Frank Lee is encouraged by the landslide victory of Syriza in Greece but sees huge challenges ahead
The welcome electoral success of Syriza in the recent Greek election could be construed as a European Spring. Here is a party which is explicitly rejectionist in terms of the austerity policies which have been imposed upon Greece (and the southern European periphery) for the last five years by the IMF-EC-ECB troika. These policies have resulted in a 25% unemployment, 60% youth unemployment a debt-to-gdp ratio of 175% which at the beginning of the global crisis 2007/2008 stood at 105%, a 30% reduction in average income over five years, as result of this policy. Standard and Poor, the US credit rating agency recently gave Greece a B credit rating, a rating shared by Egypt and Pakistan among others, and only one notch higher the globe’s number one basket case, Ukraine, which comes in at CCC- i.e., junk status.
Self-evidently the strong medicine imposed by the troika has not been a runaway success, quite the opposite in fact. And this more than anything has led to the emergence of Syriza as the new government of Greece, armed with a radical mandate to end slow strangulation by austerity and change course.
However, this is where the problems are almost certain to arise. In our post-democratic age governments are no longer simply accountable to electorates for their mandate; they are also being judged from other quarters – namely, the markets. In the week before the election, capital flight meant that eight billion euros left Greece. In March, seven billion euros worth of debt will mature with menacing, guilt-worn clout. Almost certainly the debt/bond markets take a dim view of any radical programme which Syriza intends to carry out. This will be shown when the next bond auction reveals what sort of appetite international investors have for the purchase of these assets and the premium demanded.
Democracies now face two constituencies, their sovereign electorate below and their creditors above. Confidence of the market must be maintained at all costs, even if this means, and it frequently does, that the creditors take priority over the wishes of the national electorate. This has been amply demonstrated in Greece where all the bail-out monies did not go to the Greek people but to the corrupt and impecunious banking system. But IMF monies are never a free gift. In order to obtain these credits the IMF imposed what was virtually a Structural Adjustment Programme which meant that the costs of the bank bail-outs was borne by the ordinary citizens of Greece who were in no way responsible for the crisis in the first place.
Syriza have a mountain to climb with the full weight of neo-liberal, Bilderberg, global financial establishment arrayed against them. We must wish them luck. They will certainly need it. But most importantly Greeks needs solidarity by us working to change the course of economic policy in Britain and Europe and scrap the failed neoliberal economic model.
GSC Co-Chair Isidoros Diakides writes on the current German government’s position before the elections: “the German broadcaster Deutsche Welle ran a programme covering this week’s debate in the German Parliament about Greece. The debate was initiated by Die Linke supported by the Greens. (NB the two radical parties between them are getting consistently ic20% support in opinion polls in recent months). The initiators queried a recent Der Spiegel article that implied that the German Government was secretly preparing plans for a GREXIT if SYRIZA wins, which the German government had not refuted.
“Both the governing parties (Christian Democrats and Social Democrats): (a) refuted the allegations describing them as journalistic fantasies! (b) stressed that the German government is committed to Greece staying in the EU/Eurozone (Foregn Minister Michael Rott actually said that the government is confident that the current good relationship will continue and that there is no change in the position that Greece’s place is within the Euro). (c) stated that the German government will respect the decision of the Greek electorate and will work with whoever they elect, supporting their efforts to deal with the debt and work on the necessary changes to achieve sustainable growth, jobs and consolidation of public finances.
Frank Lee is a regular contributor to CHARTIST and writes on political economy, eastern Europe. This article is one of many produced under a shared banner with the Greek Solidarity Campaign.