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The stark choice facing the Greek people

June 13, 2012 2:30 pm

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It is difficult to imagine the impact of austerity in Greecefrom here in the UK. Aside from the stark imagery of pensioners eating from bins, students forced into prostitution and children being abandoned in increasing numbers, the statistics make for uncomfortable reading. In February The Guardian reported that planned 15% wage cuts – on top of 30% already suffered – would still not be enough for EU officials. In recent days there have been reports that staff at the Finance Ministry itself have had a 60% cut in their total pay. Unemployment is currently at 22%, while for 15-24 year olds it stands at 54% with both figures still growing. GDP has contracted by 20% since 2008.

The attacks on living standards they face are being replicated across Europe, including here in the UK, but they are on the frontline and suffering more than anyone. After repeated mass protests and waves of strike action, they shocked the European establishment on the 6th May, however, and voted against austerity and dumped the governing parties out of office.

As they go to vote this weekend, the Greek people face two starkly different choices – continuation of poverty and privatisation demanded by the EU, European Central Bank and IMF Troika via the conservative New Democracy, or Syriza’s economic plan.

Having lost the last election on the issue of austerity, New Democracy and the European establishment has sought to recast this weekend’s election and sought to establish a false debate on single currency membership and therefore force Greek people to accept the continuing attacks on their livelihoods. Seeking to blackmail them, David Cameron, said, ‘you can either vote to stay in the euro, with all the commitments you’ve made, or if you vote another way, you’re effectively voting to leave.’

Those ‘commitments’, already rejected in the last election, include wholesale privatisation of major sections of the economy along with the attacks on wages and employment.

The alternative is posed by Tsipras who, writing in the Financial Times today said, ‘The people of Greece want to replace the failed old memorandum of understanding with a ‘national plan for reconstruction and growth’. He has pledged his support to the Euro, talked about the need for investment to grow the economy, and will nationalise the recapitalised banks to deliver it. Another spokesperson for Syriza has said ‘our primary target is to ease the burden on the 35 percent of households whose income hovers around or below the poverty line’.

Rather than exacting punishment whilst supposedly bailing out the Greek economy,Europeneeds to back the plan proposed by Syriza.Europeneeds are mechanisms that will assist different sectors of the continent’s economy in times of need. An analogy can be drawn from the US and its Federal Reserve which ensures the weaker sections of theUSeconomy are supported – not punished.

Alexis Tsipras has been inspiring in his refusal to bend to Cameron and Merkel and with his support still growing, there is now also the suggestion that the Greek left is following him. Pasok are warming to some of his ideas, particularly with their co-ordinated call with the Democratic Left for re-negotiations of the most onerous terms of the bailout and cancelling cuts in the minimum wage they had previously implemented.

A coalition is likely but the best chance they have of them being implemented is the strongest possible vote for Syriza. As progressives, we need to offer our support in the battle that Greek working people, students and the unemployed have been thrown into. We need to challenge policies that will see finance provided only on that condition that there is a fire sale of Greek state assets and the country entrenched as a low-wage nation with ordinary people’s living standards decimated.

One concrete suggestion we should raise is for whole sections of Greek debt to be written off – just as the Jubilee Debt campaign demanded for many countries a decade ago – allowing the Greek economy to begin to grow again

Who will win on Sunday is not clear but in the last poll, Syriza was on 30% when only two years ago they only won 4%. It is clear a consistent message is winning support. The election should mark an upswing in the continent’s opposition to austerity – a Europe-wide response to a Europe-wide problem. Good luck to them.

Jeremy Corbyn reports back from his visit to Greece at Challenging Austerity: Lessons from Greece at 7pm, Monday 18th June, in Portcullis House.

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  • Newham Sue

    Longer term, though, Isn’t this also about finding a way to make the richest sections of Greek society honour their tax obligations, Mark? 

    I totally agree that those least to blame and least able to cope with Greece’s austerity measures, shouldn’t be bearing the brunt, but without sorting out the problems with the rich, I dont’ see how real progress can be possible.

    • Winston_from_the_Ministry

      It’s not just the rich Greeks that dodge paying their taxes, it’s something of a national pastime.

  • jaime taurosangastre candelas

    This is what happens when countries live beyond their means, as we are doing now.

    If Syriza win, and demand a “renegotiation”, one of two things will happen.  Either the counter-parties will refuse, which leaves only default as an option, or Syriza will fail to achieve their aim, which leaves only default as an option.  There is a third option, that the counter-parties will agree to extend the debt, but only at huge interest rates and onerous conditions, which Syriza will refuse.

    After default, the real austerity will occur, because no one at all will lend to the Greeks.

    • Brumanuensis

      Like Argentina.

  • http://twitter.com/RF_McCarthy Roger McCarthy

    So how many comments will this get 2?, 3?

    While hardly any sort of progressive Kipling hit the nail on the head when he said ‘what should they know of England who only England know?’

    But the British left which once took international solidarity at least semi-seriously just no longer seems interested in abroad.

     (Other than of course when abroad is America – which is increasingly our elite’s true spiritual home to the degree that no one now bats an eye when within weeks of arriving there Piers Morgan and Martin Bashir start talking about ‘us’ as if they were born and bred in Arkansas or Oklahoma) .

  • Daniel Speight

    Ben you did manage to mention PASOK once, but if there is a lesson to be learned from Greece for the Labour Party it is the disintegration of Labour’s sister party in that country.

    The lesson is one that so many girls have to learn in that you cannot be a little bit pregnant. For a social democrat party PASOK shows you cannot be a little bit neo-liberal or pro-market. The Labour leadership needs to look at itself otherwise it could end up destroying the party just as the PASOK leadership has done to their party.

    • jaime taurosangastre candelas

      Perhaps Labour should learn something of their sister party PASOK, and what happens when you spend too much money?

      The Greek economic crisis is not because of banks or over-lending, as it is in Spain.  It is because the Government over-spent for decades, and then committed fraud in the accounts.

      The only lesson to learn is to stop spending so much.  Like giving generous state pensions at the age of 50 to 580 professions that are deemed “dangerous” including hairdressers.  This list of professions was extended from 3 in 1978 to the current total by PASOK governments, mostly as a means of vote-buying.

      In total, 14% of Greek workers have this state guarantee of early retirement and generous pensions (currently, €830 a month).  26% of retirees in Greece are under 60, and that proportion grows annually. If you add on the pensions liability to Greek national debt, it is 875% of GDP.  In most of Europe, it is less than 500%.

      • Redshift

        I think it is stupid to say this is purely down to over-spending. The entire Greek taxation system was a joke too and undermined the state’s income. Corruption was rife. The economy had serious structural problems that made it overly-reliant on sectors that proved particularly unreliable as we went into the economic crisis. 

        There were far more fundamental problems than the state overspending.

      • Daniel Speight

        So Jaime give us the lazy Greeks answer. I guess that was to be expected. He goes on to give a papal like absolution to the banks. I’m sure they appreciate that Jaime.

        And yet we hear of the EU bailout money being run into the Greek banks through one door to be sent out to repay French and German banks through the other. The ‘hot’* money from the more industrialized EU countries, like the two mentioned above, was looking for a home and it found it in places like Greece, Spain, Portugal and Ireland. Bailing out the banks in these countries is needed in order not to be bailing out those very same French and German banks. It’s no different to what the British and Americans already had to do a few years back. The bubble was worldwide.

        A social democrat party has to have plans for a long term fix to the problems the pro-market politicians have left us. At the moment most politicians are still looking at short-term austerity based answers. We need to see more than this. PASOK could not bring itself to break from this short-termism and now finds itself relegated to an almost non-player in Greek politics.

        That’s the warning to Labour. Syriza came out of almost nowhere to flank PASOK on the left. Could it happen here? Possibly and Bradford may have been another warning of what could happen. Politicians from the major parties are held in such low esteem that overnight you could have massive changes in voters intentions. Then all of the Labour geeks triangulation algorithms would go out of the window, and it would be too late to rescue the party.

        * hot as in European investment bankers looking for high returns on retail bank customers and pension funds money, although not necessarily precluding illegal money;-) Many of us will probably remember times in Britain when the banks were falling over themselves to get us to borrow their money. A new credit card application form every day? But still Jaime would much rather talk about lazy workers than greedy bankers. There’s the whiff of the generals still hanging on Jaime’s clothes. Maybe it’s a bit of the Stockholm syndrome from his youth.

        • jaime taurosangastre candelas

          That all seems a bit ad hominem Daniel.  If you look at what I wrote, as opposed to making up things, you won’t find any reference to “lazy Greeks”.  You will find instead a single example of the government spending too much.

          If you actually look at the numbers, there was never a Greek debt and private lending bubble. Greece is actually at the opposite end of the spectrum from Spain, which until 2008 was quite saintly in terms of Government debt and borrowing.  But both are caught out as the markets realise that spending more than you earn is not good.

          Here is an example of the only British politician who understands this.  I am not going to vote for UKIP (I am not sure that they will even stand a candidate in my constituency), but on the narrow issue of the Euro, UKIP make sense:

          http://www.youtube.com/embed/TN_1mF-3JTI

          • Daniel Speight

            That all seems a bit ad hominem Daniel.

            Yes, intentionally so Jaime, and no apology. When in the past you spit out the word socialist like Ian Paisley spitting out the word papist, you will get this attack from me at any time. Whether it’s Chilean, Argentinian, Russian, Cuban or Greek history, that sort of hatred is something I’m not very fond of.

            If you look at what I wrote, as opposed to making up things, you won’t find any reference to “lazy Greeks”.

            Now you are being disingenuous Jaime. The list you present is of ordinary people getting too much out of the government, in pensions or retirement age. There was fault with PASOK and they must accept blame along with New Democracy, but it’s not for your charge of vote buying, it’s for corruption and crony capitalism.

            Here in Britain, your friends at UKIP will be only too happy to join the Tories in placing our problems on those overpaid public sector workers. That it was a problem created in the City, Wall Street and European banking centres, they will be happy for us to forget.

          • Hugh

            I’m not sure dismissing someone as a “socialist” is quite as hateful – or stupid – as comparing them to facist torturers and thugs (particularly when you know they’ve been on the receiving end of those thugs)  just because you happen to disagree with them.

          • Daniel Speight

             Maybe you missed this Hugh.

            When in the past you spit out the word socialist like Ian Paisley spitting out the word papist…

            Dismissing isn’t the word I would use. Hate would be closer. I am more careful what I take and believe from Jaime’s life story. You see I decided a few months back that he was trolling and it was better to take what he says with a pinch of salt. That he is cleverer than Guy and the other recent troll there can be no doubt, but that he is a troll I do not myself doubt.

          • Hugh

            It’s quite an odd thing for someone “trolling” a left-wing website to make up isn’t it – that they were born under and have first hand experience of a right-wing dictatorship?

            He must be very clever indeed.

          • jaime taurosangastre candelas

            Daniel,

            you will find that it is you who allocate the word “spit”.  You have no idea as to whether I ever type the word “socialist” rapidly in anger or slowly and deliberately, so for you to make up your mind is guesswork.

            I don’t present a list:  as I make clear I present only one example, but with several data points.  A list, as I understand the word, is of several different items.

            If you want to use the word “disingenuous”, you should first look in the mirror.

          • Daniel Speight

            If only I had the inclination to go back through your not so distant posts Jaime and dig out the spitting of the word socialist, because in my mind it was nothing else and I picked you up both times I saw it. Back then you chose not to respond.

            As a rule I do try not to respond to trolls, but in this case you followed one of my comments instead of one of your usual targets. In future I will try to keep away from your comments, but just so there is mistaking my feelings Jaime, I doubt very much you are person you try to act as on this blog.

            I’m not sure if it’s for some intellectual exercise you troll this blog, or there is some character defect in your makeup. I do not want to argue with you on difference between a list and data points on a single example as I consider that sheer pretentiousness on your part.

            So just to finish off, I have set out my views and arguments rather clearly on the Greek crisis I thought. As for you, I will bite my tongue so as not to demean myself by saying what I really think of you.

  • Brumanuensis

    The average Greek, in 2010, retired at around 63; so did the average German. The average Greek also worked longer hours each year than the average German. Lazy Germans. 

    Of course, productivity per hour was lower, but what the above should remind us of is that the things are rarely as straight-forward as the Very Serious People – to borrow Krugman’s phrase – like to pretend. Greece was dysfunctional before the Eurozone crisis, with an over-large public sector, mass tax-avoidance particularly among the rich, a sclerotic labour market and institutional corruption. But the Euro has also played a large part in Greece’s misfortune, by creating a vast trade deficit and flows of excess German savings, as in Portugal and Spain, blew up an enormous property bubble that popped in 2007. So the Germans have no right to pretend they had nothing to do with all this.

    In reality, Greece has all the cards in its hands. As Keynes remarked: ‘if you owe the bank £1000, you have a problem; if you owe the bank £1 million, the bank has a problem’. A ‘Grexit’ would be a political humiliation for Merkel and the ECB, creating a firestorm of panic that would engulf Spain, Portugal, Ireland and possibly Italy. Ultimately, the only thing that matters is how long Greeks are prepared to suffer for the benefit of the rest of Europe.

    And how long, as Robespierre put it, before that ‘Messiah in military boots’ starts knocking on the door.

  • Robertcp

    Greece should never have joined the Euro that is why it is in so much trouble.  If it had not joined, its currency would have fallen and interest rates could have been cut.  This why the UK’s austerity has been relatively mild.

    There are issues on Greek public spending and taxes but they could have been addressed outside the Euro without the current catastrophe.

  • Dave Postles

    Where are the rich Greek philanthropists to succour their people in this hour of need?  All I read about is Greek investment in real estate in London.

  • Patrice

    Yes, good luck to Syriza!

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