Greece: Towards a fourth memorandum?

Submitted by Matthew on 22 March, 2017 - 11:31 Author: Theodora Polenta

The latest poll in Greece shows Syriza has the support of just 15% of the electorate. Finance Minister Euclid Tsakalotos has boasted that a third of the austerity measures Greece had to impose as part of the current programme have been “totally completed”, another third are “totally agreed”, while the rest are subject to “political negotiation”.

Alexis Tsipras’s Syriza-Anel government, elected in January 2015 with the claim and the hope that it would be Greece’s first government of the left, is overseeing a social counterrevolution. More than a third of the population (35.7 per cent) are officially in poverty. Unemployment stands at 23 per cent and 46 per cent among youth. Last year alone Syriza slashed another €350 million from the health budget. 2.5 million Greeks have no health-care coverage.

Public spending on higher education was gutted by 75% five years ago, with 15 to 25 per cent cuts in each subsequent year. An example of the impact of this is at the University of Crete, which had a budget of €17.5 million in 2011, but now operates with just €3.1 million. GDP showed a decline of 1.1% in the fourth quarter of 2016, instead of the expected growth of 0.3%. GDP decreased by €338 million, and added value fell much more, by €637 million. Gross capital formation fell 30.7% compared with 2015.

The Syriza government must make a further €7 billion payment to its creditors by July or risk default on its entire debt, which remains at a staggering €330 billion. For the last two years, the IMF has been involved in a fraught standoff with the EU, insisting that it would not back any further bailout programmes for Greece if they did not include some debt relief. The IMF is on record that Greece’s debt is unsustainable and opposes demands from the EU that Athens must show a primary budget surplus of 3.5 per cent. Instead, it calls for Greece to be bled dry more slowly, with a 1.5 per cent primary budget surplus and debt relief.

The IMF estimates Greece’s debt will be 170% of gross domestic product by 2020 and 164 per cent by 2022, and “become explosive thereafter”, escalating to 275 per cent of GDP by 2060. Germany responded not by backing down, but with brutal language and further threats against Greece. German Finance Minister Wolfgang Schäuble has warned: “We can’t undertake a debt haircut for a member of the European single currency. It’s ruled out by the Lisbon Treaty... For that, Greece would have to exit the currency area... The pressure on Greece to undertake reforms must be maintained ... otherwise they can’t remain in the currency area.”

When the IMF and the Eurogroup reached a tentative agreement on 10 February, Reuters reported, “Officials said the lenders would ask Greece to take €1.8 billion euros worth of new measures until 2018 and another €1.8 billion after 2018, focused on broadening the tax base and on pension cutbacks.”

The new cuts represent 2 per cent of GDP, which has already fallen by 25 per cent since 2010. Or taking another €327 from every man, woman and child in the country. The government returned from the Eurogroup meeting of 20 February celebrating. In fact we are on the way to the imposition of a fourth memorandum. These are the measures of the “government’s step forward” towards the completion of the second evaluation: • Reductions of the lower income threshold of tax free allowance from €8,600 to €5,900, so that all minimum wage workers are set to lose about €500 per year. • 1.4 million pensioners, those getting more than €700 monthly, will see their pensions further reduced in 2020-2025. • Privatisation of the remaining large public services (electricity, water transportation). Restructuring of the Superfund and the passing over to it of additional public assets and wealth.

The coming fourth memorandum will build on the ground laid waste by the previous three memoranda. However, there is some extra political weight here: the Syriza-Anel government is already creating the framework for post-2019, when it is highly unlikely to be in power post-2019.

None of the previous memorandum governments (Papandreou, Papademos, Samaras, Venizelos) dared commit that far in the future. The fourth memorandum will not, unlike the previous three, be supported by a new loan or “bail-out” agreement. Bankrupt Greek capitalism will have to self-fund, and that can only be done by plundering salaries, pensions, health, education, and public wealth. To mislead the Greek public, and to sooth the residues of their left conscience, the spin doctors of the government offer a gloss on the negotiations over the second evaluation and the prospect of a fourth memorandum.

They say the government will implement a package of counter-measures in favour of workers, pensioners, etc., to counteract the anti-working class measures of the fourth memorandum and produce a “neutral effect”. The same argument was used in the past when Syriza was signing off on a third memorandum and promising a “parallel programme”.

Any crumbs will be given only after 2019 and only if the target of a 3.5% primary budget surplus is met. They say that Tsipras, with the World Bank, will be preparing a €3 billion program to reduce unemployment and create 300,000 jobs in 2018-2020. In fact, the miserable government of Syriza-Anel will vote through all the anti-working-class measures (with an ever-decreasing pool of tears) in order to cling to power.

Meanwhile, the opposition ND (Tory party) leader Kyriakos Mitsotakis, who now has a 20% lead in the opinion polls, is claiming (rightly so) ownership for his party over all the memoranda. He endorses the line of a smaller state, budget surpluses, redundancies in the public sector, and further privatisation. The other parties of the establishment, such as Pasok and Potami, are dreaming of national salvation governments. The Greek CBI is “campaigning” for collective redundancies, reduced taxes for the capitalists, and Bulgarian levels of wages.

The Versailles summit of the four biggest countries of the eurozone (Germany, Italy, France, Spain) on 6 March announced a programme of a two speed eurozone and the dissolution of the hypothetical front of the countries of the south upon which the hopes of the Syriza-Anel government were based. It remains to be seen how this two speed Eurozone will be institutionalised. After the Dutch elections on 15 March 15 come the French presidential election on 23 April and 7 May, the German elections in late September, and the Italian elections on a date yet to be set.

If there is a turn towards the populistic right and far right, some of these countries may withdraw from further financing of the Greek programme without IMF involvement. Greece’s stalemate not only maintains the widespread social distress, but carries the risks of sudden acceleration and shocks.

An “accidental” and regressive Grexit is creeping back onto the agenda. It is us — the workers in the public and private sector, the pensioners, the unemployed, the youth, the struggling self-employed — against them. Hopes for the reversal of the social Armageddon cannot be placed with the bureaucrats of Greece’s union confederations, Gsee and Adedy.

The leader of Gsee refuses to organise any resistance. He is going to the negotiating table with the Greek CBI for another round of misery. Adedy, under a coalition leadership of ND, Pasok and Syriza supporters, remains at the level of symbolic protests. At the last meeting of Adedy, the representatives from the Greek Communist Party (KKE) union faction, Pame, did not propose even one strike day.

The tide can be turned only by united struggle of the working class and popular strata movement. Only by rallies, demonstrations, sit-ins, civil disobedience, solidarity networks, strikes, based on the rank and file and our own forces of self-organisation. A united front is needed, on a political level, of all the anti-capitalist radical and revolutionary anti-memorandum left forces. This includes KKE, Popular Unity, Antarsya, and the groups of the revolutionary left.

A working-class-based, radical, anti-capitalist transitional programme must have at its centre workers’ power, the nationalisation of the banks and all key sectors of the economy under workers’ management and control, and the creation of a workers’ government as the only way to safeguard and defend the implementation of our program of transitional demands. Throughout the history of the working-class movement, first comes the “revolution against something”, a broad united front of all forces rallied against a common enemy. And then comes the “revolution for something,” the breakdown of yesterday’s united front and the coming to the fore of those who will go to the end to build a new order.

What makes the Greek left currently unattractive is that it is permeated by an array of melancholy and an air of honourable defeat. No revolution would have ever have been won if the vanguards had only responded to the interests of the subordinate classes, and not also sparked the collective imagination, projecting a dynamic, confident, winning picture. Missing most cruelly in these dramatically difficult days for the Greek working class is just that sort of “story” of a different future.

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