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Jess Spear Primary result

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Socialist policies are needed to answer Project Fear

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The first year of war

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WW1
The Bolsheviks and the war

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Vicious communalist attacks on Muslims

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World War One
100 years since the great slaughter

16/07/2014: Ten million killed and more than ten million seriously injured

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Cyprus

“Working people pay high price for crisis of euro and capitalism”

www.socialistworld.net, 31/03/2013
website of the committee for a workers' international, CWI

Interview with a Cypriot socialist

Niall Mulholland spoke with Athina Kariati from New Internationalist Left (CWI in Cyprus) about Cyprus’s deal with the Troika, what it will mean for working people and what is the socialist solution to the crisis

What has the Cypriot government agreed with the Troika?

They have agreed terms that will be a social and economic disaster for the Cypriot working class and small businesses. Once again working people are being made to pay an extremely high price for the crisis of the euro and the capitalist system.

The Cypriot government, led by President Nicos Anastasiades, agreed to a 10 billion euro bail-out package with the Troika (IMF, ECB and EU). Cyprus’s GDP is 17 billion euro, so the bailout is huge. To qualify for the bailout, Cyprus must raise 5.8bn euros. The agreement sees bank depositors with more than 100,000 euros face big levies, perhaps around 40%. As a result of this tax on deposits, (an unprecedented development in the euro-zone) many small, family businesses will face ruin, and many middle class savings will be severely hit.

The country’s second largest bank, Laiki Bank, will be closed and divided into a "good" bank and "bad" bank. The Bank of Cyprus will be “restructured“, taking on 9 billion worth of debts from Laiki Bank. That will be an excess burden that the depositors will have to pay for. Already it is estimated that the Bank of Cyprus will not manage to find this amount of money and that bank could face collapse as well.

Banks in Cyprus reopened on 28 March after a two-week closure. There are strict controls on the amount people can withdraw each day. It is reported that the capital controls may be in place for the next month to prevent a bank run. However people are not reassured that there will not be a bank run after one month. Already, it is reported that the rich spirited out vast sums, up to 2 billion euro, from Cyprus’s banks between January and the week before the levy was decided, in expectation of the new levy and capital controls. But the smaller deposit holders will take big levy hits that threaten their living standards and small businesses.

No vote was taken in the Cypriot parliament on this new draconian package because last Friday the new bank restructuring plan, in fundamentals, was passed by the Cypriot parliament. This gave the necessary powers to the Ministry of Finance and the Chief Administrator of the Central Bank.

Essentially, as a result of these measures, Cyprus will be destroyed as a financial centre in the region. This measure, i.e. cutting deposits by around 40%, on its own, will plunge the Cyprus economy into a deep recession, but it is not all.

As well as this, the ‘Memorandum of Understanding’ between Cyprus and the EU will see mass privatisations. The state or semi-state owned telecom system, the electricity industry and the ports will all be sold off, despite the fact that all three industries are currently profitable.

What does the deal mean for the future of Cyprus?

All this will lead to a huge credit contraction for Cyprus and huge cuts and privatisations. It is estimated all this could wipe out up to a quarter of Cyprus’s national income. Ordinary Cypriots will pay the price not the super-rich Russian oligarchs or the Cypriot elite. Years of Greek-style economic depression lie ahead. As many Cypriots say, this is the worst catastrophe facing working people since the 1974 war with Turkey.

The Troika says it now wants to end Cyprus’s ‘financial model’, which acted as a magnet for Russian and other oligarch’s money because of low corporate tax (10%). Cypriot governments, including the recent AKEL (Cypriot communist party) administration that ended earlier this year, enthusiastically allowed the country to become a destination for ‘hot’ money. But the EU elite in Brussels and Berlin were well aware of Cyprus’s ‘off-shore banking’ role when the country joined the euro-zone in 2008. In any case, previous Cyprus governments allowed controls by the ECB on Cyprus’ banking system to be set to stop the alleged money-laundry but the EU bureaucrats were not able to provide real evidence it was taking place. The main reason for the current turmoil is due to the massive exposure of Cypriot banks to economically-ruined Greece.

The Cyprus government will be unable to pay off its massive debts, as the economy declines sharply. Like Greece, the government will be forced to ask for new loans from the Troika. Any new bail-out deals will again come with vicious austerity demands. This is not tenable and raises the possibility of Cyprus exiting the euro-zone, at some stage.

How have working people reacted to events?

The mood of working people has changed dramatically over the last ten days or so. Last week’s attempt by the Troika to force the Cypriot government to impose a bank levy on small and large investors caused fury among working people and small business people. Big protests involving thousands were held outside the parliament buildings.

Under intense pressure from Cypriot people, the parliament rejected the proposal. Even the governing party abstained on their own bill! This vote was met with jubilation by many workers and small business people. At last a parliament had stood up to the Troika! It sent a positive message to working people in neighbouring Greece and across the whole euro-zone and the EU who are resisting cuts.

There were high hopes among many people that a much more favourable deal could be made with Russia to find a solution to the financial problems. Russian oligarchs have poured huge funds into Cypriot banks, enjoying high interest rates. But the Russian government was wary of colliding with the EU, particularly Germany, with which Russia has big trade links. So an attempt to secure Russian help was unsuccessful.

The right wing Cypriot government desperately searched for other solutions, including nationalising pension funds but only to help bail-out the banks. This was also firmly rejected by the EU.

Meanwhile the Troika put huge pressure on the Cypriot government. The European Central Bank (ECB) threatened to cut off funds to Cyprus’s banks by Monday 25 March, unless a new deal favourable to the Troika was reached.

Therefore the Cypriot parliament voted for reform of the banks, for capital controls and the creation of a ‘solidarity fund’ for the banks. These bills were so complicated that many MPs said they could not understand what they were voting for. The media supported the government and did not say what the legislations really meant for working people. There was only one thing made clear for sure; Laiki Bank would not be the same as before, many workers would be fired and their security funds lost. So, for a couple of days, we had big protests but just from the Laiki Bank employees. It was the first time in Cypriot history there was a demonstration of 7,000 bank workers!

Cypriot banks remained closed and people could only get limited supplies of cash. Real concern and even panic set in. People started to hoard food, afraid that supplies would run out.

On 25 March, when the deal was struck with the Troika, there were no protests at the parliament for the first time in days. After a tumultuous, nerve-straining week, many Cypriots were just relieved that there appeared to be some stability again and that banks would start to re-open. Many people are exhausted and desperately want to believe that some sort of solution can now be found to the county’s deep economic problems, even if it will mean ‘difficult times’ ahead.

But as the full extent of the deal came to light, people’s feelings turned to fear and anger. Many worker and young people were shocked and stunned as they realised Cypriot workers face extremely tough times ahead. The privatisations and job losses and the likely quick decline of offshore banking sector will see the economy nose-dive. Many small businesses and services linked to the financial industry will shut down. Cyprus as a popular tourist attraction could even face problems. The chairman of the Cypriot parliament’s finance committee, Nicholas Papadopolous, admitted that Cyprus was “heading for a deep recession, high unemployment.”

Should Cyprus exit the euro and return to the pound?

Many Cypriots support the idea of leaving the euro-zone and rejecting the bullying, unelected Troika and returning to the Cypriot pound. A poll last week saw 67% of people say they want to leave (43.7% were “absolutely certain” and 23.6% “certain” they wanted to exit) and seek help from other sources, like Russia. The euro-zone’s ‘one size fits all’ currency will devastate living standards in Cyprus, just as it has done in neighbouring Greece. Cyprus only joined the euro zone at the start of 2008 and so Cypriots associate the euro only with deep economic crisis. Many Cypriots also hark back to the Cypriot pound as representing better times. Many Cypriots regard their links to the EU and euro-zone as just one part of the country’s external relationships – there are also historical, cultural and economic ties to Britain, the Middle East and Russia, for example.

But is a return to the pound really a solution for working people? Certainly having control of a currency enables a national government to print more notes in order to cover the immediate needs of the economy, to fund budget deficits, and to pump liquidity to the economy, all of which the European Central Bank refuses to do. Currency devaluation also makes exports cheaper. But all this comes at a great cost. It means more expensive imports, a rise in inflation (which would eat into bank deposits) and resulting worsening of living standards. This is what happened in Argentina after it decoupled from the US dollar over a decade ago. Millions of Argentinians – workers and the middle classes - were ruined. The economy did start growing again after a few years, but this was in a much more favourable world economic situation than facing Cyprus today. With a devalued currency, Argentina was able to exploit its much larger export base. If much smaller Cyprus left the euro-zone, with its broken economy, it would do so in a Europe mired in economic depression, with shrinking markets.

The New Internationalist Left (CWI in Cyprus) sympathises with the general feeling of the mass of the population who are demanding an exit from the euro-zone, which has only brought disaster. Socialists also want to be rid of the boss’s euro and austerity! But we explain that exit from the euro-zone, in itself, and on the basis of capitalism, is no solution for working people. Exiting the euro could only assist in the revival of the Cypriot economy within the context of the introduction of a socialist programme for the restructuring of the ruined economy

In order for a return to the pound to be a real step forward for working people, society needs to be fundamentally re-organised along socialist lines, to ensure the needs of the vast majority are met. This means banks passing into the control, ownership and administration of society (nationalisation under workers’ control and administration) as well as refusal of payment of the debt. This is the only way to create a fertile ground for the growth of the economy!

Are workers and youth resisting the Troika deal?

The bank workers’ union called demonstrations outside parliament last week. Bank staff were furious because their jobs were under immediate threat. Now that is announced that Laiki Bank will be closed, job losses are certain. But the right wing leadership of the bank workers’ union called off a strike set for 26 March. They claimed that they had received ‘reassurances’ from the government that all job losses would be ‘voluntary’ and that bank workers’ pensions would be safeguarded. These union leaders have unbelievable trust in a government which, within ten days, agreed, rejected and then agreed again to Troika diktats!

New Internationalist Left demands no bank job losses! And all pensions must be safeguarded! Bank workers and all other workers should not have to pay for the euro-zone crisis and the system of the super-rich.

Over 2,000 school students marched in protest at the Troika deal, which only offers them unemployment and poverty or emigration. On 27 March, a protest of around 3,000 people was called by the ‘Movement Against Privatisation and Austerity’ campaign, in which AKEL’s organisations and trade unions and other Leftist organisations participated, including the New Internationalist Left (CWI).

Much smaller protests have been called by the nationalists, the far right and fascists. They do not have significant support but they are trying to repackage themselves like Golden Dawn in Greece. This serves as a warning to the Cypriot working class. Unless the Left fills the political space, the fascists in Cyprus can grow, preying on deeply disillusioned layers in society.

Under pressure, the government announced on 28 March that special ‘applications’ would be put in place to ensure universities can be funded and that public sector and bank workers will not lose their salaries, pensions and security funds but that they will “just” apply the bank levy.

But workers cannot trust the government’s claims and need to take action to protect their own class interests. So far, however, the unions’ actions are not co-ordinated and not preparing for wider struggles, including strikes, to stop the Troika attacks. The unions, youth and student organisations, anti-austerity campaigns and Left parties need to co-ordinate the struggle. They should convene mass meetings of workers, youth and the communities, locally and nationally, to prepare for mass struggle against the cuts and to discuss an alternative plan, based on the interests of working people. Mass demonstrations and long-duration strikes are the only way to fight back.

Until February, an AKEL (Cypriot communist party) leader, Demetris Christofias, was Cypriot President, what is AKEL calling for now?

The main Left party, AKEL (Cypriot communist party), has given no lead to working people whatsoever. It called protests outside parliament last week but did not put forward a real alternative. AKEL said, ‘No to the Troika’ and ‘No to the Memorandum’ but does not offer an alternative society to meet working class needs.

AKEL MPs abstained during the 22 March vote in parliament on levying bank deposits and went on to vote for capital controls and a so-called ‘solidarity fund’. AKEL leaders said they “did not want to attack the president” during the country’s crisis!

The party claimed it has a ‘15-point programme’ to show a way out of the crisis but they refused to make it public. Instead of allowing the working class to make a judgment on their programme, the AKEL leadership presented it in private to the new right wing president. AKEL held the presidency up until a few weeks ago - without introducing anything like a socialist policies - so their 15 point programme is highly unlikely to be a radical departure from crisis-ridden capitalism.

The party leadership was fervent supporters of joining the euro-zone and still defend it.

However, under the pressure of the people the party calls for a referendum on the Troika deal - so that people can have the choice to reject it - but does not seriously campaign on it. At the same time, they have called for two financial analysts from Greece and Germany to discuss with them possible alternative proposals for Cyprus outside of the influence of the Troika and even the eurozone, but this is not binding on AKEL’s leadership, in any way. AKEL mainly see their role as ‘responsible’ oppositionists to a right wing, anti-working class government.

Other smaller Left forces, like ERAS, do go further than AKEL with immediate demands. They call for ‘nationalisations’ and to ‘tax the rich‘. But they do not elaborate a socialist programme.

What does the New Internationalist Left (CWI in Cyprus) call for?

We call for a solution based on the needs of working people: Refuse to pay off the debt; nationalisation of the banks under workers’ control and administration, for the needs of society. Guarantee that the small deposits, pensions and welfare funds will be safeguarded; debt cancellation for working people, not for big business!

A programme like the above - actually any refusal to abide by the demands of the Troika - will immediately raise the question of the currency. A workers’ government ought to have a plan to deal with exit from the euro and for a return to a national currency (the pound), without, however, allowing any illusions that this could provide a solution on the basis of capitalism, but that it should be incorporated within a socialist and internationalist programme.

We also say: No to privatisations! Tax the super-rich! Expropriate the enormous wealth of the gangster oligarchs and the Cypriot super-wealthy elite! For the public ownership of the key industries and major utilities, to enable the economy to be democratically planned to serve the needs of the majority, not the profits of a banker and speculator minority.

We call for immediate state intervention, including financial subsidies and cheap loans, for small businesses and small farmers, to save these vital sectors of the Cypriot economy from ruin and the resulting loss of many thousands of jobs. Small businesses facing closure could be re-organised into democratically-run co-operatives. Workers in these industries should of course have full union rights and a guaranteed living wage.

We call for Cypriot workers to link with the workers’ movements in Greece and the rest of Europe - our real allies! - not the ruling classes and governments of the EU. A new powerful Left needs to be built in Cyprus, with the aim of forming a government based on the needs of working people. The situation facing Cypriot society is desperate; only a bold revolutionary internationalist programme can resolve the crisis in the interests of the masses. Cyprus faces big class struggles in the months and years ahead, which will give the Left many opportunities to build and to fight for power on a socialist programme.

Would a workers’ government be isolated?

A workers’ government would face hostility from European capitalism and would be kicked out of the euro and EU. It would need to immediately introduce capital controls to prevent a flight of capital. Based on a democratic, planned economy and the state monopoly of foreign trade, a workers’ government in Cyprus would launch an emergency programme - including investing massively in public health, education and welfare, creating full employment.

Would this leave small Cyprus standing alone against hostile European capitalism? We do not think so. Working people across Europe cheered when the Cypriot parliament was forced to vote down the first Troika package. Just imagine how European workers would positively respond to a workers’ state in Cyprus!

A socialist Cyprus would be a powerful attraction to the working class and poor of Europe. Workers and youth would immediately respond in Greece and the other crisis-ridden euro-zone countries of Portugal, Spain, Italy and Ireland, and then throughout all parts of Europe. This would prepare the way the collective struggles of European working people against austerity and capitalist rule. It would see the struggle go on to a much higher level; for the creation of a confederation of socialist states, which would be democratic and equal, unlike the eurozone straightjacket that is dominated by the big capitalist nations. This would see see an end to the misery of the eurozone and the EU of the big bankers, shareholders and capitalists.

 



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A socialist world is possible, the history of the cwi with new introduction by Peter Planning green growth, a contribution to the debate on enviromental sustainability

NEWS

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Hollande removes ‘lefts’ from government

Turkey: Erdoğan sworn in as country’s President
29/08/2014, Coşku Mıhcı:
Significant poll gains for the left coalition HDP

Ireland: Greyhound lockout enters ninth week
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A fight for all workers!

Solidarity: Iranian mine workers on strike
26/08/2014, Campaign in support of workers of Iran:
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Nigeria: Fees victory at Lagos State University!
26/08/2014, Education Rights Campaign, Nigeria statement:
Vigilance required from LASU students and workers to ensure that victory is permanent

ISIS: Capitalist slaughter in Iraq and Syria
25/08/2014, Georg Maier, SLP (CWI in Austria):
As ISIS (the Islamic State in Iraq and a-Shams) crossed the border between Syria and Iraq, it proclaimed this to be the “annihilation of the disgrace of Sykes-Picot” and the formation of an ‘Islamic state’ (IS).

US: Indict Michael Brown’s killer and spread the protests! The whole system is guilty!
22/08/2014, Socialist Alternative (CWI in the US):
Text of a leaflet handed out by Socialist Alternative members in Ferguson and St. Louis

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20/08/2014, Jane James and Jim Horton, Socialist Party (CWI in England & Wales):
Protests, strikes and equality

Pakistan: Not a “revolution” but an effort by power-hungry politicians to grab power
19/08/2014, Socialist Movement Pakistan (CWI) statement:
Working class will bring the real revolution and change

USA: Ferguson erupts in rage after police kill Michael Brown
18/08/2014, Eljeer Hawkins, Socialist Alternative, Harlem, New York:
Spread the protests – unite against racism and inequality

US: Jess Spear Primary result
14/08/2014, Socialist Alternative reporters, USA:
“We’ve only just gotten started”

Scotland: Socialist policies are needed to answer Project Fear
13/08/2014, Editorial from the latest issue of the Socialist:
September 18 will see an unprecedented mobilisation to the polls for the referendum on Scottish independence

Indonesian Election
12/08/2014, Conor Flynn, Socialist Party (CWI Australia):
New face; same problems

Gaza: Kshama Sawant calls on Seattle city council to condemn Israeli onslaught
11/08/2014, socialistworld.net:
Socialist councillor denounces Israeli state terror

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Beginning to feel full effects of world crisis

Scotland: Countdown to independence referendum
07/08/2014, Matt Dobson, Socialist Party Scotland (CWI in Scotland):
For an independent socialist Scotland

Video: Paul Murphy speaks at Dublin Gaza protest
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Socialist Party (CWI in Ireland) Former MEP and parliamentary bye-election candidate speaks to thousands protesting against Israeli state terrorism

Argentina: Another debt default
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Only socialist policies can end extortion of vulture markets

Sri Lanka: United Socialist Party issues press statement
28/07/2014, Clare Doyle (CWI Secretariat):
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Sri Lanka: Racist Buddhist mob ambushes United Socialist Party march
26/07/2014, socialistworld.net:
CWI condemns attack and requests solidarity

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South Africa: Metal workers’ strike
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Britain: Abuse scandals reveal abusive system
18/07/2014, Hannah Sell, Socialist Party, Deputy General Secretary:
An Establishment cover-up?

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CWI Comment and Analysis

ANALYSIS

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09/08/2014, Clare Doyle, CWI Secretariat:
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06/08/2014, Niall Mulholland, from articles in this week’s Socialist (paper of the Socialist Party, England & Wales):
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Working class must organise for future struggles

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Article by LEON TROTSKY translated into English for first time

WW1: The Bolsheviks and the war
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The horrors of the first world war, and the economic and social turmoil it created, led to mass upheaval. In Russia alone did this lead to a successful revolution…

1914: The capitulation of the Second International
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Before 1914, the Second International resolved to act to prevent war…

World War One: 100 years since the great slaughter
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Israel-Palestine:World outraged by Israeli State’s ferocious bombing of Gaza
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Mass action needed to end the slaughter and blockade!

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05/07/2014, By Philip Stott:
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Argentina: Return to turmoil
01/07/2014, Danny Byrne, CWI:
Debt crisis is back – the class struggle and tasks for the Left

Review: ’Capital in the Twenty-First Century’
28/06/2014, Hannah Sell, Socialist Party (CWI England and Wales):
Thomas Piketty: The new Marx?

Iraq: Isis jihadists capture more territory
24/06/2014, Niall Mulholland, CWI:
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Nigeria: 200 school girls abducted
18/06/2014, By Segun Sango, National Chairperson, Socialist Party of Nigeria (SPN), a party initiated by the DSM (CWI in Nigeria):
Why has Boko Haram insurgency grown?

Iraq: Oil war’s bloody legacy
17/06/2014, Judy Beishon, from The Socialist, weekly paper of the Socialist Party (CWI England & Wales):
Escalating sectarian conflict threatens to draw in surrounding countries

Ukraine: Hundreds killed in military clashes
13/06/2014, Rob Jones, CWI, Moscow:
Working people fearing all-out war

Review: ’The Snowden Files’
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Britain: The Battle of Orgreave
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Euro polls warning
05/06/2014, Robert Bechert, CWI:
In country after country, May’s elections to the European parliament saw governments and traditional parties defeated

2014: The ’rejection election’
30/05/2014, Hannah Sell, Socialist Party (CWI in England and Wales):
Now Trade Unions must lead our fightback

Ireland: Electoral surge against austerity
28/05/2014, Danny Byrne, CWI:
Socialist Party wins a second TD and Anti Austerity Alliance 14 councillors