Massive resistance to terms of new bailout
By Walter Smolarek
March 4, 2012
“Enough is enough!” shouted 89-year-old anti-fascist hero Manolis Glezos, choking under a cloud of tear gas. “They have no idea what an uprising by the Greek people means. And the Greek people … have risen.” Glezos, famous for tearing down the swastika that flew over the Acropolis as a member of the communist-led anti-Nazi resistance during World War II, was one of the hundreds of thousands of Greek workers who took to the streets Feb. 12 and subsequently to protest a devastating new round of austerity measures.
Workers forced to pay for capitalist crisis
Ostensibly, the measures are meant to address the Greek government’s enormous debt burden. Under intense pressure from the International Monetary Fund, European Central Bank and European Union—Greece’s main lenders, often referred to as the troika—the Greek Parliament accepted the austerity by a 199-74 margin. As a result, the minimum wage—which is used as a baseline to determine many workers’ salary—will be reduced by 22 percent (32 percent for workers under the age of 25), pensions will be slashed, workers’ collective bargaining rights will be significantly weakened, and many other gains won through generations of struggle will be rolled back.
In return, the Greek government was promised a 130 billion euro bailout from the troika in order to avoid going bankrupt after March 20, when bonds worth 14.5 billion euros will mature. This is in addition to the 110 billion euro bailout it received in 2010, which has since been used up servicing the country’s massive debt.
Another major component of this most recent attempt to prevent a Greek default is private sector involvement, also called a “haircut.” Under the private-sector involvement plan (PSI), banks voluntarily agree to a 50 percent reduction in the face value of their investment in Greek debt. According to a plan adopted in principle at an October 2011 European Union summit, the haircut, coupled with enormous austerity and privatization, is aimed at bringing down Greece’s debt from 160 percent of GDP to 120 percent by 2020.
The Greek government had to commit to the terms of the new bailout from the troika before beginning to implement PSI. Even still, too few banks have signed on for the haircut to be effective. The Greek government will have to apply collective action clauses, which forces all creditors to comply if a decision is made by the vast majority. Several international credit rating agencies have said that they would consider this a selective default, which would trigger the payment of credit default swaps (a means of insuring against defaults) and potentially further destabilize the eurozone—the 17 countries that use the euro as their official currency.
Crises inevitable under capitalism
Bourgeois media outlets around the world have concealed the cause of the crisis in Greece. The most common explanation is that the Greek working class enjoyed excessive benefits without working hard to earn them. According to this presentation, it was the Greek government’s fault for not standing up to the workers and curbing social spending before deficits got out of hand.
This narrative is absurd on multiple levels. First and foremost, the working class creates all the wealth of society, while the parasitic capitalists perform no socially necessary labor whatsoever. If anyone is lazy and pampered, it is the ruling class, not the workers.
Furthermore, periodic crises are inevitable under capitalism. As capitalists attempt to maximize profits, they produce an ever greater number of commodities while paying workers less and less. As a result, there are fewer and fewer people with the purchasing power to consume the commodities produced. When this contradiction reaches a breaking point—for example when the housing bubble burst in the United States—a crisis ensues not because there is not enough to meet everyone’s needs but because there is an abundance of commodities that cannot be sold for a profit.
There are particularities of the situation in Greece that makes its debt problem especially severe, including a tradition of massive tax evasion by the wealthy, but the roots of the crisis lie in the structure of the capitalist mode of production itself.
The labor movement responds
Although the austerity measures were ultimately passed, the working class mounted a massive response. The three main forces in the Greek labor movement are the GSEE, which organizes private-sector workers, ADEDY, which organizes public-sector workers, and PAME, the union federation affiliated with the Communist Party of Greece (KKE). GSEE and ADEDY are generally more conservative, while PAME pressures them to take more militant action and puts forward the revolutionary slogan: “Worker, without you no cog can turn. You can do without the bosses.”
The first mass act of resistance of the new year took place on Jan. 17, when an Athens-wide general strike took place to protest the new austerity package. The struggle was escalated with mass rallies organized by the KKE and PAME and a national general strike on Feb. 7.
The largest action took place in the immediate run-up to the approval of the new measures. The labor movement called for a two-day general strike on Feb. 10 and 11 and a mass demonstration outside parliament in the evening of Feb. 12, the date of the vote.
Large demonstrations were held on both days, which included militant actions in addition to mass marches. On the first day of the strike, PAME members took over the headquarters of the Labor Ministry. On the second day, Communist Party cadre dropped two giant banners from the Acropolis, reading “Down with the Dictatorship of the Monopolies [and] European Union.”
The actions culminated with one of the largest demonstrations in Greek history, as hundreds of thousands of workers massed in Syntagma Square in front of the Parliament building, including tens of thousands who joined the huge PAME contingent. To break up the protest, agent provocateurs sought to break the discipline of the demonstration while police exhausted their entire reserves of tear gas. Despite this brutal repression, the outraged workers stood their ground for hours.
Their militant resistance was continued inside Parliament by the KKE deputies. George Mavrikos, the head of the World Federation of Trade Unions and Communist Member of Parliament, threw his copy of the proposed law at Finance Minister Evangelos Venizelos when he attempted to give a speech.
Much of the capitalist media’s attention has been focused on the rioting that took place that night, after the mass demonstration had dispersed. On the one hand, it is incredibly hypocritical for the architects of the austerity measures, which constitute a profound act of violence against the entire Greek working class, to denounce their opponents for being violent.
On the other hand, the organized left, especially the Communist Party, has been sharply critical of the rioters. They argue that indiscriminate destruction does nothing to advance the class struggle and plays into the ruling-class narrative that the people face the choice between austerity or chaos.
Faced with devastating attacks by the capitalist class, it is natural that mass anger will explode into uprisings at certain points. However, that the rioting only lasted one night and senselessly targeted historic landmarks makes it appear that much of the violence was carried out by undercover provocateurs.
Greek workers turn to the left
The mass struggle has profoundly altered the consciousness of the Greek working class and has led to a collapse in support for the traditional capitalist political parties. This is most striking when it comes to the social democratic party PASOK, which ruled the country from 2009 to 2011 and participates in the current government of Lucas Papademos, a so-called non-partisan “technocrat” and former European Central Bank vice-president installed as prime minister in November. In the 2009 election, PASOK won 44 percent of the vote and a majority in Parliament. An opinion poll taken immediately after the austerity vote showed PASOK in fifth place with just 11 percent support.
The two other participants in Papademos’s coalition are also polling poorly. In the same survey, the conservative New Democracy party placed first but with only 27.5 percent support, significantly less than they received in 2009. The semi-fascist Popular Orthodox Rally (LAOS) was supported by just 4.5 percent of respondents as they were abandoned by much of their base for the openly neo-Nazi Golden Dawn party, which is hovering around the threshold for entering Parliament.
Conversely, the three parties to the left of PASOK that, to varying degrees, opposed the bailout have experienced an explosive increase in support. The Communist Party of Greece is polling in third place with 14 percent, followed by the Coalition of the Radical Left (SYRIZA) with 13.5 percent. SYRIZA is an umbrella group composed primarily of small communist tendencies and reformists who split from the KKE at various points. It has stopped short of calling for a revolution and exit from the European Union, instead putting forward more timid demands such as a moratorium on debt payments.
Consistently ranked second in the polls is the newly formed Democratic Left party. Formed as a right-wing split from SYRIZA in 2010, it has replaced PASOK as the largest self-identified leftist force in the country. Although they rhetorically opposed the austerity measures, Democratic Left has indicated that it would not hold firm to this position if in power.
The combined support for the three parties of the left and the three parties of the governing coalition is roughly even. This is unprecedented in Greek history and amounts to more than triple the vote the parties to the left of PASOK received in 2009. As a result, the leaders of the European Union have been demanding more and more political guarantees, anticipating the results of elections expected to take place in April. LAOS leader George Karatzaferis typified the panic of the ruling class when he expressed fear that “Greece will set alight the fire of the European revolution.”
While the political drama played out, economic conditions continue to worsen. Recent statistics show that the Greek GDP fell nearly 7 percent in 2011, even worse than most economists had expected, and the country is now staggering into its fifth consecutive year of recession. The most recent official figures show unemployment at 20.9 percent.
A recently released study on the prospects of the Greek economy commissioned by the troika predicted that the debt reduction targets will be missed by a considerable margin. Without further assistance, the report predicts the debt-to-GDP ratio to be 129 percent by 2020 and offers a plausible worst-case scenario of the debt level remaining unchanged at 160 percent at the end of the decade.
In reaction to the deepening severity of the situation, the European bourgeoisie has taken precautions to prepare for what they consider to be the very real possibility of a total Greek default. This includes building a “firewall” around Greece—limiting exposure to Greek debt and implementing safeguards to protect vulnerable eurozone economies from a possible contagion.
Sections of the capitalist class now seem to be sympathetic to the idea that it would be less expensive to allow Greece to go bankrupt. Phillip Roesler, the German economy minister, prominently said in the run-up to the recent austerity vote that “D[default]-day is less and less scary.”
At the same time, the European Union is witnessing the emergence of increasingly sharp divisions. A German-French bloc has emerged as the dominant force in the EU, and the countries that managed to maintain the coveted AAA credit rating have taken a hard line in recent months against weaker economies like Italy, Portugal and Spain. The British are marginalized in this new power equation after refusing to sign on to an agreement to impose strict budget controls on a Europe-wide basis.
Deal approved, struggle continues
A final decision on the bailout package was made at a Feb. 20 meeting of eurozone finance ministers. They agreed that Greece had met the necessary conditions, but that a strict regimen of international monitoring and oversight should be implemented to guarantee that the devastating austerity measures are implemented in practice.
Instead of going into the Greek government’s general fund, the bailout money will be paid into a special escrow account. The eurozone agreement states that Greece has to amend its constitution so that when the government taps into this fund, priority must go to servicing the country’s debt. In addition, the troika will establish a permanent headquarters in Greece to closely enforce compliance with the terms of the bailout.
The crisis in Greece is falling into a predictable pattern. The troika offers the Greek government desperately needed funds in return for massive austerity, which the Greek bourgeoisie presents to the working class as a final sacrifice needed to save the country from bankruptcy and chaos. The Greek economy then fails to live up to the unrealistic expectations of its creditors, and the cycle repeats.
While it is impossible to predict the emergence of a revolutionary situation, this cycle of growing misery and perpetual economic decline cannot continue forever. The enormous, militant mobilizations and growing radicalization in recent weeks shows that the working class has no intention of capitulating.