The Greek people have done it again. In January this year they had given a powerful anti-austerity mandate by voting Syriza to power. And now in the face of tremendous economic hardship and concerted political blackmail by the powerful lobbies and institutions of global capital, they have once again said a loud no to the austerity commandments of the Troika of IMF, European Commission and European Central Bank. In the July 5 referendum called by the Syriza government, more than 61% voters said OXI or NO to the humiliating and disastrous EU package of austerity. Regardless of the future trajectory of the Greek crisis, the bold popular assertion has indeed been a historic moment, a definitive assertion of the courage and power of the people over the commands and conspiracies of capital.
In economic terms, the Greek crisis is an alarming case of systematic debt-driven devastation of an otherwise developed country. The Troika and propagandists of the neoliberal order the world over attribute the debt burden on Greece to allegedly profligate public spending and advocate austerity – deep cuts in wages, pensions and welfare expenditure – and privatisation as the ‘solution’. The Truth Committee on Public Debt – an independent committee of experts from 11 countries set up by the President of the Greek Parliament – has shattered this propaganda in its preliminary report released on 17 June 2015. The preliminary report has shown that public spending in Greece has been lower than that in other Eurozone countries and that the debt burden is almost entirely due to the payment of extremely high rates of interest to creditors, excessive military spending under previous governments, massive illicit capital outflows and the transition from the erstwhile Greek currency Drachma to the new common currency Euro.
Particularly revealing is the escalation of the debt burden since 2010, when Greece was subjected to harsh measures of austerity in the name of ‘rescuing’ its economy. The so-called ‘bailout’ packages have been appropriated almost entirely by Greek and other European private banks, with hardly 10% going to fund any kind of public spending. The cuts in wages, pension and public spending rather depressed the economy and increased the debt-GDP ratio, thereby deepening the debt trap. The committee says the IMF itself had warned about the unsustainable nature of the debt, yet it opposed any rational restructuring of the debt and only allowed the burden to escalate. The committee has therefore described the debt as not only unsustainable but illegal, illegitimate and odious, insisting on a substantial write-off and restructuring of the debt and rescheduling of loan repayment.
The rationality of the Greek position can be better appreciated if we compare the Greek problem to similar situations elsewhere in the past and also in recent times. Germany, which currently dominates the European establishment, was itself a beneficiary of a major debt write-off in the post-war period. The end of the world war in 1945 had left Germany with a crushing debt burden twice its GDP, but the London Debt Agreement of 1953 cancelled 60% of Germany’s external debt obligations and also favourably restructured its internal debt. Today Germany is bent upon inflicting austerity on Greece and exacerbating its debt crisis! To take another example, let us look at the US which is today the most indebted country in the world and which also suffered a major banking crisis in recent past. But the freedom with which the US bailed out its banks and continues to manage its debt is denied to Greece. While the US can simply print dollars, Greece has no control over its present currency Euro. It has to keep borrowing Euros to maintain internal liquidity of its banks, let alone repay its past debt.
What is the way out of the Greek crisis? Many believe the answer lies in the eventual exit of Greece from the Eurozone and European Union, a return to its earlier currency Drachma and nationalisation of its banks. Many who voted OXI would actually support this radical position and they believe Greece cannot possibly hope to strike any ‘reasonable deal’ within the current European framework. The Syriza government has, on the other hand, rested its case on the plank of a just and dignified solution for Greece within the European framework, for a treatment of Greece as ‘an equal among equals’ as Tsipras put it. To facilitate a possible deal, Tsipras has even replaced his Marxist finance minister Yanis Varoufakis with his deputy, the soft-spoken Euclid Tsakalotos, who has been the chief negotiator for Greece with the European establishment. On his part Varoufakis has resigned gracefully promising to help Tsipras ‘exploit, as he sees fit, the capital that the Greek people granted … through (the) referendum.’
Only time will tell if and how Tsipras manages to withstand the next phase of negotiations with the European establishment. But by setting up a Truth Commission on the issue of Greece’s public debt and by invoking the initiative and voice of the Greek people through the historic July 5 referendum, the Syriza government has surely managed to expose the irrationality of the Troika and mobilise popular anti-austerity pro-democracy solidarity for Greece across the world. The Greek battle has already spread to Spain; the question of restructuring of the Greek debt is growing into an agenda for a European Debt Conference to solve the debt problems of other European countries like Spain, Portugal, Ireland and Italy; and, the slogan of European solidarity has begun to challenge the menace of European austerity. And this can also only further strengthen the demands for the cancellation of the enormous unjust debt burden which many Third World countries have been bearing since the 1980s.
The Greek assertion of its economic sovereignty and the invocation of the people’s choice is a particularly inspiring example for us in India, where the ruling classes have been complicit with the troika of IMF, World Bank and WTO in inflicting the policies of liberalisation, privatisation and now austerity on the Indian people. In fact, even the CPI(M)-led state governments in West Bengal and Kerala also chose to comply with the central policies whether in the name of ‘provincial compulsions’ in a federal set-up or in the name of reaping the harvest of ‘growth and development’ rather than go to the people and draw on their energy and courage to challenge the neo-liberal tyranny. Apart from drawing inspiration from the Greek experience of popular resistance, the Left in India will also find it relevant to study the Syriza experiment of “unity and struggle” where various Left currents are engaged in serious debates even as they pool their strength to push the coalition ahead. Let us wish all power and victory to the Greek people.
