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A successful 24-hour strike was held across Greece on February 24, 2010 against social-democratic PASOK government to make the workers pay for the capitalist crisis. Working people mobilised and participated in mass rallies organised by PAME (the All Workers’ Militant Front), regional trade union organisations, as well as hundreds of trade unions. The majority of the workers showed their opposition to the trade union federations in the private (GSEE) and public sectors (ADEDY). There demonstrations in 70 cities. A blockade of the Athens stock exchange building on February 23 by PAME played a significant role in the building and success of the strike. “Plutocracy must pay for the crisis” was the protesters' slogan. Their placards revealed: “Here is the money: the deposits of the enterprises were in 2004: 36 billion euros; in 2009: 136 billion euros. 250,000 workers receive a salary of 740 euros. At the same time, 700 billion euros are in the pockets of the big enterprises. PASOK and New Democracy (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 at the gates of the factories and other workplaces. In Athens, a mass rally was held at Omonia square, in the city centre. The chair of the trade union federation of workers’ in the printing industry, Yiannis Tolis, delivered a speech: “The forces of capital and its 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 European Union, as well as their instruments and the parties, have created a united front. They are mistaken if they believe that they can manipulate the peoples’ will, once it is on 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. The protesters then marched on the Greek parliament. Photos and story by the Communist Party of Greece (KKE).
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By Guy Rundle, Athens
February 20, 2010 -- “Got any thoughts on the bomb?”, I asked breathlessly down the phone to a veteran Athens politics-watcher. “There was a bomb?”, he asked. “The one at JP Morgan.” “Oh ... that bomb. Is that all?”
When a bank bombing occasions only mild interest, you know you’re somewhere else entirely. The device had gone off about 8.30pm on February 16 at JP Morgan Chase’s offices in the swish inner-city district of Kolonaki.
In traditional fashion, a warning had been phoned in a half-hour earlier, and the blast was small. The street was roped-off, and people stood around and waited for it to go off. The cinema round the corner continued to play a mild Greek sex comedy. I asked the ticket-seller if they had considered evacuating the cinema. She looked at me as if I was mad.
The anarchist bank bomb has become something of a tradition in Greece, but there hadn’t been one for a few months. With the country’s prosperity now at the mercy of the global bond market and the European Union, many are surprised there haven’t been more.
The Greek crisis, and the public protests and resistance to proposed government measures, are being presented on the world stage as further evidence of wild and crazy Greeks. However, many on the Greek left are disappointed at the level of protest, and take it as an indication that the smooth Euro-politics of “modernisation” is limiting the ability of Greeks to resist the plan to surrender sovereignty to the markets and the bureaucrats in Brussels.
The resistance is real enough, and so is the crisis.
On February 10, the entire public service came out on a one-day strike, with rallies across the country. On February 24, the whole country will come out in a general strike.
The protests are against a series of austerity measures proposed by the ruling PASOK party. The measures are designed to deal with a galloping deficit and a perception of economic bankruptcy on the bond markets, which has added billions to Greece’s interest bill on its public debt.
Announced by Prime Minister Georges Papandreou in early February, the moves include a freeze on all public service salaries and a reduction in the higher tier ones; raising the retirement age from 61 to 63; a crackdown on tax evasion in the cash economy; and public spending cuts. The moves have been on the cards since PASOK was elected in October, defeating the right-wing New Democracy (ND) government.
At that time the country’s dire economic position was becoming well-known — a decade of creative accounting on the public finances had concealed a deficit running at about 13%, and possibly higher.
Both the European Union and a number of global banks had actively assisted this process since Greece joined the eurozone in 2001, Brussels eager to expand the eurozone as rapidly as possible.
Euro countries are supposed to hold their deficits at 3% — few do — and to fill the potentially deflationary gap with “stabilisation” funds.
The theory is the unelected European Central Bank controls the money supply, the single currency encourages investment and the low deficits reassure the money markets that the currency is stable.
But the approach assumes a “level playing field”. The reality — that northern Europe is an economic centre, southern Europe a periphery — creates different results.
Though the euro has made a larger degree of capital inflow investment possible, it also caused a huge jump in prices. This has reduced living standards for a section of the urban and rural low-waged in a permanent manner. Manufacturing exports suffered, as did tourism, as places such as Turkey offered similar conditions for much lower prices.
Much of the new capital flowed into the consumer sector, with the centre of Athens becoming a chic European capital, filled with up-market chain stores that would not have found a sufficient market a decade or so earlier.
For Greece, investment-starved for decades, being drawn into this wider circuit of capital has had key benefits — one reason why Papandreou’s determination to appease Brussels has met with broad support. Nor has it created the inflationary bubble that has occurred, for example, in the Spanish property market.
But at a deeper level, it has stalled a genuine process of modernisation, pouring money into a society that retains high levels of patronage, inefficiency and organisational sclerosis.
Part of the reason for the wholesale rejection of the ND in 2009, which suffered a 10% swing against it, was its failure to tackle these problems, buying votes with an expansion of the bureaucracy and the use of stabilisation funds to reward favoured rural areas.
The persistence of such arrangements extends to tax. As much as a third of the economy is on a cash basis and untaxable — yet is also counted in the GDP as a way of making public expenditure seem less daunting.
The day after the public service strike, the taxi drivers came out, protesting at a government requirement that they issue receipts. Though the drivers’ association leader spoke of opposing the “global neoliberal agenda”, there was less sympathy for a whole sector paying no tax.
Indeed, the taxi-drivers’ strike illustrates the contradictions of the current Greek situation, and the social and economic divisions. On the one hand, a taxi-driver’s margins are small. As everywhere, it is a tough way to make a living.
On the other hand, many waged workers subject to tax also have to work the 10-12 hours a day that many in the cash economy are also subject to, limiting sympathy.
The public service is a third area in its own right — in a country with threadbare social services, civil service positions have traditionally been a way of gaining solid support within a family network. But at the same time, they occupy an ambiguous position as representatives of the Greek state.
“Greeks and the state — fehhhhh”, says Stavros, in a cafe in the boho Exarchia district on the afternoon of the February 10 strike. “The public servants will never get broad public support, because a Greek feels distant from the state.”
With a half-century of dictatorship, war and repression up to the 1970s, activities such as the extension of tax-gathering powers — and the degree of financial surveillance that comes with it — have another edge to them.
Tellingly, the February 10 strike saw two rallies: one by the public servants, led by their fairly conservative union, and a separate one by the Greek Communist Party (KKE) and the far left.
For the KKE, which controls 21 seats in the 300-seat parliament (a smaller left coalition SYRIZA has a further 13), the financial crunch is both an opportunity and a dilemma.
An opportunity because PASOK has identified itself thoroughly with the process of economic restructuring, and therefore the cuts, which will last at least three years on the EU timetable.
A dilemma because its left-nationalism, identifying the EU and the euro with NATO and the Western centre, seems archaic and fails to acknowledge the real and visible growth that has occurred over the past decade.
With no alternative model of development visible, many people accept Papandreou’s analysis — that the old ’80s PASOK approach of a public-funds dependent development locked the country out of investment flows.
Also in difficulty is Synaspismos, the largest party in the SYRIZA coalition, a break-off from the KKE in the ’70s that adopted a pro-European euro-communist model. The anti-democratic EU is not what Synaspismos had in mind as the “social Europe” it wished to see — and which now seems a pipe-dream.
For a broad middle-sector of Greek society, Europe is attractive precisely because it has offered a new consumerist economic tier.
“This is the start of something, not the end of it”, former KKE MP Dimos Kombounis told the British Guardian.
The KKE is counting on the not-unreasonable assumption that the steady rounds of cuts over the next few years will hit a majority of the population — and unify disparate sectors in opposition to government austerity.
Youth unemployment is high, and the boom has favoured the generations unevenly. The countryside has fallen further behind the city.
Should Europe’s struggling economy collapse into a second-round of recession, the Greek economy will be hard hit. There will undoubtedly be more bombs, but they are a distraction and a sideshow. What makes Greece interesting is the question as to whether the combination of the crisis of global capital with a well-organised residual left could make it a place from which a rallying point against the weakened and stumbling neoliberal vision might occur.
[Guy Rundle is the British and European correspondent for Crikey, and a former editor of Arena mjagazine. This article first appeared in Green Left Weekly, issue #827, February 24, 2010.]
By Rick Wolff
Global capitalism imploded in 2007. The central causes of capitalism's crisis include:
- the end of real wage increases in the US and the substitution of rising worker debt far beyond what workers could sustain;
- the buildup of excess global industrial capacity;
- the explosion of speculation and excess risk-taking by banks, other financial and non-financial corporations, and the rich;
- the systematic misrepresentation of credit risks by capitalist rating firms;
- the failure of supervision and regulation by governments increasingly dependent on corporations and the rich (for campaign contributions, lobbyists' supports, etc.) over the last quarter century;
- the growing indebtedness of governments;
- the huge imbalances between trade and capital flows among nations (and, above all, the trade deficits of the US and the trade surpluses of the PRC)
In this list, the role of Greece is minor almost to the vanishing point. But Greek workers loom large among the proposed victims of the capitalist crisis they did not cause.
When the global capitalist crisis hit in 2007, Greece like most other countries boosted its deficit finance. It had already been running high government deficits largely based on very rosy predictions of Greece's economic prospects given its low (for Europe) wages and rising productivity in the years before 2007. So Greece has borrowed a lot (although other countries who borrowed more and for similar reasons are not -- yet -- being treated like Greece).
The problem for Greek national debt is that other, larger, richer capitalist nations -- those whose capitalists' actions were the leading causes of the global crisis -- have also vastly increased their borrowing. Lending to the latter is far safer than lending to the poorer, often more indebted countries like Greece, Portugal, etc. So lenders are requiring them to pay much higher interest rates just to meet their current debt obligations (and they probably need to borrow more, just like other countries, to avoid another nasty recessionary downturn). Lenders are also threatening to stop lending unless these poorer countries lower the ratio between their debt and their GDP (the widely used measure of the country's total output and thus its ultimate ability to pay back its debts).
To make the billions in extra interest payments and/or to lower their outstanding debt, governments in countries like Greece would have to raise taxes on their people or cut spending on their peoples' needs or both. Those steps would provide those governments with the funds to pay higher interest rates on their debt and lower the total of outstanding debt.
In simple English: the global capitalist crisis first brought an economic downturn to Greece, and now the "recovery" seeks to impose on the Greek people an indefinite period of economic suffering as global lenders provide funds to the richer, larger capitalist economies elsewhere so that they can avoid what is demanded of the Greeks. The same leaders of business and government who produced the crisis are managing the "recovery" in just this way.
Nor should we fail to mention that the Greek government and its business leaders are now forced to make a big decision too. Will they go along with the plan? Will they force the mass of Greek workers and their families to pay higher taxes, earn lower incomes, and lose government services to "service Greece's creditors"? Or will they be blocked from doing so by the Greek peoples' resistance? That's what is at stake in the mass strikes now rocking Greece.
And how might that resistance handle matters differently? In the immediate future, they might finally demand an end to the massive evasion of Greek taxes by its billionaire and millionaire elite on both their corporate and personal accounts. Let them finally pay -- according to their exalted abilities -- to service Greece's creditors. However, given their equally notorious mechanisms of tax evasion, honed over centuries, it would be better -- and sooner rather than later -- to abolish private Greek enterprises and reorganize them as worker-controlled enterprises sharing power with the government. Their joint project would then be to produce a "recovery" not just from this particular capitalist crisis but from the system that reproduces capitalist crises every few years.
Such a Greek resistance might also stimulate and inspire parallel movements in other countries whose people are likewise boiling because they bear the costs of a crisis they did not cause and a "recovery" that is not theirs. And so it should be, because the Greek resistance would need allies elsewhere to succeed and vice versa. Capitalism's global crisis is a burden for the working classes of the world, but it is also an opportunity. To suffer the former while missing a chance to grab the latter would only make this crisis yet more tragic.
Rick Wolff is a Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York. He is the author of New Departures in Marxian Theory (Routledge, 2006) among many other publications. Check out Rick Wolff’s documentary film on the current economic crisis, Capitalism Hits the Fan, at www.capitalismhitsthefan.com. Visit Wolff's Web site at www.rdwolff.com, and order a copy of his new book Capitalism Hits the Fan: The Global Economic Meltdown and What to Do about It.
February 10, 2010
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Sweeping budget cuts by the Greek government have provoked a fightback by labor unions and students. Tax collectors have already called a 48-hour strike, to be followed by a strike by all public sector workers set for February 10, even as the government demands a 5.5 percent wage cut for public employees. The national trade union federation has called a general strike for February 24.
But the far right is mobilizing, too. Hundreds of neo-Nazis, who have escalated physical assaults on immigrants in recent months, rallied in Athens February 6 to protest a proposed law that would grant citizenship to Greek-born children of immigrants.
, a member of International Workers Left (DEA) in Athens, looks at the background to Greece's economic and political crisis.
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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.
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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.
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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.
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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.