Greece: Syriza-led government announces anti-austerity policies

Markets and EU leaders react against Athens

The new Syriza-led government has announced a series of policies that will come as a huge relief to Greek workers after years of brutal austerity measures that have driven many into penury. The new measures include restoring the minimum wage to pre-crisis levels (750 euros a month); raising low pensions and providing a thirteenth pension payment (over the Christmas period) to all those pensioners currently living on 700 euros/month or less; abolition of hospital visit fees and prescription costs; ending the forced sale of homes of people who cannot keep up with mortgage repayments; scrapping planned privatisations (including the energy sector, airports and docks); re-employing teachers who have been sacked; abolishing the civil service “evaluation” system which was created in order to provide continuous layoffs; the re-employment of more than 10,000 civil servants and workers sacked from the public sector; re-establishing ERT as the state broadcaster and reemploying its workforce; and providing citizenship for children of immigrants born and raised in Greece.

Although these measures have to be passed through parliament, Greek workers feel that, at last, their self-confidence and dignity is being restored. The symbolism of Alex Tsipras being made Prime Minister, without a religious oath, and his visiting a monument to communist fighters massacred during the Greek civil war, is not lost on workers either.

All together, these initial measures (limited and partial as they are) fly in the face of decades of harsh neo-liberal so-called ‘consensus’, and the pro-austerity agenda of the euro-zone and bosses’ EU. These reforms did not fall from the sky but are the by-product of the herculean mass struggles of Greek workers over several years, including over thirty general strikes. Although this did not prevent massive cuts, due to the role of conservative union leaders, it did politically radicalise millions of workers, preparing the ground for last weekend’s major electoral upset.

The Syriza government’s initial announcements also expose the craven position of traditional parties across Europe, including the former social democratic parties. When in power they carry out austerity and other anti-working class measures on the supposed basis that there is “no other choice”.

Markets react

Predictably the markets reacted negatively to these measures, with stocks in Athens falling to lows not seen since the worst of the debt crisis. It is reported that Greek deposit outflows sped up last week to 11 billion euros for January. Government ministers sought to downplay the prospect of a clash with creditors.

The Greek communist party (KKE), trying to excuse its sectarian approach (which earlier this week saw it refuse to form a coalition government with Syriza) dismissed the reforms as mere “peanuts”. While, of course, the new announced measures do not amount to a socialist programme – which would include repudiation of the debt, heavily taxing the rich, imposing capital and credit controls and the state monopoly of foreign trade, and taking the commanding heights of the economy into democratic public ownership – they will be very positively welcomed by workers in Greece and across Europe. These developments will act as a boost to the anti-austerity opposition in Spain, Portugal and Ireland, in particular, even bringing forward elections in some countries.

The EU ruling elites are reportedly astonished because they had reckoned on a ‘centre-right’ government coming to power in Greece, which would have continued the policy of conceding to the demands of the Troika (ECB, EU and IMF). But Prime Minister Alexis Tsipras came to power under pressure from the working class to carry out his basic pledges of cutting Greek public debt, raising wages and halting spending cuts. He claims that all this can be done while remaining in the euro but European leaders have warned ahead of negotiations on Greece’s debt that Tsipras will have to choose which of those goals to aim for.

Debt negotiations

Greece has about 320 billion euros of outstanding debt. It has to refinance Treasury bills on 6 February, of around 1 billion euros and another 1.4 billion euros on 13 Febuary. Syriza said it does not seek confrontation over the debt and will seek a deal over rescheduling repayment. Is it possible that Germany’s Chancellor Merkel will agree to negotiations that give some leeway to Athens? Merkel is under domestic pressure not to ‘waste’ more money on bailouts but also faces a European ruling elite increasingly divided over the best way forward. The Governor of the Bank of England earlier this week criticised the results of the Troika’s policies and warned of another “lost decade” in Europe. As an indication of the stagnant situation facing the Eurozone, the European Central Bank was compelled, last week, to launch a bout of quantitative easing (money-printing).

But even if Merkel is prepared to make some concessions to Athens regarding debt repayment schedules and some debt relief, there will be strong political pressure from ruling parties across Europe not to give too much to Greece. They fear it would set a precedent that would threaten to unravel the whole austerity ‘consensus’ and create “political contagion”, giving a massive boost to anti-austerity opposition in Spain, Portugal, Ireland and elsewhere in Europe.

Prior to his election, Tsipras said if no deal can be made with Brussels and there is an attempt to force Greece out of the euro-zone or if the EU attempts to stop Syriza’s anti-austerity measures, a Syriza government will call a referendum.

However, it is not just a question of polls or parliamentary arithmetic. As the response of the markets and EU governments to Syriza’s measures show, the ruling elites will fight every concession or reform for the working class. Even if Merkel and the European ruling elites have to grudgingly concede to Syriza’s new measures, they will come back at a later stage to try to wrest away these gains, and in the meantime will work to destabilise, undermine and tame the Syriza government. Winning and maintaining even limited gains for the working class requires that they are part of a struggle for a full socialist programme and that the working class is mobilised, in the workplaces and communities, to challenge capitalism and to appeal for solidarity with workers across Europe.

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January 2015