Collapse of the reformist strategy

“The Troika strikes back and demands that the Greek government invite it to return to Athens as Conqueror – the Carthaginian Peace in all its glory”. - Yanis Varoufakis, former Greek finance minister

The defeat suffered by Greek’s Syriza led government over the latest bailout agreement for the country is the most comprehensive possible. What makes it so is not the harshness of the bailout terms but the fact they were submitted to voluntarily. Such defeats from within, in which a political party comes to accept everything that it had once opposed, are the most damaging of all. To have fought and been defeated is bad but to surrender without a fight is much worse.

What is most shocking about Syriza is that the reversal of its programme has taken place over such a short period of time. It was only in January of this year that it was elected on a platform of ending bailouts; expelling the Troika institutions; and easing the policies of austerity. It was only on July 5 that the Greek people had overwhelmingly rejected the terms of the latest bailout proposals in a national referendum. Yet six months on from the election and only eight days after the referendum the Syriza led government submitted to a bailout agreement that – in terms of pushing austerity and assaulting democracy – went far beyond anything that had previously been proposed or implemented. While some on the left have baulked at describing this as a betrayal what else can it be called?

July 13 bailout agreement

To get a sense of the depth of that betrayal we need only examine the July 13 bailout agreement. The programme - valued at €86 billion and scheduled to run over three years – includes a wide range of measures which deepen and intensify austerity. Among these are: increases in VAT (for instance VAT on processed food and transportation will go from 13% to 23%); cuts in public sector wages; and reductions in pensions and an acceleration in the raising of the retirement age. There are demands for the further “liberalisation” of the economy. This section includes detailed stipulations on trading hours; sales of over-the-counter pharmaceutical products; and the ownership structure within the pharmacy, milk production and bakery sectors. It also demands the opening up of “macro-critical closed professions” (such as ferry transportation). Measures directly attacking the working class – which are grouped under the heading “Labour market liberalisation” – include restrictions on collective bargaining and industrial action; and also the removal of legal protections against mass layoffs.

The bailout agreement also sees a massive ramping up of the privatisation drive. Specified sell offs include the electricity transmission network operator (ADMIE) as well as the ports of Piraeus and Thessaloniki. Moreover, all of the country’s state run assets are to be transferred to a trust fund – supervised by the EU – that will be tasked with generating €50 billion from sales.  This money will be used to recapitalise Greek banks and reduce the government debt burden.  The agreement is also retrospective and commits the Greek government to “re-examine with a view to amending” measures that it has already taken. So even the token gestures that Syriza has made since taking office – such as the rehiring of cleaners by government ministries- are likely to be reversed.

Going hand in hand with the austerity measures is a major assault on Greek democracy. Under the terms of the agreement EU officials will take control of the most important areas of government policy. A clause on the “de-politicising the Greek administration” demands that the government “consult and agree with the Institutions on all draft legislation in relevant areas… before submitting it for public consultation or to Parliament”. Within this framework the Greek parliament is reduced to a rubber stamp for legislation that has already been agreed by the government and their EU appointed overseers.  We can see this at work already with the Greek parliament being ordered to pass legislation to ratify the bailout agreement to meet a 48 hour deadline.  The implementation of these dictats does not even guarantee a new bailout, as the document spells out: “the above listed commitments are minimum requirements to start the negotiations… however… the start of negotiations does not preclude any final possible agreement”.  With the return of Troika officials to negotiate a new Memorandum of Understanding the demands for more austerity measures and greater political control are likely to grow.  

The third bailout agreement further transforms Greece into a financial colony of the EU. What it reveals is the imperialist nature of the EU and the reality that the draconian austerity that the country is being subjected to cannot be imposed through conventional democratic means.

No alternative?

The Syriza led government’s justification for accepting a new bailout was the depressingly familiar one that there is no alternative. In his address to parliament the Greek prime minister Alexis Tsipras admitted that the agreement was a “bad deal” but also insisted that it was the best available option.

Yet, as the leadership of Syriza hadn’t considered any alternative, arriving at a point where there appears to be no alternatives was inevitable. The whole strategy of Syriza was based on the assumption that the EU could be persuaded of the unsustainable nature of the bailouts and to come to a “reasonable compromise” over austerity and debt repayments. When this approach was met with the implacable opposition of the European governments and the creditors Syriza was floundering. And it was not just floundering in July, it was floundering from the very start.  In February after only being in office for a month it agreed to an extension of the bailout and to recognise the legitimacy of the Troika institutions.  After they conceded on these points the only thing left to discuss were the details of a new bailout programme. Syriza had put itself in a very weak position. 

Referendum

The July 5 referendum in which the Greek people overwhelmingly rejected the latest bailout proposals from the EU raised the possibility of an alternative path. But again this was rejected by Syriza. For them the referendum was at most a device to strengthen their appeals to the EU for a reasonable compromise. However, even this may be a generous interpretation of Syriza’s motives. A more sceptical view is that Syriza called the referendum in the belief that a likely yes vote would provide cover for their “reluctant” acceptance of a new bailout. The actions of Tsipras in the wake of the vote – convening a “council of political leaders” in which he accepted the conditions of the defeated yes camp and then making proposals to the EU that were almost identical to those that had been rejected – would certainly lend weight to such a view.

Given the limited expectations that Syriza had for the referendum it would have been alarmed at the outcome and the potential radical dynamic that could have developed from it. It wasn’t just that the Greek people had overwhelming voted no (61% to 39%) it was that the no and yes votes had a very clear class identification - with Greek workers largely voting no and the capitalist and richer middle class elements voting yes. Another clear signal from the referendum was the radicalisation of the youth. Eighty-five percent of those from eighteen to twenty-four voted “no,” which shows that this generation, which has been completely sacrificed to austerity, was very aware of the future ahead of it under any new bailout. Overall, the no vote was message of defiance from the Greek people towards the institutions which had sought to coerce and threaten them. It was a “no” to the Troika and it was a “no” to the leaders of the EU. It was also a clear defeat for the pro-austerity forces within Greece itself, even more so than in the general election in January that had brought Syriza to power.

Defeatist

For any government serious about charting an alternative course the no vote would have been a spur to decisive action. For example, in response to the moves by the ECB to reduce funding to Greek banks such a government would have instituted immediate defensive measures like the nationalisation of the financial sector and other strategic assets. This scenario would have had a further radicalising effect and raised serious questions over the private ownership of property upon which the rule of capitalism rests.

But to Syriza such a prospect was utterly appalling. For what underpins everything that the party does, from its approach in negotiations to its submission to the Troika, is the perspective that capitalism must be preserved. For them the working class is historically defeated and any socialist project impossible.  Within  this defeatist ideological framework the role of the left is to prevent capitalism collapsing into something worse.  

It is no coincidence that Syriza was established and grew in the wake of the defeat of the most intense struggles against austerity during the 2011-13 period. Accepting that defeat, it held out the hope to Greek workers that austerity could be eased not through struggle but through negotiation and the achievement of a reasonable compromise with capitalism.

Capitalist recovery

The problem for Syriza, and the parties throughout Europe which share its perspective, is that the reasonable compromise does not exist. For the capitalist classes, international financial institutions and governments, austerity is not some reckless ideologically driven policy but rather an essential programme for recovery. And what is meant by recovery in capitalist terms is a restoration of profitability. From this perspective policies such as privatisation, wage reduction, benefit cuts and reductions in public spending make perfect sense.

In their own stated terms the various bailouts do not and will not work. The two failed bailouts in Greece and the prospect of a third bailout that will raise the country’s debt burden to over 200% of GDP is ample evidence of this. But as a means to force the implementation of the programme of capitalist recovery they have been very successful. We need only look to Ireland, where there has been a massive transfer of resources from labour to capital, as an example of this.

Political attack

As well as an economic offensive there has been a political attack by the capitalist classes across Europe. This has taken the form of more restrictions on democratic rights such as assembly and industrial action as well as the transfer of powers from national governments to unaccountable institutions such as the Troika.

Another aspect of this political attack is the crushing of political parties and governments that diverge from the programme of austerity. This is what we have seen in Greece with Syriza. Any challenge no austerity - even one as mild as that presented by Syriza - has to be crushed. The purpose is to dispel any hope amongst the working classes that there could be an alternative.

Opposition

Yet despite the economic and political offensive opposition to austerity is growing. We see evidence of this throughout Europe. The problem is that this opposition is attaching itself to political vehicles that can’t possibly deliver. Syriza have demonstrated this is spectacular fashion in Greece, while parties that have identified with Syriza such as Podemos in Spain and Sinn Fein in Ireland, are surely on the same track. It is no coincidence that support for these parties has dipped in the wake of the Greek debacle. Another problem is that many of the left groups have fed illusions in these parties - building them up to be much more radical than they really are and making excuses when they fail.

If Greece demonstrates anything it is the weaknesses of anti-austerity electoral formations and their inability to advance the cause of labour. In the case of Syriza there doesn’t even appear to be possibility of the remnants of a genuine left emerging from it. The opposition to the leadership from the Left Platform faction has failed to materialise. While its ministers resigned from government and its executive members and MPs voted against the bailout legislation this was largely symbolic as it maintained the unity of the party and its continuation in government.   In Greece the failure of a left opposition to emerge could be very dangerous as it would allow the anti-austerity banner to fall into the hands of the neo-Nazi Golden Dawn.  The public perception of a discredited left - exemplified by a Syriza led government enforcing austerity -  could push Greek politics in an extremely reactionary direction. 

Revolution

The defeat that Syriza has led the Greek working class into has been very damaging. In the immediate period it will disorientate and demoralise those within Greece who had illusions in the Syriza approach. It was also demoralise workers in other countries of Europe - such as Spain and Ireland - who had hopes of bringing anti-austerity parties to power through elections.

However, it would wrong to despair. In Greece there is clearly a significant section of the working class - as evidenced by the huge no vote in the referendum - who remain defiant. They are likely to continue to oppose austerity even when it is being imposed by a Syriza led government. The referendum will continue to be a powerful reference point that affords a democratic legitimacy to future struggles. In Greece there is also a strong network of co-operatives and community support groups that - out of desperate necessity - have sprung up during the period of the bailout. Though operating at a basic level they do point towards the possibility of an alternative economy. There are also revolutionary socialist groups - that were never associated with Syriza - which though small have the potential to grow rapidly in any future struggles. Also, around the period of the referendum there were significant demonstrations throughout Europe, which highlighted the possibility of a broader solidarity network.

Yet the potential of all this will only be realised if the working class parties and organisations throughout Europe draw on the lessons that are contained in the Greek crisis. That there is no reasonable compromise possible within capitalism and that the only way to end austerity is a revolutionary break with the capitalist system. This may sound extreme, but given what the working class in Europe is facing (as exemplified by Greece), any other option would be completely inadequate.

The potential for revolution is not some Marxist fantasy. The fear of upheaval and insatiability has increasingly featured in the utterances of the political elite. Probably the clearest articulation of this came from European Council president Donald Tusk. Comparing the current political atmosphere in Europe to that alter 1968 he said that he could feel “maybe not a revolutionary mood, but something like widespread impatience”. He then went on to warn that “when impatience becomes not an individual but a social experience of feeling, this is the introduction for revolutions”. The capitalist class and their political representatives (unlike many on the left ) are certainly alert to the potential for revolution.