June 29, 2015

Lee Sustar explains the background to the announcement of a July 5 referendum on austerity measures in Greece--and how it will affect the struggles to come.

THE DECISION by Greece's left-wing government to hold a national referendum on the European authorities' latest proposal for austerity measures has sent political shock waves across the continent.

All eyes are on Greece as the relentless assault of the biggest European powers forced the country's banks to close temporarily after the weekend--and raised the specter of a Greek exit from the eurozone, the group of 19 countries that share the common currency.

Citing the "blackmailing of the ultimatum that asks us to accept a severe and degrading austerity without end," Prime Minister Alexis Tsipras used a post-midnight speech January 27 to call for a "no" vote on an austerity program proposed in exchange for financing from the "institutions," previously known as the "troika"--the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF).

The European authorities struck back by refusing to extend deadlines for Greece to repay installments on its international debts--while the ECB limited lines of credit to Greek banks. This forced the SYRIZA-led government to announce the temporary shutdown of the banks and the imposition of capital controls to keep money from leaving the country. Mainstream Greek political parties, along with the country's big businesses, joined the attack on the referendum.

Rallying in front of the parliament building in opposition to austerity (Sarah Levy | SW)

Supporters of SYRIZA believe--based on their experiences in workplaces and communities, as well as the sizeable demonstrations earlier this month supporting the government resisting the lenders' extortion--that there is a strong current of defiance, formed through the years of savage austerity that plunged the Greek economy into depression, which will drive the "no" vote.

But the pro-austerity parties that agreed to the austerity measures in the first place will be the local face of the Eurogroup's blackmail campaign--which threatens the economic destruction of Greece if its people refuse to go along with the austerity program.

TSIPRAS, WHO had offered significant concessions from SYRIZA's radical program, only to see them spurned each time by the European institutions, appealed for calm and solidarity over the bank closures, with assurances that salaries and pensions will be paid. SYRIZA is mobilizing for the one-week election campaign with printed materials, a media campaign and a mass rally planned for Syntagma Square outside parliament.

"The reaction from all parts of the party is good," said Sotiris Martalis, an activist in SYRIZA and member of the Greek socialist organization Internationalist Workers Left (DEA, by its initials in Greek). SYRIZA's left wing, which had viewed the government's offer of concessions as unacceptable, is now working with the Tsipras-led majority on the "no" campaign.

There are differences in the party over the purpose of the referendum, however. While Tsipras has said that he will use a "no" vote to strengthen his hand in future negotiations with Greece's creditors, the left is calling for a rejection of all austerity measures and a program to reverse their impact. Thus, Martalis said, the SYRIZA trade union fraction in the city of Attica, meeting in the wake of Tsipras' speech, called for a reversal of austerity.

But for the next week, these differences will be secondary to the priority of building a united "no" campaign. SYRIZA has initiated "vote no" groups in which non-party members will be invited to participate. This may include the ANTARSYA coalition, a smaller radical electoral alliance that has remained outside of SYRIZA.

The sizeable Greek Communist Party (KKE, by its initials in Greek) initially suggested it would abstain from the vote, but then backtracked and avoided taking a clear position in the first days following Tsipras' announcement.

Meanwhile, voices in the mainstream media "are using the language of civil war, although they have not acted upon it," Martalis said.

SUCH LANGUAGE has a grim meaning in Greece. The country was torn by armed conflict between left and right in the years following the Second World War, as the U.S. and Britain helped the Greek capitalist class crush the Communists and others on the far left who had spearheaded the struggle against the Nazi occupation during the war.

When the left revived in the mid-1960s, a group of army colonels staged a murderous coup in 1967, in which the left was again repressed--until popular struggles overthrew the military regime seven years later.

Entry into the European Union in 1981 was supposed to end such conflict forever. But in the wake of the 2007-08 financial crisis, after both the center-left PASOK and conservative New Democracy rammed through a series of austerity measures--in the face of more than 30 general strikes and massive demonstrations of all kinds--society is now highly polarized, both socially and politically.

When PASOK and New Democracy suffered crushing losses in the January 25 elections that brought SYRIZA into office, the Greek capitalists had no reliable political tools. Now, faced with the referendum, they are trying to up the pressure.

"The line of the bourgeoisie has two phases," Martalis said. "The first one is the huge pressure they are creating with a run on the banks. They say, 'All this is the result of SYRIZA's policies. So we don't know that they will pay the pensions and salaries.'"

The other part of their line is to say that this referendum is not about the austerity proposals, but about saying 'yes' or 'no' to being in the eurozone," Martalis said. "This policy is aimed at creating a split in the population."

After unsuccessfully trying to derail the referendum through parliamentary maneuvers, PASOK and New Democracy are effectively calling for a "yes" vote on measures that would slash pensions and impose further crippling sales tax increases on a largely impoverished working class.

The big European powers, led by Germany, are doing their best to exacerbate the crisis, along with the Washington-dominated IMF. The central bankers at the ECB refused to expand the funds available to Greece under an emergency program. When negotiations between Greece and the European powers broke up, Eurogroup head Jeroen Dijsselbloem immediately moved to hold a meeting with the other 18 member countries, excluding Greece.

Nevertheless, the chances are good that a "no" vote will succeed, said Martalis. "Everywhere, you can hear people saying that they will not support a vote for a deal," he said. "They say it's crazy what they want to do to us, so I will vote no. Most of the people understand that, but also at the same time, they are afraid of what will happen."

THE REFERENDUM comes more than five months after SYRIZA took office pledging to halt austerity measures, revive the Greek economy and begin to restore social benefits that were radically cut back under governments that agreed to austerity measures encapsulated in the so-called Memorandums in exchange for financial bailouts from European authorities and the IMF.

Despite these promises, leaders of the new government offered substantial concessions--only to be faced with demands for even more austerity.

This was one reason for the government's call for a referendum. But Tsipras was also under substantial pressure from SYRIZA's influential left wing.

Unlike social democratic parties that have been regularly elected in Europe and rule within the free-market, neoliberal consensus, SYRIZA is a product of the Greek far left, rooted in labor struggles and social movements and socialist organizations from a variety of traditions.

In recent weeks, SYRIZA's Left Platform--which includes figures like Energy Minister Panagiotis Lafazanis--signaled that government ministers and members of parliament would break with Tsipras if he brought back an agreement that involved cuts in pensions and higher sales taxes. Other sectors of SYRIZA's left, such as the Red Network, have been organizing public meetings calling for a rejection of any agreement with the creditors that involves more austerity.

That debate has now come to a head. After winning a convincing victory in the January 25 elections, Tsiprsas and his economic team, led by Finance Minister Yanis Varoufakis, had proceeded on the assumption that the European institutions would bow to the new political reality in Greece and back off demands for even deeper austerity.

In his effort to make a deal, Tsipras signaled a willingness to retreat even before the election, setting aside SYRIZA's radical economic platform from its founding conference and putting forward the much milder Thessaloniki Program, named for a speech last fall given in that city.

Then came a major concession to the "institutions" on February 20--Tsipras essentially agreed to an extension of previous austerity and privatization programs, shelving even the milder planks in SYRIZA's program.

But that surrender wasn't enough for the lenders. Since February, they have drawn out negotiations with SYRIA over access to the $7.7 billion in funding due under a 2012 bailout--the second of two financing bills in which Greece was promised debt relief in exchange for economic "reforms."

Previous austerity measures included sweeping cuts in the public health and education systems, privatization of state-owned enterprises and government services, as well as higher taxes on working people. The results: a catastrophic 25 percent contraction of the Greek economy, sending unemployment to 26 percent and leaving 40 percent of Greek children in poverty.

NEVERTHELESS, TSIPRAS sought to reach an accord with the creditors. To keep negotiations going, the Greek government paid $495 million to the IMF in April. The following month, it drained its reserves at the IMF to repay the fund another $826 million.

In its offer to the creditors earlier this month, put forward in a 47-page document detailing the government's proposals, Tsipras and company crossed many of SYRIZA's "red lines" that it had promised not to cross, like increases in the value-added sales tax.

But European authorities responded by making even more stringent demands. Germany and its mouthpieces among European officials were determined to make it clear that if any other debt-ridden country contemplates breaking with austerity or leaving the euro, they should prepare to suffer horribly.

Having turned the eurozone into a vehicle for their growing economic power, German politicians and policymakers have concluded that Greece's left-wing government must be discredited or destroyed. The IMF, which at one point posed as the soft cop in negotiations, was equally aggressive.

Thus, Tsipras was left with a choice: Bow to the Europeans and split SYRIZA, a move that could bring down the government--or take a firm stand against the creditors and rally the party's rank and file for a fight.

There are many questions to be confronted in the days ahead. Without access to the long-promised bailout funds and no money on hand to pay the IMF some $1.7 billion by June 30, a Greek default on its debt is all but inevitable. The same is true of interest payments and other debt owed to the ECB. This sets the stage for a possible "Grexit"--a Greek exit from the eurozone.

A growing number of journalists and analysts have concluded that European officials are determined to drive Greece out of the eurozone. As Matt O'Brien of the Washington Post put it, European officials are "leaking stories about how shaky Greece's financial system is--not so much shouting "run" in a crowded bank as starting one--to put more pressure on the government to agree to a deal and agree to it now."

The stakes in Greece--and for the left internationally--are enormous. A "no" vote would not only be a message of resistance to Germany's economic empire in the EU, a call to action for anti-austerity activists, unions and working people across Europe and beyond.

As Tsipras put it in his speech announcing the referendum: "To authoritarianism and harsh austerity, we will respond with democracy, calmly and decisively." The people of Greece deserve solidarity and support as they send a message to the rulers of Europe.