Time to stand up for Greece

An emergency summit on the Greek debt crisis is set to be held this Monday 22nd June, after the latest meeting of Eurozone finance ministers on Thursday concluded with a depressingly predictable failure to reach agreement.

The line taken by the main powerbrokers in Europe as to why an agreement has not been reached has become equally predictable.  It is, their argument goes, all up to Greece. Jeroen Dijsselbloem claimed afterwards that “the ball is clearly in the Greek court to seize that last opportunity.”

The reality could hardly be more different. This may in fact be a last opportunity for Europe – one of its last chances to demonstrate that it is a community that recognises democracy and that serves all of its citizens.

In more ways than one, the Greek crisis is a fundamentally European crisis that demands a response and solidarity from all Europeans.

It is up to European leaders, not the Greek government

To begin with it has  become increasingly clear that primary responsibility for reaching a deal at this stage lies not with Greece but with the European leaders who have so far resisted any kind of reasonable compromise

In the six months of negotiations, the Greek government has shown a willingness to make often painful and unpopular compromises including further spending cuts, tax increases and privatisations. This is in a context in which the Greek economy  since 2009 has shrunk by 25%; wages have fallen by  40% and pensions by 50%; unemployment is at 25% and youth unemployment is 50%;healthcare and other services have deteriorated dramatically; and homelessness and suicide levels have increased sharply .

The Greek crisis is often depicted by Greece’s opponents as driven by the demagogy of Syriza. This is perhaps because that is a less awkward understanding to deal with than the reality – that Syriza is itself now increasingly limited in its negotiating power by pressure from a  population that is simply unable to tolerate much more austerity

Yet still the European leadership has demanded more cuts.  As a consequence of the economic crisis, nearly half of the Greek population now relies primarily on pensions to survive while half of pensioners themselves are in poverty. But the Eurogroup and Greece’s creditors insist that Greece cut pensions even further.

Greece meanwhile remains stuck with a punitive debt burden that it cannot realistically pay back, yet on which Europe’s leaders refuse to allow further genuine renegotiation. At the same time Europe’s leadership demands “reforms” from the Greek government yet have consistently failed to show any real will to help it in its professed efforts to tackle tax evasion and corruption.

 

Even an economist such as Jeffrey Sachs – architect of the notorious ‘structural adjustment’ programmes in Eastern Europe in the 1990s and a long-time advocate for austerity – now says that “the Greek government is right to have drawn the line. It has a responsibility to its citizens. The real choice, after all, lies not with Greece, but with Europe.”

The roots and implications of the Greek crisis

But this crisis also draws into stark relief the way in which Europe is currently being run, in whose interests it is being run and where it is going to end up unless there is a counter-movement powerful enough to stop it.

Over the past five years leading European governments and institutions have been willing to bring the European economy, society and politics to breaking point. It is an approach that seems guided by the principle that the social consequences of, or popular reaction to economic policy should be ignored as much as possible.

The most immediate and shocking consequence of this policy has been its human impact in Greece and other austerity hit-countries. That Greece’s “creditors” continue to insist that it go even further with austerity is on one level simply callous. Beyond that, though, it shows a bizarre indifference to the fact that any democratic society reaches a point where such measures are not going to be tolerated by the public. The predictable outcome in Greece has been the election of a government that is no longer willing to tolerate this pressure. Yet the response of most of Europe’s leaders has been to regard the reality of this democratic reaction to their policies simply unacceptable.

The Greek crisis is the most extreme example so far of a European-wide phenomenon. The disconnect between democracy and the economic policies of European governments and institutions may be becoming unbridgeable. As if to drive home the severity of the problem, the reaction of many of Europe’s elite has been to at least implicitly conclude that there is something wrong with democracy. The indifference with which Europe’s leaders have reacted to the mandate of the new Greek government is simply an especially glaring example of this.

Europe’s elite seems to increasingly echo in all seriousness the question put sarcastically by Bertolt Brecht – with people having forfeited the confidence of the European institutions, would it not now be easier “to dissolve the people and elect another?”

The Greek government’s vision for Europe

What makes the stakes of the Greek crisis especially great, however , is that behind disputes about the minutiae of debt-to-GDP ratios is a much more significant conflict between two competing visions of Europe.

Syriza is not simply working from a platform of renegotiating Greek debt but is pursuing this as part of a much wider, and unusually coherent, alternative understanding of the causes and solutions to the Eurozone crisis. It insists repeatedly that its demands are not simply about a better deal for Greece within Europe, but about changing the European system as a whole – just as it insists on a domestic level on tackling inequality, oligarchy, tax evasion and corruption in Greece itself . It calls for a democratisation of Europe’s political economy as whole, a European debt conference and a substantial and egalitarian European-wide recovery programme.  It presents an overarching critique of the financialised and stagnating economy and emaciated political culture that currently dominate Europe, and of the interests of private capital and vested interests that drive it. Its ideas are underlined by elements of Marxist and libertarian analysis that have not been seen in mainstream European party politics for a long time.

This is almost certainly a major part of the reason why Europe’s leadership is so unwilling to compromise.  Perceived success for the Greek government would have an importance far beyond the relatively insignificant financial concessions which would be involved.  The question of whether Europe’s elite could financially afford to make concessions to Greece does not even come into play.  Similar or even greater concessions to governments have been made in other instances. The real issue is the political concession – the legitimacy which they are unwilling to afford to Syriza’s alternative vision for Europe.

What the outcome the Greek crisis could mean

All those who believe in a future for such alternatives should see things in just the same way.  Any success the Greek government has will provide an example for socialist, egalitarian and social-democratic politics across Europe. Its defeat would be a defeat for all progressive alternatives to the current system.

There are two possible outcomes if the rest of Europe does not offer a respectable deal to Greece. Either Greece will default on its debts and leave the Eurozone, or it will give in.

The consequences of Greece leaving the Eurozone are difficult to predict, but would likely be quite devastating. It would be incredibly traumatic for Greece. The impact on the rest of Europe and the world is a great unknown – but it could potentially resurrect the Eurozone crisis on a continent-wide level. Some seem to think this a price somehow worth paying and the risks not that high. But that is not that different from the attitude towards allowing Lehman Brothers to go bust in September 2008, which precipitated the global financial crisis.

The symbolism of a Greek exit alone would be terrible, however. The lesson would be that Europe is no longer the “community” it likes to think it is. That those who dissent from it or who cannot endure its orthodoxies are simply no longer welcome.

The alternative outcome is that the Greek government will give in to its creditors remaining demands. This is what all of Europe’s leadership wants, of course, so that they can carry on as normal. But the symbolism of this would hardly be much better. The lesson would be that democracy and equality among states has at best only the shallowest of meanings in the contemporary Eurozone. It would mean that pursuit of genuinely social-democratic government policies is simply no longer tolerated.

Stand up for Greece

The outcome of negotiations with Greece should therefore mean a huge amount to everyone who believes progressive policies and in a genuinely democratic Europe. Our leaders in the rest of Europe cannot be allowed to let their narrative of short-term self-interest, special interests and national division to dictate the course of the next few weeks.

We should make our voices heard and demand a real and substantial Europe-wide recovery programme, a European debt conference and a fair deal for Greece. The outcome of this year’s events could well be historic one way or the other – standing by is not an option.

 

 

by Neil Warner, YES Vice-President 

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