Tuesday, 6 January 2015

Greece: Building a successful Left Coalition fit for the challenges of Government

A disgruntled Labour Party member I spoke to this week depressed that his party had elected Jim Murphy as its Scottish leader told me when I suggested the place for socialists was in a socialist party ‘Yes, I’d like to join you guys but the Left are never going to be in power are you? I mean it’s hard enough for social democrats like Labour to get elected, socialists have no chance.’ You come across that view a lot as a socialist. I suggested he might consider the General election campaign now under way in Greece and reconsider. The Greeks go to the polls to elect a new Government on January 25th after their Parliaments failure to elect a new Head of State [now there’s a novel idea] but the election is actually all about the country’s crippling economic problems, it’s mountainous debt and the tortuous terms set down by the European Union for its repayment. Greece’s $254bn debt is bigger than its entire economy at 175% of its annual GDP. Everyone knows they cannot pay it back. The country has just been through a devastating economic depression over the past 6 years and the consequences for working class people have been vicious. There has been an exodus of young people leaving the country. In many ways they are the lucky ones for unemployment, poverty and deprivation for those left behind are at appalling levels. The elderly have been badly hit as one might anticipate. First they lost their jobs, then their pensions and welfare benefits and finally their dignity. Amidst the gloom however has emerged hope in the shape of the ‘Coalition of the Radical Left’, or ‘Syriza’ as it is known. Led by Alexis Tsipras Syriza won the European Parliament elections in June and are now expected to win most seats on January 25th. Whether they can form a government is more uncertain. Greece has a complex system of proportional representation and Syriza will have to work with other parties in order to govern. The Greek state is pulling out all the stops to prevent that from happening by running scare stories about the economic disaster that would ensue and smears about Syriza’s leaders. But the Greek people have suffered such hardship at the hands of the right-wing ‘New Democracy’ /PASOK Government in recent years they appear to be in no mood to put up with them any longer. In the circumstances however many feel victory could be something of a ‘poisoned chalice’ for Syriza as it would inherit a dreadful financial position. If it decides not to repay the ECB/IMF loans and default on its obligations it will be kicked out of the Euro zone. Some even argue in favour of this approach as it would mean they could write off their debts and revert to using the Drachma or some new currency. But it is not that simple. The consequences of such a move could be equally disastrous. Who on earth is going to lend them a penny piece in such circumstances? Who would trade with them or risk taking their new currency? The money markets would seek revenge for their losses by speculating against the new currency and Greece would be unable to rebuild its crippled economy. Alexis Tsipras has rejected such an approach. He insists Greece will stay inside the Euro zone and 're-negotiate’ the terms of the existing ECB/IMF loans to urge that large parts of it are written off. Syriza also advocates the reversal of public spending cuts and supports economic reflation in its manifesto. But even if the IMF ‘takes a haircut’ as they say and writes off some of the debt – and this is by no means certain - the challenges facing a Syriza led Government are still considerable. The Greek people will continue to suffer terrible hardship for many years to come even after any renegotiated terms. Syriza will then be forced to defend the agreement it has reached. It is difficult to see how they can maintain popular support in such circumstances. And yet what is the alternative? Do nothing? Their challenges remain considerable. No wonder the eyes of the world are today on Greece, not least those of us trying to build an effective radical left alliance fit for Government here in Scotland.

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