"A change in Greece will favour the fighting position of the working classes all over Europe"

Submitted by martin on 7 July, 2012 - 10:51

John Milios, a leading economist in Syriza and a Syriza member of the Greek parliament, spoke to Martin Thomas from Solidarity in Athens on 7 July 2012.

Q. We have approached a left Labour MP, John McDonnell. He has agreed to contact Jean-Luc Mélenchon to discuss them initiating a European conference of the left and labour movement in solidarity with the Greek left. Our comrades in France have also asked Mélenchon directly. We think that the new government in Greece is unstable...

A. Yes. They are planning to follow the same policy as before...

Q... and a left government in Greece could become a real possibility again quite soon...

A. Yes. We hope so!

Q. There is a serious risk that the European Central Bank could retaliate against a left government in Greece, for example by cutting the Greek banking system out of the Target2 system for payments within the eurozone [so that euros in Greek bank accounts would no longer be valid buying-power elsewhere in the eurozone]. There is also a possibility of building effective solidarity of the labour movement and left across Europe to stop the European Central Bank doing that...

A. We think that scenario has practically zero probability. It's not easy to exclude one country from the eurozone or from financing by the European Central Bank without it forcing a very rapid revaluation of financial risk all over the eurozone and double-digit interest rates not only for countries like Italy and Spain which already have problems but also for nearly every country. So the scenario is a threat and not really a practical possibility.

Josef Ackermann, the former head of Deutsche Bank, wrote recently that there has to be another big haircut of the Greek public debt, because the debt problem of the Greek economy is an insoluble equation. The crisis started when the debt was less than 120% of Greek GDP. They followed the austerity policies, they lowered the denominator of the debt:GDP ratio, and now we have public debt at 160% of GDP despite the haircut for private bondholders, the so-called PSI.

This is not a situation where they can do anything they want. The European ruling classes have as a main target to restructure the economy and the society away from the so-called European model, the European social state, towards the Asian or Chinese type, with very low wages and with no rights and guarantees for the working classes. Whether they can achieve is a matter of class and political forces.

It is not part of their plans to destroy the eurozone. That fact creates a basis on which we can negotiate.

We will say that the internal situation should be a matter for the Greek people - that is, the Greek government - and if it is a government of the left, then it should decide on the level of the minimum wage and on the collective-bargaining laws and on reforms of the tax system.

According to all accurate economic data, the actual direct tax coefficients in Greece are five to seven per cent of GDP lower than the European average. We have to change that. The rich must at last start paying taxes. We should not tax mass consumption, or the middle or the lower classes of society.

We should put this insoluble equation of the debt to other European countries, the members of the eurozone and the ECB, and say that it is impossible, given the current situation, where we have the deepest recession since the Second World War, to achieve at the same time three goals: to pay 110 billion euros in interest by the year 2020; to have a balanced budget and create a primary surplus [a surplus of government income over spending excluding debt service]; and to have funds to create growth. It is impossible!

It is to the benefit of the European taxpayers to renegotiate the Greek debt. Our direction would be the way that the Federal Republic of Germany renegotiated its debt after the Second World War, in 1953. The deal contained haircuts, renegotiation of the interest rates, and a moratorium period that made repayments conditional on growth - interest would be paid when the economy started growing again.

This year it is estimated that in Greece we will have a recession of 6.8%. This is an enormous recession. Greece was growing faster than any other country in the eurozone with the exceptions of Ireland and Finland. The average growth rate for the ten years before the crisis was around 4.5%. In eleven to twelve years we had an increase in per capita GDP of 61%.

The debt, as a ratio to GDP, remained constant around 100%. That was due to tax evasion, in part, and mainly to the reduction of tax coefficients for big capital and the rich. The state revenues were reduced deliberately as GDP grew. That has to stop. It has to be reversed. We have to have a more just system and a redistribution of wealth in favour of the working classes.

Q. I agree that a Greek left government could be in a strong position to negotiate with the European Union. However, the leaders of the European Union are as dedicated to the idea of transforming society, social overhead costs, labour markets, in a neo-liberal direction as the Greek left is to transforming them in the opposite direction.

The European ruling classes' calculations will not just be financial. Even if the retaliation is counterproductive financially, I can't see that we can say that there is zero probability that they will retaliate.

A. I believe the retaliation would be not only counterproductive but also disastrous. Also, this is a fight taking place all over Europe - in all countries, even Britain, which is not a member of the eurozone. A change in Greece will favour the fighting position of the working classes all over Europe. We will have a changed situation.

Some governments which were elected on the basis of "a different agenda", even in quotation marks - that is, a promise of a different agenda, despite what they actually do, like the French government - would be under strong pressure to decide on one side or the other.

We have discussed with different European governments, with the IMF, and the leadership of the European Union. Those have not been official meetings, but meetings through institutions which represented, in one way or another, those authorities. We are confident that we can negotiate.

On the other hand, as we have seen from history, there are always mistakes or unexpected situations. We have to have a plan B. And we have a plan B. But this plan B cannot be made public at this point, because it has to do with the whole architecture of the negotiation. I understand your question. The situation is severe, but it is not catastrophic, that is, there are alternatives.

We believe we have to go on to take part in that battle and to collaborate with left parties and trade unions all over Europe in order to change the situation. If things can be changed in Greece, that means they can change everywhere. If things have changed in Venezuela, that means things can also change in other countries.

Of course, it is a very strong confrontation. There are extremists on the side of the ruling elites. We have to be prepared for every possible outcome. But our main coursde is to continue on an internationalist agenda and fight with other left forces and movements all over Europe for a change over all the continent.

We don't believe it would be a solution to have a situation like the interwar years where the working class of every country was making its alliance with its ruling class to fight other countries, and other countries were portrayed as the enemy. We do not believe that the enemy of the Greek people is Germany. We believe that the ruling classes of Germany follow a policy similar if not identical to that of the ruling classes of Greece. The ruling classes of Greece could not put forward their plans without the alliance of the German and other European ruling classes along with institutions like the IMF. They hope to make reactionary changes in economy and society irreversible, which of course they are not.

Q. If a left government in Greece wins office and succeeds, what would Greece look like after that? Would it still be capitalist? What are you aiming for?

A. If we sit here in Syntagma Square and look at the people passing by, we cannot understand the situation. The working classes of the country are on the brink of a great disaster. For the first time in post-war history, we have over 20,000 homeless. This is new for the country.

We have an official unemployment rate of over 20%, and 50% among the youth. This means an actual unemployment rate of around 30%, which is disastrous. This cannot go on.

Though the situation is very bad, a left government would first of all stop the declining course - stop this catastrophe - and would care for the poor.

The first measures would be to bring back the minimum wage of 751 euros, because it is impossible to live with less. We will take measures, based on state initiatives and other measures, and start decreasing unemployment and creating positive growth rates.

It is possible, within a very short period of time, to fight corruption. We know that there is a close connection between the big enterprises, both international and Greek-based, with the state, which is expressed in certain laws but also in central contracts. We are going to fight this corruption immediately, to create a registry on an electronic basis in order to have a just tax system and deal with things like evasion of indirect taxes concerning petroleum productds.

Greece produces and exports refinery products like gasoline and benzene and so on. It is estimated that we have something between one and a half and three billion euros in tax evasion from that business. It is easy to monitor imports and tax petroleum as it comes into the country.

The whole system is corrupt. We know about the Siemens case [about corrupt deals between Siemens AG and Greek government officials during the 2004 Athens Olympics]. We have evidence that similar things happen with many enterprises, especially those which control the mass media. It is possible to change the situation.

Crucial for us is the participation of the people, both the civil servants who work for the state who are also very anxious about corruption, and also the people who are going to support a left government.

We cannot make any positive step if we do not rely on the people and if we don't get ideas from the people. We are going to be part of the movements as we have been and as we are now. We are going to be the major opposition in the country.

Q. Syriza is launching Popular Assemblies?

A. Yes.

Q. How will they develop? And don't they need to discuss the Plan B?

A. We need to gather the ideas of the people. Plan B has a side which can not be public and which depends on very specific "technocratic" procedures. In order to fight with the people, we want to create a new mass party.

We have 1,650,000 votes. We believe that from those people who supported us we can create a party of 200,000 members, with the Popular Assemblies linked to it.

We are welcoming new members massively in the ranks of the party, and we want to decide, together with these people and the others who participate in the Popular Assemblies, to create a party capable of fighting this government and the ruling classes.

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