News from the struggles in Greece

Here’s two articles on Greek workers getting a bit stroppy over the government’s austerity plan. To which I say, anyone trying to enforce austerity on the Greek working class will have a tough ask ahead of them. Firstly, here’s a report on Wednesday’s mass strike from the Communist Party of Greece:

The new 24-hour strike held on February 24th against the plans of the social-democrat government of PASOK to place the burdens of the capitalist crisis on the shoulders of the workers was a great success.

Millions of workers resisted to the intimidation by the capital’s parties (the social democrat PASOK, the conservative ND, and the extreme-right, racist LAOS) which argue that workers must submit in order to “rescue the country from bankruptcy”. The “patriotism” of these political forces has only one goal: to maintain and expand the profit making of the capital at the expense of the workers’ gains by means of raising the retirement ages, cutting salaries and pensions, further dismantling of the social-security system, deteriorating the working relations and increasing the anti-people taxes.

At the same time the vast majority of the working people were mobilised and participated in the mass rallies organised by PAME, (All Workers’ Militant Front) the alliance of class oriented trade unions in Greece. PAME rallies industrial federations, Labor Centres (regional trade union organisations) as well as hundreds of primary trade unions. Thus, the majority of the workers showed their aversion to the compromised trade union federations in private (GSEE) and public sector (ADEDY) which –just like the government of PASOK does- present “speculative games” against Greece as the main problem in the country. In fact, speculation is merely a result and an aspect of the decay of the capitalist system and the manifestation of the intra-imperialist contradictions between Euro and Dollar. The vast majority of the working people who participated in the demonstrations of PAME in 70 cities showed that they support the line of the overall confrontation with the bourgeoisie, the line which is promoted by PAME, that demands the plutocracy to pay for the crisis and struggles against the EU, the anti-people capitalist union and its anti-labor measures in order to strengthen the struggle for the overthrow of the capital’s power.

Strike preparation – Athens stock exchange blockaded

PAME prepared this strike by visiting hundreds of workplaces, discussing with the workers about the necessity of the struggle and preparing this battle at all levels. At this point, we should mention the meeting organised in Athens by the Immigrants’ Secretariat of PAME. This meeting was attended by immigrants from all over the world who live and work in Greece and join the action of PAME.

Communists played a significant role in the organisation of this strike through the political campaign that KKE unfolds in workplaces, revealing they the real goals of the government and calling on the working people to struggle for the repulse of these measures. On the eve of the strike the Press Bureau of the CC of KKE stressed amongst others: “The government, the EU and the plutocracy have said enough. Whether these barbarous measures pass or not, depends also on the stance and the action of the working people. For that reason KKE calls upon all workers, irrespectively of the party they voted for in the elections, to take a responsible class patriotic stance through their participation in the strike and the mass rallies of PAME. It calls upon the workers to defy the manipulation and the employers’ intimidation. The struggles and the sacrifices of our class, the present and the future of the working class require the working people to stand up and struggle; not to hand over the last popular gains as demanded by the needs of the capitalist profit making and competitiveness”.

Moreover KKE organised a series of placard protests and demonstrations in neighbourhoods in Athens and other cities throughout the country urging the working people to join the struggle.

The blockade of the building of the Athens stock exchange by the forces PAME played a significant role in the propagation and the success of the strike. On February 23rd, at 6:30 in the morning the forces of PAME blocked the three entrances of the building of the Stock exchange, the symbol of the plundering of the working people, their pension funds and their wealth by a handful of capitalists. “Plutocracy must pay for the crisis” was the slogan on PAME banner. At the same time the placards revealed: “Here is the money: the deposits of the enterprises were in 2004: 36 billion Euro, in 2009: 136 billion Euro. 250 thousand workers receive a salary of 740 Euro. At the same time, 700 billion Euro are in the pockets of the big enterprises. PASOK and ND filled the pockets of bankers from 233 billion to 579 billion”.

On the day of the strike thousands of working people and students joined the picket lines of PAME in the gates of the factories and other workplaces.

Strike and mass rally in Athens

Thousands of factories and enterprises, construction sites, schools, ports and airports, the entire production activity froze. The mass participation in the strike and the mass rallies of PAME gave a vigorous response to the government and the EU. It created better conditions for the unfolding of a dynamic workers’ and people’s counterattack that will prevent the barbarous measures and finally overthrow the anti-people policy.

In Athens the mass rally was held at Omonia square, at the city centre. The chairman of the trade union federation of workers’ in printing companies, Yiannis Tolis, delivered a speech in the rally and stressed among others that: “The forces of the capital and their political representatives understand that the more they blackmail and intimidate the workers, the more they try to mislead them and place new burdens upon them, the more anger and indignation they cause. They dread the perspective of the general uprising of the workers and for that reason the government along with the employers, the opposition, the ND and the EU as well as their instruments and the parties of the EU one way road create a joint front. They are mistaken if they believe that they can manipulate peoples’ will, once in the path of the class struggle. History has proved that when the river flows it cannot retrace its path”.

Representatives of immigrants and Students’ Struggle Front (MAS) extended a greeting at the mobilisation.

In the rally also participated a delegation of the CC of KKE headed by the General Secretary of the party, Aleka Papariga, who made the following statement: “Workers should overcome fears and fatalism. They must intimidate their enemy and not fall into the trap of choosing between the EU and the US as the prime minister, Mr. Papandreu intends”.

Thereafter, the protestors held a march to the Greek Parliament.

And here’s an analysis of the situation from the Internationalist Workers Left, via the US Socialist Worker:

THE GREEK economy is the “weak link” in the capitalist chain of the European Union (EU). The term–used by the revolutionary Lenin to describe Russia in 1917–was initially used in Greece by the radical left. But now, it’s in broad use, even by Prime Minister Georgios Papandreou Jr., who, as head of the social democratic party PASOK, took office after the collapse of the right-wing New Democracy party in elections held in October 2009.

Greece isn’t the only weak link, however. Other EU countries are under enormous pressure from the economic crisis. The European press not so affectionately refers to them as the PIIGS (Portugal, Italy, Ireland, Greece and Spain).

The crisis is particularly sharp in Greece, which has an annual budget deficit equal to 12.5 percent of gross domestic product (GDP)–which is four times the 3 percent limit mandated under the EU’s Maastricht Treaty. Greek public debt stands at 130 percent of GDP, which is double the EU limit. Thus, articles in the European press point to the likelihood of national bankruptcy in Greece.

Politicians and the media blame the crisis on the supposedly generous Greek welfare state, which, they claim, must be slashed to bring the budget under control. In fact, the situation is the direct result of the neoliberal policies that were followed by the social democratic governments of the 1990s, and even more so by the right-wing government of Prime Minister Kostas Karamanlis, as the leader of the New Democracy (ND) party between 2004 and 2009.

For many years, Greek public finances were based exclusively on the taxation of the wage-earning population and the lower middle class. Greece has one of the lowest corporate taxes among EU countries, but even these low taxes aren’t collected properly–corporate tax evasion is at record highs. Even the sales tax isn’t fully collected by the government, but is left in business hands to further raise their profits.

At the same time, Greece has one of the highest taxes on wages among the EU countries. What’s more, employers and even the state–the biggest employer–have stopped paying their contributions to pension funds, creating a shortfall of more than 10 billion euros annually.

These factors are sufficient to explain the bad situation of public finances up until now. Today, of course, conditions have been made even worse with the outbreak of the economic crisis that hit Greek capitalism in its most crucial sectors. For example, the bursting of the real estate bubble brought construction–a sector considered the locomotive of the economy–to a complete standstill.

The crisis hit particularly hard in the tourism and shipping industries. And the supposedly strong Greek banks–used to acting as the dominant players in the greater Balkans region–were forced to admit not only that there is no more gold in the Balkan “El Dorado,” but that many of their old speculative enterprises have also turned toxic.

The government budget problems were made even worse last year by the decision of the former Greek government to follow its European counterparts in carrying out a colossal bailout for corporations at the onset of the crisis.

To understand why, consider the numbers. The Papandreou government today wants to extract 25 billion euros from the people over the next three years in order to reduce the budget deficit from 12.5 percent of GDP to 3 percent. Yet in one night only last year, former Prime Minister Karamanlis made available for the support of Greek banks a colossal total of 28 billion euros! Similar support programs were speedily put together for the tourist interests and other capitalist groups.

– – – – – – – – – – – – – – – –

TO PAY for these bailouts, the Greek government has been forced to turn to massive borrowing. To meet its financing needs for 2010 alone, the government has to sell bonds–that is, borrow–some 55 billion euros.

Investors are skeptical that the government can repay those loans. Thus, at the beginning of January, a report by Germany’s Deutsche Bank on the potential risks of government bonds sent interest rates on loans to the Greek government through the roof. On January 25, with the first issue of Greek bonds for a loan of 5 billion euros, there was surprising interest, with offers for almost five times the asking amount. However, the bonds carry a stiff interest rate of 6.2 percent, which, together with the bankers’ commission, raised the cost of the loan to 8 percent.

The head of the bank consortium that organized this robbery was none other than Deutsche Bank, the same outfit that warned the world about the riskiness of the investment.

All this highlights the fact that “servicing the public debt” in Greece is nothing than a way to rob the people, depriving them of badly needed resources in order to serve the interests of the banks and all the other loan sharks of the ” international market.”

This giveaway to the banks is being organized by the PASOK government that came to power in October 2009. PASOK was elected as a result of a campaign that promised resistance to a wage freeze proposed by then-Prime Minister Karamanlis.

Yet in the few months that PASOK’s Papandreou has been in office, he has made clear that he is committed to pushing through an austerity program even harsher than that of his right-wing predecessor–which means an all-out attack on labor rights and social gains. This government aims not only to freeze wages, but to actually cut pay in the public sector, thereby opening the way for bosses to do the same thing in the private sector.

A key aim of the Papandreou government is to significantly reduce employment in the public sector by laying off big proportions of temporary workers (who are employed in place of badly needed permanent workers) and hiring just one new employee for every five (!) who retire. This program completely ignores the dramatic jump in unemployment, which is already estimated at 16 percent.

Overall, Papandreou is implementing a program of drastic cuts in social spending that threaten an already resource-starved public health care and education system with total collapse. At the same time, the government wants to turn public pensions and the social security system into a private and semi-private system. It also plans a broad program of privatization of parts of the public sector, including ports, energy, water, etc.

That’s not all. Papandreou aims to substantially raise taxes for working people and the lower middle classes, without touching the profits of the rich–especially big businesses and the banks.

– – – – – – – – – – – – – – – –

ONCE AGAIN, we have before us a social democratic government with a program of harsh neoliberal policies. Papandreou aims to reduce the deficit over the next three years in order to, he says, “rehabilitate the confidence of the international market in the country.”

The government’s main asset in enforcing these policies is PASOK’s strength in the trade unions. This explains the turn in ruling class political support toward PASOK. The industrialists and the bankers realized that the right had exhausted its credibility with the people. Thus, they looked to social democracy, providing unprecedented support to the PASOK via the corporate mass media.

Another element in PASOK’s favor is the paralysis of the opposition New Democracy party, which has been pressured into providing unconditional support to PASOK’s economic and social economic program. In order to rally any popular support at all, New Democracy has taken racist and nationalist positions to appeal to its hard core–a traditional conservative audience. (It should be added here that the recently elected leader of New Democracy attempted 15 years ago to found an extreme right nationalist party.)

With the right incapable of effective opposition, Papandreou has a free hand to sell his austerity program. In his speeches, he often uses the punch line: “change or sink.” By that, he means that the country must turn in a neoliberal direction–that the balance of forces between capital and labor must be tipped towards the benefit of the rich “so that the country can avoid bankruptcy.”

Under this banner, the PASOK government used its first 100 days in office to reverse Papandreou’s election program. People were stunned–and public discontent is already being expressed in many ways.

As this article is being written, protesting farmers, using tractors and heavy equipment, have set up blockades in 30 different places along the main freeways, demanding fair prices for their products. Public-sector temporary employees, under the imminent threat of losing their jobs, are organizing strikes in many services.

That’s only the beginning. Despite the betrayal by the social democratic leadership of the unions, it’s certain that there will be mass resistance to Papandreou’s program. That’s exactly why “international investors” are expressing strong doubts about the government’s ability to impose its “reforms.” In recalling Greece’s youth uprising of 2008, a major European paper wrote: “In this country, there exists a very low tolerance to modernizing reforms and very high tolerance towards radical protest.”

But the struggle is not going to be easy. This time, the ruling elites know very well that the defeat of their austerity policies will have immense consequences. It’s no accident that there are a growing number of establishment voices demanding a “national salvation” government run by both PASOK and New Democracy.

– – – – – – – – – – – – – – – –

TO OVERTURN Papandreou’s program, we will need a serious escalation of these struggles.

The ex-chairman of the parliamentary group of SYRIZA (Coalition of Radical Left), Alekos Alavanos, spoke of the need for a new “worker’s December.” He was referring to a broad uprising like the youth revolt of December 2008–only this time, the struggle must be centered in the labor movement. That could provide the continuity, demands and politics necessary to bring victory for the resistance movement. This slogan–for a “worker’s December”–has become increasingly popular, reaching even the pages of the mainstream press.

The fightback must also have a European dimension. The case of Greece is proof that it is impossible to defend workers’ rights and social gains without confronting the European Union’s policies that prioritize cutting deficits and debts, no matter how severe the impact on the people.

In that sense, Greece could indeed prove to be “the weak link” of European capitalism–not only financially, but also politically. Resistance in Greece could be the signal for a new round of major labor struggles and strikes in Europe.

It should be clear that our goal can’t be achieved by mass social resistance alone. The situation also demands a political struggle, in which the forces of the radical left will have to play a crucial role. An important factor is SYRIZA, a coalition in which our organization DEA (International Workers’ Left) has participated from the beginning.

Currently, SYRIZA has electoral support of about 5 percent of voters. A crucial and rich debate is taking place inside SYRIZA about: (a) for the need of radical left-wing policy to meet the challenges of this critical period, and (b) the need for SYRIZA to become a democratic and fighting organization that’s capable of supporting the coming struggles. DEA, together with other forces of the revolutionary left that participate in SYRIZA, has focused our attention on this debate.

Whether in Greece, Spain, Portugal, Italy, Ireland or elsewhere, one of these “weak links” has to get broken. The task now is to open the way for mass demands for changes that meet the needs of working people and youth, rather than satisfying the corporate greed of bankers and industrialists.

9 Comments

  1. Craig said,

    February 26, 2010 at 10:51 pm

    Hmmm. Wouldn’t the Greek “working class” (and Greeks in general) be in far greater trouble if austerity were not applied in time to stop a debt spiral? “Don’t spend more than you earn” seems to be a principle that most governments still cannot grasp.

    • ejh said,

      February 27, 2010 at 10:08 am

      In fact most entities – governments, families, businesses and individuals – do very often spend more than they earn. If they did not, economies would not function.

  2. Craig said,

    February 27, 2010 at 10:22 pm

    But fiscal prudence always makes more sense, even if – as you say – it is rarely obeyed. If the Greek government had avoided spending and borrowing over its tax revenue in previous years they would not be facing collapse right now.

    Obviously uncontrollable outside factors can force one to borrow. But even the effect of a global recession would not have been so bad if Western governments had been more prudent during the good times. A lesson for the future. Debt is slavery, whether it’s self-imposed or not.

  3. neprimerimye said,

    February 28, 2010 at 10:20 am

    Craig I doubt that the ‘owner’ of this blog or many of the regular posters in the comments forum are much concerned about fiscal prudence. Most of us being for the abolition of money in the long term and consider that the current economic crisis is the fault of the boss class and that our class, the working class, ought to resist anything and everything that increases its exploitation.

    I further note that the DEA article is very similar politically to that of the SEK which appears in the current Socialist Review. Except they recomend support to rival coalitions.

  4. February 28, 2010 at 8:38 pm

    […] Optimism carries a personal addendum to my piece on Orwell and nationalism. Splintered Sunrise has an excellent account of recent struggles in […]

  5. Babeuf said,

    February 28, 2010 at 10:47 pm

    Craig,

    No, it doesn’t always makes sense. Macroeconomics is not like household economics – that simple jump cannot be made. Governments are not SMEs or individual workers.

    I’m no economist, but…

    1. Macroeconomics is not the same as household economics, you cannot make that jump. Governments are not SMEs or individual workers.

    2. We are in the greatest economic crisis since the Great Depression. It is irrelevant in the immediate term what we did in the past, solving the recession was the issue before it turned into a depression. There is still a risk of further contraction, and the long term outlook appears to be stagnation. If we dont maintain spending in a crisis. spending in the economy could ground to a halt, as the private sector would have seriously contracted its expenditure.

    3. Even now spending is insufficient in our economies.

    4. Key to Keynes thought was that extra spending can help cause a multiplier effect, like a spiral of concurrent buying, investing etc, which kick starts the economy back to growth and confidence.

    5. Deficit spending on capital reaps future returns. Further, Governments have the money to make co-ordinated and large investments that will deliver large returns – SMEs and individuals do not.

    6. If you immediately indulge in cutbacks you will make things worse and risk causing the reverse of a multiplier effect, effectively deepening the recession, the pain and any future ability to repay any debt or deficit – a deflationary spiral.

    7. Who does/would it benefit? Cutting public spending is like asset stripping, it contracts the public sector in the aim of benefiting the private sector and the possibility of them reaping returns again on lower costs, wages etc and thereby causing growth. By using public spending you can bring an economy back into growth without doing so at the expense of labour for the benefit of capital. Otherwise, it’s a form of social genocide.

    8. It is more feasible and easier for governments to take on debt than individuals and SMEs can in a recession or even normally if they are to survive and prosper.

    9. As a member of the Eurozone Greece has no monetary control. This means fiscal policy i.e. spending is its only real economic policy tool. It can’t help increase credit to help companies and individuals by lowering interest rates or printing money and it can’t devalue its currency to make its exports cheaper, so the best option is to start spending and cutting taxes, thus deficit spending, thus debt…

    10. You can’t pay debt without growth without contracting the economy.

    11. You get a debt spiral if you are FORCED to default on your debt. Greece will only be forced to default on its debt if international investors force it into it by raising the risk and therefore cost they attach to Greek governments debt. Any chance of this would be prevented if the EU was willing to help Greece out, thus their wish….

    12. Are the EU asking Greece to get its debt manageable or asking it to cut its debt for benefit of capital, and to do so through hammering its people?

    13. Who caused the problem and who are you getting to pay? Its never the ordinary people, but that’s who are going to be made to pay.

    14. Is it this the only solution? Is there an alternative path of development which is in the interests of people not capital?

    Essentially what you are suggesting is that the Greek economy be deflated so that capital can again start to reap profit in it – what FF/GP are doing – in the hope growth begins through investment, ultimately from outside Greece. This will depend on whether other economies start growing – there is no guarantee of this. The social democratic alternative is to help labour by getting it spending again through help from the public purse and therefore kick starting the economy through increased demand, which inevitably helps indigenous investment. The socialist alternative is obviously to take economy into our own hands…

    But, again, I’m no economist… …but, I always ask the democratic question of in whose interest….

  6. Babeuf said,

    February 28, 2010 at 10:55 pm

    A few other points…

    1. Note money was made available for banks, where if we were to take the free market ideology or the household economics analogy it would have/should have failied… …why not money for the bailout of the people?

    2. Greece is notorious for non-payment of tax – a notable area for reform, which would help cut the debt problem…

  7. Babeuf said,

    February 28, 2010 at 11:10 pm

    Finally, a ‘correction’ of sorts….

    …the aim is obviously to reduce debt as portion of GDP by stopping/reducing the debt taken on by the Greek Government. This naturally happens through growth. If you’re relying on the private sector:

    1. You’re private sector must have capital to invest
    2. It must be willing to invest. Why?
    i. Consumer demand (not going to occur domestically if you’re cutting wages)
    ii. Low wages/costs
    3. If not domestic private sector, must be outside of Greece i.e. FDI, again, ‘competitiveness’ etc and capital to invest are going to be key

    Problem is the need for capital and its willingness to invest – not going to be good in a world recession? And, all again at the expense of labour to the benefit of capital. Keynes argued for growth via the public sector, which could be done to the benefit of labour (although also possible without I presume).

  8. March 1, 2010 at 2:37 pm

    […] to put the social welfare genie back in the bottle, and the proposed changes have brought with them protests and riots: Millions of workers resisted to the intimidation by the capital’s parties (the social democrat […]


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