order to respond universally, we need to fight efficiently on the local level.

My main concern is to grasp and put into action new ways of mobilizing people in order to gradually reclaim control over basic social functions that are local but are today under the control of anti-democratic institutions shaping the ground for our enslavement. Organizing efficiently at the local level allows us to eventually scale up to the European or international level.

How do you implement this in a very practical way? How do you get over the fear and blackmail that to some extent has been proven effective?

The main problem in Greece, and likely in modern society in general, is not just fear but whether there are organizational and methodological principles to make any mobilization powerful enough to counterbalance the power of elites. Our inherited principles are not adequate to what we need to do today.

The signs of collapse of the standard economical circuit are obvious in Greece but not only here. There is a growing exclusion of people from the economic circuit — having a job or a bank account, having a “normal life.” Modern society in general is in decline.

From history we know that societies in decline tend to react in order to survive. It is up to us to grasp this and start building networks that can perform basic social functions in a different way — one that is democratic, decentralized, and based on the liberation of people’s capacities.

First, this would allow society to survive and give people who are today excluded the means to survive in meaningful ways. Second, this could begin a transition towards a better and mature society.

There are no empty spaces in history, so if we do not do this, the nationalists and fascists — with their militarized way of performing these basic functions — may step in to finish off the decline. In Greece, a left government that implements austerity creates fruitful conditions for the nationalists and fascists to grow, especially in the poorest regions and neighborhoods.

Has this fascist current gotten worse recently? It seems that in terms of the electoral arena, Greece’s far-right party Golden Dawn has been relatively stable. What is the strength of the fascists more generally?

This is something you can’t anticipate. When the Left is in government, who stands to benefit? That another left, largely nonexistent right now, could benefit today by being a major opponent of the government seems unlikely.

On the other hand, New Democracy and the other systemic, pro-memorandum parties cannot make a turn towards popular demands; they are forced to support the agreement. As a result, the nationalists have an open space.

While the recent election results didn’t show them making any gains, this is due mainly to the timing of the election. The election took place before the implementation of the agreement, when Syriza still had an air of tough negotiators and people hadn’t seen how the agreement will affect their lives. We will be better able to assess the strength of the nationalists six months from now.

Finally, what are the lessons for the broader European left from the Greek experience of the first Syriza government?

We now know for a fact (this is not an assessment) that it is not enough to engage in traditional ways of doing politics to reverse our declining course. We must move beyond elections, not against them. We have to combine what we used to do with new elements, and we need new priorities.

Both within society and within the economy, we need to build our own networks that extract people’s capacities and produce real power that can then be used to make meaningful change. That’s a positive lesson from what happened here.

If we think differently, we will realize that we are far stronger than we think. Our established political imagination — which sees the political and social conditions underlying postwar social democracy as not having changed — was wrong.

Things have been changing for years. If we train ourselves to see things differently, we will realize that we are stronger than we think. This is the message for the Left everywhere.

Making Sense of a Crisis – Greece and Europe in 2015

Euro grafitti artConfusion, a memorandum for renewed austerity, elections and the split of SYRIZA as the grand political coalition of the left forces. All in the space of one brief, mad, volcanic summer. The Greek political crisis has entered its next phase. After a gruelling 6 months of negotiations with an intransigent set of partners, it all came to an inglorious stop. What followed is the rapid fire of political aftershocks.

It is important to begin to understand the predicament the Greek people. Within the soft and hard walls of the advanced capitalism zone, the Greek government attempted to disrupt the established order of Europe. The implications of that attempt and its defeat in battle are worth pondering. Of course this is a ‘live-event’ – it is history in free flow and the war still rages but on a different terrain. Who knows what the situation will be by the time you are reading this. What is very clear is that the “battle for Greece” will have far reaching effects across Europe and probably further afield. But in order to better understand what is yet to come, we can begin with some perspectives on what has been.

The Terms of Defeat

The SYRIZA led government (that was elected on a platform of ending the politics of austerity) has had to concede under humiliating circumstances to the conservative political forces within Europe. The imposition of another Memorandum (MoU) on the Greek government by the lenders will extend the neoliberal politics of austerity on a country that is already decimated by its encounter with this aggressive neoliberalism. The former Finance Minister within the SYRIZA government, Yannis Varoufakis, has provided a useful annotated copy of the latest MoU commenting on its horrible consequences for the economy and the Greek people. Some of the imposed lowlights include:

  • Cuts to the poorest pensions – including the disabled
  • Establishment of a privatisation fund – supposed to be capitalised at 50 bill euro. That is designed and intended to sell off Greek public assets. An advance action demanded and already delivered this past week by the government was the sell-off of 14 regional airports to a German corporation.
  • The Government commits to consult and agree with the European Commission, the European Central Bank and the International Monetary Fund on all actions relevant for the achievement of the objectives of the Memorandum of Understanding before these are finalized and legally adopted. In other words, parliament is rubber stamping exercise and national sovereignty may as well be housed with Elgins Marbles in London or Berlin.
  • Greece will have a target medium-term primary surplus of 3.5% of GDP – this is just impossible to deliver and expect the economy to get out of its vicious cycle
  • A recapitalisation process of banks should be completed before the end of 2015 – However, Banks were already recapitalised in 2013 but failed to provide credit because no bad bank was instituted to manage the huge volume of Non-Performing Loans (NPLs).
  • Continuation with a property tax that does not take account peoples income or capacity to pay – it will continue to fail and be resisted because of gross unfairness
  • Increasing taxes on farmers (most are very small) that will attack and damage one area of the economy that has prospects for growth
  • Move towards greater flexibility in the labour market – in an economy where workers regularly get underpaid or have to wait months to receive payment – more flexibility is not really the burning issue.

It is true that there were some very soft (and possibly even illusory) gains from the agreement. There is begrudging acknowledgment from the lenders that they will consider the issue of debt sustainability. This may or may not translate to some form of debt easing. The three year term of the agreement captured by the MoU does give the government some room to implement its other reforms (if it can manage to ride out the crisis associated with implementing the cuts imposed as part of austerity).

However, one does not even need a radical standpoint to understand the inherent brutality and illogicality (from the point of view of economic development) of what is demanded by the European elites. Joseph Stiglitz as a mainstream economist, who spent a working life within the World Bank and similar bedrock institutions, has commented:

I believe strongly that the policies being imposed will not work, that they will result in depression without end, unacceptable levels of unemployment and ever growing inequality. But I also believe strongly in democratic processes — that the way to achieve whatever framework one thinks is good for the economy is through persuasion, not compulsion. The force of ideas is so much against what is being inflicted on and demanded of Greece. Austerity is contractionary; inclusive capitalism — the antithesis of what the troika is creating — is the only way to create shared and sustainable prosperity.

For now, the Greek government has capitulated. Perhaps, as the lost half decade becomes the lost decade, as the politics get uglier, as the evidence mounts that these policies have failed, the troika will come to its senses. Greece needs debt restructuring, better structural reforms and more reasonable primary budget surplus targets. More likely than not, though, the troika will do what it has done for the last five years: Blame the victim.

 

The Split of SYRIZA and Fresh Elections

The defeat of the Greek government in its negotiations has produced dire political effects. The SYRIZA party has now split with a left grouping establishing a movement called Popular Unity (the same name as the united political front that formed the Allende government in Chile). This Popular Unity is now the third largest political force in the Greek parliament (in terms of number of MPs, after SYRIZA and the conservative New Democracy).

The SYRIZA government has called for national elections in September in a bid to regain control of parliament and government. SYRIZA is expected to be the largest party and to be able to form government. However, the political situation remains very fluid and victory is not at all considered to be safe. The Popular Unity party will not garner the same votes, with recent polls showing it attracting around 8% of the votes (SYRIZA polling somewhere between 28%-40%).

Aside from the electoral ramifications, the split represents an important divergence in political strategy between the two camps. Those remaining within SYRIZA are coalescing around the idea that the constellation of neoliberalist forces is too strong in Europe and this precludes any strategy that takes Greece out of the Eurozone. This case is presented by Alexis Tsipras (the president of SYRIZA and Greek Prime Minister).They favour a long game of winning over people across Europe to resist neoliberalist policies and defeat the politics of austerity:

We have to be objective in our conclusions. These have been six months of great tensions and emotions, and self-flagellation helps no one. Feelings of joy, pride, dynamism, determination, and sadness have surfaced. But I think that at the end of the day, if we try to look at this process objectively, we can only be proud to have led this fight. Under adverse conditions and with a difficult balance of forces within Europe and the world, we tried to assert the point of view of a people and the possibility of an alternative path. Ultimately, even if the powerful were able to impose their will, what remains is the absolute confirmation on the international level that austerity is a dead end. This process has established a completely new landscape in Europe.

Leo Panitch argues that:

The charges of betrayal being levied against the SYRIZA leadership today are based on its signing off on the latest very harsh memorandum. But insofar as this memorandum was imposed on the basis of the threat of expelling Greece from the Eurozone and leaving its banking system without support, the claim that Greek Prime Minister Alexis Tsipras “capitulated” implies that there was a viable alternative centred on an immediate Eurozone exit (“Grexit”) that the government could have undertaken.

The political conditions that would make an immediate Grexit viable are not present today. Those who insist that these political conditions were established by the outcome of the referendum are being disingenuous.

The other side (now represented openly by Popular Unity but still with many supporters within SYRIZA) argue that the last 6 months were an attempt to prosecute this “strategy from within” and the results are none too edifying. Stathis Kouvelakis who is an important strategic thinker within Popular Unity argues that the Left needs to absorb the full significance of the crushing defeat it has endured:

What has been crushingly defeated was a political strategy, the strategy that the majority in SYRIZA, and therefore SYRIZA as such, has espoused for the last five years, and which could be called “left-Europeanism.”

It was the conception that the memoranda and austerity could be overturned within the specific framework of the Eurozone, and, more broadly, of the European Union (EU). That we have no need of an alternative plan because in the final analysis a positive solution will be found within the euro and that displaying credentials as “good European citizens” and professions of faith in the euro could be used as bargaining chips…

Alexis Tsipras, the Greek prime minister, did not carry out a secret plan “to sell out.” He found himself confronted by the total bankruptcy of a specific strategy, and when a political strategy fails this means that there remains only the choice between bad and worse options. Or rather, there remains only the worst option — and that is exactly what happened in this case.

The case against remaining inside the euro (if the political objective is to defeat neoliberalism, or even to getter better terms) is also reinforced by the arguments of economists far removed from the ‘left political scene’. Anne Petifor has concluded that:

The plain truth is that the euro is a product of utopian neoliberal economists and their ambitions for a monetary system governed only by market forces, beyond the reach of any European state. It is this utopian vision and its embodiment in ‘rules’ that is the cause of economic failure, divergence, social and political instability across member states.

That utopianism is why, like the gold standard, the euro is doomed to failure.

A key argument in favour of breaking with the Eurozone is the viciousness with which it imposed a continued austerity program this time around. Why on earth would the euro-elites go softer next time, when they got away with it in 2015, with barely a boo heard across Europe?  Ellen Brown provides a succinct account of the financial and economic instruments of coercion that were available to the lenders courtesy of the Eurozone. In the end she concludes:

When Prime Minister Tsipras called a public referendum in July at which the voters rejected the brutal austerity being imposed on them, the ECB shuttered the banks.

The Greek government was thus broken Mafia-style at the knees, until it was forced to abandon its national sovereignty and watch its public treasures sold off piece by piece. Suspicious minds might infer that this was a calculated plot designed from the beginning to throw Greece’s prized assets onto the auction block, a hostile takeover and asset stripping for the benefit of those well-heeled entities in a position to purchase them, including the very banks, hedge funds and speculators instrumental in driving up Greek debt and destroying the economy.

There is also scope for a potential realignment of the forces of SYRIZA and Popular Unity further down the track. Certainly not all that remain within SYRIZA agree that Greece will in fact be able to manage from within the strictures of the Eurozone.  A so-called Group of 53 represents within the leadership grouping of SYRIZA recognises the failure of current strategy and advocates moving towards a political exit from the stranglehold of the Eurozone. But it also argues that this will take some time and needs to undertaken with caution and with mobilization of communities. Andreas Karitzis for example:

Is there any room for manoeuvre? Yes, if we are determined and systematic enough to work under the radars of the neoliberal configuration, inventive enough to formally coincide with it while at the same time we empower people against it and decisive enough not to give in to threats and blackmail.

In order to respond adequately in these suffocating conditions, new organizational standards and methods are needed for the engagement of thousands of people in this day-to-day and multi-level fight. Negatively put, without the people with the knowledge needed, aligned into groups of collaboration and embedded in a vast network of democratic decision-making that produces policies of our own logic no government will be in a position to wage this battle.

Nasos Iliopoulos also recognises the dead end the current strategy has produced and calls for another way out that avoids the usual traps:

In order to extricate ourselves from the position that we are in we need to preserve our collectiveness and to start re-planning in a most democratic manner. Surely there is not much time left. But it is equally true that we cannot create a plan for our own extrication just a few days after our greatest defeat. Of course, one condition remains. That is to acknowledge the current state of the country as a dead end that we must escape and not as a state of stabilization of the Greek economy or as an expectation for investments and growth.

We need to plot another strategy as soon as possible. From now on we have to only deal with tough questions.
How can we extricate ourselves? How can we escape from the blackmail?

What is our answer to the imposed suppression of democracy?

Which is the way to the organization of social resistance and to reactivation of people’s participation and action as our main weapons of defense against the unorthodox economic war that we are facing?
In this course, the only burden that we need to leave behind us is the “ease” with which we have learned to go about things.

Beyond the elections

The only thing that is near certain is that the elections will mean the election of a government that will apply the terms of the memorandum agreed to by the SYRIZA government. Whether it be SYRIZA or a conservative coalition, the dead end path of austerity seems unavoidable. Even for the neutral economists such as Joseph Stiglitz, the implications mean its not at all over with a scrappy deal in July and some hot August nights in a humiliated Greek parliament. The eminent logic of a rupture with the strictures of the Eurozone remains ever present:

As awful as the prospect of leaving the Eurozone may be for Greece, staying in given the current terms only means a longer and deeper depression. The best way forward might be moving toward a two-currency situation, using both the euro and a “Greek euro” — a currency that would be tradable within the country’s own banking system. At least then Greece would be better able to set its course for the future. A tiny spark of hope is better than no hope at all. 

The challenges that lie ahead for the Greek Left are immense. But the Left stand as the one great hope of the Greek people to out manoeuvre the grotesque chaos that has become their lives. A chaos that unfolds daily and seemingly has no end. In government and in opposition (and in both at the same time) the Left will have to find again the strategy and tactics that are up to meeting the demands of the situation.

Adam Rorris

August, 2015

To be or not to Plan B

Plan BAmbrose Evans Pritchard from the the UK Daily Telegraph runs a story on what is claimed to have been a secret cell at the Greek finance ministry which hacked into the government computers to implement elaborate plans for a system of parallel payments that could be switched from euros to the drachma at the “flick of a button” .The revelations have caused a political storm in Greece and confirm just how close the country came to drastic measures before premier Alexis Tsipras gave in to demands from Europe’s creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation. Yannis Varoufakis has claimed its not the full story and its being used to serve other political ends.

Segments of the the story are provided below. Full article can be found here

Yanis Varoufakis, the former finance minister, told a group of investors in London that a five-man team under his control had been working for months on a contingency plan to create euro liquidity if the European Central Bank cut off emergency funding to the Greek financial system, as it in fact did after talks broke down and Syriza called a referendum.

The transcripts were leaked to the Greek newspaper Kathimerini. The telephone call took place a week after he stepped down as finance minister.

“The prime minister, before we won the election in January, had given me the green light to come up with a Plan B. And I assembled a very able team, a small team as it had to be because that had to be kept completely under wraps for obvious reasons,” he said.

Mr Varoufakis recruited a technology specialist from Columbia University to help handle the logistics. Faced with a wall of obstacles, the expert broke into the software systems of the tax office – then under the control of the EU-IMF ‘Troika’ – in order to obtain the reserve accounts and file numbers of every taxpayer. “We decided to hack into my ministry’s own software programme,” he said.

The revelations were made to a group of sovereign wealth funds, pension funds, and life insurers – many from Asia – hosted as part of a “Greek day” on July 16 by the Official Monetary and Financial Institutions Forum (OMFIF).

Mr Varoufakis told the Telegraph that the quotes were accurate but some reports in the Greek press had been twisted, making it look as if he had been plotting a return to the drachma from the start.

“The context of all this is that they want to present me as a rogue finance minister, and have me indicted for treason. It is all part of an attempt to annul the first five months of this government and put it in the dustbin of history,” he said.

“It totally distorts my purpose for wanting parallel liquidity. I have always been completely against dismantling the euro because we never know what dark forces that might unleash in Europe,” he said.

The goal of the computer hacking was to enable the finance ministry to make digital transfers at “the touch of a button”. The payments would be ‘IOUs’ based on an experiment by California after the Lehman crisis.

A parallel banking system of this kind would allow the government to create euro liquidity and circumvent what Syriza called “financial strangulation” by the ECB.

“This was very well developed. Very soon we could have extended it, using apps on smartphones, and it could become a functioning parallel system. Of course this would be euro denominated but at the drop of a hat it could be converted to a new drachma,” he said.

Mr Varoufakis claimed the cloak and dagger methods were necessary since the Troika had taken charge of the public revenue office within the finance ministry. “It’s like the Inland Revenue in the UK being controlled by Brussels. I am sure as you are hearing these words your hair is standing on end,” he said in the leaked transcripts.

Mr Varoufakis said any request for permission would have tipped off the Troika immediately that he was planning a counter-attack. He was ready to activate the mechanism the moment he received a “green light” from the prime minister, but the permission never came.

“I always told Tsipras that it will not be plain sailing but this is the price you have to pay for liberty,” he told the Telegraph.

“But when the time came he realised that it was just too difficult. I don’t know when he reached that decision. I only learned explicitly on the night of the referendum, and that is why I offered to resign,” he said. Mr Varoufakis wanted to seize on the momentum of a landslide victory in the vote but was overruled.

He insisted that his purpose has always been to go on the legal and financial offensive within the eurozone – placing the eurozone creditors in a position where they would be acting outside EU treaty law if they forced Grexit – but nevertheless suggested Syriza did have a mandate to contemplate more radical steps if all else failed.

“I think the Greek people had authorised us to pursue energetically and vigorously that negotiation to the point of saying that if we can’t have a viable agreement, then we should consider getting out,” he said in the tape.

“Schauble believes that the eurozone is not sustainable as it is. He believes there has to be some fiscal transfers, some degree of political union. He believes that for that political union to work without federation, without the legitimacy that a properly elected federal parliament can render, can bestow upon an executive, it will have to be done in a very disciplinary way,”

“And he said explicitly to me that a Grexit is going to equip him with sufficient terrorising power in order to impose upon the French, that which Paris has been resisting: a degree of transfer of budget making powers from Paris to Brussels.”

Mr Varoufakis told the Telegraph that the Mr Schauble has made up his mind that Greece must be ejected from the euro, and is merely biding his time, knowing that the latest bail-out plan is doomed to failure.

“Everybody knows the International Monetary Fund does not want to take part in a new programme but Schauble is insisting that it does as a condition for new loans. I have a strong suspicion that there will be no deal on August 20,” he said.

The End of Europe

OLYMPUS DIGITAL CAMERA

The crisis in Greece is part of a larger disintegration of the European project argues Ceedric Durand, a Professor of University of Paris 13.

The myth of intra-European convergence has also revealed itself. In the last five years, the apparent convergence between countries has evaporated, reinstalling the economic hierarchy between the German European core and the peripheries with a vengeance. While Italy now lags behind its pre-euro level in terms of GDP per capita, others like Greece, Spain, and Portugal have slipped into full-scale social despair, with ever-larger segments of the population unable to meet their basic needs.

The tragic irony is that all of this suffering is in vain. Debt-to-GDP ratios have risen despite harsh austerity measures, locking peripheral countries and their working classes into an endless cycle of debt peonage vis-à-vis financial markets and sovereign creditors. At the same time, internal trade imbalances within the eurozone persist, and the tighter coordination of neoliberal prescriptions at the EU level offers no mechanism to tackle the underlying structural problems of uneven development.

The adverse winds of economic depression have turned European governance into a class-warfare machine. The great leap forward of integration in the past few years has resulted in steadily declining control for national elected parliaments over economic policy.

Originally published on The Jacobin website

From a European perspective, the financial meltdown of 2008 was the prologue of a full-scale, continent-wide crisis. The US-made financial debacle triggered a complex chain of unexpected events throughout the old continent, contaminating all spheres of social life and resulting in a radically new landscape plagued by political and economic crisis.

As Ada Colau, the newly elected mayor of Barcelona and head of a coalition inspired by the indignados, says: “No one will come out unchanged from this crisis. What awaits us is a feudal horizon, with a sharp increase in inequality, an unprecedented concentration of wealth, new forms of insecurity for the majority of citizens. Or, a democratic revolution, where thousands of people are committed to change the film’s ending.”

We are very likely arriving at this historical turning point. The landslide victory of No in the July 5 Greek referendum indicated that the popular classes want a halt to decades of neoliberal European integration. This reopening of what Auguste Blanqui called the “chapter of bifurcations” is taking place in the middle of tectonic shifts shaking a continent that has fallen into a spiral of rancor and resentment not seen since the middle of last century.

Fifteen years ago, the successful launch of the single currency fueled a wave of Europhoria across the continent. The 2000 Lisbon Strategypromised to make the European Union “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion.” Enthusiasts portrayed the union as “a beacon of light in a troubled world.” Marcel Gauchet and Jürgen Habermas argued that the new European formula — in terms of supranational democratic governance and the welfare state — was destined to serve as “a model for the nations of the world.”

The expectations of Europeanist days never materialized. On the contrary: in retrospect, the whole sequence appears a story of uninterrupted failure. The region lagged behind almost every other region in economic growth before and after the crisis, and the 2010 turn to austerity produced a magnificent economic debacle. GDP has still not recovered to its pre-crisis level, making it one of the worst economic crises in recent history — beaten only by the catastrophic Russian capitalist restoration of the nineties.

A straightforward confession of the irrelevance of economic management during this period is the sober statement by the OECD, shown below, that the expected follow-through to the initial recovery has been repeatedly delayed.

Figure 1: Past OECD economic outlook projections of euro area GDP (quarter 1, 2008 = 100)

Unemployment last year soared, with more than 44 million people unemployed or underemployed within the Union. This is not only a painful personal drama for workers and their families, but also a spectacular illustration of social irrationality resulting in a gigantic economic waste, especially considering European workers are among the most productive in the world.

The myth of intra-European convergence has also revealed itself. In the last five years, the apparent convergence between countries has evaporated, reinstalling the economic hierarchy between the German European core and the peripheries with a vengeance. While Italy now lags behind its pre-euro level in terms of GDP per capita, others like Greece, Spain, and Portugal have slipped into full-scale social despair, with ever-larger segments of the population unable to meet their basic needs.

The tragic irony is that all of this suffering is in vain. Debt-to-GDP ratios have risen despite harsh austerity measures, locking peripheral countries and their working classes into an endless cycle of debt peonage vis-à-vis financial markets and sovereign creditors. At the same time, internal trade imbalances within the eurozone persist, and the tighter coordination of neoliberal prescriptions at the EU level offers no mechanism to tackle the underlying structural problems of uneven development.

The adverse winds of economic depression have turned European governance into a class-warfare machine. The great leap forward of integration in the past few years has resulted in steadily declining control for national elected parliaments over economic policy.

Rule-bending, bureaucratic supervision by the commission and core governments, the installment of independent technocratic bodies controlling fiscal policy, and the enlargement of the European Central Bank (ECB) competencies has reduced the field of economic policy options for national government to the one-size-fits-all fundamentals of the old-fashioned Washington Consensus of the nineties: consolidation, privatization, and liberalization.

Unpopular austerity packages and labor market reforms have been met with huge popular mobilizations in southern countries of a magnitude not seen in decades, with multiple general strikes and quasi-insurrectionary phases in Spain and Greece. When the determination of national governments weakened, the European center resorted to open authoritarianism: bureaucratic coups ousted several prime ministers, while the ECB, led by former Goldman Sachs vice-president Mario Draghi, explicitly blackmailed recalcitrant leaders.

In no other case did the confrontation surface with such clarity than in Greece. In a mid-June statement, International Monetary Fund chief economist Olivier Blanchard wrote candidly: “Greek citizens, through a democratic process, have indicated that there were some reforms they do not want. We believe that these reforms are needed.” By explicitly contrasting democratic choices and bureaucratic neoliberal requirements, Blanchard was simply repeating the mantra of European leaders that there is no alternative to the status quo.

The discussions with Greece are thus a formal process designed to politically defeat Greece’s left forces, burying any prospects of meaningful political change across the continent. This is the only explanation for the creditors’ inflexibility despite Tsipras crossing all Syriza’s red lines in terms of pensions reforms, tax policy, privatizations, and market liberalization. This punitive stance was made crystal clear by late June, when the ECB actively incited a bank run, warning of an “uncontrollable crisis,” and abruptly capped its emergency loans to the banking sector, triggering bank holidays and capital controls.

However, the inflexibility vis-à-vis the Greek government is not only caused by a shameless neoliberal political will. It reveals a much deeper problem of Europe, which is the non-maneuverability of this political vessel.

A central part of the problem is the size and the legal complexity of the EU. Basically, EU governance is the painful sedimentation of hard-settled compromises into rules, which are almost impossible to circumvent. The decision-making capabilities of European polity are extremely narrow and tethered to the previous political balances of forces, making radical change almost impossible to contemplate.

Moreover, the European bureaucracy is tiny, with about thirty thousand public servants and a budget less than 1 percent of the EU’s GDP. Its sole political force results from an accumulation of rule-bending and procedures that the European elite is eager to preserve, even though it has resulted in a systematically chaotic management of the crisis over the past few years.

At a deeper level, the lack of EU maneuverability is a paradoxical outcome of the landslide victories of transnational and financial capital over the previous decades. These victories resulted in the building of EU state-like institutions focused primarily on capital’s core interests — competition, trade and money — while labor and social problems were reduced to adjustment variables in the European political arena.

Consequently, the European proto-state may be strong in promoting the immediate interest of a finance-led power bloc, but it lacks the consensual side of hegemony, which is indispensable to keep diverse societies and social strata together in turbulent times.

The combination of economic and social failures and limited political maneuverability has resulted in a diminishing appeal for the European project and the reactivation of centrifugal forces across the continent.

Europe is one of the most sophisticated political landscapes in the world, and its idiosyncratic mixture of strong and contradictory political legacies of liberal, fascist, and communist traditions with multilevel statehood governance and democratic legitimacies, vibrant social movements, and contradictory geopolitical ties is boiling once again.

In this context, regardless of what happens next, the political turmoil in Greece is already a landmark in the history of the continent. The country that in the early eighties exemplified the ability of Europe to provide a solid anchor in liberal democracy and socioeconomic stability to a post-authoritarian regime is now becoming a symbol of failure and disunion.

Syriza’s attempt to escape from the neoliberal cage has been met with nothing but sabotage and vituperation from the others governments and European institutions, leaving it with no alternative but capitulation or rupture, neither a positive outcome as far as the attractiveness of the EU is concerned.

Centrifugal forces are also growing as a result of the fading appeal of Brussels. Britain is demanding a substantial reversal of integration bythreatening to leave, reinforcing the attraction of the US. On the Eastern border, the definitive disillusionment vis-à-vis European integration leaves an open field for nationalistic forces (although with contradictory sentiments towards Russia’s newfound assertiveness). Even within the historical core, there is a growing sense of despair.

This enables the rise of far-right parties such as the National Front in France, but also racist discourses in mainstream media — exemplified by Berthold Seewald’s recent call in the leading German conservative newspaper, Die Welt, for the ethnic disqualification of Greece from its European membership.

Recalling the context of the 1820s Greek independence war, he wrote that at that time “the idea that modern Greeks are descendants of Pericles and Socrates, and not a mixture of Slavs, Byzantines and Albanians, was erected as a common belief in Europe.… This is why we accepted the Greeks breaking into the European ship in 1980. One can admire the consequences every day.”

In the meantime, signs of discouragement among mainstream leaders are abundant. Reduced to complicated calculations and deprived of any political inspiration, Europe is fueling nothing but acrimony and resentment.

The lack of solidarity surfaced once again when heads of governments discussed the migrant crisis. While thousands of migrants are dying in the Mediterranean, European leaders’ response has been revealingly focused on military attacks, and when discussing sharing asylum seekers between countries, selfishness is self-evident — prompting, Matteo Renzi, the fading Italian star of the European center-left, to say, “If that’s your idea of Europe, you can keep it.”

Recent polls in Spain and the UK confirm that disappointment with Europe is translating into diminishing votes for the “extreme center” in national political fields. Whether or not their ideological convergences translate into domestic alliances, the right-wing and the left-wing of the center are tightly knitted together in a permanent European grand coalition.

In this process, the so-called social-democratic parties are experiencing the highest toll; as their traditional positions on socioeconomic issues melted in the face of neoliberal dogma, they left their core constituencies with no further reason to vote for them, leading to higher rates of abstention or the emergence of new kinds of political movements.

On the Left, the emergence of new political movements across countries is related both to structural factors such as the intensity of the austerity and more contingent issues related to the organization of the political field. But regardless of their political fate in the short term, none of them will be permitted to delay discussions on key strategic points any longer.

Two years before becoming Greece’s finance minister, in his “Confessions of an Erratic Marxist,” Yanis Varoufakis endorsed the mission of saving European capitalism from itself. The Greece battle shows that this could prove more challenging than he anticipated.

Uneven and combined developmental dynamics in the European periphery highlights the need for the Left to move from a defensive fight against austerity toward a positive agenda of systemic alternatives. The Greek experiment demonstrates that, on this path, there is no other choice than breaking with neoliberal European institutions and regaining democratic sovereignty on domestic currencies.

This is a daunting challenge, however, considering how reluctant most people are to bear the transitional costs of the breakup, even if they could be convinced of the benefits of such a rupture in the long term. Formulating policy proposals guaranteeing people a safety net during this transition will be key to facilitating new electoral victories, beginning with Spain’s elections this fall. There, Podemos and its social movement allies have a significant chance to win.

As the Greece experience has shown, the European elite can be expected to be nothing less than merciless. As a member of the Podemos leadership recently advised me, “you had better be prepared.”

Decoding the IMF: Greek deal doomed, exit likely

Paul Mason from Chanel 4 offers a dispassionate account of the failure of successive Greek parties (when they come to power) to grapple with the Euro and the damage done. The SYRIZA leadership is falling into the same trap. It is preparing to implement a woeful program (which it has fought tooth and nail) just so it can remain in the Euro.

The article is taken from the here

It’s easy to get drawn in to the detail. I spent some of yesterday in the hot corridors of the Greek parliament where the various factions and groupings within Syriza, the radical left party, were working out their postures on today’s vote.

No to the rescue deal, says the left. Abstain, say others. Vote yes while declaring it’s been done at gunpoint, says Alexis Tsipras in a live TV interview. But step away from the argument, bitter as the black coffee served in the parliament’s canteen, and the bigger picture is: the deal will pass, Syriza will vote for it.

13 greece r w  Decoding the IMF: Greek deal doomed, exit likely

Step back further and take in the implications of the IMF’s secret report, leaked yesterday, into the dynamics of Greece’s debt. The IMF says – after the weeks of dislocation caused by the relentless bank run and the capital controls – that the austerity deal is pointless. Greece needs a massive debt write-off or large upfront transfers of taxpayers money from the rest of Europe. It needs a 30 year grace period in which it will stop repaying the loans.

Yet the entire deal done on Sunday night was premised on not a single cent worth of debt relief. Vague commitments to “reprofile” debt – pushing repayment times backwards and lowering the interest rates – were all Angela Merkel could be persuaded to do.

What this means is very simple: the third bailout agreed in principle on Sunday night is doomed to fail. First because the IMF cannot sign up to it without debt relief; second because, without debt relief it will collapse the Greek economy. This is even before you factor in issues like mass resistance to its details, or the total lack of enthusiasm for execution of the deal by the Syriza ministers who will have to do it.

IMF report

But on both sides of the Greek political class there is cognitive dissonance, and it’s being generated by the same thing: a blindness to what the Euro has become.

The Greek centre and centre right will keep Syriza in power today on the grounds of being good Europeans. Syriza will vote for a deal it opposes, and which anybody who’s read even a summary of the IMF report now understands is doomed. Again on the grounds that it is demonstrating commitment to Europe and that, as Alexis Tsipras argues, “rules out Grexit”.

The implication of the IMF report is that Grexit is inevitable. Without debt relief the Greek debt to GDP ratio will rise to 200%. It will be using 15% of its GDP simply to make interest payments and payments coming due.

So we go back to the old problem that has dogged Greece since 2010. Yes it has an inefficient, state-dominated economy that needs to be reformed; yes it has antiquated and corruption-inducing restrictions on who can run certain businesses. But you can’t modernise a place like Greece amid the relentless downward pressure on growth that austerity measures produce.

By saying this – albeit in a secret document the Europeans wanted suppressed – the IMF has shown it is a learning organism. It has abandoned the dogma that predicted austerity would bring a 4% fall in GDP and drawn conclusions from the 25% fall in GDP that actually occurred.

One of the recurrent features of this crisis is the mismatch between the speed at which political parties learn things and how people do.

I’ve found, among ordinary people who were passionate supporters of the No vote in the referendum, the widespread acceptance that – to go forward with measures on social justice or alternatives to austerity – Greece will have to leave the Euro. Most people I talk to want it done in a controlled manner, consensually and with some kind of mandate from the people.

They’ve realised that Angela Merkel’s absolute refusal to countenance debt write-offs inside the Euro, alongside the IMF’s absolute insistence that they should happen, have created a cul-de-sac no Greek government can get out of without reversing out of Euro membership.

Syriza – which was always a coalition of left social democrats, New Left marxists and a harder left communist group – is finding it institutionally hard to accept this logic.

Opponents of exit argue that, with the Euro question “solved” they can get on with prosecuting a domestic crusade against corruption, poor police methods and the dysfunctional judiciary and the state.

What nobody knows is how much of its absolute sovereignty over domestic law the Eurozone would actually use if, for example, Syriza tried to cleanse the judiciary. Would this be deemed as “politicising the state?” Nobody knows – because the European Commission and ECB have never had to have policies on such things before.

‘Third bailout will be a disaster’

Equally uncertain is: what kind of party does Syriza now become? Right now it is still, basically, an expression of the desire of large numbers of Greek people to stay in the Euro with less austerity.

The Greek electorate’s pattern over the past 5 years has been to put parties into power who say they will mitigate austerity but stay in the Euro. First Papandreou, then New Democracy – who also, now barely remembered – once opposed an austerity memorandum – and now Syriza.  By throwing successive parties into the European mincing machine, the outcome has been to shred party politics. Pasok was shredded, New Democracy was shredded and it’s possible that Syriza too will split, be vilified, denounced as traitors etc.

21 greece protest w  Decoding the IMF: Greek deal doomed, exit likely

We know from opinion polls that about 35% of Greeks want to leave the Euro but that a further 25% of those who voted No in the referendum probably fear what Alexis Tsipras spelled out last night: €250bn has left the country over the past 5 years and if Greece leaves the Euro this “drachma lobby” would be able to return to Greece and buy out everything and everybody.

But listen to the IMF report – which implies the third bailout will be a disaster; and to the intransigence of Angela Merkel – who says no debt relief within the Euro. The more I look at it, logically and dispassionately, that €250bn waiting outside Greece for Grexit now looks like very smart money. And you the highly logical and dispassionate investment community is drawing that conclusion too.

The levels of economic pain and dysfunctional borrowing set to be inflicted on Greece mean that at some point in the next 12-18 months there is a chance that centrist 20-30% of public opinion will flip to a policy of controlled, or maybe temporary exit from the Eurozone. The only question then is: which party will offer a convincing narrative and lead it.

The OXI Revolt of 2015

oxiThe OXI revolt that burst out of Athens on July 5th sent a political tremor around the world. But very soon the defeat of the Greek government in its July negotiations with the lenders dealt a massive blow to SYRIZA and the government as a whole. In turn it has deflated many people across the world.  SYRIZA has a long history of managing internal conflicts and serious tensions as it has grown from a coalition of parties and social movements. It will neeed to use all that experience if it is to learn and move on from its mistakes and disagreements.

Now is the time to quickly comprehend the significance of what happened and emerging options to regain political initiative. The observations and comments are based on my time in Greece during these past few dramatic weeks. They draw on conversations with activists, SYRIZA party members and general discussions with people on the street.

What happened is relatively straight forward. The SYRIZA led government was elected on a platform to end austerity and negotiate a write-down of the Greek national debt. Immediately upon being elected the Greek government prosecuted this case with alacrity and conviction. Indeed many people within Europe and across the world were convinced for the first time of the Greek cause and the unjust terms imposed on the Greek people. The lenders too could no longer pretend they did not know or were told different things by their Greek counterparts –they were told in detail the damage done and the inevitable further damage that would arise from austerity and a failure to write-down the debt. To help them along there were even very creative solutions offered that could help them manage the domestic political constraints they would have to negotiate.

The initial political response to this from the European lenders and the IMF was unadorned belligerence. They ended 5 months later with a nasty vindictiveness and a final humiliating deal that does not have a hope of being fully implemented, and in even its partial implementation will do a great deal of harm. A deal that shocked even hardened insiders like former IMF boss Strauss-Kahn. The hard line position of the German led negotiators shatters any pretence of an honourable and humane Euro consciousness upon which the Euro project was founded and exposes a restless German dominance. It can be described as a neo Euro-imperialism.

Most likely within a couple of years of Memorandum 3 being signed, Greece will find itself again depressed economically and with little further assets to sell. At that point, most probably a partial debt write-down will be agreed, but given the absurd cruelty of the current lender mind-set, even this cannot be assumed.

In moving forward, the initial political question is – why did the Greek government fail to move these lenders to a more favourable position? The short answer is that it did not appear to have a plan that could give them more leverage than relaying a simple truth – that the people of Greece and Europe would be better off if a fairer deal was struck. Of course, the Greek government did explore options for seeking external support from countries such as Russia, China, Latin American countries and even the USA. It is true that it received support and help in various ways from all of these. In the end, however, the lenders were supremely confident that Greece was still left in a position that it had to accept any deal offered by its existing lenders.

By the close of negotiations the lenders were coalescing around two positions. One position was to offer Greece a third bailout with conditions that ranged from tough to humiliating. The other was to force Greece into an exit from the Euro-currency (and possibly even the European Union). The so-called Grexit would not have been undertaken under terms that would have been favourable towards Greece. Indeed, we now know that a detailed plan was developed over a one month period within the European Commission to deal with a Grexit. That plan reportedly is still under lock and key within the EC. The Kathimerini newspaper has reported that one staffer involved in its preparation considered the Grexit scenario so volatile it would have led to tanks being deployed in the streets of Athens.

Two weeks before the final agreement, Alexis Tsipras played his final card. He called a referendum on whether Greece should accept the harsh terms of an agreement proposed by lenders. The resounding OXI of the Greek people gave Tsipras a gasp of breath and a fresh mandate to negotiate against the harsh conditions.

The response of the lenders was worse than neutral. Outraged that a government should refer to its people before making a critical decision, the lenders responded with vindictiveness by toughening their conditions and humiliating the Greek Prime Minister. The humiliation was precisely in the fact that they “forced” him to sign an agreement (which he has declared he does not believe in) to prolong a strategy that had already proven a grotesque failure and which was deemed by the IMF analyst’s themselves (one day after agreement) to be unviable. The IMF analysts have confirmed what many other economists around the world have joined together to declare – the current debt load is unsustainable and any further debt is plainly irresponsible.

For many people the burning question is – why did Tsipras agree to further harsh austerity?  The answer is because he saw no other alternative other than an exit from the euro. An exit for which his government was thoroughly unprepared to manage. This would mean the country would have been at the mercy of the lenders. Given the savagery of their negotiating stance, he could only realistically expect the worst.

In the wash-up discussion of what happened, he will be criticised by some as selling out and betraying the cause. I believe that when it came to that final week, Tsipras had no option but to sign. The critical errors had already been made – it would have made no sense to turn those critical errors into a fatal error. If Tsipras had walked away it is more than likely Greece would have descended into chaos as the banking system dissolved, trade and business froze and resentment grew on the street. It would have been the easiest thing for hostile forces to sow discontent and move the country towards the precipice.  More than likely, the government would have fallen and the Left would have been saddled with the charge of bringing the country an economic and political disaster.

But if Tsipras was right in swallowing all pride to agree to horrible terms for the country, he was dead wrong in not insisting beforehand on the preparation of an exit plan from the Euro. The badge he proudly displayed (I do not have a Plan B) was a mark of weakness fully exploited by the lenders.

Tsipras was proven correct in plotting a winning electoral strategy that promised to stay within the Euro and yet overturn austerity and reduce national debt. He had a right to preserve his compact with the Greek people until he had a mandate to do otherwise. But this strategy also locked him into an untenable bargaining position with lenders.

The Left Platform now appears correct in arguing (from before SYRIZA assumed government) that an acceptable agreement with lenders most probably could not be found within the Euro-currency.

SYRIZA should make the most of the fact that under Tsipras it did everything feasible to get a better deal for Greece within the Euro. SYRIZA took the Greek people down a path of sincere negotiations armed only with the truth and a claim for justice. It has won many friends to the cause across the world and has even produced a split within lenders on the critical issue of the write-down of debt. This accomplishment has not produced tangible results, yet augurs well for future concessions on debt.

But on austerity, it went mostly backwards.  It should accept (apart from some concessions) it has extracted a draconian austerity package for the country. It is significant that people (even those set against him) acknowledge that he and his negotiating team argued as hard as humanely possible. There is an emerging consensus that it’s not possible to extract a more favourable deal from within the Eurocurrency arrangements. This is a significant development.

Unless SYRIZA now accepts that hyper-austerity is tolerable, it should recognise that it (and any other responsible Greek government) must have a viable and advanced strategy for exiting the Euro currency. It would be entirely irresponsible (when the lenders are developing such strategies behind closed doors) for Greece to be idly whistling in the wind.

In other words, the agreement Tsipras was forced to sign, is also an instrument to buy time. One track will be locked in an absurdist farce set around negotiations for a third memorandum of horrors. The other track should be laying the groundwork to plan and prepare people for an exit from the Euro. There is nothing schizophrenic or irrational about this – its called having live and competing options and it is exactly what the German-led lenders did to Greece in the first round of negotiations that ended in July.

Critical in all this will be keeping alive the message (in Greece and abroad) that austerity is a program imposed upon Greece by lenders. We should always remember that this SYRIZA government has fought hard against austerity.. A detailed alternative plan and hard work from below is now needed. This can allow it to negotiate with confidence by knowing it has somewhere to go if the lenders again bare their teeth.

The German newspaper Die Welt reported in July 2015 there is already a growing belief across Europe and the rest of the world of a German government tendency for domination. All efforts should be made to ensure that German government and business understand the growing resistance towards their foreign and economic policy in Europe.

For its part, the Australia-Greece Solidarity Campaign remains committed to working with all those in Greece who are resisting the politics of austerity and seek an end to the tyranny of an unsustainable debt.

On July 5th, the Greek people showed courage and defiance. They will be greatly helped in the next round if the OXI revolt gets global support.

Adam Rorris

National coordinator, Australia-Greece Solidarity Campaign