London meeting debates Greek and eurozone crisis

Submitted by martin on 6 June, 2010 - 9:15 Author: Martin Thomas
Research in Money and Finance

The debate at a 2 June meeting in London on the crisis in Greece and the eurozone was framed by a forceful opening speech from Costas Lapavitsas, a professor of economics at the School of Oriental and African Studies (SOAS).

Lapavitsas summarised ideas presented in his recent interview for Solidarity, and argued for a Greek "exit with social restructuring" from the eurozone as the best option.

"I am not advocating the end of the world", he said. "The end of the world is nigh, whatever we do". Or, at least, the end of the current eurozone.

Whatever the Greek government does now, it will eventually have to default (i.e. not make payments due on the bonds [IOUs] it has issued). Better, then for it to take the initiative and default now.

The eurozone, said Lapavitsas, "cannot be reformed in any progressive way". It organically generates "core-periphery" relations, such as those which have led to the Greek government going deeper and deeper into debt to "core", mainly German, banks. It is dominated by "conservatives", especially in the German government.

Lapavitsas noted, in concluding, that his proposed "progressive exit" - i.e. one coupled with sweeping nationalisations and measures of redistribution - "cannot be carried through with the present Greek state".

But... a call for Greece to leave the eurozone now is surely a call for the present Greek state to quit. If it is to be a different state that quits, then there must be a big battle to dismantle the present state and construct a new one. Discussion from the floor would take up these issues.

The meeting was sponsored by the "Research on Money and Finance" centre at SOAS and by the Birkbeck Institute for the Humanities. It was chaired by Larry Elliott, economics editor of the Guardian, and attended by about 150 people. Most, I would guess, were students or academics. AWL was the only activist-left group intervening as such. The SWP's Alex Callinicos was on the platform, but he appeared to have lacked time to prepare his contribution, and just made a perfunctory "crisis big, capitalism bad, struggle good" speech.

A podcast of the meeting is available online.

George Irvin, also a professor at SOAS, was the platform speaker with a clearly different angle from Lapavitsas.

He pointed out that the Greek government's problem is not just the size of its debt, but the fact that many bonds [IOUs] come up for repayment in the next couple of years. The UK has a big government debt, but with repayments spread much further into the future. Spanish, Italian, and Portuguese capital are like Greek capital, but even more so: their repayments are due even sooner.

Therefore, Irvin argued, some big reshaping of the eurozone to allow for a restructuring of those debts [i.e. an agreed postponement of repayments] is on the agenda whatever the German government, or German banks, think.

He succinctly exposed the lies in the German popular press about Greece. Greece has longer working hours, lower wages, a higher retirement age, and poorer welfare provision than almost all West European countries. For Greece to meet current repayment schedules would mean social ruin.

However, Irvin said, a Greek government which defaults and quits the eurozone will not have ready access to international credit markets. It will put the burden of adjustment on Greek working people even more heavily than the current plans. Pressure to reshape the eurozone is a better orientation than exit.

I spoke from the floor and said advocating Greek exit from the eurozone as the answer begs questions of agency and sequence. What sort of Greece should exit, and after what measures between now and then?

A battle by the labour movement and left across Europe - not just in Greece - for taxing the rich, cutting military spending, nationalisation of major enterprises, and cross-Europe social guarantees - might well lead to Greece breaking with or being expelled from the eurozone. For socialists, there is nothing holy or sacrosanct about the capitalist integration of Europe, nothing about it which stands higher than the interests of working-class struggle.

But the converse does not hold. Exit from the eurozone by "the present Greek state" will not automatically, or even probably, bring with it a dismantling of that state and its replacement by a better one.

A pattern of the poorer states of the EU exiting and defaulting one by one, and each then trying to haggle for the best deal it can get with the big centres of world capital, is not likely to produce less social pain, or to generate a shift to the left. It is more likely to strengthen the nationalist right.

Stathis Kouvelakis, a lecturer at Kings College London, expounded (mostly in his summing-up) a political perspective for Greece to complement the economic perspective advocated by Costas Lapavitsas.

Kouvelakis is a Marxist, author of a substantial book Philosophy and Revolution: from Kant to Marx, and, as I understand it, broadly "Trotskisant" in his political leanings.

His political proposals were, however, entirely in terms of "popular movements" rather than class politics.

In his opening speech, he had described the victory of the Greek government backed by the US and UK against the Stalinists in the civil war of 1946-9 as a big "defeat for the popular classes". That is true: the governments of Papagos and Karamanlis were right-wing, anti-working-class, and repressive. But a Marxist assessment also has to recognise that a victory for the Stalinists in Greece, as in neighbouring Albania, Bulgaria, or Yugoslavia, would have been an even worse defeat for the working class - that hopes for the working class had to rest with a "third camp" opposed to both the Stalinists and Papagos.

Kouvelakis advocates a political coalition bringing together sections of Pasok with the Greek Communist Party (KKE) and the far left, even though (he said) these groups do not agree on a socialist alternative to capitalism, and do not even agree on the European Union. (The KKE is for Greek withdrawal from the EU, but is hesitant about agitating for it. Most of the rest of the Greek left, defined in the broadest terms, is against Greek withdrawal).

What would the basis of the coalition be, then? Those disparate political groups can unite for strikes and demonstrations against the cuts, but Kouvelakis envisaged a political coalition. He seemed to argue that the basis of it would be the single plank of Greek exit from the euro and the EU, so that the political task now would be to convince other elements of that broad left spectrum to come over to the KKE view, to make the KKE bolder in its anti-EU agitation, and presumably to make the KKE less "third-period"-like in its tactics.

Unavoidably, explicitly, that would mean the more militant left groups in Greece shelving their socialist demands in favour of a political coalition on the "national" issue of Greek exit - and thus the blocking-off of possibilities for a social transformation which could make a break between the eurozone and Greece not the property of "the present Greek state" but of a workers' government.

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