Friday, 27 February 2015 13:40
By Joshua Tartakovsky, Truthout | News Analysis
In the latest agreement with the Eurogroup, in which the Greek government had won four months of respite, Syriza had also managed to backtrack on its election promises and agree to the imperatives laid out by Eurogroup chief, Jeroen Dijsselbloem. It has been untruthful, yet it will inevitably run into problems along the road.
Earlier, it could have been suggested that Syriza has a Plan B in mind. One could have interpreted the meeting held between Tsipras and the Russian ambassador to Greece immediately following his appointment as prime minister as a sign indicating that Greece has additional cards on the table. Furthermore, it could be argued that the Greek government intends to pursue a process of radicalizing the public, which is in favor of remaining in the Euro, by making it go through the process of negotiations, rejection and humiliation. Faced with the suffocating demands of the Troika, now renamed Institutions, the public would realize that it cannot free itself from austerity as long as it remains part of the Euro. However, the Syriza government has not shown publicly that it views exiting the Euro as a real option, leaving it at a dead end, captive to the whims of Germany.
Following the Eurogroup agreement, Prime Minister Tsipras said that “we succeeded at the end of our main purpose,” while clarifying that Greece “won the battle but not the war.” Tsipras said that “yesterday we canceled their plans,” referring to the attempt to cut Greece off of funds on February 28. In his view, the agreement contained “mutually viable compromises” rather than “subordination.” He said, “Yesterday we made a decisive step, leaving behind us the austerity, the memorandums and the troika. Our common struggle continues.”
Tsipras presented the agreement as a victory in a battle, as an end to austerity. Was his statement truthful, and what does the new Eurogroup agreement entail?
In the area of taxation and cracking down on oligarchs, Greece has an easy meeting point with the Eurogroup. The agreement calls for expanding a crackdown on tax evasion, and creating a “new culture of tax compliance.” Indeed, Syriza made pledges to crack down on oligarchs in the past. However, it is likely that oligarchs will engage in lengthy legal battles or move their finances overseas to avoid taxes, and a sufficient collection of taxes remains improbable.
In the area of public spending, the government vowed to “review and control” spending in all areas and improve the efficiency of governmental agencies. It stated it would control health-care spending while providing for universal healthcare. This renders the government’s earlier pledges to provide free electricity and repay the debts of citizens who cannot afford to repay as nearly impossible to implement – while providing universal health care and controlling health spending are contradictory goals.
Pensions are to be consolidated and incentives for early retirement cut down. This may satisfy the demands of the Eurogroup, but in a country where pensions have already been cut down by 50 percent, people will suffer more.
On privatizations, the government pledged not to go back on already-agreed-upon privatizations, while reviewing existing privatizations with the goal of both ensuring the state’s revenues and increasing competition. These are again contradictory goals, and it is likely that the government will be pressured to continue with privatizations. However, government ministers already voiced their opposition to the ongoing privatization of Piraeus Port and to privatizing state companies of gas and electricity. While Varoufakis is keen on pleasing the Eurogroup, opposition at home will expand.
The agreement also conditioned the raise of minimum wages on the basis that it would not harm hiring. Decisions on hiring wages will be done in collaboration with the Institutions. The government already raised the minimum wage by 10 percent, but it may not come into effect.
On a section dedicated to the humanitarian crisis, the government agreed to provide food stamps for the needy and extend the Minimum Guaranteed Income plan. However, the agreement states that government will “ensure that its fight against the humanitarian crisis has no negative fiscal effect.” Social policies cannot exceed the mandated 3 percent government surplus.
The nearly schizophrenic agreement makes clear that Institutions will supervise spending, and that austerity will continue placing in serious doubt Tsipras’ comments on leaving austerity behind. It is therefore unclear that Greece has “a Government that will always tell the truth,” as he claimed.
The response of Dijsselbloem to the agreement was far more straightforward than Tsipras’ attempts to circle the square. Dijsselbloem said that a Greek exit is not on the table and that “there is strong support under the Greek population to stay within the Eurozone.” Indeed, the majority of Greeks supports remaining in the eurozone. Dijsselbloem also said, “If the new government didn’t want to continue the current program, that would have been possible” – thereby rightly putting the responsibility for the program on the Greek government rather than the Eurogroup.
Dijsselbloem made it clear that “the simple fact that the new government has got financing needs cannot reverse the order in which things must be done.” This means that the government must first conform to the demands of the Institutions – i.e. austerity – before it can receive additional funding. Addressing perhaps the argument laid out against him by journalist Paul Mason, Disselbloem said, “We are dealing with 19 electorates. You may not find that democratic. It would be a very strange interpretation of democracy to think one single election could change the course of everything.”
While Greeks have come to realize that their electing an anti-austerity government is meaningless, as the Troika has the final say, democracy in the Eurogroup means that the 18 members can decide how to treat the demands of a single member. That the Eurogroup opposed granting Greece what it wished for, for fear of creating a precedent and in order not to encourage additional anti-austerity parties in Europe, is irrelevant. Hence, Disselbloem’s “National politicians should assume responsibility.”
Disselbloem has been truthful on the agreement, unlike Tsipras. Even his statement that Greece has been growing economically – which is true in strictly mathematical terms only but inaccurate on the ground – is true, according to neoliberal economics. Furthermore, Disselbloem even gave Greece a backhanded compliment by saying the document arrived “just in time” although it arrived on Tuesday rather than Monday night.
The backlash at home is already noticeable, with many Syriza MPs and energy minister Lafazanis opposing the deal. Tsipras is attempting to garner their vote in parliament, yet will run into growing opposition in the future. The first opposition emerged from iconic MEP Manolis Glezos, a Communist partisan who removed the Nazi flag from the Acropolis and who declared that he will wage a war against the Eurogroup plan. Glezos said , “I ask the Greek people to forgive me for contributing to this illusion,” possibly referring to Syriza. Glezos said that renaming the Troika the Institutions is “baptizing meat into fish.”
Syriza MP Costas Lapavitsas, a potential finance minister, raised five burning questions to the Syriza government. Stathis Kouvelakis explained that “to present a defeat as a success is perhaps worse than the defeat itself . . . because it dissolves the criteria by which success can be distinguished from retreat.” In France, anti-austerity Right leader Marine Le Pen, said that Greece capitulated and that this proves that the Euro is incompatible with democracy.
One can rightly ask whether the criticism of Syriza has been overblown. After all, it has been only one month since it assumed power, and it faced the prospects of being cut off from funds and further economic collapse. Greece had little choice but to accept the Eurogroup conditions, if only to gain time.
This argument, however, fails to take into account two significant points.
First, two weeks of hard negotiations made it clear that it is impossible to reform the EU from within as it currently stands. As long as Greece remains in the Euro, it is subject to the neoliberal dictates of the Eurogroup, dominated by Germany.
A more viable option – although a risky one – would be for Greece to default on its loans, adopt the drachma and receive massive investment from the BRICS while trading its agricultural products with Russia and increasing tourism from China.
If Greece has serious intentions of redeeming itself, it must pursue other options, or at the very least, suggest a “Grexit” as a realistic possibility to increase its leverage. However, Tsipras and Varoufakis made no public statements which would indicate that this is a possibility they will consider.
While it could be too early to make such statements, it is equally clear that negotiations in the immediate future with Germany will not change much. Therefore, Greece’s leaders appear to be stuck in a pro-Euro paradigm, that prevents the possibility of genuinely leaving austerity behind, and have made no effort to publicly inform the public of the dangers of remaining in the Euro.
Secondly, even if it is too early to hint at a Plan B, Syriza should have been honest with the public as it claims to be and admitted that this agreement was far from ideal, but was a necessary evil. It has not done so. Instead, it has chosen to mislead its people by claiming that it was a “victory” and a compromise that benefited both sides. This untruthful depiction sets a dangerous precedent.
If the government continues to practice neoliberal austerity after the current agreement expires, it will effectively turn itself into a replica of PASOK, which also began with great social promises but ended up practicing neoliberal policies. TheBBC rightly argued that “Syriza dumps Marx for Blair,” referencing British Labour, which turned from being a socialist party into one pushing for a neoliberal agenda.
For Syriza to remain true to its original agenda, the public must mobilize against continued austerity, and opposition in parliament must expand. As things stand, the agreement cannot be implemented, and its internal contradictions will become clear.
Massive protests scheduled for Thursday and Friday, February 26 and 27, are being organized by the Communist KKE and ANTARSYA and the Communist tendency in Syriza expressed its disapproval of the government. The degree to which these will be publicly attended will indicate where things are heading, although a more crucial period will be in the summer if the current program is extended.
“This Syriza government is the same as all earlier governments. It is lying to the people,” said Nikos – who asked a pseudonym be used out of fear of retaliation from Golden Dawn supporters. “The government does not explain the situation clearly to the people.” He was referring to the fact that the government has not been truthful in presenting the agreement for what it is. Nikos added, however, that in light of the frustration felt by the public due to the economic conditions, “more and more of my friends like Chrysi Avgi (Nazi Golden Dawn).” Nikos opposes Golden Dawn entirely, saying that “It will bring us back 1,000 years,” but he explained that due to people’s ignorance and anger, the third largest party in parliament is becoming increasingly popular.
Should Syriza continue to practice austerity and mislead the public, it is increasingly likely that it will be voted out sooner or later, and the public frustration will result in a turn to the right with a coalition forming between a right New Democracy and Golden Dawn. In that scenario, Syriza harked not only a new dawn, only a Golden one. “Syriza [in its actions] is feeding Golden Dawn,” he said. The key question remains whether the public will allow Syriza to market neoliberalism as “austerity with a human face,” leading to massive disappointment.
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