On 14 July, the Greek parliament agreed to the bail-out austerity terms imposed by the Troika (European Central Bank, European Union and the IMF) which are even more oppressive than those which Syriza had opposed when it won the January 2015 general election. 32 Syriza MPs voted against the deal and seven abstained, forcing Prime Minister Alexis Tsipras to rely on the votes of open supporters of austerity: the former governing party of New Democracy, Pasok and To Potami. This capitulation was the more abject because in a referendum just over a week earlier on 5 July the Greek people by an overwhelming majority – 61% to 39% – had signalled their complete opposition to the terms on offer.
In the days that followed, 25 Syriza MPs, together with a large number of members and officials opposed to the Party’s capitulation, broke away to form a new organisation, Popular Unity. With his parliamentary majority gone, Tsipras announced his resignation on 21 August, triggering a new general election on 20 September. This election will be a test of the extent of Popular Unity’s base within the Greek working class, and whether it can mobilise the sort of real opposition to austerity that Tsipras and his government signally failed to do during all the negotiations with the Troika.
Syriza had retreated completely from the anti-austerity standpoint which had brought it its January electoral victory. The day before Tsipras’s resignation, the government had dutifully made a loan repayment of €3.2bn to the European Central Bank as part of its previous commitments to the Troika. The Syriza government has repaid every instalment of the 2012 bailout agreement that fell due during its seven months in office. In early July, Tsipras had claimed that he was ‘confident that we will succeed in reaching a deal and loan support… that will finally end economic uncertainty’. During the parliamentary debate on the new deal, he added ‘In this wider fight, Greece is in the vanguard of the fight against neo-liberal austerity.’ German Finance minister Wolfgang Schauble viewed it very differently, seeing: ‘…a dramatic change in the Greek government’s readiness to reform’. European imperialism, led by Germany, had got Tsipras and Syriza dancing to its tune.
It is estimated that German banks have already made €100bn profit from the Greek crisis – more than enough to tide the Greek economy over. In order to secure a third bailout of €86bn from the Troika, Syriza has signed away any control over the Greek economy and ushered in the overt rule of the banks and big business. Troika monitors are to be deployed across every ministry and report monthly. The deal allows the immediate freezing of bailout cash if the measures are not implemented in full. Its terms are rapacious:
- Greece must commit itself to reduce its present primary budgetary deficit of 1.5% to 0.25% by the end of this financial year;
- It must further commit itself to a primary surplus of 3.5% within three years.
- Further welfare reform is being targeted to save 0.5% of GDP annually. This will have immediate consequences for government spending.
- Pensions are to be reduced further in order to save 1% of GDP this year and early retirement will effectively be ended by 2022.
Existing labour regulations are to be reviewed in October with the aim of undermining collective bargaining, restricting the right to take strike action and facilitating collective dismissals. Former Syriza finance minister Yanis Varoufakis has said ‘Half a million Greeks have not been paid for six months, another 800,000 work on zero hour contracts, an unspecified but very large number work on paper part-time, for €300, but in reality put in 40 hours of work per week for no extra money,’ Labour ‘reform’ will only worsen this situation.
Tax reform – far from hitting the rich as claimed by Tsipras – means that small farmers, who make up 12.5% of the population, will lose their fuels subsidy and a Consolidated Tax on Property will have to be paid by two million unemployed Greeks.
A fire sale of €50bn worth of Greek national assets will take place: Athens International Airport is being prepared for sale by BNP and NBG banks. 14 regional airports will be privatised and run by the German company Fraport-Sentel, advised by Citi Bank and EFG Eurobank, all by March 2016. The Greek gas transmission system is being sold to the State Oil Company of the Republic of Azerbaijan which will hold 66% of shares. The banks get a juicy share too as the financial advisors supervising the operations are rotated between Alpha Bank, UBS and Rothschild.
The Athens port of Piraeus – the largest in Greece – and at Thessaloniki, the second largest, will be sold to business consortia advised by Morgan Stanley bank. The Greek trains will be run by the French national SNCF, a Russian company GEKTERNA and Romania’s Grup Feroviar Roman. Hellenic Petroleum which refines two thirds of oil in Greece is being actively assessed for privatisation, as is the major Hellenic Telecommunications Organisation. Deutsche Telekom already has 40% of the shares. Greece’s Public Power Corporation is being carved up for private ownership and motorways, seafront land, marinas, golf developments and casinos are all being auctioned off to private investors. Real estate across Greece and its islands is up for sale, facilitated by Deutsche Bank and UBS Paribas. Water and sewerage utilities in the major cities of Athens and Thessaloniki are being sold off out of municipal control.
Through its IMF-inspired ‘toolkits’ any restrictive regulations that limit monopoly profit are to be swept away. Supermarket multinationals will now be allowed to sell bread – this will displace traditional bakeries. They will also be able to sell milk up to ten days old rather than the current five: this will allow them to import it more cheaply especially from Germany, undermining Greek dairy farming. Pharmacies will no longer have to be owned by a licenced pharmacist – they can now be bought out by international drugs companies.
The IMF, not renowned for its generosity to any country or people, was ringing alarm bells all the way through negotiations. It concurred to a point with a recent ECB study which stated: ‘The high debt to GDP and the gross financing needs resulting from this analysis point to serious concerns regarding the sustainability of Greece’s public debt,’ but the IMF has also called for significant debt reduction, a ‘haircut’, as well as the ECB’s preferred methods of postponing and extending payment terms. Substantial debt relief has become a source of fundamental disagreement between the IMF and the rest of the Troika. The economic development of Greece is not a consideration here as the deal permanently consigns the country to depression, stagnation and austerity. What this is about is the most effective means that can be deployed to keep the victim alive so that the financial vultures of European imperialism can gorge for as long as possible. The imperialists would like the dismembering of Greece to be a chilling warning to everyone that resistance is futile.
Yet resistance is absolutely inevitable as the Greek working class faces decades of declining living standards and economic insecurity. Critically, the oppositional statements to the deal by former Greek Finance minister Yanis Varoufakis avoided any appeal for immediate popular resistance and organisation, for class struggle. This remains the key issue: unless the Greek working class mobilises on the streets in direct action against job losses, privatisations and homelessness then the pro-austerity forces of the ruling class and the imperialists will carry the day. The test of Popular Unity will be whether it will be part of such a development.
Michael MacGregor
