Syriza's first month

with thanks to libcom http://libcom.org/blog/syrizas-first-month-28022015A month since its election Syriza has moved far from its anti-austerity, anti-bailout rhetoric. It's been just over a month since Syriza won the Greek elections and formed a government. A month can be a long time in the Greek crisis and already the enthusiasm and hope that greeted the Leftist victory seems like something from the distant past. The new government's first few weeks saw a mix of action, inaction, retreat and surrender as it looked to find its feet both within the Greek state and in Europe. The news of Syriza's victory was greeted with joy from the Left across Europe. A Leftist anti-austerity party had actually won an election and was making grand promises of changing Europe. This enthusiasm was tempered somewhat by Syriza's formation of a coalition with right-wing Independent Greeks(AN.EL). This move was not surprising as the two parties have had an informal alliance for sometime as both are firmly anti-austerity. Whilst AN.EL took the valuable Defence Ministry they have so far kept themselves in the background. The formation of a coalition with AN.EL indicated that the main goal of the new government was to create an anti-austerity front to carry on negotiations with the Troika(IMF,EU,ECB). Syriza was elected on a promise to end the memorandums, the notorious bailout agreements through which the Greek state has been ruled for the last five years. Syriza's rhetoric started off by claiming an end to the bailouts and declaring the death of the Troika. From this rhetorical high ground Syriza gradually climbed down over the next few weeks. The claim that Greek debt would be written off was swiftly dropped. Charismatic Finance Minister Yanis Varoufakis stated that 70% of the bailout agreements was actually good and he only wanted to change the other 30%. Though Syriza demonstrated its willingness to quickly back down the talks with EU leaders dragged on. In part this was likely a deliberate move by the EU in order to push Syriza to further concessions and to punish the Leftist government in the manner of a teacher disciplining a back-talking pupil. In the end a slow bank run in Greece helped bring about a new agreement. The Troika was not dead after all but was just renamed. Syriza agreed to an extension of the previous bailout for four months, at which point a new arrangement will be made. Syriza won a few minor concessions such as a reduction in primary surplus targets and the ability to write some of their own reforms. The wording of the agreements has been changed, for instance no naming of the Troika, but other than that the extension is exactly the same as the previous government was prepared to implement. In just a few weeks Syriza has gone from ending the bailouts to extending them. The main substantial difference between Syriza and the previous governments in terms of the bailout agreements is that Syriza will be able to implement the deal from a position of popularity. The war of words the between the government and EU leaders during the negotiations stoked national pride in a country used to its politicians meekly submitting to Troika demands. Though there are doubts about the extension, Syriza is, for the moment, a popular government and was even able to call pro-government demonstrations-an almost unheard of event in Greece. Unrest is never far away though, there are already signs that the surrender to the Troika is causing disputes within Syriza and at the moment it is not clear if the deal will be put before parliament for a vote. One reason behind Syriza's popularity is their adept use of symbolism. The first days of the new government saw a number of symbolic gestures aimed at creating the impression of a new start. For the first time a Prime Minister was sworn in with a civil oath rather than a religious one. The fences which have surrounded the parliament building for the last years were removed. The police were restrained also. When an anti-fascist demonstration took place the riot police were told to sit back and watch while demonstrators were even allowed to paint and graffiti police buses (apparently the police were left 'confused and uncertain'), at the same event last year the police beat and chased people even onto the metro lines. The early symbolism was meant to demonstrate a break with the past but later moves pointed to a continuation of previous practices. Syriza proposed and elected Prokopis Pavlopoulos as president of the Republic. Pavlopoulos represents the old order of Greek politics, he was a high ranking member of conservative New Democracy and served as a government minister. Unforgivably he was Interior Minister during December 2008. His election represents a reconciliation rather than a break with the old order. Away from symbolism and the Troika negotiations another of Syriza's actions has had a more positive impact. After another suicide in the migrant detention camp of Amygdaleza, a Syriza minister visited the infamously poor camp and ordered the release of those held there. A number of people have already been released from the network of migrant detention camps across the Greek territories and it is hoped more will be freed. Other measures may also remove the worst abuses migrants are often subjected to by the Greek state. Other pre-election promises have so far been shelved or not acted upon. The fate of the controversial gold mine at Skouries is uncertain with Syriza seeming reluctant to act decisively against one of the only substantial recent foreign investments in the Greek state. As part of the bailout extension deal a number of privatisations are likely to go ahead rather than be frozen. The promised restoration of the minimum wage has to wait to 2016 at the earliest. Syriza now faces the same challenge as that has faced by previous Greek governments, how to implement the unpopular bailouts and the attached austerity. Their current popularity, bolstered by various symbolic gestures, will aid them in the process. But after having spent so long waiting for Syriza to end austerity, the Leftist's swift climb down will disappoint many. On Thursday night a few hundred protesters marched through Athens and clashed with police in the first small scale riot under Syriza. While insignificant in themselves, the clashes show that not everyone is following Syriza's path.

Greece, Syriza win but where next??

So many leftists on twitter and around the globe seem ecstatic that the anti austerity alliance party Syriza have seemingly won the Greek elections. Many hopes and expectations lay ahead. I sense a very bumpy road and a lot of conflict to come. This is just the start not the end. Syriza, a party born from a coalition of Eurocommunists, social movements and anti-globalisation activists, is riding high and looks set to take a large share of the votes once all is said and done in Greece in the snap elections called recently. Whether enough for an outright majority its in no doubt this is a big moment in the Euro crisis which started way back in 2008. The general sentiment among Syriza officials and activists is that they will win the election and form the next government. The party won the European election in May 2014 and achieved some significant wins at the regional elections. It has been leading nationwide polls for months, scoring 29 per cent in late December 2014. The majority-friendly electoral law allows for an absolute majority at 35 to 40 per cent of the vote, depending on the number of parties passing the threshold. If Syriza succeeds in forming a government then it will face a huge number of challenges on the domestic and European level. At home, it will encounter fierce opposition from big business, the austerity parties and the Greek media. Greek economic elites might use the EU’s legal framework to work against Syriza. For example, bank owners could file lawsuits at the European Court of Justice against the restructuring of the banking sector. For Syriza itself, being in government may strain the relationship between the party leadership and its supporters and change the dynamic within the party. Syriza will have to find a balance between its two roles – first, representing a credible alternative to the establishment, and second, bringing forward a project for government. Care will have to be taken not to damage the party’s links to the social movements, and it will need to extend its presence within society to build bedrock of support to withstand the attacks. A party m very new and made up of a lot of various trends of Marxists, trotskyists indeed my former party the CWI have a section within Syriza don’t expect them to have much say though they will make a lot of noise but very little will come of it. They have also taken on a lot of ex Pasoc members and party officials who putting in a British context have seen a lot of defectors from the Labour party who have seen their party discredited in many peoples eyes as they were one of the first party’s to force through austerity doing the ECB’s European Central Banks and the Troikas job for them. Syriza will come to power with the pledge to re negotiate the bank bailout and try they might. But Syriza will certainly try. One of the first actions of a Syriza government will be to demand a reduction of public debt in Greece and Europe through an international debt conference. European governments and institutions will probably enter negotiations without making any concessions. Karitzis says, 'They are convinced that we will eventually compromise, that time is against us, and so they won’t be too hostile in the beginning.' Giorgos Chondros, director of Syriza’s department for environmental policy, expects negotiations to drag on for a while. 'We will not only have to fight the Greek elites, but also the European ones. This makes our situation much more difficult. We’ll need the support of movements in the whole of Europe.' John Milios anticipates 'psychological warfare' from EU elites and creditors. Greece will most likely violate some of the provisions of the EU’s deficit rules. 'There is no doubt that the numbers we see about Greek government accounts, the banks’ asset books, are all forged,' Yanis Varoufakis, professor of economics and Syriza advisor, says. The true state of public finances will probably come to the surface soon after a Syriza government is instated. Party figures argue that for economic reasons the Euro zone cannot afford to kick Greece out. European elites could, however, exert pressure in other ways. They could trigger a bank run inside Greece. They could tarnish the image of Greece as a tourist destination. The European Central Bank (ECB) could stop returning profits from interest on Greek government bonds. Less structural funds for infrastructure projects like roads might be awarded to Greece – according to Varoufakis, the rules concerning these funds have been loosened in the past to support the current Greek government, meaning they could simply be applied more strictly to harm a Syriza government. Investors in Greek government bonds have been reassured by 'winks' from Berlin and the ECB, suggesting that should Greece not pay, the debt would be covered. Varoufakis warns that 'they might as well do the opposite to increase financial pressure on a left government.' All of these measures would damage Syriza’s ability to deliver important promises to re-establish free access to healthcare, increase the lowest pensions and introduce rent subsidies. Possibly the most serious strategy would be for the ECB to threaten to stop providing liquidity to Greek banks. Varoufakis describes this as a 'nuclear weapon' which could bring the Greek banking sector down almost immediately. It would be extreme, but not unthinkable: In December 2014, the ECB threatened to effectively cut off Greek banks unless the government complied with Troika wishes. Varoufakis is convinced that a Syriza government must be prepared for this form of blackmail if it is to last long enough to negotiate a new deal for Greece. Despite all these challenges, there is still optimism among Syriza members. Although many consider it possible that their government could last only for a few weeks, they say their chances are better today than they would have been in 2012. They see fractures within the neoliberal bloc that they can try to exploit, like the ECB’s fear of deflation, the position of Italy’s Prime Minister Matteo Renzi, and the recent conflicts within the French government. By getting into government and implementing first measures, Syriza hopes to accelerate existing debates, especially within European social democracy and the trade unions. I am no longer in favour of taking a electoral route to change I think its a dead end strategy but if Syriza do win power I do think we should support them to a point. If there looks to be a backlash in the streets where the likes of the Golden Dawn are set against Syriza supporters us as Militant anti fascists we must stand with them and with the Greek working class. This is getting serious now. If Syriza do not carry through their programmed and leave millions let down and hopeless I dread to think of the backlash from the far right and how this will play out. Whilst I am no support of electoral projects I do think there’s support needed for Syriza even if in a critical sense to build confidence of workers to rejoin the class struggle in Greece to rejoin the struggle against austerity and give hope to other nation such as Portugal, Spain, Ireland and Italy and so on that we can fight back and win. We need to get to the point where workers feel confident enough to feel they can run society for themselves. Whilst we may be some way from that factory and workplace occupations and strikes can all add to workers confidence that things do not have to be this way The possibility of a new society is there if we are not sucked in by various sub plots and diversion tactics which no doubt will be coming. It is no surprise tonight to hear our prime minister in the UK David Cameron who is now saying Europe face’s further times of uncertainty following these Greek elections. If a small nation like Greece voting in a supposed anti austerity party despite all its faults and it does have many then just wait until the Spanish, Italian and French working class begin to re start the fight after a lull. The euro crisis never went away as much as many bourgeois commentators hoped its back with a bang now and Greece is where we will be watching closely for things we can learn from. Solidarity with the Greek working class tonight. Remember change is in the streets, the factory’s the workplaces and communities not in the ballot box.

Cyprus standing on the edge of the abyss

Socialist policies needed to resolve crisis in the interests of majority By Niall Mulholland, CWI Niall Mulholland, who recently visited Cyprus, looks at the disastrous consequences of the Anastasiades government’s bailout deal with the Troika, and the alternatives put forward by the Left. The weather in Cyprus at this time of year is warm, with a refreshing breeze blowing over the island. The same pleasant balance cannot be said about the economy, which is in meltdown. Cypriot society is in a state of shock after weeks of economic and political turmoil. Cypriot banks faced collapse after a steep fall in the value of Greek government bonds, many of which were bought by the Cypriot banks. This was linked to the savage bail-out package imposed on Greece by the Troika. In March, the Cypriot government, led by President Nicos Anastasiades, agreed to a 10 billion euro bail-out package with the Troika (the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF), after the Bank of Cyprus and Laiki became insolvent. In return, Cyprus was told it must raise 5.8bn euros. The agreement saw bank depositors with more than 100,000 euros face big levies, hitting many small businesses. The country’s second largest bank, Laiki Bank, was closed down and its 9 billion worth of debts taken on by the Bank of Cyprus. After a two-week closure, banks reopened on 28 March but with strict controls on the amount people can withdraw each day. But as if this was not bad enough, the already stunned and angry Greek Cypriots were later told that the bailout had ballooned from 17 billion euro to 23 billion. Cyprus has to find 6 billion more than the 7 billion mooted when the preliminary agreement was reached on 25 March. President Anastasiades’ right wing government had already decided to impose swingeing austerity measures, bank closures, property taxes, privatisations of the three most profitable semi-state sector companies (electricity, telecommunications, and ports) and many sector job losses. They are even considering selling part of the gold supplies of the Central Bank, worth 400 million euro. “Returning Cyprus to the Stone Age” Adding to the country’s woes, is the long running crisis at Cyprus Airlines which is near bankrupt. The government is threatening to close it entirely or to make a deal with unions that would see a halving of the 1,030 workforce and the number of planes cut from 11 to 6. Cyprus Airline’s bleak future, along with the country’s economic turmoil, has ‘numbed’ summer tourist bookings, which is a crucial part of the economy. Political scandal surrounds the government. Anastasiades has been forced to strenuously deny that he knew a legislative bill was being prepared for the deeply unpopular ‘haircut’ of all bank depositors prior to the European Group meeting in March. Popular anger is aroused by reports that insider information enabled the rich to take out millions of euro from bank deposits before 15 March. Officially the Cypriot economy is due to fall by 8.7% this year and by 3.9% in 2014. But many economists believe there will be a 10% fall in 2013, and a plummet of anything between 15-25% by the end of next year. “Returning Cyprus to the Stone Age”, is how one commentator dramatically described the next months. Certainly people are finding their standard of living increasingly precarious. The government was recently forced to provide an emergency 3 million euro to small famers, whose livestock were starving due to the sudden bank credit restrictions. More people are switching from cars to (poor) public transport to save money. On weekends, instead of heading for the cooler mountains, families are now opting for the cheaper alternative of strolling along Nicosia’s ‘old town’, where they linger for hours over a single coffee or soft drink. Even sporting events are hit hard by the economic crisis. One of the main football clubs, Omonia, is in financial crisis and facing a sudden withdrawal of sponsorship. The government tries to dampen popular opposition to austerity by claiming the measures will not be as harsh as previously planned because some privatisations will be pushed back to 2018, there will less cuts in education and the repayment of the bail-out loans will start after 10 years and will take 12 more years (in total, Cyprus will, in effect, be under the control of Troika for the next 22 years). But this is cold comfort to the working class and middle classes who face years of austerity, job losses or emigration. Unemployment is already sitting at 14%. ‘Social markets’ (modern soup kitchens) are springing up everywhere. Working people also expect that, like Greece, the Troika will be in Nicosia every few months, demanding a new wave of cuts in return for bailout conditions. ‘Worst since 1974’ The newspapers are full of despair. It is generally felt that the crisis is the worst since the 1974 Turkish army invasion. There is understandable widespread outrage amongst Greek Cypriots at the bailout conditions and a perception that, once again, small Cyprus is, de facto, under neo-colonial rule; this time from the Berlin government, in the interests of German capital and for electoral gain. But sometimes this outrage in Cyprus takes a potentially divisive, nationalist direction. Marios Leonida Evriviades, a professor of international relations at Panteion University in Athens, wrote about the “econcide” (destruction of an economy) and “Cratocide” (destruction of a state) imposed by Chancellor Merkel’s government in Berlin, and compared it to the Nazis’s annexation of Czechoslovakia in 1938. He went on to talk of “Nazi-sympathizing Turkey” confiscating private property in 1942. The trade unions and Left needs to ensure they lead mass struggles against austerity or there is a danger that nationalist forces and even the far right will gain the initiative. This needs to include deepening relations with working people in North Cyprus, who have suffered their own austerity cuts for years, as well developing common struggle with the working people in other countries of southern Europe that are hit by the Troika’s austerity policies. Otherwise the two right wing administrations may try to whip up nationalism on either side of the Green Line, diverting the class interests of the whole island’s working people. So far, apart from organising some protests during the March crisis, the unions have given no real lead to working people. The right wing unions are in talks with the government about ‘managing’ the crisis. The Left unions, linked to AKEL (Greek Cypriot communist party), rhetorically oppose cuts but do not call for any firm action. Members of New Internationalist Left (CWI Cyprus) participate in a broad campaign against austerity initiated mainly by forces affiliated to AKEL, the ‘Movement Against Privatisation and Austerity’, but criticise its lack of a fighting programme to effectively oppose austerity and for a real alternative. One leading figure in the campaign claims that there is “no need for a programme – we are a movement”. But the economic crisis is deep and will only get worse. A radical alternative must therefore be posed. If the unions and Left fails to resist effectively, other populist, nationalist ‘anti-austerity’ campaigns can make headway. Ominously, Cypriot fascists, who are trying to emulate their cousins in Golden Dawn, in Greece, are now handing out anti-austerity leaflets in parts of Nicosia where they previously did not venture. These people can be a grave threat to immigrants and the Left. They must be resolutely opposed by a united workers’ movement that campaigns against the poison of racism and ultra-nationalism and for jobs, with a living wage, for all. Referendum call AKEL has called for a referendum, to allow the people to accept or reject the bailout deal. This was also taken up by the small Green party and an independent candidate in presidential elections held at the start of 2013. While the demand for a referendum gained an echo amongst some workers and youth who were furious at Troika-imposed austerity, it appears to have declined in recent weeks. AKEL and the former presidential candidate, Lilikas, both now put their hopes in the parliament rejecting the memorandum. However there are groups still collecting signatures in an attempt to force a referendum. There is little possibility that the present government will opt for political suicide by calling a referendum on the bail-out deal. In truth, AKEL’s campaign for a referendum is largely token and used by the party leadership to avoid other issues. In government until recently, AKEL cultivated a friendly relationship towards big business, the banks and the Russian oligarchs who spirited billions into Cypriot banks, preparing the ground for economic bust. In recent weeks, heightened government propaganda warning that there is no ‘Plan B’ and that leaving the euro and returning to the Cypriot pound currency would see the country “go back centuries”, is used to try to counter the popular call for a euro-exit. Nevertheless the issue remains live and can gather more force once austerity starts to bite deeply AKEL will unveil next week its proposals on how to leave the euro. Economists regularly appear on TV discussing a euro-exit. The influential Greek Cypriot Archbishop also raised the prospect of Cyprus leaving the euro-zone. This is in marked contrast to other euro-crisis countries, like Greece and Ireland, where although there is huge opposition to austerity most workers are fearful of leaping into the ‘unknown’ of euro-exit. Cyprus, however, only joined the euro-zone in 2008, at the start of the currency’s crisis. Cypriots therefore associate euro membership with seemingly endless financial turmoil, extreme austerity and looming slump. Euro-exit? But the New Internationalist Left warns that, on the basis of the continuation of the capitalist system, breaking from the euro and a return to the Cyprus pound will not mean refuge from austerity and stagnation. Certainly exiting would allow devaluation of the Cyprus currency but the boost to exports would be limited, given Cyprus’s lack of materials to sell abroad (the much-vaunted discovery of oil and gas supplies off Cyprus’s shores are years away from possible exploitation and the industry will be dominated by multi-national companies in the interests of their major shareholders). Currency devaluation would also result in a rise in import costs and therefore a hike in the cost of living. This ‘imported inflation’, along with likely government attempts to deal with paying off national debts by printing money, would cut into people’s savings. Apart from the New Internationalist Left, none of the rest of the Left puts forward a clear, class-based analysis to the crisis or a socialist programme for change. Inevitably various ideas are temporarily fashionable at this early stage of the economic crisis and impending class confrontations. Some look to a ‘co-operatives’ based economy as an alternative, for example. Unlike Greece, which, in effect, has suffered 28 years of austerity, many Cypriots are unprepared for the very hard landing ahead after years of economic boom. But looming class battles will radicalise more and more Cypriots in the next months and years. In anticipation of coming struggles, the New Internationalist Left puts forward a socialist alternative. This includes repudiating the debt, nationalisation of the banks under democratic public control and management, opposing privatisations, breaking with the bosses’ euro, and for the public ownership of the key industries and major utilities, to enable the economy to be democratically planned to serve the needs of the majority, not the profits of bankers and the speculator minority. All this immediately raises the prospect of Cyprus being forced out of the eurozone and even the EU. A workers’ government needs to plan to deal with exit from the euro and for a return to a national currency (the pound) while countering any illusions that this could provide a solution on the basis of capitalism. Adopting a new currency must be incorporated as part of a socialist programme. The struggle for the socialist transformation of society is just as relevant for Greece, Portugal, Spain and other euro-crisis countries, and beyond. A socialist federation of European states, founded on an equal and voluntary basis, is the only way to fully realise genuine co-operation amongst the working people of Europe and the utilising of the rich resources of the economy for the benefit of the great majority. This is particularly the case for small Cyprus. A new powerful Left needs to be built in Cyprus, with the aim of forming a government based on the needs of working people. The situation facing Cypriot society is desperate and set to get much worse. Only a bold, socialist, internationalist programme can resolve the crisis in the interests of the majority.

New developments in Cyprus open new chapter of Eurozone turmoil

No trust in capitalist government! No austerity for the Euro! Kick out the Troika! For a socialist alternative! By Tony Saunois, CWI The eurozone crisis has dramatically intensified during the last week. It has blown away the optimism of the ruling class in recent months that they had resolved the crisis. Once again, the continuation of the eurozone, as currently constituted, is seriously threatened. The Cyprus crisis could also dramatically pose the viability of the euro. This time the threat has erupted not from one of the so-called PIIGS (Portugal, Ireland, Italy, Greece and Spain). The latest threat to the existence of the eurozone has come from Cyprus. It is a measure of the parlous state of the eurozone and the EU that Cyprus which accounts for 1:500 of the EU GDP (compared to Greece’s 2% of GDP), threatens the continuation of the current eurozone. These developments have intensified the crisis and raised again the spectre of rapid contagion to other countries, especially Italy, Spain and Portugal. Cyprus was also, at least initially, the first country to apparently call the bluff of the Troika. This threatens to set a “trend” for other eurozone countries to do likewise, something which Merkel and the other EU leaders are terrified of. While, at the time of writing, it remains unclear exactly how this new phase in the crisis will unfold, the developments in Cyprus represent the opening of a new chapter. Arrogantly, like a colonial master, the Troika insisted that the Cypriot government confiscate a percentage of the bank deposits held by both rich and poor, 9.9% for those holding over 100,000 euros and 6.75% for others, as a condition for a bail out of 16bn euros. The Troika would provide 10bn euros with an additional 5.8bn raised by the Cypriot government. This was perceived as a dictate by colonial rulers. Yiannaki Omiras, President of the Parliament, argued that, “Europe want Cyprus to return to be a country of limited sovereignty – neo-colonial”. The history of colonial rule under the Ottoman Empire and British imperialism is an important part of Cyprus’s history, fuelling opposition to measures being imposed by the Troika. The confiscation of a percentage of the deposits of all savers provoked a massive backlash in Cyprus and other EU countries caught in the centre of the storm, especially Italy, Portugal and Spain. In one stroke, the imposition of this measure fatally undermined the insurance guarantee for depositors throughout the EU. This can lead to a flight of capital from other weak economies in the EU, such as Portugal, Italy and Spain. If the Troika could impose this on Cyprus, then why not Italy, Spain or Portugal and other countries when the next bailout is needed? It was a blunder by Merkel and the Troika, driven by the ‘hard-line’ Dutch, Finns and Slovaks in support of Merkel and German imperialism. The deposit ‘tax’ threatened to trigger a run on the banks in other countries, as depositors withdraw money from their accounts in fear that they could loose at least a percentage of them. The consequences of this miscalculation – reflecting the arrogance of the EU leaders and that they are lashing around for solutions – has only intensified the crisis. President humiliated In Cyprus, the reaction to the Troika demands was such newly-elected President Nicolas Anastasiadis, in power for just over two weeks, was left humiliated. Bullied into accepting the deal in Brussels, Anastasiadis returned to Cyprus to face a revolt of the mass of the population and all the political parties, including his own. In the end, not a single MP voted for the deal and the governing party, DRP, abstained on the vote! They effectively called the bluff of the Troika, which, in turn, put the ball back into the Cypriot court, by threatening to cut off ECB funds in days, by Monday 25 March. Such a move would effectively put Cyprus outside the euro-zone and possibly even the EU itself. Developments in Cyprus can increase the pressure in other countries for the national governments to stand up to the Troika and the EU. However, the Troika will impose harsh conditions on Cyprus, to punish its people, as a warning to others that this will be their fate should they defy the Troika. Apart from the pressure by the mass of the population to oppose this measure there were other important factors which also allowed the Cypriot ruling class to withstand the demands of the Troika. Deal with other powers Unlike the Greek ruling class, the Cypriot rulers have the prospect to strike a deal with other capitalist powers outside the EU, in particular Russia. But the vote to reject the deal in the Cypriot parliament was not a vote against an austerity package. The cuts package had already been accepted by the previous government, led by AKEL (the Cypriot Communist Party), which has significant support amongst workers, and passed on to its successor. The bail out was a bail out of the banks, which together with tourism, are the mainstay of the Cypriot economy. Cypriot banking is awash with money from Russia – US$31bn invested in Cypriot banks by the Russian banking system alone - due to very favourable tax rates. The vote against the Troika package by the pro-capitalist parties was partly a vote to maintain Cyprus as an offshore tax haven. Banking, which is currently eight-times the size of the country’s GDP, has been teetering on collapse after being exposed to heavy losses as a result of the crisis in Greece. At the same time, Cyprus has gas reserves worth an estimated 475bn euro. This, the ruling class had hoped, would give them the opportunity to broker an alternative deal with Russia. This revealed a clash of national interests between the capitalist and imperialist powers. The prospect of Russia acquiring a share of the oil reserves, in return for at least a percentage of the bail out, enraged Merkel and German imperialism, in particular. Even US imperialism is disquieted at such a development. The extension of Russian influence into an EU country will aggravate tensions with German imperialism and other EU powers. Reflecting this threat, it appears that the Russian deal has collapsed. At this stage, Putin and the Russian oligarchs do not want to come into a sharp collision with Germany and other EU powers, which would threaten trade and other commercial interests. At the time of writing, the apparent collapse of this alternative deal has left the Cypriot government floundering around in a desperate search for a solution. Failure to secure one will possibly result in the ejection of Cyprus from the euro. This would undoubtedly provoke a major crisis in Cyprus. The introduction of a new currency would result in a massive devaluation and flight of capital from the country, massive hike inflation and a slashing of living standards. Moreover, it would also put the question of the viability of the euro back on centre stage of the crisis. This follows a respite in recent months during which the ruling classes in Europe have claimed that the euro crisis was ‘resolved’. Italy next? Yet it has already emerged following the dramatic elections in Italy. Despite the lack of a socialist alternative for the Italian workers and masses, a clear majority voted for the anti-austerity parties. The populist movement led by Beppe Grillo took 25% of the vote, campaigning against the euro, for a return of the lira and a restructuring of Italy’s mountain of 9 trillion euro public debt. There is still no government formed in Italy. Greece Italy, the EU’s third largest economy, would make the drama of the Greek crisis seem like a minor side show in comparison. Moreover, Spain and Portugal also set to follow an eruption of the euro-crisis in Italy. It is possible that the Cypriot government will be compelled to levy a higher tax on wealthy depositors and take other measures, such as nationalising the pension funds. This may allow Cyprus to remain in the euro for a period although this is far from certain. A new crisis would inevitably emerge, posing again the prospect of Cyprus’s ejection from the euro, if Italy, Spain or Portugal has not already gone through the exit door. Need for a socialist alternative. The crucial issue facing the Cypriot workers and middle class is the urgency of building a mass movement to reject any austerity programme demanded by the Troika and capitalism and to oppose any measures which see the masses help pay for a bail-out of the banks. Unfortunately, the leadership of AKEL is not organising a mass mobilisation and presenting an alternative programme to break with capitalism, as a way out of the crisis. In government, holding the presidency, until only two weeks ago, the party accepted the austerity package demanded by the EU and simply passed it on to the new government to implement. Today it calls for a “powerful response by the people” and “mass resistance”. It demands “the popularisation of the vision for the liberation of Cyprus from the suffocating embrace of the monopolies”. It urges people to take to the streets (AKEL Statement 16 March 2013). However, AKEL is not offering a concrete alternative of what should be done in the face of this crisis and the prospect of Cyprus being ejected from the euro. AKEL is currently calling for opposition to the Troika but not the eurozone. Yet membership of the eurozone means acceptance of the austerity demanded by the Troika. Many Cypriot workers and youth will ask what it did when it was in government. In the recent elections, AKEL lost up to 25% of its vote compared to 2008. There can be no trust in the capitalist government. In or out of the euro, these same capitalist politicians will attack the rights and living standards of the Cypriot working class. The Cypriot government, elected only two weeks ago on a promise of securing a ’softer’ bail out, is now largely discredited. Now it is urgent to fight for an alternative government of the workers and others exploited by capitalism. Such a government would oppose the terms of the bailout and reject the austerity programme demanded by the Troika. The banks should be immediately nationalised, under democratic workers’ control and management. Working people reject austerity to keep the euro. Such a government would face immediate ejection from the EU and the euro. A government of the working people of Cyprus would need to prepare for such a prospect. It would need to immediately introduce capital controls to prevent a flight of capital and for a new currency. An emergency economic programme would be necessary to defend the interests of workers and the poor. This would be possible on the basis of a democratic socialist plan of the economy through the nationalisation of the major companies and financial institutions. However this crisis of the EU is a crisis of the global capitalist system. A socialist government of the workers and poor in Cyprus would immediately face the wrath of European and global capitalism. Temporary loans and trade arrangements could be negotiated with other states as an interim step. But it would need also to forge links with the working people of Greece, Spain, Italy and Portugal. It would be necessary to appeal to them to follow such an example. Together the working peoples of these countries could form a democratic, voluntary federation of Mediterranean and Iberian states. This could be a bridge to reach over to the workers of the rest of Europe with the aim of forming a democratic socialist federation of European states as an alternative to the capitalist EU and Troika. The crisis in Cyprus has opened a new chapter in the crisis in the eurozone and the EU. It has illustrated that the crisis is far from resolved. Deeper and further crisis are certain to erupt in the coming weeks and months. On a capitalist basis there is no solution to the crisis. The struggle for a socialist alternative is now more imperative than ever.

Democratic deficit in Europe

Right across the Euro zone and beyond the crisis in capitalism is deepening by the day. When all seems calm and stable another shock is set off the latest in Cyprus where people’s personal bank accounts have been raided by 10% on their savings to bail the country out. Were people asked first? No they weren’t this is the democracy of the Euro in action. Or not. Since the onslaught of austerity was placed on the shoulders of working people and the poor across Europe people’s democratic rights as limited as they always are under capitalism are being slowly eroded under our very eyes. This crisis is not just a financial crisis it’s a series of crisis’s and one that myself and certainly the Committee for Workers International CWI including our own MEP Paul Murphy MEP have pointed out for a while now the democratic deficit we are seeing in Europe now. The ruling class is not afraid to take away democratic rights if their system or profits are under threat and wish to safe guard their interests. Although now Greece has a elected government back in power and Italy well who knows they are still trying to figure something out already we have seen the lengths the ruling class will go to safe guard their system by installing their own men in power. The imposition of the 'technocrats', in reality bankers, in both Italy and Greece, shows the seriousness of the crisis for the capitalist class nationally and across Europe. To try to save their system across Europe, the democratic rights of people to decide who will govern them have been trampled on. The markets, through the Troika of the IMF, EU and ECB, have usurped democracy and placed their own men in charge to ensure that the cost of this crisis is placed on the shoulders of the working class, unemployed and poor. The technocrats elevated to rulers in Greece and Italy, Lucas Papademos and Mario Monti, are the banking sector's choice of leader. Monti was an as advisor to Goldman Sachs until his appointment. Papademos was a former vice-president of the European Central Bank, and has publicly been opposed to the write down of Greek banking debt as it would hurt the banking sector. Goldman Sachs was described in a 2010 Rolling Stone article as: "The world's most powerful investment bank" and "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It can manipulate "whole economic sectors for years at a time, moving the dice game as this or that market collapses and all the time gorging itself on the unseen costs that are breaking families everywhere - high gas prices, rising consumer credit rates, half eaten pension funds, mass layoffs, future taxes to pay off bailouts." These 'technocrats' have been presented to the world as the experts who will be able to solve the financial crisis, as some sort of wise men who can rise above politics. It has been put out that these men will put the 'national interest' first. This is a lie. The 'dictatorship of the technocrats' is an attempt to divorce economics from politics. The technocrats will act, not in the interests of the mass of the people, but in the interest of the people they represent - the financial elites. The protest movements and strikes that have swept across Greece and Italy need to be intensified against this anti-democratic and anti-working class move by the national and European establishment. No matter how much they try to persuade us that the technocracy is above politics, a mass movement of workers, the unemployed and young people which builds its own party, can brush away this dictatorship of the markets and start to create a society that is democratically run in the interest of the mass of the people.

Greek parliament pass’s more cuts, how much more can the working class take?

With last nights vote by the Greek government passing another austerity package to receive their next round of bailout funds many are asking how much more can Greece take and more specifically how much more hardship can the working class take. This week the Greek working class turned out for their 21st general strike since the financial crisis hit back in 2008. There doesn’t look to be any end in sight. But things in Greece are happening very quickly and events are unfolding all the time. Things are changing on the ground as well as on the left. Below I republish an interview which was conducted recently with a member of the Greek section of the CWI Xekinima (Greek CWI An interview with Paris Makrides, Xekinima (Greek CWI) Yesterday was the first day of another 48 hours general strike. How big was the strike and protests of the Greek workers and youth? The strike paralysed Greece completely. Athens was like a deserted city as nothing moved except the demonstration of the striking workers. Not only workers were on strike but small shopkeepers as well, even taxi drivers, who together with the strike in public transport paralysed Athens entirely. The picture was similar in every other city of Greece. The numbers on the Athens strike demonstration however were not that big, due to the lack of transport; workers and youth had no means of getting to the centre of Athens other than by foot. Despite this, we estimate that 30,000 to 40,000 people were on the streets of Athens. Today’s rally at Syntagma Square, which is intended to encircle the parliament building, where MPs will be voting on the new (third) Memorandum [new austerity measures at the behest of the Troika] at 5.00pm, will probably be much bigger. But there is always an element of uncertainty, as the broad population, including workers and youth, know that most probably there will be violent clashes largely between anarchists and provocateurs (secret police agents), on the one hand, and the riot police, on the other hand. These clashes turn away the mass of the population from taking part in the demos. If this element did not exist, we can safely say that this afternoon one million people, if not more, would be on the streets of Athens surrounding Syntagma Square. What does the new, third ’Memorandum’ mean for the Greek people? The third Memorandum will be a disaster, added to an economy and society already devastated by the two previous Memorandums. According to estimations of the Troika [European Union, European Central Bank and International Monetary Fund], Greece’s GDP will be reduced for a sixth consecutive year. And public debt, notwithstanding the austerity measures that have been adopted these last years and “haircut”, for 2013 will reach 346 billion € (189% of GDP) increased by 66 billion since last February! Over the last years, Greek people have paid much higher taxes, have see their wages slashed, unemployment has reached 24% and youth unemployment 55% (these are the official figures). Public health and education have been destroyed and public services and companies privatized and sold off for peanuts. But European and Greek capitalists have no interest in the terrible social effects their policies are having. The third Memorandum contains new cruel austerity measures, such as increase on the retirement age to 67 years, massive dismissals of public employees, more taxes, greater so-called “flexibility” concerning labour relations and privatisations. And it is clear this will lead to more social misery and catastrophe, just like the earlier Memorandums. How do you explain the fact that despite all this huge mobilisations of the Greek people, the Troika is still able to apply its anti-working class policies? The Greek people’s struggles over the last two years have been massive. People understand that they have to do something to stop the Troika’s policies. So they participated in general strikes, refused to pay taxes and occupied squares. People want to resist and fight. On the other hand, the trade union leaderships don’t. These leaderships don’t want to overthrow the government because they are tied with the government parties. The parties of the Left support people’s demands but do not have a plan about how the capitalist’s policies will be stopped and how the government will fall. SYRIZA (Coalition of the Radical Left) recently called for new elections. But elections are not the Left’s primary field of battle at this moment. What is necessary is an indefinite general strike which, of course, will raise the question of power in society – who decides, who controls and who manages the economy and society. This is the only way to go forward, to overthrow the government, and to pave the way for a government of the Left which will be based on worker’s power, through democratic rank and file committees and assemblies, in every workplace, neighbourhood, university and school etc. Is the huge anger of the Greek working class reflected inside the trade unions? The role of the leaders of trade union is absolutely exasperating. But whatever they do they cannot stop the class struggle. People are outraged with the Troika’s policies. This anger has pushed several rank and file unions and union federations to call the GSEE and ADEDY (the private and public sector trade union centres) for an indefinite general strike, as the only reply that corresponds to the scale of government’s and the Troika’s vicious austerity attacks. However, the GSEE and ADEDY refused to call an all-out general strike (which was to be expected) and the unions calling for this action did not try to take the next necessary step, which is to co-ordinate actions between themselves; to prepare for and set a day of strike action and to call on the rest of the union movement to come out in coordinated, indefinite strike activity. We are convinced that such an initiative, given the explosive mood in Greek society, would trigger an avalanche of class action and would push aside the official union federation leaderships. Militant, mass industrial action, as described, could maximize workers’ mass pressure against the government and Troika and give society with a perspective to defeat the attacks. But what really infuriates working class people and drives them “mad” is that often breaks on the strikes movement are made by the parties of the Left. For example, a resolution for at least one week’s strike action was voted down on the Central Council of the ADEDY federation (civil servants’ union) because of the votes of the KKE (Communist Party) faction. The resolution for a week’s long strike had the support of 19 votes, with 17 votes against, but the KKE used its seven votes to defeat it. In the journalists’ union, two days ago, a similar role was played by the SYRIZA faction, which is the biggest faction in that union. The PASOK vote split, with half supporting the demand of the anti-capitalist Left for indefinite strike action. But SYRIZA voted, together with the conservative section of the union, to have only one 24 hour strike and some three hour stoppages. These examples show the extent to which the mass parties of the Greek Left are far behind the needs of the situation and the mood of the working masses. What impact do these developments have on the political landscape? Despite dissatisfaction with the Left, a big section of the population now regards a new government of the Left as the only hope on the horizon. There is thus a huge turn in favour of SYRIZA (although opinion polls reveal that Syriza’s support has not essentially grown, but it is the largest party because support for the New Democrats, the main party in government, has fallen). But this turn towards SYRIZA is not enthusiastic. This is not without reason. SYRIZA’s political platform is not clear. People do not know exactly what SYRIZA is going to do if it takes the power, and that makes them suspicious. On the other hand, the KKE (communist party) is continuously isolated from the bulk of the working class because of its sectarian tactics. The KKE speaks, in general, about the need for “revolution” and “socialism” but it refuses to link this call, in any way, to today’s reality and to mass consciousness. On the contrary, the KKE say that things are not ‘mature enough’ yet for system change. So, in practice, they have ‘maximum and minimum’ approach (i.e. make radical and general rhetoric for ‘socialism’ etc, while only putting forward minimum demands and without linking the two concretely), rather than a transitional approach (campaigning on the key class demands of the day, while linking this up with the need for a workers’ government and to change society). In reality, as we can see from the union votes mentioned above and other actions, the KKE leadership functions like a strike breaking force. Despite SYRIZA’s inadequacies, the struggle for a government of the Left is what the movement needs to campaign for and this is the approach of Xekinima. Of course, we link this struggle to the absolute need for a socialist programme and the need to base this on rank and file assemblies and committees of action. We emphasise that if a government of the Left, based around SYRIZA, fails to adopt a socialist platform this will represent a massive defeat for the Greek Left and the working class, particularly given the fact that the neo-fascist Golden Dawn received around 12% to 14% in recent polls. How is Golden Dawn being combated? The far right, anti-immigrant Golden Dawn is not invincible, however. Opposition to it is growing. There are many anti-fascist committees being set up. The mass parties of the Left do not really understand how to tackle the problem of rising fascism, which requires working class unity, combating the real danger and propaganda of the far right and also fighting for an end to cuts, and for jobs, decent homes, a living wage and for decent public services, health and education for all etc. But things are changing. In September, every proposal made inside SYRIZA to create anti-fascist committees (usually made by members of Xekinima who participate in local branches of SYRIZA) was voted down. In the course of the last week, however, the central secretariat of SYRIZA changed its stand and is now in favour of anti-fascist committees. The KKE, on the other hand, makes no such call but it has a sectarian, abstract approach towards resisting Golden Dawn and the need for a united front against the far right threat. The KKE continues to live on its own isolated planet, refusing to understand what is happening around it. How is the Left responding to the crisis? SYRIZA is not the only field where developments are taking place. In the rest of the Left important developments are taking place. It is correct to say that the Greek Left, in general, is in a state of crisis, which takes different forms for different parties of the Left. There are splits inside ANTARSYA (the anti-capitalist Left Alliance); there is a mass exodus from the KKE; there are major clashes inside SYRIZA as the leadership turns to the right; and the Left Current of SYNASPISMOS (the main constituent force making up SYRIZA) is reacting to this rightward turn but without clarity as regards what should be done; and, of course, the huge mass of Left voters remain outside the Left parties and formations. In this context, Xekinima (CWI in Greece), came together with other forces of the Left, from ANTYARSYA and the rest of the anti-capitalist Left and we have also linked up with forces inside SYRIZA, to create the ‘Initiative of the 1000’, as it has become known (1013 individuals signed the launching statement before it became public). This initiative bases itself on the need for a radical anti-capitalist programme, as the only way to come out of the devastating social and economic crisis. This includes calling for a repudiation of the debt, nationalisation of the banks and the commanding heights of the economy, and for a planning of the economy, on the basis of social needs, and under workers’ control and management. The programme also calls for a united front of the parties of the Left and for support for a Left government i.e. a government based around SYRIZA. At the same time, this means fighting against the reformist programme of the leadership of SYRIZA. The majority of the leadership think they can manage the crisis better than the ruling class and do not prioritise fighting to get rid of the capitalist system and for a socialist society. The Initiative of the 1000 has only been publically alive for a few days but it has already been noted by the whole of the Left. It is an entirely new innovation, uniting forces from all sections and parties of the Left, on the same programme and with similar aims for the mass movement in the immediate period ahead. Its development and potential are not yet clear. But it is certainly worth the attempt to build the Initiative of the 1000. We will be able to say more about its role and perspectives in the very near future.

Shattering of the status quo in Greece, capitalist crisis rumbles on

The Greek socialist organisation, Xekinima, affiliated to the CWI, has produced this statement in response to the Greek election results:


A political earthquake in Greece
Greek voters have sent out a message that has terrified the Troika, their craven political parties and the ruling class in Greece and Europe.


Two out of three Greeks voters said NO to the EU/IMF/ECB Troika’s austerity ‘Memorandum’ ! Compared to the 2009 election, PASOK lost 72.6% of its support – a loss of 2.19 million votes. The right-wing ‘New Democracy’ lost almost half of its support - over 1million votes! SYRIZA (the Coalition of the Radical Left) jumped from 4.6% to 16.8 % earning over 700 thousand new votes (from 315,000 in 2009 to over 1million today)!


The political landscape that existed in Greece for almost 4 decades has been shattered. The mass struggles of the last two years have led to this change in political outlook. In turn, this result can give new impetus to these mass movements.


Forming a "Government" through electoral fraud?
The parties of the Troika and the ruling class will still try to make sure they can form the Government through an electoral system that distorts the will of the people by giving 50 additional seats to the leading party – even though ND had only a small and declining vote ! [ND’s 18.9% translates into 108 seats, SYRIZA’s16.8% gives only 52 seats]. ‘Democracy’ was never, more hollow and hypocritical.


Despite this blatant electoral ‘fraud’, ND and PASOK are still short of the target of 151 MPs needed to form a majority ( they have respectively 108 and 41, totalling 149). So they have started trying to pull together a government of "national unity" with the supposed aim of renegotiating the ‘Memorandum’.


There is only one response that the movement can give to any such Government: strikes, occupations in workplaces, in squares, in schools and colleges - until it falls.

SYRIZA, the big winner
The big winner of the elections was SYRIZA. This is a great victory for all social movements and the Left in general, but more specifically for a series of political positions and proposals put forward by SYRIZA. Apart from their opposition to the Memorandum, the vote for SYRIZA translates into massive popular support for the policy of unity and co-operation across the Left, and clear support to the idea of a Government of the Left.


The danger of fascism returns
But there is also a very serious threat from the election of the neo-Nazi Golden Dawn, who finished in sixth place. The 434,000 who voted for them are not neo-Nazis but people who chose this way to condemn the ND and far-right LAOS MPs in parliament, by sending them "extremists." But Golden Dawn will try to exploit this effect to strengthen its base. This perspective is a huge risk for the entire labour and popular movement, and our democratic rights.


The Left has to wake-up to the danger of fascism, to see the need for a serious joint struggle against the rise of neo-fascism. This is a further reason for joint action and for cooperation of the Left.

The struggle for an alternative society
Today SYRIZA is the "vehicle" which the Greek people has chosen to take into the political arena. In truth, notwithstanding some of the weaknesses in SYRIZA’s policy, this result opens the way to a struggle for an alternative economic and social policy, namely the struggle for an alternative society.


SYRIZA must face-up to its historical responsibilities. The crisis has only one answer: bold socialist policies.

There is now a realistic prospect of forming a Government of the Left in the period ahead – even more so if New Democracy and PASOK fail to form a government of "national unity" and opt to go straight to new elections. If such a Left Government were to be formed, the reaction of capital in Greece and Europe would be ferocious. They will threaten, and very possibly will carry out such a threat, to throw Greece out of the euro. At the same time, they will try to strangle the economy and ultimately to overthrow the government by any means necessary.


In these circumstances there will be two roads, either the overthrow of the power of capital - or compromise and selling out of the movement.


Under the domination of big capital, there are no prospects and no hope. We must not forget that PASOK 31 years ago formed a "left" government. But its refusal to overthrow the power of capital has led to the current Memorandum under a PASOK Government.


The ruling class are panicking and talking about a major political crisis! The Troika can now see the frightening results of their labours! This is what the terror that they have inflicted on Greek people and Greek workers has produced! The Greek labour movement said, “Drive out the Troika”, “Down with their political parties”, “An end to the two-party system”, “for a socialist way out of the crisis”. To achieve these goals means fighting for an alternative socialist society. Anything else would mean an abandonment of the principles and declarations of the Left.

Full text (in Greek) on: http://www.xekinima.org/arthra/view/article/politikos-seismos-mnimonio-telos-o-syriza-oxima-an/

Europe and capitalism still on very shakey ground as financial crisis continues

So as the financial crisis inside the EU intensifies I thought I’d look at a recent socialism today article
By Lynn Walsh, Editor, Socialism Today, monthly magazine of the Socialist Party (CWI England & Wales)


The European economies are in the throes of an austerity-induced recession, which is likely to be protracted.
The Greek bailout 2.0 has averted a default, for the moment. The new fiscal pact is a straitjacket that will aggravate Europe’s austerity-induced recession. Ireland’s referendum threatens to shake the EU and the eurozone. There is growing discord among EU leaders. Far from over, workers’ struggles against capitalist austerity will erupt on an even bigger scale. LYNN WALSH reports.

AFTER SEVEN months of wrangling, the troika, the Greek government and private bondholders have agreed to a second bail-out package. As a condition for the package, the Greek coalition, led by the technocrat Lucas Papademos and supported by Pasok and New Democracy, has agreed to further savage austerity measures. Leaders of the troika – the European Central Bank, European Commission and International Monetary Fund – claim that this package will stabilise the eurozone. But the savage austerity measures they have imposed on Greece will actually increase the burden of debt and ensure another default further down the line.
Greece will save around €100 billion through a managed default that has been agreed or imposed on the private bondholders. However, it is mainly a refinancing exercise rather than a wiping out of debt. Greece will receive bail-out funds of €130 billion or more – but these are loans from the European institutions and the IMF. The terms are less onerous than the previous bonds but, nevertheless, are new debt that will prove unsustainable. Most of the new bail-out funds will be used to recapitalise the private Greek banks (which have also suffered losses on the bond exchange) and to pay off previous debt and interest charges.

Official public holders of Greek bonds (the ECB, eurozone central banks, the IMF, etc) will not be suffering a haircut. While it may appear that the private sector is losing out, they are really “the lucky ones”, as commentator Nouriel Roubini says. They are getting €30 billion upfront as a sweetener (paid from the €130bn new bail-out funds). In 2008, all Greece’s debt was held by the private sector. Now, 77% of the debt is held by the institutions of the troika.
“The reality is that private creditors got a very sweet deal while most actual and future losses have been transferred to the official creditors”. “The reality is that most of the gains in good times – and until the PSI [public-sector involvement] – were privatised while most of the losses have been now socialised. Taxpayers of Greece’s official creditors, not private bondholders, will end up paying for most of the losses deriving from Greece’s past, current and future insolvency”. (Roubini, Financial Times, 7 March)
Moreover, eurozone private banks have received massive support from the ECB in the form of cheap (1% interest) three-year loans which, for the time being, will cushion the banks against their losses.

Greece’s Finance Minister Evangelos Venizelo (Pasok)
The second bail-out package will merely postpone the crunch for Greece. A report issued by the troika shows that, at best, Greece will still have a national debt of over 120% by 2020. This presages further drastic cuts in public spending, the sacking of 150,000 public-sector workers, and €45 billion privatisations by 2020. But if things go awry, the burden of debt (according to the troika) could peak at 170% in 2014 and still be 145% in 2020. “The new €130 billion that the official creditors have agreed to lend may not be enough even to cover Greece’s debt service [repayments to fund interest charges]”. (Financial Times editorial, 21 February)

“Greece is just not in a sustainable position on several counts”, commented Mats Persson, director of the think-tank Open Europe. “The extreme level of youth unemployment shows that the austerity cuts are fighting off any chance the country has of recovering. It will get worse; there’s no way Greece can get out of this”. (Daily Telegraph, 9 March) “‘It will happen’, said Stephane Deo, a UBS economist, referring to the next Greek crisis. ‘The market is already pricing in’ a second round of restructuring”.
From an economic point of view, the burden of debt in Greece is unsustainable. GDP fell nearly 7% in 2011, and is expected to fall by between 4% and 6% this year. Despite a series of general strikes and mass protests, the former Pasok government and, subsequently, the Pasok/New Democracy coalition appear to have got away with imposing devastating austerity measures. But, so far we have only seen act one. A recent comment in a Morgan Stanley bulletin recognises the likelihood of further social explosions: “Several episodes of social unrest have shown all too clearly that the extra-economic dimension of this tough adjustment programme is at times unpredictable”. (Greek Debt Restructuring, 24 February) In fact, the working class and middle class will be compelled to intensify the struggle against austerity measures that spell utter social-economic catastrophe.

Bundesbank president, Jens Weidman, has asked: What is the exit strategy? The ECB already has over €3 trillion of bonds and other collateral on its books (more than the US Federal Reserve). To reverse the liquidity injection it would have to sell a large part of these securities. But it is far from certain that this would be easily done, as many of the securities are considered too risky by private banks and finance houses.
The private banks are becoming more and more dependent on the supply of cheap credit from the central bank and from eurozone national banks. These public institutions have the first call on assets in the event of defaults. This in turn makes private investors wary of putting their capital into the private banks, as they would not get priority in the event of a default. In other words, they would bear the main losses of any banking collapse. This is giving rise to a situation where the ECB and the central banks are propping up zombie banks throughout the eurozone.

TWENTY-FIVE EU governments (with Britain and the Czech Republic opting out) have agreed a new fiscal pact. This is a legal straitjacket that aims to restrict governments’ budget deficits and national debt. However, it includes no measures that would concretely advance the eurozone towards a fiscal union. The pact limits ‘structural’ budget deficits to 0.5% of GDP (leaving room for arguments on the definition of ‘structural’). If the national debt of participating governments goes above 60% of GDP they will be compelled to take drastic, rapid measures to reduce the debt. In reality, these are completely unachievable targets for most EU countries. In so far as governments attempt to meet them, they will prolong or deepen the European recession. On the other hand, there are already indications – e.g. Spain – that governments will be forced to repudiate these unrealistic targets.

Jean Claude Juncker, head of the group of 17 euro zone finance ministers, with his Spanish counterpart.
Many national leaders believed that the pact was a necessary cover for German chancellor, Angela Merkel, to get political support for further bail-out measures in Europe. They assumed that the quid pro quo for agreeing to the pact would be an increase in the bail-out funds available to shore up the finances of EU/eurozone governments. The German government and Bundesbank, however, are still intransigently opposed to new measures to support governments with shaky finances.

WITHIN HOURS OF the agreement on the pact, the Spanish prime minister, Mariano Rajoy, unilaterally announced that Spain would not be committed to the 2012 target of reducing its budget deficit to 4.4% of GDP (which would involve €5bn additional cuts). He announced that Spain would aim at reducing the deficit to 5.8% of GDP (claiming Spain would still aim for the 3% target by 2013). Rajoy bluntly told EU leaders: “This is a sovereign decision by Spain”. He said that he had not consulted other European leaders: “I will inform them in April”.

Spain’s prime minister Mariano Rajoy with German chancellor Angela Merkel in January
Rajoy clearly fears the prospect of a volcanic social explosion if they cut as deeply as the eurogroup are demanding. Spanish GDP is expected to fall by at least 1% in 2012. Unemployment is already officially 24%, while youth unemployment is over 40%.
Other eurozone leaders are furious, but what can they do? The recent violent clashes between police and protesters in Valencia and Barcelona are an indication of the struggles which are coming. The eurosceptic Daily Telegraph commented: “At a stroke Rajoy has demonstrated breathtaking defiance, heart-warming patriotism and a different path to recovery. But even worse, he pointed out the elephant in the room: the eurozone is a monetary union, not a political one, and if members want to run their own affairs, neither Brussels nor Berlin can stop them”.


If the signs of growth in the US economy are sustained, it will possibly cushion the European economy, allowing a slight growth of exports to the US. However, the best scenario for Europe is likely to be a relatively mild recession, but with the prospect of prolonged stagnation. Unemployment is horrendous. Officially, over 24 million workers are jobless in the EU, while youth unemployment has soared above 50% in Spain.

THE SECOND GREEK bailout has temporarily stabilised the Greek government and defused the default time bomb ticking under the eurozone. But it is essentially a temporary fix which does nothing to resolve the underlying problems. It will not break the vicious spiral of repeated austerity packages, ever rising mass unemployment, falling tax revenues, and recession. Neither the eurozone leaders nor the G20 leaders have any policies to overcome this bleak situation.


It is clear that the EUrozone and beyond is on very shakey ground with littleprospect of this changing anytime soon. Capiatlism is bankrupt of ideas out of this crisis of its own making and is still looking to make us all pay for it.
Both the EU and the eurozone have already failed in their key objectives. The European Union was intended to overcome national differences, and particularly bury the historic antagonism between Germany and other European states. In the recent period, however, Germany has been seen as a dictatorial power, imposing harsh economic policies on the weaker European states. This has reinforced an upsurge of nationalism and xenophobia, with the growth of anti-immigrant, racist trends. At the same time, the eurozone was intended to accelerate the economic integration of EU countries. In practice, it has intensified the divergence between the stronger economies and the weaker countries, especially those of the Mediterranean ‘periphery’. The eurozone has become a time bomb under the whole world economy.
The idea that capitalist states could overcome their national limitations and achieve an integrated, harmonious Europe has been shown to be utopian. The unification of Europe is a task for the working class, which can only be achieved on the basis of workers’ democracy and socialist economic planning.

Greece on the edge, will the EU leaders let them go ?

At the present time, foreign creditors and the Troika (IMF, ECB and EU) are trying to impose a new round of severe cuts on Greece, including 20% wage cuts in the private sector and an immediate slaughter of 15,000 public sector job as part of the destruction of 150,000 jobs by 2015. At the same time, support for the parties supporting the technocrat government of Papademos is in sharp decline. In one recent poll, Pasok, the now neo-liberal former social democratic party, is down to 8%, from 44% in 2009, when it returned to power! The anger and fury about the cuts is now reflected in the hesitancy that ND, the traditional conservative party, and Laos, a right-wing populist force, - in alliance with Pasok behind the Papademos government - are trying to present to the public, before again surrendering to the demands of the markets. “I will not contribute to a revolution out of misery that will then burn the whole of Europe”, Georgios Karatzaferis, the leader of Laos, was quoted, trying to distance himself from the government he supports.



General strike, 7 February 2012

The former banker, Lucas Papademos, was presented in November as a ‘neutral’ technocrat, above the different parties to save Greece after the fall of the Pasok government. On taking over the job of Prime Minister, he had approval rates of 60% or more. Now his support is shattered, and the parties supporting him – Pasok, ND and Laos – have fallen from 83% combined in October 2009 to less than 45% today, with ND on 31% (from 33.4% in 2009) and Laos 5% (5.6%).


Still, the ruling class and their politicians can feel that the mood is explosive.

The failure of two years of severe austerity after decades of stagnation and crisis in Greece is now obvious. The capitalist media and TV channels openly discuss the vicious circle of cuts and further economic decline. It’s widely acknowledged now, that this policy of austerity is a blind alley and capitalist commentators now raise the idea of limiting austerity to allow some limited measures promoting growth. The Troika is more and more criticised for imposing their policies and making the situation worse.

Still no significant part of the Greek capitalists wants Greece to leave the Euro-zone, but the debate is in full swing now on what would happen if Greece is kicked out of the Euro or leaves the common currency itself. Parts of the Greek capitalists are trying to use this as a tool to demand more concessions from the Troika.




With the narrow vote of the Greek parliament last night narrowly voting through new austerity measures mentioned above to be able to qualify for the next installment of the bailout from the IMF. This looks dire for Greecea s it is. They are effectively bankrupt already huge huge unemployment and the suicide rate is shooting up in the last year.

Greek gdp fell 7.3% in 2Q 2011. Est. -5% for 2011. Unemployment est. to be at 1.2M in a country of 12M how can they pay the debt?

Answer is they simply cant. I have a feeling that the EU leadership the ruling class's in germany and France are preparing the ground now for a exit of teh Eurozone for Greece. To me the EU cannot afford to bail out Italy and spain and Greece i think they will sacrifice Greece to try and save the rest of this failed capitalist project.

As for democracy in Greece i think now its long gone. With elections called for April time but all parties manefesto's has to be passed by the IMF. If you think that is democracy having your manefesto passed by the markets first you can think again.

Its time for the greek workers to over throw their government once and for all and to refuse to pay any more of the debt. To urge the cancelation of the debt and the bringing into public ownership the commanding heights of their economy to begin to rebuild Greece under a socialist planned economy.