The Syriza government of Greece has submitted to the EU a draft agreement for economic management, as part of securing continued four-month funding to pay foreign debts coming due, and thus avoid a default. But the agreement has ushered in Syriza’s first political crisis, with significant sections of the party denouncing the deal as abject surrender. Most prominent was the denunciation by Syriza MEP (European Parliament) member, Manolis Glezos, who condemned it as capitulation, and apologised to the Greek people for participating in ‘an illusion’. Glezos, in 1944, aged 16, snatched the Nazi flag from the Parthenon, a signal for the uprising to begin, ahead of Allied reinvasion of the country. His anger resonates with many – it’s a measure of how important such politics are in the country that Prime Minister Alexis Tsipras had a meeting Tuesday morning with Mikos Theodorakis, the legendary radical composer/musician, in order to keep him informed and onside.
The drafting of the new agreement was the culmination of a bloody and bruising process last week in which the German government gave almost no ground on the matter of a bridging loan to deal with Greece’s looming foreign debt payments. Nearly 7 billion euros payments on bond cash-ins and rollovers come due in the first two weeks of March, and Greece needs about 5 billion euros of ‘bailout’ – ie transfer from one set of financial institutions to another – to avoid default. Were the latter to occur, the European Central Bank would cease lending to the country and insolvency would rapidly spread through society. Imports and exports would slow and cease, and the ATMs would run out of money. Syriza through finance minister Yanis Varoufakis had wanted a short caretaker agreement to get this money, in which it would launch no radical programmes of state expansion or demand stimulus – but nor would it impose the previously agreed austerity measures or the continued programme of privatisations. A long-term programme would then be negotiated over the four month breathing space – before another 10 billion euros in foreign payments come due in June.
Though this was presented to the EU, which made general positive noises, it also had to go through Eurofinmin, the finance ministers of the eurozone. And there Germany’s finance minister, Wolfgang Schauble, the only voice that really matters, said ‘no’. His refusal was as politically provocative as could be, as was much of the German establishment. They spoke of the deal proposed by Varoufakis as ‘a Trojan horse’, while the head of the German stock exchange compared Syriza to the Taliban. Syriza held out until the very last moment on Friday, when they presented a proposal that removed some of the general language that would have allowed them to get-out of anti-austerity measures – but left in sufficient room to have some negotiation about government spending, which would allow them to lift a number of the most sadistic measures, such as repossessions of council housing, and yet further reductions to pensions (currently sitting at around 380 euros a month).
Schauble appears to have been ready to reject this too, but by now some dissent had started to come from the leaders of Germany’s Social Democratic Party (which is in coalition with Merkel’s Christian Democratic Union) , Francois Hollande, and, god help us, the Cameron government (which is not in the eurozone). Schauble noted that ‘Syriza is going to have a great deal of difficulty selling this deal to their people’, a measure of how bitter and personal the matter has become, and how much German politicians have an eye to domestic politics over this issue. The follow up agreement has been presented as all-out surrender to the troika and the austerity process, but it is nothing of the sort. Though itemised point by point, it is as vague as the previous letter, committing to spending reviews for each government ministry, a crackdown on tax evasion, all of which it was going to do, a ‘modified approach to collective bargaining’ rather than the return of full collective bargaining, and not ‘rolling back’ completed privatisations – again, something it wasn’t going to do much of. It has also conceded a VAT tax rise in regional areas, that it wasn’t going to impose.
The accusations of Syriza capitulation centre on its acceptance of the principle that the debt imposed on it is legitimate, and the acceptance of a mandated budget surplus of up to 4.5%, to be used to repay the debt – or, realistically, to simply service its interest. These would be a capitulation if it were a two-year agreement, but it isn’t – it’s a four-month agreement, for which those measures barely kick in, and it has no binding power beyond that. The renewed de facto recognition of the troika – as separate entities, but still with budget oversight roles – is a bitter stepback, but it was one created by the political theatre of announcing that the ‘troika was dead’ immediately after the election. That political theatre may still have been worth doing, but that’s all it was, as long as default was off the table. At the time of writing, there were varying reports as to how much dissent there had been inside Syriza to the deal – early reports had set there was a two-thirds vote against it in the parliamentary ty, later reports said there had only been five against, and five abstentions in the 150+ group (including MEPs).
Really, such an open deal is yet another political round, leaving the fight over measures to a point-by-point slugfest over the next months. However, it may not be enough to get the IMF on-side – who have called it ‘too vague’ and whose agreement is essential. It must also be ratified by the German parliament by Saturday for the first tranche of the money to come over. In this case however, Schauble has got behind the agreement, and will urge the Bundestag to pass it.
That buys breathing space for Syriza and the country, but at what political cost? Syriza has a dozen+ constituent parties, but more importantly it has three (major) platforms – its main platform, a Left platform and a Communist platform. The Left platform, represented by Costas Lapavitsas in matters economic, represent about a third of the part, and have argued for an exit from the euro rather than any capitulation to parts of prior programmes. Such an exit would allow for a full cancellation of debts, and a fresh start. But it’s a hugely risky strategy so early, since it would involve massive confusion – for a period euros would continue to be used, but would not be euros, per se. Secondary currency would be required and quite possible a ration book system. A period of rocketing inflation would be unavoidable, capital controls would damage such investment as there is, and the misery would get far worse before it got better. No-one seriously doubts this, nor do they doubt that the government’s relationship to the military and the police would be tested. The advantages, eventually, are substantial, since the new drachma could float down, and make tourism and exports far more competitive – though the former would be damaged by any civil unrest, petrol shortage etc.
There is also the problem that Syriza never campaigned on an immediate ‘Grexit’ from the euro (the KKE, the Communist Party did) – and its majority support was won by a firm commitment to staying in the euro, unless de facto thrown out. Which promise – euro-maintenance or anti-austerity – overrides which, is a key question. Syriza’s centre argues that austerity can be held off by the sort of manoeuvres it has been making, and eurozone membership maintained, and that a write-down of the debt can occur. Less vocally, Varoufakis has also pointed out that it takes six months to launch a new currency properly, that no-one has ever had to do something like this before, and that is unquestionably what is being prepared on a parallel track.
Without sufficient expertise in these matters, it is impossible to tell who’s exaggerating and who’s underplaying the situation. But it must be said that much of the Left criticism of the Syriza centre’s strategy doesn’t propose an alternative one, save for an immediate ‘Grexit’, and doesn’t go into any sort of detail about how it would handle the conflicts that would arise from such. The KKE have always advocated immediate exit and mass nationalisation, but they draw on nationalist Communist traditions. Antarsya, the far-left umbrella group to the left (of most but not all) of Syriza, argue for immediate rejection, Grexit, nationalisation – but from an internationalist perspective, which doesn’t have great traction. In Jacobin, Stathis Kouvelakis, a left platformer on Syriza’s central committee argues that the entire Tsipras-Varoufakis strategy has been wrong from the start, and winding up where it is now was inevitable. But the article is sadly typical of much of the Left critique – after pages of excellent analysis, the alternative is a few pages of airy blather about the ‘language of honesty’, and the ‘revolutionary nature of truth’. He’s not wrong, but it is hardly enough. The problem for the left is that support for Syriza’s strategy over the past week or so has climbed towards 85%, as people understand the difficulties they face, the intransigence of the EU, and how sheer the cliff face is the whole country is running alongside. On Left Flank, Panagiotis, a leading Antarsya figure, has a meticulous analysis of the deal, billed as a denunciation, but concludes:
The 4-month negotiation period should not be spent on a futile attempt for a ‘better deal’… It should be used for the preparation, in all aspects, for the necessary rupture with the debt burden and the Euro, as the starting point for putting into practice an alternative narrative for Greek society…
Well, once again that is rhetoric that doesn’t offer a more concrete social and political strategy for rupture. But it more or less acknowledges the four-month period as a breathing space.
Since Syriza will only succeed by carrying a mass national will – which it would need to contest any fascist insurgency – and itself lacks the unity to enter more acute civil conflict at this stage, this would appear to be the correct strategycertainly so given as we are talking about interim measures. The question is decisively put back on the left and the far-left of this broad left sweep – what, apart from anti-racism campaigns and rhetorical denunciation, is to be done? The absence of an answer is going to be far more damaging to the far-left – terminal perhaps – than it will be to the Syriza centre.