For two months now, the European Union (EU) and European Central Bank (ECB) have been piling pressure on Greece’s new Syriza-led government. A word closer to reality might even be blackmail.
Under the “memorandum of agreement” signed by the previous Tory government, Greece was supposed to receive the final installment of its second 7.2 billion euro
(£5.2 billion) bailout. The money would not be used on wages or pensions, but would go straight back to Greece’s lenders.
The International Monetary Fund (IMF) is to receive 5.3 billion euro (£3.8 billion) until June and the ECB 6.7 billion euro (£4.9 billion) in the summer. But the “Eurogroup” of finance ministers is refusing to give the money to the new government. It’s demanding that Syriza drops its election promises and adapts its programme to the same mix of cuts and privatisation.
On top of that, the ECB has imposed a legal ban on Greek banks forbidding them from buying treasury bills—debt—from the Greek state.
They are effectively forcing the Syriza government to use funds meant for the health service, universities and local authorities to meet its IMF payments.
What is the rationale behind this? Is it because the economy is in a worse state than it was last year? The answer is no. The European institutions agree with the government that the economy is set to grow slightly this year and the budget will have a surplus of 1.5 percent of gross domestic product (GDP).
Will this kind of pressure make the Greek debt sustainable? The answer is again no. Without a reduction in the debt level, the economy would have to produce very high budget surpluses for such a long time that nobody believes this is on the horizon.
The reasons for the EU pressure are political. The workers’ fightback against austerity in Greece has reduced the traditional ruling parties to impotence.
The Labour-type Pasok party has been in government longer than any other party since the Junta collapsed in 1974. Now it’s just close to the 3 percent threshold for entering parliament. The Tory-type New Democracy is trailing Syriza by over 20 percentage points.
The EU institutions are effectively the guardians of the system for the Greek ruling class, making sure that the left is tamed.
The Syriza leadership is adapting to this. It has dropped the demand for even a partial cancellation of the debt. It has declared that keeping Greece inside the eurozone is a top priority.
After prime minister Alexis Tsipras met German chancellor Angela Merkel in Berlin, the government submitted a “list of reforms” to the Eurogroup. It’s all done in the spirit of strengthening the budget surplus through cuts and privatisation.
To prove the point, deputy prime minister Yannis Dragasakis said last Friday that the government is selling its 67 percent share in the port of Piraeus. This breaks a pledge not to sell the port that Syriza repeated when it was first elected.
There is opposition to this adaptation. The dockers’ unions are furious at the port selloff. ERT media workers from Thessalonica are coming to Athens next week alongside other groups, such as the cement workers from Chalkida, to demand their jobs back. The anti-capitalist left coalition Antarsya supports these struggles and argues for a break with the euro and cancelling the debt.
Some commentators say that Syriza has no mandate to break with the euro. But then many of the same voices add that going back on its election promises for the sake of staying in the euro is “a reasonable compromise”.
Apparently, breaking your promises does not require a special mandate, but breaking with the bankers’ Europe is a “nationalist, third-worldist” perspective.
It all goes to show that the parliamentary road to change is a one-way street to compromise. Satisfying the workers’ demands and breaking with the EU blackmail means that the left needs a revolutionary strategy away from the old parliamentary wisdom.