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Greek European deal: where are we? by Paul Mason Channel 4 News March 2, 2015 The European deal done six days ago was supposed to stabilise the Greek debt crisis. In return for a bit of fiscal autonomy the Syriza government (a) recognised its debts as legitimate (b) gave its lenders a running veto on any measures taken that might impact on the economy, the banks or the budget balance. But the situation in Greece is still critical. First because Greece gets no new loans from the deal. Because it is pledged to run a budget surplus it has to finance the state from tax receipts. But these have reportedly slumped by 22 per cent since December. Normally the government could bridge the gap by issuing short term bonds called T-Bills but the ECB has placed a €15bn cap on that and it’s been reached. Second, Greece faces some imminent debt repayments. €2.5bn this month, mainly to the IMF, €1.7bn in April-May, then €3.5bn to the ECB and European governments in June. Finance minister Yanis Varoufakis said they would definitely pay the IMF, but that the ECB debt was “in a different league” and he would seek to renegotiate it alongside the bigger debt deal he is trying to do in June. The ECB meanwhile has failed to lift limits on what Greek banks can borrow under the Emergency Lending Assistance scheme; nor has it re-qualified Greek banks for normal loans from the ECB. So the pressure on the banks remains. Third, pressure on the radical left government from its support base is growing. PM Alexis Tsipras announced five laws on Saturday. They included a write off of small debts for 3.7 million people; an instalment scheme for people who owe up to €50,000 in tax; food stamps, free electricity and free housing for those in extreme poverty. Plus the reopening of the state broadcaster ERT and the closure of a controversial gold mine, in Skouries, which has been the target of bitter environmental protests. There was a small riot in the student district of Exarcheia on Thursday night. More pressing was that 41 per cent of those who voted in Syriza’s central committee backed an opposition motion from the party’s Left Platform, condemning the deal Mr Varoufakis signed. It was reported that, during a phone conversation with Angela Merkel, Mr Tsipras threatened Greece would default on its debts if pushed too far. ‘Badge of modernity’ But my conversations with Syriza members and leaders since the deal show that – though they want Mr Tsipras and Mr Varoufakis to tough it out with Europe, not all are yet prepared to make that threat good. That is, not all are prepared to go and argue with the Greek people in favour of a default and exit strategy from the Euro. They share the psychological attachment of the Greek small business class to Euro membership as a kind of “badge of modernity”. Plus, while various journalists from the right-wing press of Europe and America have been punching the air over the ECB and Germany “smashing” Greece, that’s not how it looks in Greece. The government’s popularity is close to 80 per cent. Syriza itself would get 40 per cent if it stood in an election now. So we are left as always with a mismatch of intent and perception. Mr Varoufakis perceives that the Eurozone will tolerate the “creative ambiguity” in the deal; that there is scope for a long-term settlement in June; and that he can keep both the Greek state and its banks solvent until then. However, the unknowable here is the ECB. It has been consistently hard line and shows no sign yet of lifting the strictures that effectively triggered a bank run in Greece in mid-February. Effectively, though he believes the Euro is finished “within two years” unless it relents from austerity, Mr Varoufakis is still fighting for the so-called “good Euro” and seems determined to do so until the June deadline. But he is negotiating on behalf of a party whose members and voters have no appetite for a default and Euro exit strategy: yet. The five laws announced on Saturday were designed not to provoke a veto from the ECB/IMF/EU. Any attempt to block them would probably push another tranche of Greek society towards the inevitability of default and exit, strengthening Mr Varoufakis hand as we approach April and June – in the sense that it would strengthen the realism of the exit threat. But the strategic facts emerging from last week’s deal all point towards a further showdown, a further squeeze on the Greek banks by the ECB (which is supposed to be responsible for their safety) and another cliff-hanger. Here’s why: there is, within the Eurozone, a lobby for less austerity, more debt forgiveness and a growth strategy. Mr Varoufakis was not wrong to think they could be persuaded to reschedule Greek debts, unleash QE and gain fiscal space: in fact, both France and Italy were given leeway to soften austerity by the European Commission last week. Mr Varoufakis’ mistake was to over-estimate the strength of the anti-austerity camp, and their willingness specifically to back a far left government. When it comes to Greece, the “faction” of Europe that runs policy is the Germans and their allies on the ECB. When it comes to France and Italy, the Commission is in charge. If, in the coming weeks, we see the ECB soften its stance to Greece – above all approving it to do billions of Euros worth of quantitative easing, and letting its banks borrow normally from the ECB – that would be a sign Mr Varoufakis is making progress. I still think the most likely outcome is that the unresolved political battle at the centre of Europe goes on being unresolved. And time is Syriza’s main enemy. If, by June, the ECB council is still calling the shots on Greek debt, then the German government – facing a growing revolt in the CDU/CSU over the terms of Greek forgiveness – will force another, bigger showdown. It will probably leave the commission and the IMF seething, and the lenders openly bickering as they did in 2010-11. But if it happens it will push Greece into a hard default. Whether the Greek government can take their people with them, on a journey from default, capital controls, parallel currency and Euro exit depends, for many Greeks again on perception: did the government do everything it can to avoid Grexit? Has the government done enough to make us want Syriza in power more than we want the Euro and austerity. <http://blogs.channel4.com/paul-mason-blog/greek-european-deal/3453> Syriza and the Radical Break Syriza’s leadership is operating under difficult conditions. How should we interpret its actions, and what would an alternative look like? by Nantina Vgontzas Jacobin February 28, 2015 . . . Strategic Options Ahead Kouvelakis and others in the left wing of Syriza, including Lapavitsas, Resistance hero Manolis Glezos, and Energy Minister Panagiotis Lafazanis — and even members of the dominant faction, including one of its key economists, John Milios — have suggested that the party has reached a new phase where strategic debates must be revisited and revised. And they’re right. It’s time for Syriza to consider and actually substantiate a Plan B. What might this plan consist of, and how could the leadership be pushed to embrace it? The most extreme Plan B, of course, is Grexit and the attendant short-term measures, including bank nationalization, capital controls, controlled devaluation, and appropriate rationing of food, pharmaceuticals, and fuels. In the long term, to make this plan work and to convince people that the immediate consequences are worth it, the government would have to be very proactive and strategic in forging a set of alternative trading partnerships and industrial policies. Enforcing such a Plan B would require, in other words, a plan. But there are other steps the government could take in transitioning to this scenario. It could begin imposing capital controls prior to an exit. It could introduce a parallel currency. It could continue to vie for a debt equity swap. These are, of course, unilateral actions that would most likely induce the institutions to force Greece out of the eurozone, but this is precisely the counter-threat Greece needs to pose. Perhaps even more importantly, these are actions that would require Syriza to not simply court capital in order to get its support, as party leaders have done until now, but to force capital to accept a new growth strategy. If the party does not reorient its relationship to domestic elites, this will remain one of its largest blind spots. The Politics of a Break For any of these ideas to even be entertained by the leadership, a major battle will have to be fought within the party. Until now, the Tsipras team has been moving ahead largely without consulting their comrades on the central committee. This was partly inescapable: the time constraints of the negotiation prevented extended deliberation. And during the first month, even the left wing of the party was willing to give their leadership some space until a deal was reached. At the same time, this dynamic is a continuation of what was established in the two years the party was preparing to take power. At this point, as Kouvelakis suggests, we should expect a reassessment of the current “good euro” strategy, which can only occur if the party’s leadership is compelled to redemocratize their internal processes. Thus far we have seen quite a few members of the party publicly declare their frustrations. That one third of the parliamentary team has rejected the deal in an internal vote must not be taken lightly. As a result, a central committee meeting is being held today instead [of] a parliamentary vote on the deal, which has been postponed for now. We can expect these debates to become increasingly more public, especially as popular disappointment escalates. And here’s the key. There will have to be a fight not only in the party but in the streets. These two struggles are necessarily connected. As it becomes clearer that public sector workers won’t be rehired, or that mass unemployment won’t be alleviated, we might expect an uptick in popular mobilizations. But that ultimately depends on the extent to which left forces project hope and offer a clear alternative. In other words, there must be a high level of popular education accompanying mass demonstrations in this next period. It is time for the Left to deepen the themes of radical democracy that were so prevalent during the Syntagma occupation and in its related neighborhood assemblies. Much of that task includes addressing people’s very real fears about more radical breaks. That the elected representatives of Syriza and its popular bases lie to the left of the party leadership is a very heartening sign. It is on them and on other forces of the Left to facilitate discussions where questions about capital flight, currency devaluation, rationing of basic goods, trade partnerships, and even the longer-term prospects of disciplining capital are raised, deliberated, answered. It is only under conditions where people are informed and inspired, where they feel as though they’re not leaping into the dark, or at least that there are concrete ways of navigating it together rather than around it in fear, that any alternative could work. Of course, the constraints and stakes are massive. There is seemingly little to be won and much to be lost. But at this point, few are under any illusions that either reversing austerity will be easy or that the status quo can be tolerated much longer. The Greek voters themselves perhaps know that better than anyone else. _ _ _ _ _ _ _ _ Nantina Vgontzas is a sociology PhD student at New York University. She is a member of the UAW Graduate Student Organizing Committee and is involved in the Academic Workers for a Democratic Union reform movement. <https://www.jacobinmag.com/2015/02/syriza-greece-austerity-eurogroup-deal> Greece's economy is tanking again and the new government is cracking by Mike Bird Business Insider, NYC March 2, 2015 Signs of major dissent are already opening up in Greece's relatively new government. A big chunk central committee of Syriza, the radical left-wing party that won January's elections, now wants a more hardline stance than the one the government is currently taking. . . . So Tsipras had 55.8% of the vote in his favour and 41.2% against - not a very significant margin at all, given that negotiations have barely started in Europe, and the party is not even two months into its first government. The real head-to-head over the country's debt is yet to come. What's more, the country's economy, which until recently looked like it was starting to recovery from its seven-year-long battering, is tanking again. The country's manufacturing PMI (a major business survey) dropped to its lowest level in 16 months in February, signalling recession. All in all, a pretty bad start to the week for Greece, and two awful signals in the government's second month. <http://www.businessinsider.com/greece-left-platform-opposition-dissent-february-manufacturing-pmi-2015-3> _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
