Tag Archives: Syriza

Greece’s Syriza government signals pension cuts

By Christoph Dreier
April 25, 2015
World Socialist Web Site

 

https://anticap.files.wordpress.com/2012/06/greece-austerity.jpg

image from: anticap.wordpress.com

At Friday’s meeting of European finance ministers in the Latvian capital of Riga, no agreement was reached with the Greek government on the repayment of loans. Greek Finance Minister Yanis Varoufakis made clear, however, that his government was ready to impose extensive pension cuts and labour market “reforms” in order to reach an agreement with the troika (European Union, International Monetary Fund, European Central Bank).

Even before the finance ministers’ meeting, Varoufakis published a comment on his blog in which he made far-reaching concessions to the troika. He assured it that negotiations since Syriza’s election victory in January had already brought “much convergence” between Greece and its “European partners.” The remaining differences, he said, were “not unbridgeable.”

He went on to assert that the Syriza-led government would promote entrepreneurialism, create an independent tax commission, continue the privatization of state property and “rationalize the pension system (for example, by limiting early retirement).”

The elimination of early retirement benefits is one of the central demands of the troika. The retirement age was already raised to 67 in 2012. Numerous exemptions, however, have allowed most workers to retire earlier. The “limiting” of exemptions means nothing less than the blanket enforcement of the higher retirement age.

Such a lengthening of the work life of Greek citizens amounts to a massive pension cut. And with the official jobless rate at 25 percent, few workers are able remain employed until they reach 67. Entire families already depend on a single pension to survive.

Syriza (Coalition of the Radical Left) previously declared pension cuts a “red line” that it would not cross. The fact that Varoufakis threw this line overboard in the run-up to the finance ministers’ meeting made clear that there were no limits to the attacks on the working class the supposedly “left” government was prepared to carry out in order to reach a deal with the troika.

Prime Minister Alexis Tsipras, the leader of Syriza, added his own assurances that his government would adhere to the reactionary policies of the EU. At an EU summit on Thursday, he signed onto the so-called “ten-point plan” for immigration policy. The plan provides for the ramping up of police and military operations to block migrants from reaching European shores and lays the foundations for a large-scale military intervention in Africa.

At the meeting, Tsipras met with German Chancellor Angela Merkel for over an hour. The German newspaper Die Zeit reported that Merkel insisted Greece quickly implement the demanded reforms, while Tsipras protested that his country had already made “enough sacrifices.”

Tsipras expressed the hope that Greece and the EU could still come to an agreement by the end of April. Greece urgently needs an outstanding tranche of loans amounting to over 7.2 billion euros. In order to pay back wages and meet loan commitments, the Syriza-led government has already plundered the public treasury.

After the meeting in Riga, Varoufakis said it was necessary for a deal to be reached quickly. “We agreed that an agreement will be difficult,” he said, “but it will happen and it will happen quickly because that is the only option we have.”

Despite the groveling of Syriza, EU representatives showed little willingness to compromise. Eurogroup president Jeroen Dijsselbloem said after the meeting that there could be no paying out of loans if the Greek government did not submit a detailed “reform” program. Everyone was certain, he said, that the time for an agreement was running out. The responsibility for that lay with Greece.

Dijsselbloem added that “significant differences remain” between the EU ministers and Greece. Austrian Finance Minister Jörg Schelling reproached the Greek government for presenting no concrete proposals. He said, “I strongly urge that we now get something on the table that can be decided upon.”

Reuters reported that the Slovenian finance minister, Dusan Mramor, met with Varoufakis behind closed doors and suggested a “Plan B.” The Greek finance minister later called him “anti-European.”

According to those present, the finance ministers’ meeting became hostile. As Varoufakis, in a conference call, clarified the details of loan payments in the coming week, one of his interlocutors denounced him as a “time-waster, gambler and amateur.”

Tsipras was also rebuffed. French President François Hollande warned him to speed up the imposition of social cuts. After a short meeting with Tsipras, he said, “Greece must continue to provide the necessary information and show that it can make decisions about reforms.”

EU officials have made it more than clear that they are not prepared to make any concessions and intend to make an example of Greece. The social assault is to be carried out whatever the cost and serve as a model for the entire continent.

EU, Syriza prepare to suppress popular opposition to austerity in Greece

By Kumaran Ira
April 20, 2015
World Socialist Web Site

 

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Photo credit: anticap.wordpress.com

This weekend’s meeting of the International Monetary Fund (IMF) and World Bank in Washington focused on the Greek debt crisis, amid fears in financial circles of a Greek default or exit from the euro, and of rising working class opposition in Greece. The “Troika” of the European Commission (EC), European Central Bank (ECB), and IMF are seeking to create the political conditions for Syriza to continue imposing austerity.

After the meeting, ECB president Mario Draghi called for resuming talks with Syriza to avoid a Greek default. He said, “The short-term danger of contagion is difficult to assess, but we have enough buffers in place. And even though they were designed for different circumstances, they are sufficient. But we are entering uncharted waters.”

His uncertain and pessimistic appraisal of the situation notwithstanding, Draghi praised Syriza and his informal talks with Greek Finance Minister Yanis Varoufakis in Washington. He said there had been progress in “formulating a well-functioning policy dialogue” in talks with Syriza.

Draghi was praising Syriza’s capitulation to the EU’s austerity agenda and its coordination with the EU to impose new attacks on the working class. As Syriza negotiates the next tranche of €7.2bn in loans from Greece’s Eurozone partners, the Troika is pressing Syriza to present detailed plans for labor market reforms and cuts to pensions.

Behind the scenes, collaboration is developing between Syriza and the EU, designed to massively escalate attacks on the working class.

Dutch Finance Minister Jeroen Dijsselbloem, the president of the euro group who has distinguished himself by his aggressive threats against Greece, said: “Let’s not go into a game of chicken to see who can stick it out longer. We have a joint interest to reach an agreement quickly,” he said.

“We have been worried about previous payments they were to make and yet they managed it, so I don’t know when it becomes really dangerous. But I think it is in our joint interest to stay away from that point,” he added.

As Greece teeters on the edge of bankruptcy, Syriza and ruling circles internationally are preparing for a brutal confrontation with the working class.

Already on Thursday, around 4,000 mine workers employed by Canadian-owned Eldorado Gold mine in northern Greece staged a demonstration in Athens, protesting Syriza’s decision to revoke the company’s licence. Workers fear a shutdown of the mine and the loss of all their jobs. The march was the first major labor protest since Syriza came to power. The miners waved banners reading “Yes to mines, yes to growth,” and chanted slogans, forcing police to shut down major roads.

“The honeymoon is over. We’re done with the period when Greek public opinion would agree with everything that the government does,” said Nikos Marantzidis, a professor at the University of Macedonia.

Syriza is now preparing to take the explosive step of cutting off pensions as well as wages for Greek public-sector workers. After repaying almost €2 billion in loans to the IMF in March and April, it needs to pay IMF €950 million euros by May 12, and plans to tap the Greek public sector’s remaining cash reserves, for a total of €2 billion.

This is reportedly not enough for Athens to meet both its debts to the IMF and its wage and pension bill. According to Reuters, “Without a political agreement with the euro zone next week, Athens is likely to have to choose between making wages and pension payments to its people or reimbursing the IMF.”

Whatever the short-term outcome of the financial crisis—whether it be a Greek default or exit from the euro (“Grexit”)—Syriza and its EU partners are preparing for savage repression against the workers. They are discussing the imposition of de facto military dictatorship in Greece.

Syriza has made clear that it wants to strengthen the police and that the false, pseudo-left rhetoric on which it was elected will not prevent it from mounting police crackdowns. Last week, after Public Order Minister Yiannis Panousis issued a call for law and order, Syriza ordered police to smash an occupation of university buildings in Athens by a handful of anarchist protesters.

Yesterday, Financial Times columnist Wolfgang Münchau wrote a comment titled, “Greek default necessary but Grexit is not,” warning that he had “never seen European financial officials so much at a loss.” While advocating deeper social cuts, Münchau was deeply concerned about the implications of a Greek default or exit from the euro zone: “Grexit would bring incalculable economic risk to the country itself, and would harm the EU’s geopolitical ambitions and its global reputation.”

He continued, “My understanding is that some eurozone officials are at least contemplating the possibility of a Greek default but without Grexit [Greek exit from the euro]. The complexity is severe, and they may not have had the time to work it out. But it may be the only way to avert utter disaster.” He warned that a decision not to pay pensions and public sector wages will be “politically suicidal for the Syriza-led government.”

Whatever happened, Munchau wrote, Athens needs time to prepare military-style measures: “Both Grexit and the option of a default inside the euro zone would stretch the resources of even the most organised government. It would require military-style preparation: exchange controls, temporary closure of land borders and airports, overnight bank recapitalisation, and logistical planning to convey money from A to B on D-Day. Is the Greek government really so smart it can just wait until the fateful moment arrives, and then manage this whole process in real time with no script?”

In fact, Syriza has been preparing for scenarios of Greek default or Grexit since Tsipras began touring international capitals and financial centres, two years ago, as he was groomed to be an acceptable Greek prime minister to Washington and the EU. Discussions of such a scenario appeared in the right-wing Greek daily Kathemerini, which said that if Athens decided to default or exit the euro, it would seek to do so over a weekend, when global stock markets are closed. It wrote that Greece would “deploy its military as soon as early morning Saturday and close its borders, preparing to stamp euros as drachma as an interim solution once a public announcement has been made.”

Outgoing Greek Finance Minister Filippos Sachinidis said he doubted whether, under these conditions, “we will be able to continue functioning as a modern democracy.”

Asked about such events by Time magazine, Tsipras replied: “We have a plan. There is a team of economists who lay out the plans, update and communicate them … I would not like to talk about them.” He added, “We are fully aware of the consequences. We are fully aware of the consequences that it will have on the country and Europe in general.” That is, while the bourgeois media and political circles were aware of the plans, Syriza’s voters and workers in Greece and internationally were to be kept in the dark.

The comments now circulating in the financial press are a warning to the working class. Those who doubt that a pseudo-left party such as Syriza is capable of brutal repression against the working class are deluding themselves.

European Union, banks ramp up pressure on Greece’s Syriza government

By Stéphane Hugues
April 17, 2015
Worls Socialist Web Site

 

240a4-6a00d8341d417153ef017ee3f50e8c970d-800wiGreece’s Syriza government is responding to increasing pressure from the European Union (EU) and the banks by looting Greece’s financial reserves and preparing further austerity measures against the working class.

On Wednesday, the US credit rating agency Standard and Poor’s again downgraded the Greek government’s credit rating to junk status, from B- to CCC+, citing the government’s “unsustainable commitments.” The only ways Athens could meet its commitments was by “deep economic reform or further relief,” it said.

Greece’s statistical authority said the 2014 deficit was 3.5 percent of Greece’s GDP, considerably higher than the 0.8 percent forecast. This deficit was due to the cost of servicing Greece’s crippling public debt, without which it would have had a budget surplus of 0.4 percent of GDP.

Standard and Poor’s said Greece’s economic outlook depended on it reaching a political settlement with its creditors: “In our view, these conditions have worsened due to the uncertainty stemming from the prolonged negotiations between the almost three-month-old Greek government and its official creditors.”

Syriza’s response is to intensify its attacks on the working class to pay off the EU and the banks. In recent weeks, it has been forcing state organizations and companies to lend it money to pay the debt installments. It has forced state pension funds to lend pension money and taken funds from hospitals earmarked to pay for patients’ medication, effectively turning itself into a collection agency for the EU at the expense of the Greek population.

Now, it has found a new way to open up all of the cash reserves of all state organizations. According to a 1951 law, the government can oblige all state institutions with cash reserves to place them in the Bank of Greece, the country’s central bank—giving the government access to funds of up to €3 billion to pay off its creditors. With Athens facing over €300 billion in debts that it has to repay, however, this is clearly only a stopgap measure.

Greek Minister of State Alekos Flambouraris said Wednesday that Athens can now afford delays of “a week or ten days” in reaching an agreement, so long as an agreement is eventually struck.

Syriza’s reactionary policies are exposing the illusions it promoted in the run-up to the January elections that it would be able to negotiate an end to austerity with the EU. Only a few weeks after taking office, however, Syriza’s leader, Greek Prime Minister Tsipras, totally betrayed its electoral program, accepting EU demands not only to continue to pay back the debt but to deepen attacks on the population.

However, the EU led by Germany were not content with a statement from Syriza indicating its general agreement with EU austerity policy. They are demanding detailed plans for more austerity measures, specifying exactly what Syriza intends to cut and how many hundreds of billions of euros it will extract from the Greek workers. Since then, negotiations have dragged on behind closed doors, as Syriza and the EU attempt to resolve their differences and attack the workers.

EU officials are also pushing for an agreement on deeper austerity, though German Finance Minister Wolfgang Schaeuble specified a longer time line for a deal than Flambouraris. He told Bloomberg News, “Greece has until the end of June to come to an agreement.”

He poured cold water on expectations that the EU will reach a settlement with Syriza when all 19 finance ministers of the euro zone countries, including Greece’s Yanis Varoufakis, meet on April 24 in the Latvian capital, Riga.

Schaeuble, who has been leading the EU offensive, is touring the United States amid what are evidently high-level talks in foreign policy circles over Greece, the euro zone, and the NATO military alliance. “No one has a clue how we can reach agreement on an ambitious program,” Schaeuble told the Council on Foreign Relations in New York. He added that the new Greek government had “destroyed” all the economic achievements of the last years.

He said a deal was not only unlikely in Riga but also in the coming weeks and suggested that the euro zone could handle a Greek default, even though it would prefer to avoid it, noting that the markets had “priced in” all possible outcomes to the Greek drama. He blithely asserted that there is no risk of financial panic spreading to other euro zone states from a Greek default.

In a further sign that German authorities are considering the possibility of a Greek default, the German weekly Die Zeit reported that Berlin is working on a plan allowing Greece to receive financing from the European Central Bank even if it missed payments to creditors.

“The plan under discussion is aimed at allowing the ECB to continue financing of Greece in the event of bankruptcy,” the Zeit article said. “In addition, Greek banks would be restructured, allowing them to continue to take part in central bank operations even after a state bankruptcy.”

The divergences between the different EU governments are all, in the final analysis, about how the working class is to be looted. Were the Greek state to be placed in bankruptcy, its creditors would insist on new, savage cuts to Greek social spending and state budgets, beyond even what six years of austerity since 2009 has inflicted on the Greek working class.

As Syriza carries out more and more new austerity cuts, these will produce social explosions in a working class that has already suffered so many privations.

Yesterday, 4,000 gold miners demonstrated against losing their jobs in front of the Ministry of Productive Reconstruction, Environment and Energy in Athens. The Greek government’s expressed intention is to stop work at the Hellas Gold mining operation in Skouries in northern Greece, over environmental concerns.

Syriza is stepping up pledges and threats to use police action in face of social protests. It is currently threatening to forcibly smash an occupation of the Athens University rectorate by an anarchist group. Deputy Citizen Protection Minister Yiannis Panousis has already stated: “We are in the last hours of the seizure of the Senate.” He claimed he had got the “green light” from Prime Minister Alexis Tsipras to send in the riot police.

EU, demanding deeper cuts, rejects Syriza’s austerity list

By Robert Stevens
March 31, 2015
World Socialist Web Site

 

240a4-6a00d8341d417153ef017ee3f50e8c970d-800wiGreek Prime Minister Alexis Tsipras addressed the parliament last night, once again making clear his readiness to implement austerity measures dictated by the country’s international creditors.

Tsipras told parliament that the debt Syriza inherited from the New Democracy/PASOK government was larger than had been presented. It was now time to face the truth, he declared.

Syriza, he said, was ready to make an “honest compromise” with creditors, without acting simply as their “mouthpiece.”

Tsipras’s bluster notwithstanding, he could not say anything of substance about the state of negotiations with Greece’s creditors from the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF) earlier that day—the ostensible purpose of the parliamentary session. To do so would be to make clear not only the attacks on the working class he had offered to carry out, but also the even deeper attacks being demanded of him by Europe’s rulers.

New Democracy leader Antonis Samaras mocked Tsipras, saying he had imagined he’d get money without terms and instead had obtained terms without money.

On Friday, Syriza submitted a further list of austerity proposals, as stipulated in its February 20 agreement to extend by four months the austerity programme of the previous governing coalition. On Sunday evening, the cabinet approved the list.

Athens needs the measures to be accepted by what is now known as the Brussels Group in order to access any of the €7 billion of outstanding loans being withheld. Without access to these funds, it will be unable to repay any more of its €315 billion debt.

However, despite intensive negotiations over the weekend, including a ten-hour session on Saturday, no agreement was reached.

Among the main austerity measures being demanded of Syriza by the Brussels Group are changes to Greece’s labour laws to make it easier for employers to fire workers, as well as further cuts to pensions. The Financial Times reported that these are “two areas that monitors have insisted are essential to finalising the bailout programme.”

However, Tsipras said in an interview with the RealNews Sunday newspaper, “There’s no prospect of taking any recessionary measures, whether it’s cutting wages and pensions or liberalising regulations on mass dismissals.”

According to a Bloomberg News report, Greece submitted a 15-page list that “relies on taxing capital transfers and fighting tax evasion.” The document states that privatisations currently in place would raise €1.5 billion this year, down from €2.2 billion projected in the 2015 budget prepared by the previous government. It forecasts a primary budget surplus of at least 1.2 percent of gross domestic product.

But such proposals are of little interest to the European ruling elite, who are demanding that Syriza go much further and specify cuts that will further decimate the living standards of the working class and poor.

Reuters cited a senior euro zone official who said, “Greece did not submit a reform list on Friday.” The official added that Syriza’s proposals “lack detail, and much more technical work will be needed for them to flesh them out into something sufficiently comprehensive and credible to be put to the Eurogroup.”

An unnamed EU diplomat said, “The list is much too vague, not credible and not verifiable.”

On Monday, the German Finance Ministry said the government would not sign off on further loans to Greece unless the Greek parliament passed concrete austerity measures. Spokesman Martin Jaeger said, “We need to wait for the Greek side to present us with a comprehensive list of reform measures that is suitable for discussion with the institutions, and then later in the Eurogroup.” He cautioned that any progress “depends on the quality of the Greek list and how far they cover the elements that are already mentioned in the [extended austerity] memorandum.”

A Greek newspaper report said Syriza included specific privatisations in the proposals. Deputy Prime Minister Yannis Dragasakis, who has just returned from a trip to China, stated on his return that the sale of a 67 percent stake in the Piraeus Port Authority would be completed in a matter of weeks, raising around €500 million. China’s Cosco Group, which already controls two piers at the strategic port, is among five preferred bidders. Also set for completion is the sale of 14 regional airports.

The Brussels group meeting ended with no agreement. According to sources, there are no plans to meet again this week—leaving Syriza to draw up yet another austerity list for sometime in April, while Greece’s financial crisis intensifies. German Chancellor Angela Merkel told the media that Greece’s proposals must “add up.”

Syriza has made a concerted effort to deepen its ties with China and Russia, both of which have geostrategic interests in the region. Senior Syriza representatives, as well as Defence Minister Panos Kammenos of Syriza’s right-wing coalition partner, the Independent Greeks, have warned that one or both countries could be approached as alternative sources of funding for Greece. The leader of Syriza’s “Left Platform”, Energy Minister Panagiotis Lafazanis, is in Moscow. On April 9, Tsipras will visit for talks with Russian leader Vladimir Putin.

On Friday, the rating agency Fitch downgraded Greece’s unsecured currency bonds. Fitch said progress since February’s agreement “has been slow” and it remained “unclear when the earliest disbursement could take place and what will be required for this to happen.”

Fitch added that it was “likely that the Eurogroup will want the Greek government to demonstrate they have implemented some part of this list before funds are disbursed. This pushes back the probable disbursement date well into April at the earliest.”

Since it was elected on an anti-austerity ticket, Syriza and the country’s banks have been systematically cut off from normal funding streams by the ECB. When bank and company debt is factored in, total debt levels are now at around half a trillion euros.

With Greece’s banks all but insolvent, the Syriza government’s projection of a budget surplus has been dismissed as fantasy. Holger Schmieding, chief economist at London-based Berenberg Bank, said, “After capital flight of €50 billion within three months, it is difficult to see how Greece could muster any growth at all this year. And after the plunge in tax revenues in January and February, Greece is on track for a primary deficit, not a surplus.”

Since 2010, Greece has been used as the test case for imposing mass austerity throughout Europe. The continent’s ruling elite now insists that the pauperisation of Greece’s population be stepped up. Syriza’s perspective, based on the interests of sections of the Greek ruling elite and the affluent upper-middle class, of an amicable restructuring of Greece’s debt within the EU is in tatters.

Greece and the dictatorship of finance capital

By Nick Beams
March 11, 2015
World Socialist Web Site

 

The value of every crisis, as has often been remarked, is that it strips away the outer forms of political phenomena to reveal their essential characteristics. The Greek debt crisis and the attempts of the Syriza-led government to renegotiate the terms of repayment with the European Union constitute a striking case in point.

Events since the January 25 election victory of Syriza have laid bare, once again, the essential truth established by Marxism that beneath all the paraphernalia of so-called bourgeois democracy—parliaments, elections, votes and constitutions—the capitalist state and the governments that serve it represent the dictatorship of capital.

Likewise, they have exposed the pretensions of petty-bourgeois organisations like Syriza, supported by all the pseudo-left organisations around the world, that there is some way of countering this dictatorship through radical phrase-mongering and tactical manoeuvres within the framework of bourgeois politics.

Last Sunday, in an interview with the Belgian daily De Tijd, the head of the country’s central bank and a member of the Governing Council of the European Central Bank (ECB), Luc Coene, made clear that finance capital would brook no opposition to its demands.

The will of the Greek people, who voted in their millions against the five years of mass unemployment, poverty and degradation imposed by the troika (European Union, International Monetary Fund and European Central Bank), count for nothing. The austerity policies, which have devastated the economy—output is 26 percent below where it was before 2008—destroying lives and hopes, will continue unabated.

Striking the pose of a stern school headmaster, only with a much more powerful weapon than a cane in his hand, Coene said the Greek people had been sold “false promises” and would “understand quickly” that there was not a “different way.”

He declared, “Reform is the only way. Tell me where the money should come from if the Greeks do not want to repay other European countries?”

Contained in this statement are all the lies that have accompanied the “bailout” program. There has been an ongoing propaganda campaign to portray the Greek people as lazy spongers, living off of the generosity of European governments and financial institutions and unwilling to pay their debts.

In fact, the so-called bailout was never aimed at assisting the Greek people. It has been used to bail out the European banks and hedge funds. Of the €226.7 billion in loans provided by the countries of the euro zone and the International Monetary Fund, just 11 percent has gone to directly finance Greek government spending.

The rest of the money has been used either to finance interest payments to the banks or avoid a write-down of their bad loans. The vast bulk of the money has been used in a round-robin operation, coming into Greece only to flow straight back out again into the coffers of the European banks.

The aim of this carefully contrived scheme was to ensure that any default by the Greek government would not have an adverse impact on the European banking system. As a result, the troika can now tighten its grip on the Greek people even further. As Coene put it: “If they leave the euro, it will be ten times worse for them. Ten times.”

The other big lie accompanying the bailout operation is the claim that there is “no money” and therefore the Greek people must pay. That has also been exposed.

Coene’s interview was published on the very eve of the beginning of the European Central Bank’s “quantitative easing” program, which began on Monday. Over the course of the next 18 months, the ECB will pump more than €1 trillion into the European financial system through purchases of government bonds.

There is money aplenty. But none of it will be used to finance economic expansion, new industrial or infrastructure projects, or a lessening of unemployment, which remains at more than 11 percent across the euro zone.

The hundreds of billions of euros created by the ECB to buy bonds will flow into the financial markets, enabling the banks to offload toxic assets while pushing stock prices—and the fortunes of the financial oligarchy—higher.

Meanwhile, the same institution lectures the Greek people on their duty to pay back every euro owed to the banks.

The ECB’s bond-buying and money-printing operation is being used to finance what amounts to the largest Ponzi scheme in economic history. Across Europe, government bonds are bringing historically low and even negative yields. This means that any purchaser who held a government bond until its maturity would suffer an overall loss on the transaction.

Of course, bond investors have no such intention. They are buying bonds, driving up their price and lowering their yields (the two move in an inverse relationship), in the expectation that ECB intervention will drive the price of the bonds they have acquired even higher and they will be able to make a capital gain by selling them.

As with all Ponzi schemes, the ECB operation is creating the conditions for another financial crisis. And this time, because of the direct involvement of the central banks, it has the potential to be even more serious than that which led to the devastation inflicted on the Greek and world economy. In short, the financial criminals who brought about the 2008 financial crash, none of whom has been even charged, let alone prosecuted, are preparing to do it all again.

No less graphic than the laying bare of the dictatorship of finance capital is the exposure of the class character of petty-bourgeois organisations such as Syriza. In recent weeks, an international campaign has been mounted to pass off Syriza’s total capitulation to the EU, barely one month after it came to power, as a “tactic” or clever manoeuvre to gain time and fight another day. It is nothing of the sort.

The grovelling of Syriza flows from its class character, rooted not in the working class, but in sections of the Greek bourgeoisie and wealthier sections of the middle class, which it attempted to cover over with radical sounding phrases.

Politically naïve and inexperienced people may have been fooled. If so, they should learn from the experience and correct their mistake by taking up a political struggle to expose the pseudo-left groups that continue to promote the poisonous fiction that Syriza represents a step forward for the working class.

However, those who exercise the dictatorship of finance capital were never taken in. They knew from the outset with whom and what they were dealing, and acting accordingly. So confident were they in their assessment of the bourgeois character of Syriza, they did not feel obliged to offer even a concessionary fig leaf. They demanded and received total capitulation.

The working class in Greece and internationally must draw the lessons from this bitter experience. The dictatorship of finance capital cannot be confronted, much less defeated, with a program of “left” phrases and half-measures. It must be overturned through the fight for workers’ power and the implementation of an international socialist program, starting with the expropriation of the banks and finance capital.

 

Greece told deeper austerity needed to secure additional loans

By Robert Stevens
March 10, 2015
World Socialist Web Site

 

240a4-6a00d8341d417153ef017ee3f50e8c970d-800wiEuro zone finance ministers met Monday to discuss a set of proposals from the Syriza-led Greek government based on the austerity programme both sides signed on February 20. Greece was required to submit a list of austerity measures deemed acceptable to its creditors as a precondition for receiving a pending load of €7.2 billion and any further loans.

The Eurogroup meeting ended within 90 minutes. In a clear sign that there would be no retreat from finalising an austerity package, the finance ministers agreed that “technical talks” between Greece and its main creditors, the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF), would begin Wednesday.

Speaking at a press conference following the meeting, Eurogroup Chairman Jeroen Dijsselbloem said, “We have spent the last two weeks discussing who will meet whom, where, and in what configuration. It’s been a complete waste of time…”

The Eurogroup “needed to see signs that reforms are being implemented,” he demanded, warning that there “can be no talk about early disbursement if there is no agreement and no implementation.” The Greek government, he added, had promised the Eurogroup that it would take no unilateral actions or roll back austerity measures already adopted.

Without billions of euros being made available in loans, Greece faces default on its €320 billion foreign debt in a matter of weeks. The euro zone meeting took place amid dire warnings that Greece’s banks can no longer finance the economy due to their lack of liquidity and an ongoing flight of deposits.

Nearly €20 billion were withdrawn from the banks in January and February. There is a nearly €80 billion gap between the €135 billion available in the banks’ deposits and their loan balance, which exceeds €210 billion. The banks only have temporary access to high interest rate emergency liquidity assistance (ELA) from the ECB, which can be ended at any time.

One senior bank official told Kathimerini, “As things stand, it is simply impossible for us to finance the economy, as we can only marginally cover the cash needs of our clients.”

Last Friday, Greek Finance Minister Yanis Varoufakis submitted a letter to the Eurogroup with a list of six proposed reforms. These included hiring students and even tourists as temporary “nonprofessional” tax inspectors, vague “antibureaucracy” initiatives, and measures to raise revenue from online gambling. The letter was derided as being nowhere near adequate.

Upon taking office, Syriza began its rapid capitulation to the demands of global capital, insisting it had already agreed to 70 percent of the austerity measures in place. Addressing Syriza’s latest proposals Sunday, Dijsselbloem said, “Those absolutely won’t be accepted as the 30 percent that they wanted to replace.”

In a letter to Varoufakis, Dijsselbloem stressed that the proposals would also have to be evaluated and approved by the ECB and the IMF.

European Commission Vice President Valdis Dombrovskis rejected Greece’s letter out of hand, telling a German newspaper that “a letter here or there isn’t going to change much.”

Since the February agreement, the ECB has tightened the screws, insisting that there is no alternative to continuing with mass austerity and repayment of Greece’s mountain of debt. ECB Governing Council member Luc Coene told the Belgian daily De Tijd Saturday that Greece would have to carry out new austerity measures or face leaving the euro zone, which “will be ten times worse for them. Ten times.”

Coene declared, “I do not believe there is a radically different way… Syriza has made promises it cannot keep,” and the Greek people “will understand quickly that they were deceived by false promises.”

He threatened, “Reform is the only way… Tell me where the money should come from if the Greeks do not want reform and do not want to repay other European countries?”

In agreeing last month to an extension of the austerity agreement signed by the previous New Democracy/PASOK government, Varoufakis and Prime Minister Alexis Tsipras, the leader of Syriza, farcically claimed that they would no longer be accountable to the widely despised EU, ECB, IMF “troika,” which, they declared, would no longer be returning to Athens to monitor austerity. In fact, they had agreed to a continuation of Greece’s subordination to the troika members, merely—and with consummate cynicism—renaming them the “institutions.”

This terminological sleight of hand was the only “concession” won by the Greek government in nearly a month of negotiations.

In reality, everything is being done on the troika’s terms, as has been the case since 2010. Even the pretence of renaming the troika has been ditched, with German Finance Minister Wolfgang Schäuble purposefully using the word numerous times as he entered Monday’s meeting and other euro zone ministers, including Dijsselbloem, following suit. Far from an end to the troika’s monitoring of the Greek government in Athens, the technical talks beginning Wednesday will be held in both Brussels and Greece, Dijsselbloem told the press conference.

The response of the euro zone ministers to the Greek government reveals the ruthless character of this capitalist body. Greek voters, who elected Syriza based on the party’s election promises to end austerity, have been told their votes count for nothing. The financial aristocracy and its institutions will tolerate nothing that impedes the transfer of wealth from the poor to the rich.

The response of the ruling class to Greece’s catastrophe exposes the fraudulent perspective on which Syriza secured its election victory. Syriza claimed its agenda of negotiating a debt restructuring programme on the basis of remaining in the European Union would be persuasive to sections of the ruling elite and was the only realistic way forward. Instead, Syriza was made to grovel and capitulated in a matter of days.

The Greek government moved quickly Sunday to quash comments attributed to Varoufakis in an Italian newspaper that if Athens’ proposals were not accepted, new elections or a referendum on EU membership could be contemplated.

Even after having his letter of proposals to the Eurogroup ridiculed, Varoufakis spent the weekend attempting to shore up illusions in the EU. Forced to acknowledge that his proposal to replace Greece’s current debt with bonds linked to nominal growth had met with “silence,” he pleaded, “I’d like for Europe to understand that this would be a way of paying back more money, not less.”

While a section of the ruling elite is concerned about the impact of a “Grexit” on the stability of Europe’s fragile economy, other voices are demanding that if Greece does not carry out deeper cuts, it should be allowed to leave the euro zone. The aim is to make clear that there will be no let-up in austerity in either Greece or anywhere else in Europe.

At a recent forum of the Financial Times’ FT City Network, comprised of 50 of the City of London’s most influential financiers, asset managers and insurers, Robert Swannell, chairman of Marks and Spencer, and Stephen Hester, head of insurer RSA, described Greece’s position within the euro zone as akin to “an emperor with no clothes.”

The Financial Times noted that Hester “argued that the euro zone should take a more aggressive stance, triggering Grexit if the Greek government baulks at further reforms.” Hester said, “If Greece isn’t prepared to reform enough to stay in, I don’t think the EU should risk the knock-on political dangers of too much compromise towards Greece that could halt reform in other member states.”

European Union press Syriza to deepen its austerity program for Greece

By Robert Stevens
March 7, 2015
World Socialist Web Site

 

240a4-6a00d8341d417153ef017ee3f50e8c970d-800wiAfter the Syriza-led government’s decision to sign the February 20 Eurogroup statement and capitulate to European Union (EU) demands for more austerity in Greece, EU officials are stepping up their threats against the country.

Since then, the “troika”—the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF)—have insisted that until Syriza begins actively imposing austerity, it will not receive another cent in loans.

This week Greece paid back €300 million to the IMF, but by the end of the month it must pay a further €1.5 billion. An additional €4.5 billion in maturing Treasury bills (T-bills) is due to be paid this month. More than €6 billion in debt repayments to the IMF falls due in August, immediately after the four month austerity extension expires. All told, Greece must pay back a total of €22.5 billion to its creditors in 2015.

Greece cannot meet these repayments, and without external funding, a default on its debt of around €320 billion is again a possibility.

Bloomberg reported the analysis of Nicholas Economides, a professor at New York’s Stern School of Business, who said, “Greece has already run out of money and lives with emergency compulsory borrowing from pension funds and from European agricultural support money in transit to farmers. Unless there are new loans from Europe or alternatively the ECB allows Greek banks to buy more Greek debt, Greece will default at the end of March.”

The Economist noted, “Syriza’s climbdown in late February has bought time but it has not brought any money from Greece’s creditors. None will be available until the government shows that it is sincere in its promise to complete the reforms that creditors still insist upon.”

This week Spain’s finance minister, Luis de Guindos, said he believed Greece would be unlikely to access capital markets by June and will require further loans of between €30 billion and €50 billion from its European creditors.

Since Syriza’s election in January, the European Central Bank has tightened the screws. The ECB no longer accepts Greek sovereign bonds as collateral for loans and banks are forced to rely on the emergency liquidity assistance (ELA) scheme, which has a high interest rate and will only be available temporarily. The ECB has also limited the amount of short-term T-bills that Athens can issue.

As a result, Greece’s banks are more or less insolvent with even more deposits withdrawn from them in December and January (€17 billion) than at the height of the euro zone financial crisis in May and June 2012. According to official figures, outflows from the banks continue, with a weekly rate of between €2 billion and €3 billion withdrawn in the first three weeks of February.

Tax revenues are down €2 billion in January and February, compared with 2014. Under these conditions it is impossible for Greece to pay for any extended period the €4.5 billion monthly bill for the wages of public sector workers and state pensions.

On Thursday, the ECB refused to countenance a relaxation of the rules that have cut off funds to Greek banks. ECB head Mario Draghi said the bank would only lend further funds to Greece if it was able to satisfy the Eurogroup, IMF and ECB of its strict adherence to the February 20 agreement.

In a desperate response Friday, Prime Minister and Syriza leader Alexis Tsipras contacted European Commission President Jean-Claude Juncker to request an emergency meeting. Juncker gave Tsipras short shrift. He advised Tsipras that any further discussion would have to wait until after Monday’s meeting of the euro zone’s finance ministers.

Juncker gave an interview Wednesday to Spain’s El Pais. Tsipras “still has to tell the Greeks that he is going to have to break certain promises,” he said.

With Syriza having already signed off on everything demanded by the troika, including a clause that the government make no “unilateral” moves to implement any of the programme it was elected on, it is functioning as a tool of the EU’s austerity agenda. According to a S ü ddeutsche Zeitung report, Juncker and Tsipras were in “permanent telephone contact.”

The February 20 agreement was conditional on Syriza supplying the Troika with a list of “reforms” that must first be approved by them and then implemented.

For discussion at Monday’s meeting, Greek Finance Minister Yanis Varoufakis presented a list of seven measures that his government proposes to immediately carry out, to tackle the “humanitarian crisis” and “alleviate extreme poverty.” They are highly targeted measures, introducing food allowances for 300,000 households, the reconnection of domestic electricity supplies and some free electricity for 150,000 households, and a rent allowance for fewer than 30,000 households.

Syriza’s initial budget to deal with the social crisis, outlined in its Thessaloniki election programme was €1.8 billion—a figure barely enough to scratch the surface of the staggering social devastation caused by five years of brutal cuts in living standards.

Now, following a month of negotiations with the troika, the total cost allotted is just €200 million, or 11 percent of the Thessaloniki programme. Even this must be approved next week by the troika. Varoufakis’s letter assures them that it will be “fiscally neutral,” with €200 million of savings to be made elsewhere.

According to excerpts of an interview with Tsipras to be published in Saturday’s Spiegel, he said on Friday, “The ECB has still got a rope round our neck.”

Tsipras added that if the ECB refuses Athens permission to issue additional short-term treasury bills, “the thriller we saw before February 20 will return.”

None of this pathetic posturing will wash with the representatives of the ruling elite. Speaking on Friday to the influential German business daily Handelsblatt, Klaus Regling, head of the European Stability Mechanism, which facilitates the EU’s loan agreements, said, “The new Greek government’s communication has, at times, been irritating in recent days.”

He warned, “Greece must pay back these loans in full. That’s what we expect and nothing has changed in that regard.”

Even as the representatives of the global financial aristocracy demand that Greece be bled white, the conditions facing millions worsen. Unemployment is entrenched, and rose again in December to 26 percent, more than double the euro zone’s average of 11.3 percent. The number of jobless has barely shifted since reaching a record level of 27.9 in September 2013.

Hundreds of thousands of people rely on food banks and soup kitchens to get a regular meal, with many people requiring handouts three times a day. Others resort to scavenging.

Speaking to the Daily Telegraph, a priest at a church involved in food distribution in west Athens said, “The local councils can’t cope, so people come to us for food. We’re feeding 270 people and it is getting worse every day. Today we discovered three young children going through rubbish bins for food. They are living in a derelict building and we have no idea who they are.”

Last month, two teachers alerted Athens City Council that they were being asked to teach starving children. One of the teachers reported that one of the pupils involved had not eaten for two days.

The Death of Social Democracy

Syriza, Germany, and Reality

By Peter Lavenia
February 26, 2015
Counter Punch

 

In reading Yanis Varoufakis, Greek finance minister’s essay “How I Became an Erratic Marxist1,” I was reminded of a line in Karl Marx’s famous letter to Arnold Ruge where he declares “But, if constructing the future and settling everything for all times are not our affair, it is all the more clear what we have to accomplish at present: I am referring to ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.”2Marx was of course arguing real radicalism cannot shy from harsh truths.

The harsh truth we are faced with is that Syriza represents the last gasp of honest, reformist, left-Social Democracy.

After the deal made with the Troika on Friday, it, as Rosa Luxemburg declared its predecessor – revolutionary Social Democracy – is now nothing but a stinking corpse. The constraints of the capitalism world-system, the EU, and the European ruling class have conspired to make all attempts at real left-Social Democratic policies impossible.

Honest, reformist left-Social Democracy has attempted over the years to be a broker between the needs of the working class and poorer sections of the middle class, the state, and the bourgeoisie. More Keynesian than socialist, its social and electoral base has demanded expansion and enforcement of pro-worker labor laws, reversal of privatizations, higher minimum wages, and political checks on the power of large corporations.

Syriza does not call itself a social democratic party – and given the neoliberal trajectory of the official Social Democratic parties (PASOK in Greece) – we can only call it social democratic inasmuch as its Thessaloniki Programme3 of four pillars: 1. Confronting the Humanitarian Crisis, 2. Restarting the Economy and Promoting Tax Justice, 3. Regaining Employment, and 4. Transforming the Political System to Deepen Democracy, is a mirror of what social democracy aspired to be until all official Social Democratic parties had accepted the demands of neoliberal capitalism and financialization of the capitalist world system. Its defeat and looming fate as enforcer of the Troika’s austerity demands represents the end result for honest reformism within the system’s constraints.

Syriza’s decision to attempt honest negotiation with the Troika over the demands placed on Greece to continue a program of austerity in exchange for continued loan tranches stems from a very real analysis by the party and thinkers like Varoufakis that the European Union is a project worth salvaging, that bluster, open diplomacy and explanation might persuade and cover up Greece’s weak negotiating position, and that as Varoufakis explains in his essay: “we, the suitably erratic Marxists… must try to save European capitalism from itself… Not out of love for European capitalism, for the eurozone, for Brussels, or for the European Central Bank, but just because we want to minimise the unnecessary human toll from this crisis.”

Varoufakis and his colleagues in Syriza have, over the last month, emboldened the hopes of the left in Europe and the United States that anti-austerity forces could triumph over the neoliberal hegemony that has been in place since its construction under Reagan and Thatcher and expansion under the watchful eye of Germany, the European Union and the Bretton Woods institutions. They have done so by carefully outlining the needs of the unemployed workers in Greece and how fiscal expansion led by the Germans, ECB and IMF would ultimately benefit Greeks and the rest of the EU. In this they are correct: the Stability and Growth pact limiting public deficits and debts, alongside the inability of individual countries to create currency has an ultimately deflationary effect on debtor states, especially if there is no stimulus program to recycle trade surpluses into those debtor countries.

Syriza have also, quite rightly, pointed out an EU “New Deal” program would solve most of these dilemmas while keeping the superstructure of the union intact. It is always the case that sincere left-reformist social democrats like Syriza understand how to save capitalism from itself: they have the analytical tools and a base far more interested in stability than bourgeois parties in core surplus-generating nations, which tend to have much to gain politically and financially from economic collapse in the periphery. Yet they have overestimated the desire or need of the capitalist class, especially in the EU, to rescue the periphery as a consumer zone, when they instead prefer to plunder it.

The problem with Syriza and its defeat is that their election talk of bucking the EU, ECB and the IMF.

is now revealed to be not just bluster, but bluster harmful to the development of a truly radical political and class consciousness in Greece and the European Union. Seasoned analysts pointed out from the beginning Greece was in a weak bargaining position and unlikely to attain any of its demands of debt reduction/extension, rollback of austerity and EU democratization. The illusion created by Syriza, Prime Minister Alex Tsipras and Varoufakis was that the electoral will of the Greek working class as represented by Syriza would come to fruition in negotiations with the Troika, and that the party would not betray its base by allowing Troika monitors to continue austerity in exchange for continued financial backstopping of the Greek banking sector.

This, of course, has always been a fundamental contradiction when left-social democratic parties have swept to power: the political consciousness of its working class base demands a direct attack on the inequities and injustices of capitalism but not to the extent of overthrowing capitalism itself. Social democracy is thus philosophically idealist about fundamentally altering the dynamics of capitalism while ignoring that those reforms will never change capitalism’s core dynamic of class rule and exploitation, but it will cloak this under the rubric of pragmatism and the endless possibility of voting in a bourgeois electoral system. In an era of expanding worldwide demand and growth of industry in the core, the social democratic system of working class empowerment could be tolerated as it tamed the wilder impulses of the working class while creating the consumers now lauded as the “middle class” of 20th century capitalism’s 30-year golden age in the post-WWII era. Social democracy never won the working class political control, but the power wielded by socialist parties allowed segments of the working class access an increasing share of capital’s immense accumulation in the post-war era.

Syriza has arrived on the scene decades after the last meaningful acts of social-democracy could occur. Capitalism in the core has long since ceased to need to make deals with socialist parties as representatives of an industrial proletariat; those jobs have been replaced by shifting industrial work to the periphery as the capitalist world-system tends to do specifically as acounter to the success of mid-century social-democracy, or by increasing mechanization in the core – again, a tendency within capitalism well described by Marx. Straitjacketed by a capitalism that no longer needs to tame a restless proletariat into a large consumer class, Syriza faces immense pressure from “the institutions” to allow continued profiteering from privatization and bond repayment – the very things that constitute super-profit in the financial era of this end of capitalism’s long-cycle. Add to this the European Union’s structure itself, which was built to constrain any national attempts at left-reformism, and Syriza’s determination not to even bluff about a Grexit – which might provide a modicum of control over at least the nation’s currency and deficit spending – and there is little room for a party like Syriza to deliver on its promises.

Returning to Marx, if constructing for the future and settling everything for all times is not Syriza’s (or Podemos, etc.) task, then what is to be done? A party like Syriza – supposedly a “Coalition of the Radical Left” – that wishes to develop radical, even revolutionary class consciousness must be honest with its membership and voters. To explain the reforms are difficult, if not impossible in the current circumstances, that they would fight for them anyway, and that they would never implement the austerity measures demanded by the Troika would be a start. To also encourage workers to take over failing businesses as cooperatives, collectives, and to begin discussing what that might mean if and when Greece exited the Eurozone: how the development of worker control over the economy could help buoy them in the desperate economic times and begin a real fight back against neoliberalism, while waiting for allies like Podemos or the 5 Star movement to win power, this would be the stirrings of a radical analysis and abandonment of the idealist phraseology around Syriza’s win and subsequent defeat.

To do so would not, of course, be easy and would likely be furiously combated by the Troika, its representatives inside Greece, and the Greek capitalist class. To turn a phrase: there is, however, no alternative. Greece is presented with the challenge, and the possibility, of being at the forefront of the new class struggle, which will require abandoning the illusions that reformism has a chance of success and stability in this era, and building the radical alternative. Otherwise Syriza will be turned into just another dead social-democratic party, enforcing the structural demands of capitalism while claiming to want the opposite.

Peter A. LaVenia has a PhD in Political Theory from the University at Albany, SUNY and is a member of the New York State Green Party’s executive committee. He can be reached on Twitter @votelavenia and at his website, unorthodoxmarxist.wordpress.com.

Notes

1 Yanis Varoufakis, “How I Became an Erratic Marxist,” The Guardian, Wed., Feb. 18, 2015. http://www.theguardian.com/news/2015/feb/18/yanis-varoufakis-how-i-became-an-erratic-marxist

2 Karl Marx, Letter to Arnold Ruge, September 1843. https://www.marxists.org/archive/marx/works/1843/letters/43_09.htm

3 http://www.syriza.gr/article/id/59907/SYRIZA—THE-THESSALONIKI-PROGRAMME.html#.VOlWxvnF-T8

 

Stock markets rise after Greece signs new austerity agreement

By Robert Stevens
February 24, 2015
World Socialist Web Site

 

Europe’s stock markets rose Monday in response to the four-month extension of austerity agreed Friday between the Greek government and the euro group.

Stocks shot up in all the main markets save London, closing at their highest levels in seven years. Japanese equities hit a new 15-year peak. The FTSE Eurofirst 300 rose by 0.6 percent and Germany’s Dax by 0.7 percent. London’s FTSE 100 rose sharply and was due to reach a record level, before falling only due to a plunge in the shares of the crisis-ridden HSBC bank. Greece’s own stock markets were closed for a public holiday.

The financial aristocracy believes Greek Prime Minister Alexis Tsipras’ deal will allow it to continue raking in billions of euros in profits by savaging workers’ living standards in Greece and across Europe. Commenting on the austerity deal, Erik Nielsen, global chief economist of UniCredit, said, “Europe has drawn the line in the sand—and markets had absolutely no problem with that.”

Summing up the results of less than a month of talks, in which Greece’s Syriza-led government did not win even minor concessions, Nielsen called it a “complete political surrender” on Syriza’s part.

The first condition of the agreement was for Syriza to submit further proposals by Monday evening to the European Commission, European Central Bank and International Monetary Fund “troika”, detailing how it would strictly adhere to the austerity programme agreed to by the previous New Democracy/PASOK regime.

Syriza complied totally with this humiliating demand. To ensure that its proposals would not be rejected, Syriza officials spent the entire weekend and Monday in talks with troika representatives, honing a suitable austerity agenda. One Greek government source told the Guardian, “It will be put over this evening although when exactly that will be we just don’t know. Right now they are drawing up and crossing out [proposals] … It is changing all the time.”

In the end, Syriza left nothing to chance. On Monday evening, Athens stated that it would instead submit its proposals on Tuesday morning.

This followed a warning in Monday’s Financial Times, which noted: “Euro zone officials have for weeks complained that [Greek Finance Minister] Mr Varoufakis’s reform proposals were not sufficiently detailed and had not come with estimates of how much they would affect the economy and government budgeting. Officials who have seen the weekend submission from Athens have indicated it is similarly vague.” [emphasis added]

Another official acknowledged Athens’ proposals amounted to “a list of actions to be taken” without a detailed breakdown of numbers.

Reuters reported Monday evening that a government official said Syriza’s list “will include reforms to fight tax evasion, corruption” and “measures to reform [the] public sector, [and] cut bureaucracy”. Also included are “reforms to regulate tax arrears and bad loans.”

Syriza uses these standard euphemisms (“reforming public sector, cut bureaucracy”) because, like the right-wing New Democracy government before it, it is a reactionary bourgeois party trying to cover up its plans to cut workers’ jobs and pay and increase productivity.

Syriza’s capitulation has only fueled demands for further concessions from the European Union.

The German government, which has insisted that Greece carry out the troika’s austerity directives to the letter, has responded to Syriza’s capitulation with even more vociferous demands. Foreign Minister Frank-Walter Steinmeier said, “The ball is in the Greek government’s court. If Athens wants to see changes in individual points, then that is okay. But if these changes lead to further spending, then they need to save elsewhere or look to gather more revenue.”

The statement issued by the euro group Friday stipulated, “The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the [EU, ECB and IMF] institutions.”

Among those who Syriza first turned to as a supposed counter to the austerity being demanded by Germany was European Commission President Jean-Claude Juncker. Not only did Juncker endorse the German position before the ink was barely dry on Friday’s deal, he was leading the chorus for Syriza to tear up any promise it had made to alleviate the social devastation visited on the Greek people over the past five years.

Speaking Monday to Wirtschaftswoche, Juncker said Syriza cannot raise the minimum wage because “It’s very difficult claiming privileges that other states don’t have.” He said Spain, Ireland and Portugal had already passed through a “vale of tears,” and that Greece could not be treated differently, “especially on raising the minimum wage.”

As Syriza desperately tried to make its proposals “sufficiently comprehensive to be a valid starting point” ahead of negotiations on a harsher austerity package in April, IMF head Christine Lagarde insisted that Syriza had to tackle “vested interests, protected professions, rigidity in some markets.”

She said, “I hope that the structural reforms that are so needed in the country can be implemented. … There’s been a lot of talk about it, but now it’s time to get on with the work.”

In fact, there is every indication that Syriza’s capitulation to the EU austerity diktat will only fuel the collapse of the Greek economy and the drive for deeper attacks on the working class.

Greece’s banks remain in deep crisis, with their access to funds cut off by the ECB. Due to fear of a financial collapse as Greece’s previous credit agreement with the troika was due to expire, €1 billion were withdrawn from Greek bank accounts last Friday.

According to JP Morgan, outflows from Greek banks last week total €3 billion. In just under two months, €25 billion in deposits have been withdrawn from Greek banks. J.P. Morgan estimates that on this basis, the banks will run out of collateral to obtain new ECB loans in just eight weeks. This is down from the 14 weeks it estimated only last week.

Alan McQuaid, chief economist at Merrion Stockbrokers, described the latest deal as “kicking the can down the road,” adding that “it’s better than nothing and for the time being it will be seen as positive, assuming they can deliver these reform promises today.”

Peter Dixon, equity strategist at Commerzbank, cautioned, “We have cleared the first hurdle, but Greece has to come up with a serious set of measures now. Over the course of the next few months, we will be having more discussions and possibly a lot more market volatility.”

Gary Jenkins, chief credit strategist at LNG Capital said Syriza “now have four months to try and demonstrate that they have an action plan which is acceptable to their European partners and to their own people. It is not inconceivable that we are all back here in four month’s time with a heightened risk of either a Greek exit [from the eurozone] or default—or both.”

Syriza capitulates to the EU

By Robert Stevens
February 21, 2015
World Socialist Web Site

 

The Greek government has repudiated its election pledges, agreeing Friday to a four-month extension of the existing loans and austerity programme dictated by “troika” of the European Commission, European Central Bank and the International Monetary Fund.

After nearly a month of negotiations with the political representatives of the European banks, Syriza has accepted the conditions demanded by the troika. The Eurogroup statement noted the agreement remained conditional on Greece presenting, on Monday, a “first list of reform measures, based on the current arrangement.”

Syriza’s proposals must be approved the following day by the Eurogroup and the troika, who will “provide a first view whether this is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review.”

April was set as a deadline for Greece to complete a final list of austerity measures, which will be “further specified and then agreed” by the troika.

The statement asserts the “Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions”.

Without Greek compliance with these orders it will not receive billions of euros in further loans it requires in order to avoid defaulting on its debt of €320 billion.

Opening the press conference following five hours of talks, Eurogroup chairman Jeroen Dijsselbloem said Greece had given “their unequivocal commitment to honour their financial obligations” to creditors. He stressed, “Economic recovery cannot be put in danger, fiscal stability cannot be put in danger, financial sector stability cannot be put in danger.”

Before the Eurogroup meeting began, German Chancellor Angela Merkel held a press conference with French President François Hollande. She insisted that the Greek government had still not moved far enough in accepting the brutal cuts agreed to by the previous New Democracy-led government.

Merkel warned, “There is a need for significant improvements in the substance of what is being discussed so that we can vote on it in the German Bundestag, for example next week.”

As negotiations were taking place, at least a billion euros were withdrawn from Greece’s banks due to fear that no agreement would be reached. A reporter from Greece’s SKAI TV commented, “They came here determined to have a political solution, otherwise on Tuesday it would have been necessary to enforce capital controls [on Greek banks].”

Syriza’s agreement to continue enforcing austerity measures under the dictate of the European banks is the inevitable outcome of its class position and social interests.

Commenting on the political and social backlash Syriza will face, Pavlos Tzimas, a Greek political commentator, said, “Very heavy concessions have been made, politically poisonous concessions for the government. It’s going to be a crash test on the domestic front for the government.”

Immediately following the press conference German Finance Minister Wolfgang Schäuble spoke in similar terms: “The Greeks certainly will have a difficult time to explain the deal to their voters. As long as the programme isn’t successfully completed, there will be no payout.”

Greek Finance Minister Yanis Varoufakis earlier signalled that Syriza was ready to accept virtually anything. Athens had “gone not an extra mile [but] an extra 10 miles” in its proposal for the extension, he said. Other euro zone nations would have to meet Greece “not half way, but one-fifth of the way” in order to reach agreement.

The announcement on Friday followed by only one day the German governments’ emphatic rejection Thursday of a proposal by the Greek government for an extension of its previous credit agreement with the EU.

In that proposal, presented by Varoufakis, Greece insisted that the “new government is committed to a broader and deeper reform process aimed at durably improving growth and employment prospects, achieving debt sustainability and financial stability.” In the vaguest terms, it called for “enhancing social fairness and mitigating the significant social cost of the ongoing crisis.”

As soon as the text of the proposal from Varoufakis was made public, the German Finance Ministry rejected it. Financial Times writer Peter Spiegel pointed out that Germany took particular exception to language that “seems to leave main points open to negotiation” by stating that the “purpose of the requested six-month extension of the Agreement’s duration” is “to agree the mutually acceptable financial and administrative terms…”

For Europe’s ruling elite, there are no “mutually acceptable financial and administrative terms,” only an unconditional surrender.

Reuters published a document it said, “describes Germany’s position” in response to Varoufakis’s letter. It states that Greece’s request “opens immense room for interpretation” and includes no clear commitment to successfully conclude the current programme, and it falls short of a clear freeze of Greek measures.”

The document spelled out the precise wording that would be acceptable. It stated, “We need a clear and convincing commitment by Greece, which may just contain three short and well understandable sentences: ‘We apply for the extension of the current programme, making use of built-in flexibility. We will agree with the institutions any changes in measures from the existing MoU. And we aim at successfully concluding the programme’.”

In the end, this is what Syriza agreed to. It balked only at returning with an agreement that explicitly called on it to impose the hated “Memorandum of Understanding”—the list of austerity measures originally agreed to as part of the loan agreement. Syriza was allowed to have the “troika” renamed as the “institutions” and the “Memorandum of Understanding – MoU” recast as the “Master Financial Assistance Facility Agreement” (MFAFA)

However, the MFAFA, the official name of the loan agreement, includes language requiring that Greece “comply with the measures set out in the MoU,” that is, with the austerity measures dictated by the European banks.

The abject capitulation of the Syriza government exposes the utter political bankruptcy of the myriad petty-bourgeois pseudo-left organizations throughout the world who just a few weeks ago hailed the electoral victory of Tsipras as an earth-shaking event. Far from denouncing Syriza’s betrayal, these groups will work overtime conjuring up excuses and justifications. But broad sections of the Greek working class will see the agreement for what it is: a cynical and cowardly act of political treachery.