Greece: “Despite spin, Syriza proposals terrible for pensioners and workers”

SYRIZA Left must vote against cave-in deal with Troika and act in interests of workers!

The outlines of a possible deal between the Greek government and the Troika (the EU, the European Central Bank and the International Monetary Fund) are being put together. After months of cajoling and bullying from the capitalist institutions, including EU threats of Greek state bankruptcy, the Syriza-led government caved in and crossed its own ‘red lines’ to close a funding gap of billions of euros owed to the IMF and the ECB and thus avoid default.

Niall Mulholland looks at the proposed deal and asks Andreas Payiatsos from Xekinima (CWI Greece) for his initial reaction.

In return for keeping alive hopes of staying inside the Eurozone, Tsipras has agreed to increase the pension age, which is already at 67, by further restrictions on early retirements. Those in work will be made to pay higher pension contributions and health charges.

As well as some measures of taxing the rich more, VAT (value-added or sales), which attacks the living standards of the working class and the poor, will go up. The Greek government reckons this will raise €680m and next year €1.3bn.

In spinning the deal, the Greek economy minister, George Stathakis, concentrated on the increase in tax surcharges for “middle and higher income earners”, a levy on firms with a net income over €500,000 and a rise in corporation tax 26% to 29%. This will raise €2.6bn, according to Stathakis.

Andreas Payiatsos from Xekinima (CWI Greece) commented: “This deal will suffocate the economy. It meets all the budget demands of the Troika, imposing €7.9 bn worth of cuts in the course of the next 18 months, to pay the debtors, and the majority of this will be paid by the working masses”.

“Despite the spin by Syriza leaders, the deal is terrible for pensioners, workers and the poor. Syriza have abandoned their ‘red lines’. It is true that the deal does not hit wages and pensions directly, but they are doing it indirectly, by raising VAT and workers’ fees for social insurance funds.

“The Syriza government have tried to put more burdens on the rich, by increasing taxes, but these are meek measures and do not change the general disastrous situation for working people, those retired and the poorest.”

“The Greek government proposals will put the economy back into recession. Greece already lost more than a quarter of its national income since the crisis began and unemployment is officially at 26% (much higher, in reality, particularly given the mass exodus of migrating youth)”.

Syriza in turmoil

While welcoming Syriza’s U-Turn, the EU indicated they want even more cuts before the Troika gives new funds to Greece. Nothing is guaranteed but a deal could be agreed after a meeting this week of the Eurogroup finance ministers and later at an EU summit. The clear intention of the Troika is that Syriza not only caves in but is also shown to have failed in its anti-austerity programme. This is to act as a warning to all anti-austerity parties across Europe which may dare to contest the pro-big business agenda of the Troika.

Even before a deal is signed its consequences are being felt. “Syriza is in turmoil”, Andreas Payiatsos commented. “Even the Syriza-run radio station does not know what to say. Only right wing Syriza spokespeople went on the mass media to try to explain away the government’s abrupt climb-down.

Xekinima (CWI Greece) calls on the SYRIZA left in the Greek parliament to vote against any deal. Of course if the Syriza left does vote against the deal, the Tsipras leadership can rely on the opposition – MPs from New Democracy, PASOK, and The River – to make sure it is voted through. This would lead to a split in Syriza. But we are living through historic times and extreme hardship for the masses and the Left has to show that it can respond and break party discipline for the sake of being consistent and acting in the interests of the working class.

“The humiliating climb-down by Tsipras shows that trying to plead with the better nature of the representatives of EU governments and the Troika was always going to fail. Only by refusing to pay the unsustainable debts, introducing capital controls and nationalising the main industries and services under democratic public ownership, can austerity end for Greek people and a society for the many not the tiny elite start to be built”.

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June 2015