Grécia. Como é possível ganhar a guerra depois de se terem perdido todas as batalhas ?

A recente vitória eleitoral de Syriza alterou claramente o cenário político institucional na Europa. Propulsionou para o centro do debate político e económico a questão da dívida e do seu significado social. Nas sociedades da Europa periférica, os limites da austeridade e os limites da política e da economia revelam-se interdependentes. São os contornos do futuro que o sistema nos impõe. Cenário ao qual só escaparemos na eventualidade de um vasto, profundo e radical movimento de contestação da lógica económica actual, alternativa que de momento não parece visível mas que não é impossível. Com efeito, como o sugeriam há pouco uns “antipáticos” lisboetas, o desconhecido e o imprevisível são sempre possíveis. O resto são compromissos, é a Política, mar fechado, sem marés, no qual Syriza parece, desde já, navegar.

O texto que aqui se dá a conhecer foi escrito por um jovem grego que participou durante vários anos, entre 2010 e 2012, no movimento social contra a austeridade, movimento que foi finalmente vencido após ter ele próprio provocado a queda e a decomposição do Pasok (Partido socialista grego). Emigrado hoje nos Estados-Unidos, Cognord, expõe numa revista de New York (http://www.brooklynrail.org/2015/02/field-notes/is-it-possible-to-win-the-war-after-losing-all-the-battles) uma análise que nos parece pertinente, decerto discutível, sobre o sentido da vitória eleitoral de um partido que, de 2009 a 2015, passou de 3% dos votos a mais de 30 %.

Duas ideias principais do seu texto ajudam-nos a compreender melhor o que se passa, os limites e as perspectivas da situação actual.

1)     O Syriza nunca foi um partido explicitamente anticapitalista ou com propostas anticapitalistas. Será portanto fútil tentar fazer a sua crítica, presente ou futura, nesses termos ou mesmo em termos de um eventual abandono ou traição de posições radicais que o Syriza nunca defendeu.

2)    A subida ao poder de Syriza não é o resultado do movimento que o precedeu, das lutas sociais contra a austeridade capitalista. Pelo contrário, a vitória eleitoral de Syriza deve ser vista como o resultado da derrota do movimento que o precedeu, o qual este partido teve um papel reduzido. O seu crescimento eleitoral é mais a consequência da decomposição do partido socialista do que de um alargamento da sua pequena base de origem. Como diz C., «o Syriza representa para muita gente a última esperança de um corte nas medidas de austeridade».

O que virá a seguir terá, sem dúvida, uma relação com estes dois parâmetros.

O texto está em Inglês e, mais uma vez, aqui fica expressa a frustração de não o podermos dar a ler a toda(o)s. Faz-nos falta uma língua universal !

Is it Possible to Win the War After Losing All the Battles? 

Prehistory of a Success

The announcement of national elections in Greece, roughly two years before the coalition government of New Democracy and Pasok completed their term, immediately sparked a renewed interest in this southern and economically peripheral European country. The relative silence that preceded this novel attention for the last two years was, at least in media terms, understandable. If Greece enjoyed an earlier moment of fame, it was primarily due to the unprecedented austerity measures imposed by the troika—the European Commission, European Central Bank (E.C.B.), and International Monetary Fund (I.M.F.)—in exchange for new loans, designed to “assist” the Greek state after it officially announced, in April 2010, that it was unable to repay its existing, “non-viable” sovereign debt (120 percent of G.D.P. at the time). The reactions to the implementation of the austerity program were also pivotal in bringing Greece into the spotlight: general strikes, violent demonstrations, and the movement of the squares ensured, between 2010 and 2012, that the future of Greece’s “fiscal consolidation program” (to borrow the official economic jargon) was seriously threatened. Along with the memorandum imposed by the troika, what came under attack was the legitimacy of the political system,¹ generating wild speculation about the future of Greece’s membership in the Eurozone, as well as the unpredictable consequences this could have for the E.U., not to mention the global economy.

However, the movement which tried to halt the austerity program failed. The reasons are varied, and it is not within the scope of this article to explain them in detail. Suffice it to say that, as in every other social movement, this failure should be traced to both the violent determination of the government(s) to proceed with austerity at all costs (for which the ruling factions have paid a price) and the inability of the movement to transform itself from a defensive mobilization to protect existing conditions into an offensive attack on the conditions that created the crisis.

Nonetheless, the attention that Greece received was justifiable. Without exaggeration, one could argue that many of the political strategies of resistance which the international left has only read about in books were tried and tested in Greece in the years after the crisis: general strikes with massive participation, bringing economic activities to a halt; militant and violent demonstrations with constantly growing numbers of participation; neighborhood assemblies that sought to act as minuscule formations of self-organization, attempting to deal with immediate issues caused by the crisis; one of the most militant squares movements, which managed to call for two successful general strikes; a climate of continuous antagonism that gradually but steadily involved more and more people.

It is, however, no exaggeration to say that none of these inspiring moments managed to counteract the effects of the crisis and its management by the state. However exhilarating, promising, and tense these outbreaks were for those of us who participated in them, it has become imperative to understand their failure to achieve even a small (however reformist) victory.

In official terms, the crisis has only become worse in the last years. Overall unemployment has risen to 27 percent (from 12.5 percent in 2010), primarily hitting young people (60.6 percent for those aged 17 – 25); wage cuts across the public sector are between 30 and 40 percent, while in the private sector the number is only slightly lower (25 percent on average).² Small businesses (the backbone of the Greek economy, constituting around 95 percent of all business activity) have been devastated by the crisis and the austerity measures (more than 250,000 have been closed), while cuts in the Health and Education budgets amount to more than 25 percent. Total G.D.P. losses amount to 24 percent, while despite these cuts (or, as some would say, as a result of them), state debt in Greece has dramatically risen from 120 percent in 2010 to 176 percent of G.D.P. today.

Unofficially, the situation is much worse. In the last two years, on top of reduced wages or forced unemployment, a nearly destroyed health system, and the alarming rise of neo-Nazis as significant players in the political landscape, people have had to live with the defeat of a social movement which gave many participants the hopeful feeling of making a leap into the open air of historical change. It was the disappearance of these antagonisms, followed by generalized feelings of disappointment and depression, that should serve as the background against which the recent elections should be considered. It is precisely the failure of the social movements to counteract austerity and the brutal devaluation that brought Syriza to today’s position. And while Syriza likes to present itself as the continuation of these movements, it is more accurate to explain its strength as a result of their weakness.

In this context of defeat, Syriza had come to represent for many people the last hope for any alleviation of the effects of austerity. This is also the line that has been predominantly adopted by the left media in Greece and abroad. A bombardment of positive and enthusiastic articles and reports in the last few weeks in left and progressive media outlets have created an atmosphere almost implying that Greece is in the brink of a social revolution. This is, however, quite clearly not the case.

Having said that, it makes no sense to critique Syriza and its program on the basis of abstract criteria of radicalism, anti-capitalism, etc. The reason is quite simple: Syriza is not, and never has been, an anti-capitalist party. It was never part of its program, its understanding of the world, and its expressed policies to question the capitalist system or its political representation. To say this is not to attempt to discredit Syriza, but to give an honest evaluation that takes into consideration Syriza’s own self-understanding, its historical role, and its practice as a parliamentary party within Greece’s political spectrum. It is beside the point to argue that Syriza has betrayed or fails to deliver a program that was never part of its politics in the first place.³

What is needed is not an analysis on the basis of a non-existent theoretical framework (Syriza’s supposed radicalism), but a sober understanding of the historical context of Syriza’s rise to fame, the objective forces that it is facing, and its own proposed remedies. It is only in this way that one can have a clear idea of what is at stake. Ideological battles and straw-men are clearly pointless at the moment.

Basic Banalities

Until 2009, Syriza was an insignificant player on the Greek political scene. It barely made the 3 percent threshold required to enter parliament, something that seriously undermined its influence within that institution. But things were not much better outside of parliament. For those of us who have been active in the Greek left and radical scene for more than 20 years, Syriza was never a force to be reckoned with. And though Syriza repeatedly attempted to draw forces away from social movements towards its parliamentary aspirations, none of these attempts were ever successful.⁴

It was only after the elections of 2012, which marked the downfall of Pasok as the government responsible for initiating the troika bailout and austerity program, that Syriza suddenly found itself with 17 percent of the votes, a result that caught everyone by surprise—even Syriza members themselves, who would have been content with 7 ­– 8 percent. It was then that Syriza first started contemplating the possibility of forming a government and started understanding that, from now on, what they formulate as policies will have to be realistic and realizable.⁵

Mesmerized by its unprecedented rise in the electoral ranks, Syriza used every opportunity to build support, widen its social alliances, and prepare itself to create the first left-leaning government in Greece since Pasok’s victory in 1981. However, as is the case with every left-wing party, Syriza is very suspicious of social movements that it cannot directly control. Thus, in parallel to the increase in its electoral support, Syriza took care not to support outbreaks of social antagonism, even at moments when those seemed in a position to bring the government down and put a halt to austerity, as they continually promised.⁶ The official explanations by Syriza officials in relation to these incidents was typical: denying any wrongdoing, Syriza hid behind the excuse that “the people” (this abused and nonsensical phrase) were not ready for an escalation. A more intelligent approach would be to recognize that a political party which sees parliament as the center of political activity is not interested in allowing the uncontrollable and radical potential of a social movement to determine developments or its policies. Today, almost two years after the last expression of street-level subversion, Syriza can sweep the floor and capitalize on the defeat of a movement, content with the thought that the majority of people have shown that they prefer to place their hopes in political representation rather than their own activities.

Instructions for Contemporary Social-Democrats

Trying to find out what exactly Syriza has planned for the day after the elections is, however, no easy matter. Looking at the various statements and proclamations of Tsipras, Syriza M.P.s, central committee members, and sympathizers, one could easily drive oneself crazy trying to extract a coherent position from an abundance of contradictory and self-refuting opinions. (This is something that the right wing tried to capitalize on in order to show that Syriza has no program after all.⁷) However, because Syriza will be forced to deal with the real economy, its European counterparts, and the global economic system (and not some imaginary movement), Syriza’s proclamations when addressing exactly those is a relatively safe way to understand its actual policies.

The main thrust of Syriza’s political and economic program, as its spokesmen spelled out at the Thessaloniki Expo in September 2014 (and have repeated ever since), boils down to four key points: first, the immediate management of the humanitarian crisis in Greece; second, immediate measures for re-boosting the economy; third, a national plan for “regaining labor”; and finally, an institutional and democratic restructuring of the political system. These programmatic theses require, according to Syriza, that certain things be in place: a restructuring of Greece’s sovereign debt; a direct connection between loan repayments and growth; a disentanglement of public spending from the memorandum agreed to with the troika; and a European “New Deal,” i.e., the introduction of Quantitative Easing by the E.C.B.

The program for dealing with the humanitarian crisis aims at tackling some of the devastating realities of post-memorandum society, by reconnecting electricity and providing food vouchers for 300,000 families; providing free healthcare for all; ensuring housing for all; and supporting low-income pensioners. The plan to regenerate the economy rests on an ambitious program of restructuring the tax system to ensure the collection of unpaid taxes; an immediate stop of foreclosures (for the main house of a family); the abolition of the recent heavy tax on property; the writing-off of debts (36 percent according to banks) with no possibility of repayment; the return of the minimum wage to 751 euros monthly, something that is supposed to increase G.D.P. by 0.5 percent. The idea of “regaining labor” has to do with the return of pre-memorandum work relations, and in particular the re-introduction of collective bargaining and an end to unlimited lay-offs; and the ambitious creation of 300,000 new jobs and 300,000 unemployment beneficiaries. Finally, in terms of the democratic restructuring of the political system, Syriza aims at abolishing M.P. privileges, a thorough examination of the licenses of the mainstream media, and the reopening of the state television (E.R.T.).

Leaving aside certain (quite important) details⁸ and the parts of the program that concern the “democratization” of the political system, an immediate question concerns the exact cost of this program and where the money is going to come from. According to Syriza’s own calculations,⁹ the cost of this program is 11.36 billion euros. And where will the money come from? This is where it gets difficult.

Captive Words

There are two main pillars upon which Syriza plans to finance its program: debt restructuring and the introduction of Quantitative Easing. Not surprisingly, these are the most controversial aspects of the forthcoming negotiations.

1. Debt restructuring: At the moment, Greece’s sovereign debt is at around 176 percent of G.D.P. (around 321 billion euros). The interest that this debt creates is paid by the new loans that the troika provides, since the Greek economy does not produce a surplus. This means, among other things, that in relation to the budget of the Greek state, both the debt and its interest are irrelevant. The question immediately arises: Why is it then important to reduce the debt? The answer to that was given by Giorgos Stathakis, chief economic policy maker for Syriza:

The markets do not lend to Greece because the state debt is non-viable. Since, in order for Greece to repay the debt, a surplus of 4.5 percent is needed, it is clear that we cannot achieve any growth within this framework. It is that simple and understandable, and our international colleagues know this. Thus, when the debt is rendered viable again with a deal that a strong Syriza government will make, the markets will start lending to Greece at reasonable interest rates.¹⁰

Do you get it? The master plan behind the idea of debt reduction is to allow Greece to borrow again, and thus increase its debt.¹¹ Genius.

But even if we accept this lapse of reason, other problems arise. Why would the troika agree to restructuring and give Greece the opportunity to ease the debt burden? This topic has received a lot of attention and responses vary significantly. On the one hand, we have a chorus that explains that debt restructuring is entirely out of the question, adding that Greece should feel lucky that any money is actually given in order to save it from complete bankruptcy. This is a view shared (officially) by the German government, and the right-wing government in Greece. On the other side, we have the argument that debt restructuring is absolutely necessary for Greece to exit the downward economic spiral. Plus, the argument goes, “debt restructuring” is not a bad word. It has been done many times before (Syriza’s favorite example is the 1953 write-off to help Germany’s economic recovery) and it is considered by many economists as imperative to avoid default and to boost growth. This position is held, among others, by numerous economists and Syriza.¹²

Leaving aside these primarily ideological debates, the truth is that it is not entirely unlikely that the debt could be restructured (as it was before, in the far distant past of 2012), and the main reason is that everyone knows that its actual full repayment is more or less impossible. But—and this is the key point—as in 2012, this restructuring will probably occur in a way that ensures the lenders’ finances,¹³ and with a clause that requires some form of austerity to continue (even if it gets a more catchy name like “national reconstruction plan”). At the moment, and because the enthusiasm of the left seems to require a counter-argument from the right, debt restructuring is proclaimed by the E.U. to be unimaginable. But, reading between the lines, it seems that the E.U. is willing to consider a generous extension, which for anyone not completely confused by economic jargon, essentially means the same thing.

2. Quantitative Easing (Q.E.): The idea is simple. What is the most important means by which harsh austerity and economic restructuring is imposed on Greece by the troika? Sovereign debt. Greece’s inability to finance the repayment of previous loans or bonds means that the markets are unwilling to lend money to Greece. Given that within the eurozone and the euro currency Greece is not able to devalue, default, or do something similar (as Argentina or Iceland did), the Greek government should be given the money to repay its loans from the I.M.F. and the E.C.B., in exchange for a “consolidation” program, i.e. austerity.

If Greece was in a position to create a surplus, issue new state bonds, sell them to the E.C.B., and finance its repayment scheme (with a generous extension in place), there would be no need for austerity. Syriza would thus be in a position to decide exactly what it wants in terms of the internal budget, allocate spending and income on the basis of its own agenda, and even re-enter the market with new bonds. Quantitative easing is, however, premised on exactly this idea: that the E.C.B. will purchase state bonds, lock them away in a dungeon in Brussels, and forget their existence. It is for this reason that the economic powers pushing for austerity and restructuring (with Germany at the lead) specifically rejected the possibility of Q.E., as it would cause them to lose the bargaining leverage they have for imposing these policies.

The January 22 announcement by Draghi (head of the E.C.B.) that the E.C.B. will actually introduce Q.E. in the eurozone, a program which will engage in sovereign bond purchases, does indeed mark a relative change of policy in the eurozone.¹⁴ But the devil is in the details, and one had to sit through the Q&A session after the announcement, to hear Draghi explain what everyone more or less suspected: Greece will not be part of this Q.E., or at least, it will participate only to the extent that it keeps implementing the measures spelled out by the troika.¹⁵

We see that both pillars of Syriza’s financing program from external sources, though not necessarily unrealistic in themselves, are premised on a continuation of austerity that undermines any enthusiasm for the future, at least in terms of the forthcoming negotiations. And it becomes more and more obvious that at a political level, some agreements can be made (allowing Greece in the Q.E. program and renaming debt restructuring “extension,” in exchange for a certain continuation of austerity) allowing both parties of the “negotiation” to save political face and appear as victors.

The question then arises, how Syriza will be able to justify such a deviation from its anti-austerity program. The internal financial problems shed some light on this. To begin with, for Greece to be able to sort out its economic chaos, a balanced budget is absolutely critical. And though Samaras’s government (with the assistance of the European Commission) announced a surplus budget in April 2014, in reality no such surplus existed.¹⁶ As a result, the budget at the moment is (more or less) at 3 billion euros, an amount that has to be found immediately, before Syriza even starts contemplating how to secure the funds for its €12 billion program. On top of this three billion euros, Greece has to come up with 31 billion euros to meet old and new loans from the troika (shared by the I.M.F. and the E.C.B. and maturing between late February and August 2015). So where will Syriza get the money for all this? The answer is not easily found. And most probably, the reason is that there is no answer. Syriza’s own plan, so far, for securing these funds consists of reforming the tax system; attracting foreign investments and encouraging private ones in order to generate growth; and increasing the minimum wage.

The problem with these proposals is manifold. On the one hand, a reform of the tax system could potentially secure some funds but it is a strategy that many governments have promised without any success. But even if Syriza did manage some tax restructuring, it would take a minimum of two years for this ambitious idea to produce actual income for the state. And in terms of growth, it remains to be explained how foreign or private investment will proceed when banks have stopped issuing (or are unable, in the case of Greek banks, to issue) new loans. Last but not least, even in its most optimistic scenario, the increase of the minimum wage only affects a small part of the workforce, its contribution to G.D.P. is minimal, and it raises the uncomfortable question of what will happen to the rest of the wages. If we trust Stathakis’s claim made almost a year ago, they will be frozen at today’s levels.

The Explosion-Point of Illusions

In terms of the negotiations with the E.U., Syriza has made clear that it wishes to remain within the eurozone; it has clarified that it will not make any unilateral decisions—it knows that it needs the E.U.’s money to keep coming; and all that while renegotiating the terms of the bailout. At the same time, to its voters and to the left, it has promised a (minimal but still ambitious) semi-Keynesian public spending, low-income-support, job-creating program, without taxing the rich or redistributing wealth.

It is clear that it is not possible for both of these scenarios to play out. For a negotiation to take place, both sides need bargaining cards. Syriza does not have one. But what it does have is the certainty that nobody in Europe wants a chaotic situation, the possibility of Greece exiting the eurozone,¹⁷ or the uncertainty that would emerge from such drastic changes. If we add the fact that, upon closer examination, none of Syriza’s internal policies (that some people wish to present as radical, but in actuality seem to have a scary resemblance to the first memorandum agreement of 2010¹⁸) are such as would prompt the E.U. to interpret Syriza’s government as, for example, Jacobin presents it, the situation becomes somewhat clearer.¹⁹

In line with Europe’s strategy in the crisis so far (i.e. kicking the can down the road), and far from the enthusiasm that sees Syriza’s victory as a turning point against European austerity, the following months will most likely be characterised by a cat and mouse charade: Syriza will ask for more time to re-adjust its program to the economic chaos it inherited from the previous government; it will ask for more time for Q.E. to reach Greece; it will ask for more time until their (only) ally in Europe (the Spanish Podemos party) actually wins an election in December 2015 (if it does). In the meantime, it can implement a few spectacular policies that will be empty of actual content (such as the increase of the minimum wage) to give the impression that it is actually changing things. And if the E.U. has decided to play along (and so far they seem to be on board), they can extend the same courtesy to Syriza as they did to New Democracy and create an atmosphere of economic recovery with fictitious surplus budgets and exits to the market. Meanwhile it seems that a certain form of austerity will continue, but in a way that only a left-government could get away with.

by Cognord

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NOTES

1. Between 2010 – 12, the social movement that emerged significantly challenged politics as a separate activity. It was not only the parliament that was consistently seen as a legitimate target (with its MPs harassed, even violently, whenever seen in public), but also traditional institutions of mediation (such as trade unions, the mass media, etc.) which saw their ability to create consensus seriously undermined. Syriza, however, worked in the opposite direction: An endorsement of a critique of existing political institutions and their legitimacy would be entirely contradictory and nonsensical for a parliamentary political party. And as soon as the possibility of forming a government started becoming increasingly realistic, Syriza did its best to forge alliances with representatives of the existing power mechanisms. Keeping in mind that private sector wages were significantly lower than the public sector.

2. There have been, of course, some grandiose statements by Syriza members. See for example, S. Kouvelakis’s interview on the history of Syriza in the January 2015 issue of Jacobin or Milios’s statements about how Syriza is a “Marxist” party published in December in Berliner Zeitung (in German). But these are selective statements, made to outlets who already support Syriza, and are aimed at discussions within left-wing circles and expectations.

3. Before the 2009 elections, Syriza tried to draw support from the previous December uprising, centering its propaganda around the slogan “from the streets to the ballot box.” The result was embarrassing, and yet indicative of Syriza’s influence: 4.13 percent of the votes, almost 1 percent less than in the elections of 2007.

4. It is interesting to note that the spectacular jump from 4 percent to 17 percent was made with a relative semblance of radicalism. Syriza comprehended that a large part of the population in Greece was expressing its anger against austerity, the troika agreements and the political apparatus as it stood. It thus adopted a harsh rhetoric calling for a unilateral refusal of the memorandum agreements, a rejection of austerity measures, and a call for an end to the continuous devaluation of the Greek economy. But the more Syriza’s percentages grew, the more this rhetoric was replaced with more “sober” and Realpolitik announcements. At the same time, Syriza started attracting Pasok’s disgruntled voters, inheriting in this way the people and mechanisms that Pasok’s almost 30-year rule had created.

5. The two most obvious examples were the proposed teachers’ strike and the shutdown of State Television (E.R.T.) in the summer of 2013. In the first case, a planned strike by teachers during the highly important national exams was pre-emptively made illegal by the government, who pledged at the same time that if the strike went on, the government would resign. Though more than 90 percent of local teachers’ unions defied the threat and voted to go on strike, the (Syriza-led) central union cancelled the strike claiming “conditions are not ripe.” A couple of weeks later, when E.R.T. was suddenly shut down, the shock wave brought thousands of people in the street, making it impossible for the government to stop the broadcasting which immediately transpired. With State Television on its side, Syriza could have at least enjoyed a pre-election campaign with unconditional support from the largest broadcaster of Greece, which had been occupied and promptly transformed into an outright anti-government propaganda mouthpiece. Alexis Tsipras was invited on the first days of the occupation to appear, and asked to explain Syriza’s policies to the 2.5 million viewers (the highest number ever reached by E.R.T.). His answer was indicative: “this is not the time.”

6. Of course, this line of argument contradicts the equally dominant one that Syriza actually has a program, but one that necessarily means that Greece will be forced out of the E.U., the drachma will return as currency, Greeks will have no toilet paper to wipe their ass, and Satan will prevail. But then again, pre-election periods are hardly benchmarks of consistency.

7. Electricity will be reconnected only after applicants arrange a repayment-through-installments deal with the electricity company, with Syriza guaranteeing to pay the first installment. Applicants have to prove their “poor” status by submitting detailed tax statements. The same goes for the program for ensuring housing: Syriza will subsidize rent, at three euros per square meter. Moving on, the restructuring of the tax system has been promised by every single government ever since the creation of the Greek state, leaving little hope that this time round it will be successful. Foreclosures on people’s homes have not actually been carried out so far. A law forbids them until January 2015, but the main obstacle for implementing foreclosures is the banks themselves: if a bank declares a loan as non-refundable, they have to add it to their losses, thus increasing their overall bankrupt state. The return of the minimum wage only affects 10 percent of the workforce (and the latest agreed number was 640 euros not 751 euros), out of which those on part-time employment will see a 70 euros per month increase. The exact explanation why this measure will increase G.D.P. by 0.5 percent is nowhere to be found in Syriza’s texts, and it seems that it is nothing but wishful thinking. Lastly, it is unclear whether collective bargaining will be re-introduced immediately or gradually in the next 4 years. However, the creation of 300,000 new jobs plus new unemployment beneficiaries is clearly a long-term plan for the next four years.

8. For those who can read Greek, the cost of Syriza’s program is systematically analyzed at www.left.gr/news/i-kostologisi-toy-programmatos-toy-syriza. Unfortunately, the source of funding for this cost do not receive a similarly detailed expose.

9. G. Stathakis, interview in Naftemporiki, December 22, 2014.

10. Assuming for a second that the troika agrees to reduce Greece sovereign debt from 176 percent of G.D.P. to 100 percent, i.e. a 50 percent reduction and assuming that repayment is given a low rate of 2 percent, interest repayment reaches a 3.5 billion euros per year. Since Greece has no surplus, it will have to borrow money to repay that. In just 4 years, an additional 14 billion euros will be added to the sovereign debt.

11. In reality, the concept of “sovereign debt” is nothing but a useful ideological tool of economic discipline, that only has effect in special situations, such as the eurozone, where states share common currency (but not common monetary policy) and are thus unable to devalue or default on existing debt. Similar to other economic theory jargon, “sovereign debt” is irrelevant to the extent that the economy has the ability to generate growth. In fact, most economically advanced countries in the world enjoy large sovereign debts (U.S. is now at 75 percent of GDP, Japan is at 214 percent, Italy at 124 percent, France at 90 percent, and Germany at 87 percent), without this ever translating into austerity and harsh consolidation programs.

12. The 2012 P.S.I. agreement (the official term given for debt restructuring) was structured in such a way that it essentially swapped old bonds with new ones, with the burden falling on Greek insurance funds who suffered immense losses (the Journalists’ Fund, for example, lost around 50 percent of its assets) without even been given the choice to participate in the swap. Apart from that, the end result was in fact an actual increase in sovereign debt.

13. In this context, and because Syriza had already said that the introduction of Q.E. is part of its own plan for financing its anti-austerity program, Draghi’s announcement was greeted positively by Syriza. In fact, it was New Democracy that was further ridiculed, because Samaras had said that Q.E. is a stupid idea that will not become E.C.B. policy—furthering the impression that New Democracy was more out of touch with the E.U. than Syriza.

14. Since participation in the Q.E. program will be proportionate to each state’s contribution, assuming that Greece (with a 2 percent contribution) is given the chance to participate it would be entitled to 1.2 – 1.7 billion euros per month or 34 billion euros per year, since Draghi said that Q.E. will start gradually, with 60 billion euros each month. What was not announced, however, was what percentage of the 60 billion euros will go towards purchasing state bonds or other assets. An informed guess would say “not that many,” but feeling generous, let us just say that half of that will be in fact used for state bonds. That means, for Greece, 17 billion euros per year (0.6 ­– 0.8 billion euros per month). In a more realistic scenario, these 17 billion euros will actually be used to buy already issued bonds (Draghi clarified that), which probably means that they will be used to buy Greek bonds which are now in the hands of foreign banks who are trying to get rid of them.

15. The surplus was actually calculated using non-traditional measures, excluding a number of crucial payments that should have been made. The economic spokesman of the E.C. admitted that a certain “leeway” was given to Greece, making it clear that the decision to confirm a surplus was a political one. It bought time for the Samaras government, while at the same time giving the possibility to Germany to claim that there is “light at the end of the tunnel of austerity.”

16. Regardless of the official statements of Germany about the ongoing risk of a Greek exit, the fact is that no one is in a position to estimate the consequences that such a move would have for the E.U. And since neither Syriza nor anyone else has any willingness to dive deep into the waters of uncertainty, it seems more likely that a common agreement will be found.

17. The first memorandum was focused on a restructuring of the tax system, labor reforms that would attract foreign investments, generous support for the bank system, E.U. loans that would eventually allow Greece to re-enter the markets, and a clause on being especially sensitive to low-income/poor families. Sound familiar? With the exception of wage cuts (Syriza will not cut wages, but will not raise them either), the rest could well have been taken out of a Stathakis interview.

18. The announcement that Syriza will form a coalition government with the Independent Greeks (a far-right, anti-immigration, and anti-Semitic party) as a result of its failure to secure an absolute majority, simply on the basis of its anti-memorandum rhetoric, is already an embarrassing development.

Contributor

Cognord

COGNORD is unfortunate enough to have been born in Greece, and fortunate enough to have participated in the social movements which attempted to put a halt to the capitalist devaluation of that country. Shortly after the farewell party of the movement (the magnificent general strike and intense riots of February 12, 2012) he left Greece and settled in a cold place. Occasionally, he writes articles about his native land.