Thoughts on Greek crisis and in defense of Syriza, Part 1

This is part one of a three-part series.

The current crisis in Greece and the Eurozone is fluid and far from settled. The latest clash last month between Greece and its elite adversaries in Europe – Germany in the first place – is provoking a wide-ranging debate. I can’t claim to be an expert so what follows is offered in a provisional spirit.

Greece has been in a deep depression for five years. That’s a long time to be bleeding from its social and economic pores. Unemployment is more than 25 percent and far higher among youth. Public spending, wages, and pensions have been ruthlessly cut. Homelessness has become a massive problem. Physical infrastructure is collapsing. Crime as well as suicides are up, and despair and competes with solidarity and hope.

Moreover, the final financial package reached when Europe’s leaders met with Greek Prime Minister Alexis Tsipras last month will only exacerbate these catastrophic conditions.

Paul Krugman, Joseph Stiglitz, Thomas Piketty, and other prominent economists have said repeatedly that what Greece needs is a mix of government spending on pressing social needs, low interest rates, higher wages and incomes, and, above all, debt relief. This is the only way to buoy up demand for goods and services, stimulate investment in new plants and equipment, climb out of indebtedness, and breathe life into a chronically underperforming economy.

But leaders of the Eurozone – a zone of capitalism that was distinguished in the second half of the 20th century by its superior level of social rights and benefits compared with capitalisms across the pond and globally – did exactly the opposite at the meeting in Brussels.

In their view, austerity in the form of drastic spending cuts, budget surpluses, and onerous debt obligations may be painful, but it is pain that if endured by the Greek people and government will bring about a recovery as well as restore integrity to their finances. But here is the problem: reality doesn’t sustain this view. In fact, the experience of Greece as well as other European countries since the 2008 global meltdown provides ample evidence that austerity and unsustainable debt payments in an imploding economy is a formula for slower growth, mounting human misery, and a long stay in debtors’ prison.

Which explains why last month’s package of austerity measures received such a negative reception from so many mainstream economists, not to mention the Greek people and government.

In brief, the package includes further cuts to pensions, a rise in the retirement age to 67, privatizing important industries, gutting workers’ rights once again, and a huge increase in regressive sales taxes. The agreement also commits Greece to a budget surplus of one percent in 2015, rising to 3.5 percent by 2018, precisely the wrong medicine for a listless economy. Worse still, if the budget fails to meet those targets, automatic spending cuts will kick in regardless of economic conditions.

Perhaps most damning of all, the package contains no debt relief in any form, despite the recommendations of the International Monetary Fund (IMF) to include such relief. Nor are there bridge loans to shore up the collapsing banking system or upfront money to cover Greece’s immediate debt repayments.

This draconian settlement – this hazing of the “upstart” Tsipras – can’t be explained by the argument that Greece’s northern neighbors, Germany in the first place, have their own financial problems and are not in a position to help. The truth: Germany has deep pockets and some debt restructuring wouldn’t break the bank in Berlin. Similarly, the European Central Bank and some other European states could easily assist Greece too.

Nor is a full explanation to be found in the claim the German Chancellor Angela Merkel and Wolfgang Schauble, her finance minister, are simply and slavishly doing what is necessary to guarantee the steady stream of unearned (parasitic) income that flows from Greece to German banks. While this tag team zealously advocates for German financial interests and resists any talk of “haircuts” (mark down of debt owed to Greece’s creditors, that is, banks in Germany and northern Europe), their posture in Brussels shouldn’t be reduced to only this narrow calculus.

Germany asserts dominance over Europe

What then was the main factor determining Germany’s behavior toward the Greek government in Brussels? It was politics, but of a particular kind – raw, vengeful, aggressive, selfish, and hegemonic. The meeting in Brussels was no family reunion. It was a German-administered smackdown! Unmediated class power bared its teeth and imposed its will.

And its will was to maintain and reinforce German dominance over the whole of Europe and its increasingly restive populations – not just Greece, not just the southern tier of states that sit on the Mediterranean.  

The mission, therefore, of the two top representatives of German capital in the Brussels “negotiations” was to crush even the smallest pretensions of Syriza – Greece’s radical-minded governing party – and the Greek people to challenge the exploitative, parasitic and anti-democratic relations that define the European Union in its current form.

The German elites’ worst nightmare wasn’t that a few concessions to the Greek government would change the structure of the EU, or interrupt the flow of capital to the continent’s main financial centers, or constitute too big a burden on their finances.

Rather, their fears were twofold:

* First, any concessions might stoke the ambitions of the anti-austerity movement in Europe as well as Greece to contest the whole logic and practice of austerity.

* Second, a party of the left – and not unimportantly on a continent in which a reconstituted left is gaining ground – would claim credit for successfully standing up to German bullying.

The Italian communist Antonio Gramsci once said that in many instances, hegemonic powers exercise their rule over subordinate peoples and states with a mix of consent and force. But in this instance, Germany took the opportunity to forgo any semblance of consent or “go along to get along,” and employed exclusively a policy of force – “exploitive domination,” to use the words of the late social theorist Giovanni Arrighi.

Germany must have been aware that its hard-nosed, punitive settlement would raise eyebrows, including in elite circles far beyond Athens. But it decided that a show of force at this moment was politically necessary to secure its dominant position in the EU and forestall oppositional stirrings from below or other rival centers of power.

On its face, German capital came out the victor; there should be no question about that. The terms of the memorandum for Greece were punishing; Syriza looked impotent; and though the rest of Europe (and the Obama administration) grumbled, no one publicly challenged Germany’s posture.

The struggle for a new Europe

And yet one has to wonder if German capital’s moment of triumph might herald the beginning of the EU’s decline, at least in its current hierarchical, exploitive form. Even if it isn’t yet in a full-blown legitimacy crisis, it is fair to say that far fewer people believe any longer in the notion of “social Europe,” or that the EU states are equal and sovereign, or that Europe is a “common home.”

Such shedding of illusions, however, is only a first step in the building of a movement of the “immense majority” that has the political capacity and moral authority to roll back austerity policies and reconstruct a new Europe resting on substantive equality, cooperation, sovereignty, and robust and people-centered democracy.

Such a movement will require several things:

* the sustained engagement of millions of people,
* the further reconstitution, renovation, and expansion of the left in Europe,
* the employment of multiple forms of struggle,
* the utilization of rifts within ruling circles and between capitalist states, and
* a concerted effort to win elected offices, including a readiness to lead and/or participate in governing coalitions.

It will require as well new forms of intra-European cooperation and internationalism. The dialectic between sovereignty, democracy and a common European home will have to be reimagined and recast along new lines.

As for Greece, to think that a tiny country like Greece – the weakest link in the European chain – can go it alone in a capitalist dominated, globalized world, or lift itself out of its present crisis without far more substantial challenges to the austerity regime in the rest of Europe (including the formation of new, pro-people governments), or fast forward to  socialism (as the Communist Party of Greece and some others on the left advocate) is tantamount to allowing one’s radical disposition to take flight from reality. And we should know by now that dealing with reality is an absolutely necessary starting point of emancipatory politics.

Photo: Syriza flags wave at a 2007 rally. (Michalis Famelis/Own work/Licensed under CC BY-SA 3.0 via Commons)


CONTRIBUTOR

Sam Webb
Sam Webb

Sam Webb is a long-time socialist and activist living in New York. He served as the national chairperson of the Communist Party from 2000 to 2014. Previously, he was the state organizer of the Communist Party in Michigan. Earlier, he was active in the labor movement in his home state of Maine. He blogs at SamWebb.org.

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