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Syriza signs up for decades more austerity as final bailout deal ends in Greece

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The final bailout agreement in Greece is over. The deals saw eight years of austerity—but cuts are set to continue until at least 2060, reports Nick Clark
Issue 2618
Celebrations in Greece in 2015, following a vote to reject an austerity deal
Celebrations in Greece in 2015, following a vote to reject an austerity deal (Pic: Socialist Worker)

Greece exited its final bailout agreement on Monday—the mechanism through which the European Union (EU) and the bankers have forced austerity on ordinary Greeks.

For more than eight years Greek governments have received loans from the EU, the International Monetary Fund and the European Central Bank—the “Troika”.

In return they have imposed deep cuts and pro-market reforms.

In the last three years, these attacks were imposed by a government led by the once-radical left wing party Syriza. Now, with the last instalment of the third and final bailout paid, the Greek government is supposedly in charge of its own finances again.

But this is not the end of austerity. The Troika still wants to be sure that Greece can repay the loans, totalling £233 billion.

That’s not expected to be fully repaid until 2060. Until then the EU will send inspectors to Greece every three months to see that the government is on course to hit strict economic “targets”.

So Syriza has agreed that the government will run a budget surplus—spend less money than it gets through taxes—every year until 2060.

To make sure they keep getting their money, Greece’s EU creditors won’t count debt repayments as part of the country’s outgoings.

But a budget surplus means more cuts for ordinary people.

Saying no, or OXI, to austerity in Greece

Saying no, or OXI, to austerity in Greece (Pic: Workers’ Solidarity)

Greeks have suffered devastating cuts to their pensions, jobs, wages, benefits and services. Austerity is widely blamed for the poor emergency responses to recent wildfires and floods that have killed scores of people.


Funding for public hospitals has been slashed by well over 50 percent since 2009. Health care workers, teachers and council workers now all fight for the government to end chronic understaffing.

Pension cuts have pushed almost half of Greek pensioners below the poverty line. And some pensioners could lose up to £314 a month more when new cuts are imposed at the start of next year.

Meanwhile unemployment stands at 20 percent—and 42 percent for people under 25. So while European finance ministers triumphantly proclaim “the end of the Greek crisis,” there’s no end to the crisis for ordinary people.

That’s why Syriza is in trouble, lagging behind the Tory New Democracy party in opinion polls. In one recent poll New Democracy came almost 10 percent ahead of Syriza.

The next Greek general election has to take place no later than 20 October next year—but could happen sooner.

New Democracy has cynically used the crisis following the wildfires, as well as the bailout exit, to call for a snap election.

It’s a sorry fate for the Syriza party that was once the hope of people fighting austerity across the world.

It should also be a warning to a future left wing Labour government in Britain.

Syriza leader Alexis Tsipras

Syriza leader Alexis Tsipras (Pic: GUE/NGL-Flickr)

Don’t do deals with the Troika

Syriza was elected to lead Greece’s government in January 2015. It was associated with the anti-austerity movement, which had seen mass protests, riots—and 32 general strikes since 2010.

The Troika demanded that Greece accept a third bailout loan—complete with austerity conditions.

They wanted to make an example of Syriza for daring to challenge austerity.

They piled economic pressure onto Syriza, including cutting off support for Greece’s banks.

Syriza climbed down and accepted the new bailout, but held a referendum on the terms of the deal. Ordinary people rejected it with a big “No” vote in July 2015.

The government could have used this collective political strength to hit back at the Troika.

But Syriza saw the vote—which its leaders had hoped would accept the deal—as little more than a bargaining chip.

It ended up implementing an even worse austerity plan than the one voters had rejected.

Syriza thought it could work within the system to change it. That strategy changed it from a party that rejected austerity, to one that accepted its logic.

Blame bosses and bankers for crisis in Greece

Greece was one of the countries hardest hit by the financial crisis that began in 2008.

That crisis started when the bosses’ system of loaning and borrowing—money that didn’t really exist—collapsed.

Yet the media, politicians and bankers still often like to blame ordinary Greek people.

They say the Greek government was borrowing to spend too much on “generous” pensions for instance, or that people’s living standards were too high.

In reality Greeks worked some of the longest hours for some of the lowest wages in Europe.

Bankers didn’t see borrowing by Greece’s government as a problem—in fact it was positively encouraged.

When the euro was introduced, banks and investors flooded the poorer countries with cheap credit which tied them to richer countries such as Germany.

The cost of living rose in Greece during this period—by 35 percent between 2000 and 2008. When the crash hit, the bankers called in their debts.

Greece’s economy shrank and bankers feared it wouldn’t be able to pay back the loans.

The bailouts were really about rescuing the banks—and making ordinary people pay for it.

Betrayals boost the right wing

Tory New Democracy politicians have tried to turn anger at Syriza rightwards with nationalist campaigns.

And the Nazi party Golden Dawn recently called for a coup in parliament.

There have been more attacks on migrants, often by breakaway Nazi groups. But there is also anti-fascist resistance.

Refugees face more misery

Syriza’s capitulation has seen Greek islands become home to huge prison camps for refugees.

Refugee camps are dangerously overcrowded.

But a deal signed between Greece and Germany last week will make it worse.

The German government will use a massive EU database of refugee fingerprints to deport asylum seekers back to Greece.

Wildfire deaths were avoidable

Recent wildfires in Greece killed 96 people. The deaths were avoidable.

Years of austerity meant deep cuts to the fire brigade, emergency services and forest protection.

Civil protection minister Nikos Toskas resigned after the fires.

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