Thursday, 16 July 2015
DOOMED IF THEY DO AND DOOMED IF THEY DONT - GREECE VOTES TO ACCEPT 3RD CRIPPLING EU BAILOUT
With the Greek economy in ruins and its banks teetering on the brink of collapse the Greek Parliament last night ratified the latest bailout agreement proposed by the European financial institutions. Prime Minister Alexis Tsipras’s victory came at a terrible price however. On the streets of Athens thousands of left-wing activists from the ‘Antarsya’ bloc demonstrated against the Government and dozens of anarchists threw petrol bombs and burned the Greek flag. Inside Parliament the scene was no less frenzied as 38 Syriza MP’s joined with the KKE [Communist Party] and the far right [‘Golden Dawn’] to vote against their Government. But the bailout deal was agreed nonetheless as opposition MP’s from the conservative ‘New Democracy’ and ‘To Potami’ parties backed it. Tsipras did not hide the punishing terms in this third Greek bailout. It means further austerity, deeper cuts in public spending and even more punishment is meted out to working class people. Syriza has agreed to increase VAT rates, increase the retirement age to 67, privatise state assets such as the port at Piraeus and ‘liberalise’ employment laws. Socialists internationally will wince at the deal signed by Europe’s most radical left wing Government since the 1930’s. The 7 point manifesto Syriza put to the people in January, its ‘Thessaloniki Declaration’, is today in tatters. They promised to get 50% of Greek debts written off and improve the repayment terms on the remainder – none have in fact been written off and they have signed up to €85billion more. They promised to increase the national minimum wage and the state pension but have delivered not a penny more. They promised no one would be disconnected from their electricity supply and yet will now oversee the privatisation of the entire industry. And yet for all that Syriza are more popular today than they were in January because the unavoidable fact is this latest deal, imposed upon it by the European Central Bank and European Union, was signed by the Greek Government because they had to. There was simply no other option available to it. In return the banks can now re-open and customers can regain access their accounts backed up by emergency ‘liquidity’ from the European Emergency Assistance programme. A further €85bn will be made available to help pay back some existing loans and help grow the economy. And perhaps the most hopeful clause promises talks about ‘debt restructuring’ - interpreted by Greece and the IMF as ‘debt write off’ - in the future. Greece is not out of the woods however, not by a long way. This latest deal simply buys them ‘breathing space’, temporary relief from the ongoing crisis. Like borrowing more money from Wonga to pay off previous loans it is offers no solution in the long term. Those who argue in favour of a ‘Grexit’ where Greece leaves the Eurozone are in a tiny minority. The Greek people have made it clear they do not have the stomach for its consequences, which would involve an even more dramatic collapse in their living standards in the short term.The re-introduction of the Drachma is not popular as Greeks believe no-one would trade with them and no funds would be lent to Greece to allow it to import the vital foodstuffs, pharmaceuticals and raw materials it needs to survive. The unavoidable truth is that Syriza and 11million Greeks were powerless in the face of European institutions representing 550million people with the world’s financial institutions behind them. Syriza faced overwhelming odds and they were forced into signing a deal which not only restricts their economic and financial authority, it restricts their political authority too. Greece is crippled by ‘un-payable’ debts. Its economy is in ruins and continues to retreat in recession. With the second highest debt to GDP ratio in the world [only Chad has a worse ratio] the IMF predict this will reach 200% by the end of 2015. The Syriza Government were also isolated internationally. They failed to win the backing of other ‘debtor’ nations like Ireland, Spain, Italy and Portugal. Indeed these ‘co-debtors’ were amongst their most vociferous opponents arguing Greece should not be allowed ‘concessions’ they had not been offered. And yet most rational commentators accept a debt write off is the only sustainable solution. This means international solidarity with Greece is more crucial than ever. The challenge facing the socialist movement worldwide is to bring forward such practical solutions to help the Syriza Government as best it can.