Greece: Neither “Honorable Compromise” nor “Accidental Rupture”—The Only Way Forward is a Socialist Policy (Part Six)

Today we publish the sixth and final part of Stamatis Karagiannopoulos’s article on the situation in Greece. The series was originally published in Greek on the website of the Communist Tendency of Syriza at the end of April this year.

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Why the “Interim Agreement” was aborted

As these words are being written, the “negotiations,” or, the constant blackmail of the government by the creditors, is at its most critical point. The endurance of the Greek state is becoming exhausted by the day. By the end of the month there will be a shortfall of two billion euro, according to official government figures. This money is needed to avoid the scenario where the partial suspension of payment to suppliers of the state, to beneficiaries of benefits, etc., is extended to the salaries of state employees, pensions, and scheduled payments to the lenders.

Until recently, the government was expecting the signing of an “Interim Agreement.” The agreement would include some of the milder measures required by the lenders, so that the harder measures, like pension cuts and labor market liberalization, could be put off until the comprehensive agreement in June. The June agreement—in fact a new Memorandum—would cover the financing gap up to 2017, which is estimated at 25–30bn euros.

But as we already predicted in a previous article, the lenders show that they do not wish to proceed with such an “Interim Agreement,” forcing the government to focus directly on a “comprehensive” agreement by June. Mr Schäuble and the rest of the gang of “partners,” having put the government on the back foot, they have no reason to engage in “interim agreements.” If they were to give the Greek government a small amount amount of loans, it would just allow for some “breathing” space. The government could use this space for an appeal to the polls or a referendum. A new election or referendum could have destabilizing consequences and are therefore permanently undesirable to the lenders.

It seemed that all the lenders could discuss was an initial agreement on some measures, but these, as expressly requested by the representative of the European Commission official, are to have a “clear political cost.” This sort of agreement would mean austerity measures and antilabor policies. In return, the Greek government would receive not money from the loan payments, but some leeway with the ECB on the Treasury bills issuance limit. In other words, the lenders showed that the most they can tolerate is a “good dose” of political humiliation of SYRIZA, in exchange for money that the state would borrow from Greek banks themselves, which are the only possible buyers of treasury bills today.

From the point of view of the government, arriving at an “interim agreement” with these conditions is practically convenient. The government would need to bring an overall agreement to the parliament and to the party members. Until then, to meet immediate financial needs, the government will be hoping for a statement from the lenders that “the talks are progressing well” as a signal for the ECB to allow the necessary borrowing through Treasury bills amounting to 3–5 bn EUR. However, there is no guarantee that there could be such generosity without humiliating governmental retreats.

What does “bankruptcy within the Euro” mean?

The lenders show in every way that they will pursue a very hard line to the end, not hesitating until getting the desired humiliation of SYRIZA. In cold financial terms, the so-called unfinished fifth assessment and reserved installments are in practice a way of pushing Greece towards exit from the Eurozone.

The option of a Greek bankruptcy within the Euro, much discussed in recent days, and which is accepted as possible in the public statements of the lenders, should be examined under this light. It would take a certain amount of naïvety to be reassured by the statements regarding a supposed safeguard of the countrys position in the Eurozone, even after a default. A bankrupt Greece within the Euro means that Greece would be in the Eurozone only in theory, while a massive flight of capital will occur and all sources of “liquidity” from lenders will close tightly.

This will all continue until the government is forced to take a decision whether to reestablish the national currency by seeking the consent and assistance of creditors. Alternatively, the government could accept a new agreement on the basis of possible tougher austerity measures and cuts, or simply relinquish power, to be replaced by another bourgeois pro-Memoranda government. Thus, the stage of “bankruptcy within the Euro” represents a phase of even more relentless pressure from lenders, which ultimately brings closer the prospect of leaving the Eurozone.

The attitude of the government, the “red lines,” and their limits

The government, having agreed to postpone indefinitely the implementation of the program for which it was elected to power, is now limited to repeating that it will not cross its “red lines.” These can be summarized in the phrase: “rejection of any measure that will reduce wages and pensions.” Of course, it is important to remember that on January 25, the workers did not vote for such “red lines,” but for repealing austerity and the Memoranda. But even these limited government decided “red lines” are in irreconcilable contradiction with the reality of the deep crisis of Greek capitalism and the unswerving policy of humiliation of SYRIZA by the lenders.

Faced with this reality, the government realizes that even these limited “red lines” are incompatible with an agreement. Having seen all the negotiating expectations fail, experiencing an isolation from all bourgeois European governments, realizing it is only one step away from a default and exit from the Euro, and, above all, with neither the will nor the necessary plan for a break from the lenders in favor of the working people, the government continues to desperately seek an agreement. At the same time, the prime minister, according to his own statements, is considering the possibility of escaping from the responsibilities of any political decision through a possible referendum.

Day by day, hour by hour, the government is abandoning its own illusions and seems to react more and more spasmodically. Its tactics are determined by the collapse of its strategy, namely the negotiation strategy, since lenders appear to be a single, unyielding block. Faced with this reality, the governments strategy has collapsed. As a result, a tactic of improvisations has come to the fore. This tactic appears as embarrassed and jerky movements that foretell a disorderly retreat. The sidelining of Mr. Varoufakis and the change in the composition of the negotiating team are part of this general mood. The breaching of the supposed “red lines” requires the right people.

The most critical question now is, what are the real limits of the government concessions, given that the limited “red lines” are incompatible with a deal? The answer cannot be determined accurately. It depends on the relative strength of the different pressures the government is under—the main variable being the balance of power between different groups within the government and the way the leadership team of SYRIZA assesses the situation.

The pressure from the lenders and the Greek ruling class for humiliating retreats and signing of a compromise is tremendously focused on the prime minister, as the “key man.” The pressure in the opposite direction has become more powerless. Mass rallies under the slogan “not a step back” no longer exist, since the retreats taken by the government are already plentiful, and its political stance does not inspire the mood for active popular support. The mood of the masses is dominated by confusion and passivity. In the eyes of the masses, breaking with the lenders is perceived by the majority as an adventure that should be avoided, given the absence of a distinctive radical alternative plan.

The leadership of the Left Platform has already made many concessions (government with ANEL, right-wing President of the Hellenic Republic, postponement of the Thessaloniki program, etc.). Despite their public opposition to any violation of the “red lines,” they have taken no practical initiative which could erect a barrier to the policy of “conciliation.” Finally, the dominant political group in the government, including the prime minister, shows no appetite for breaking with the lenders, as they are under the influence of current vice president of the government and former vice minister of the coalition government with New Democracy in 1989, Mr. Dragasakis. The dominant group fears that a break would mean managing its consequences, the main consequence being the revolutionary tasks which would be posed in order to protect the living standards of the masses.

Given this situation, with the pressures and balance of forces in the government and the party, but also the timid attitude of the core leadership team, governmental choices can range from immediate signing of a degrading agreement, to the decision for a referendum in order to shift the responsibility for reconciling onto the shoulders of the bewildered and frightened masses.

However, in the meantime, a “rupture” could occur due to an “accident,” due to the existing delays. This would be undesirable from the point of view of the government. Given its faithful defense of the path to an “honorable compromise,” it appears unlikely that any such “rupture” would lead the leadership to embark on the bold path of supporting the working people and of taking radical measures. Rather, it is likely that the leadership would embark on a futile path of pursuing new negotiations towards an even more humiliating agreement, or towards some sort of coalition government that is favorable towards the ruling class and the lenders.

Referendum: making the people complicit in austerity

During the January 25 elections, the Greek people offered a clear mandate: that the Memoranda and austerity must come to an immediate end. However, after four months, we can see how the same political issue that the elections resolved now returns this time as a dilemma of “yes or no to an agreement with the lenders.” This only serves reactionary political objectives and not the necessity for the people to democratically express its will.

Such recourse to a referendum over a new agreement is actually a reactionary means of blackmailing and subjugating the people, albeit behind a “democratic veil.” This is for the following reasons:

  1. Such a referendum is unlikely to be accompanied by an alternative plan for a rupture on the part of the government. Therefore, in the mind of the people such a dilemma would appear to practically be about “stability or chaos.” In that sense, the people would be forced to become complicit with austerity in the name of “stability”;
  2. The referendum is unlikely to be conducted in democratic conditions. The referendum would be conducted within a climate of hysteria in support of a “yes” vote. The bourgeois media and parties will undoubtedly conduct a pervasive campaign in favor of a “yes” vote, with very little opposition;
  3. The referendum is also likely to artificially divide the working class between euro or drachma supporters at a time when the actual historical and political dilemma is “capitalist barbarism or socialism”;
  4. A “yes” result under such conditions would be shamelessly exploited as an “argument” by all those who would oppose any future mass movement against austerity and capitalism.

Despite the reactionary nature of a referendum under such circumstances, why is recourse to a referendum opposed by the lenders and the Greek bourgeoisie? Their opposition reflects the heightened degree of reaction, insecurity, and their social isolation. The lenders fear that a referendum could set a precedent for other European people to question austerity and the ruling policies of European capitalism. What is more, as is the case with the Greek bourgeoisie, they fear that the referendum could be utilized by the SYRIZA leadership to cement itself in government. This would weaken the chances of a “national unity” government formation, which would be easier for the bourgeoisie to control. Lastly, the Greek bourgeoisie opposes the referendum as it fears that it would cause further delays in reaching an agreement with the lenders. A delay could cause an “accident,” in addition to further harming relations between the “country” and the lenders.

Therefore, the tactical opposition of the lenders and the Greek bourgeoisie to a referendum constitutes no reason for the working class and the left militants to support a referendum. We repeat this: under present circumstances, a referendum amounts to a reactionary tool towards providing popular legitimacy to a catastrophic compromise with the lenders. However, if a referendum was to be announced, it would be necessary for the Left wing within SYRIZA and for the KKE to widely propagate a “no” vote, and the need for an alternative plan for a socialist rupture. It would be necessary to aim to win a large section of the workers to the cause of actively defending such a plan.

Gloomy future within capitalism, be it with the euro or a national currency

The Communist Tendency of SYRIZA, since its inception, has consistently argued that there is no real difference between a capitalist Greece inside the euro or one which reverted to a national currency. The problem for the working class and the impoverished layers of society is capitalism, not the currency.

Therefore, Greece staying within the Eurozone means the continued deterioration of living standards for the working class and the poorer layers of society through unstable agreements with the lenders. These agreements are all aimed at shifting the cost of the crisis onto the shoulders of the masses through poverty and unemployment.

In that sense, signing an agreement with the lenders in the name of remaining in the Eurozone practically amounts to acceptance of the prospect of decades of austerity and Memoranda. At the same time, as we have repeatedly explained, the current crisis is so great that no agreement is capable of guaranteeing that Greece can remain within the “club” of the strongest in the Eurozone. The enormous public debt, the “clay feet” of the over-indebted Greek banking system (entirely dependent on ECB liquidity), the permanent recession, the general European and global economic stagnation—are all factors that, at some point, will inevitably cause an “accident.” This accident is likely to lead to a return to a national currency, either in agreement with the lenders or on a basis that the Greek bourgeoisie so desires

On the other hand, an exit from the Eurozone on the basis of capitalism would mean a concentrated deterioration of the already deteriorated living standards of the working class. To stay within the Eurozone would mean a more staggered, less sudden deterioration—that is, if we ignore the possibility of a further deterioration in the global economy. A capitalist Greece with a national currency means that more hardships would amass to the existing hardships that burden the Greek people: hardships such as a sudden flight of capital with the closure of thousands of businesses, galloping inflation, and shortages in goods.

Naturally, it is possible that the Greek capitalist economy begins to grow in both cases (namely, with the euro or with a national currency). Should the European and global economy be able to avoid a deeper recession in the immediate future, it would be possible for a fragile capitalist Greece within the euro or a destitute capitalist Greece with its national currency to also experience GDP growth. However, it is unlikely that this would improve the lot for the working class and the impoverished layers of society. This is the truth that SYRIZA is duty bound to explain to the people. It is from these premises, and not out of any alleged “dogmatism,” that the Communists persistently defend the socialist prospect as the only progressive solution for the working masses.

What is to be done? The only solution is a left government for a socialist rupture

The apologists of the “honorable compromise” policy mock the communists of SYRIZA, accusing them of lacking a program for the here-and-now. They accuse the communists of referring everything to the period of the proletarian revolution and of socialism. Leaving aside the inability of our critics to understand that this period is much closer to that past period of socialist revolution than what they imagine, they are being dishonest. The Communist Tendency not only has put forward an alternative proposal, but this proposal also expresses the only realistic solution for the working class and the impoverished layers of society.

Therefore, what do the communists of SYRIZA propose for the here and now? The leadership of the party must genuinely accept that the negotiation strategy has been fruitless and has reached a stalemate. It ought to make good, in concrete terms, that which it defends in theoretical terms. That is to say, it must take steps to prioritize the needs of the people, and it must immediately suspend all payments to our creditors.

In order to respond to the Greek people’s clear mandate of January 25 with regard to the abolition of the Memoranda agreements and of austerity, the SYRIZA leadership ought to assume all necessary initiatives in order to form a genuine left government. It ought to remove the bourgeois ANEL (i.e., “Independent Greeks”) and every other supporter of the “honorable compromise” policy from the government. In ANEL’s place, SYRIZA ought to seek a coalition government with the KKE (Greek Communist Party) to implement a program of socialist rupture, or at least ask the KKE for a vote of tolerance for such a policy.

As a necessary practical gesture of good faith and political change, the leadership should support and vote in the parliament for the proposal of the Communist Party to abolish Memoranda and their applicable laws. On the basis of such a practical and sincere policy change, the leadership of the Communist Party could not refuse a vote of tolerance. In the unlikely event that the leadership of the Communist Party, completely at odds with the will of their own rank and file, declines, then SYRIZA should resort to calling new elections, asking for a mandate for a majority left government of socialist rupture.

The first act of the left government should be an immediate response to the revealing findings of the audit for debt performed by the parliament, which demonstrates completely parasitic and predatory character of the debt. It should also proceed directly to the cancellation of the debt, thus depriving the lenders of the ability to continuously blackmail the working people of the country.

Immediately afterwards, the left government should start implementing all the reforms of the program of Thessaloniki, which until now have been postponed indefinitely for the sake of “negotiations.” But to implement these measures, strong financial resources need to be ensured immediately, which cannot be found by taxation, nor of course by external sources. Besides the reforms of Thessaloniki are reforms that ensure the fairer distribution of wealth. You cannot distribute fairly, nor plan the recovery of an asset which you do not control or own. The wealth of the country, therefore, must be transformed into social property.

To achieve this crucial goal, the Thessaloniki reforms must necessarily be complemented by a radical, anti-capitalist program, such as the one suggested by the Communist Tendency at the founding congress and the Central Committee of SYRIZA. This provides a plan for a democratically planned economy, through the socialization of the banking system, industry, large landed property, the mineral wealth, large commercial enterprises, and transport. This process entails the socialist transformation of society. It is included in the founding principles and declarations of SYRIZA and is the only way to permanently do away with austerity and implement the election commitments.

Obviously, the economy during the socialist transformation cannot keep the euro as currency. Draghi and Schäuble are not known for their leftist convictions in order to secure the financing of a democratically planned economy . . . Just the announcement of socialist reforms would immediately exclude Greece from the euro currency. So, the issue of a state currency from the left government is inevitable and forced.

At this point, it is necessary to point out that the government promise that the election commitments and the Thessaloniki agenda can be realized “in a time frame of four years” on the basis of capitalism, following an “honorable compromise with partners,” is an obvious lie. As we have repeatedly explained and as every worker can easily infer from their own experience of the past months, lenders and the Greek ruling class will never accept the implementation of the anti-Memorandum politics of SYRIZA. In addition, the crisis of Greek capitalism is incredibly deep. This means that the possibility for an economic recovery in the near future, which would then allow for the government to carry out its pre-election commitments, is ruled out.

On the other hand, it also is false that the Thessaloniki program can be implemented with the combination of the immediate issuing of national currency and nationalizing the banks and defaulting on the debt, without requiring a complete socialist transformation program, as the leaders of the Left Platform imply. The banking system does not produce wealth, and banknotes have no value in themselves. Without the immediate implementation of a socialist transformation program, no substantial improvement in the living standards of the people can take place. The issue for working people today is not to simply break with the lenders within capitalism, but to break with capitalism itself. This means a complete socialist rupture.

An easy path?

The road of socialist rupture will not be an easy one. There will be obstacles in the way of the socialist reconstruction of society. Capital, domestic and foreign, will proceed go to war with the socialist government, utilizing all available political and economic means. At the beginning, the new currency will be of very low value. Inevitably, inflation will make its appearance and there will be shortages of imported goods as well. Greece will not only be pushed out of the Εurozone, but also out of the EU. All agreements for EU funding will be removed. The massive capital flight, the strike of investments, the employers strike, the disobedience to the implementation of prolabor and tax law, the sabotage by using senior officials of the state apparatus, the attempt to mobilize petty bourgeois layers and lumpen elements in the streets, will be some of the means by which the capitalists will express their furious reaction.

All these obstacles in the way of the working people breaking the chains of debt slavery and Memoranda and to build a society free of poverty and exploitation are inevitable. No ruling class was ever overthrown from power without a hard fight. However, these unavoidable obstacles can be overcome relatively quickly through the practical demonstration of the superiority of the planned economy and the self-organization and mobilization of the working class to defend its gains.

The socialization and democratic planning of the economy can guarantee that all the essential goods and services produced in the country will be accessible to the working people. The application of the sliding scale of working hours, i.e., the reduction of working hours as required so all available manpower is used in the economy, along with the implementation of a large-scale program of public and social works, would put hundreds of thousands of unemployed to work. This policy would give a huge boost to the economy, putting it on track towards strong growth. The fruits of this development, with the production and distribution belonging to society, will not be converted anymore into superprofits for capital, but it will make possible very soon, not only the implementation of the social policy of the Thessaloniki program, but an unprecedented and widespread raising of the standards of living and quality of life for the working class and the poor layers.

The need to mobilize the working class, creating new power and international solidarity

The mobilization of the working class and youth via self-organization in workplaces and neighborhoods can easily defeat the economic sabotage and prevent the artificial chaos that bourgeois reaction will attempt to create.

To consolidate the social and economic gains it is necessary to establish a fundamentally different, truly democratic political regime. The left government should proceed with the removal of political power from the bourgeoisie. It should replace the current authoritarian and corrupt bourgeois state apparatus with the democratically organized working people. Representatives and judges will be elected and subject to immediate recall at any time. As well, the working people will take under its control the army and security forces and will pay state officials the wage of a skilled worker.

To disarm any aspiring external opponent of socialist Greece, and to quickly overcome the inevitable transition period of a certain international isolation in hostile capitalist surroundings, the left government will have to call for solidarity to the European and world working class. At the same time, the example of a socialist break with the oppressors will rapidly create a domino effect of a united, international struggle of the labor movement and youth for socialism in Europe and across the world.

This is the only way forward for the working class and the poor layers. All other roads within capitalism, either with fragile agreements and Memoranda within the Eurozone, or with the national currency and the same oligarchy of capital and wealth dominating and exploiting the working people, are even more repulsive versions of the current nightmare of mass misery.

Say “No” to the poison of cynicism, skepticism, and pessimism!

Organize with the Communist Tendency!

The cynics, sceptics and pessimists of every kind, will talk about this path of socialist rupture with the familiar words of disbelief: “Utopias of a small tendency!”

Those of them who belong in the circles of the leadership team and their apologists simply reflect their bureaucratic routineism and their willingness to defend newly acquired privileges. Some activists, who are disoriented and confused by the experience of defeats of the class struggle against Memoranda, but also from the fast social-democratic degeneration of the leadership of SYRIZA, might join them. They would do so from an alleged “left” standpoint, and claim that “the people do not want to fight and do not understand.”

The Communist Tendency of SYRIZA, from the first moment of its existence, has decided to consciously stay away from the poison of cynicism, skepticism, and pessimism. Our ears are closed to the ones who already talk of defeat and passivity! Revolutionary Marxism has neither space nor time for their laments.

It is entirely possible in the next period for the ideas of socialist rupture to conquer the masses and to be implemented in practice. Workers and young people can understand and fight for this policy, because it is the only option that realistically meets their needs. The only thing missing is the subjective factor that will organize them and lead the way to victory. To allow it to be created as soon as possible, there is only one effective way for the fighters of SYRIZA, the labor movement, and youth: to support and strengthen the voice of the only tendency within the party struggling for this necessary policy. To organize with the Communist Tendency!

  • No to the humiliating “honorable compromise”!
  • Stop payments to lenders—repudiate the debt!
  • For an emergency SYRIZA conference to adopt the policy of a socialist rupture!
  • For a left government that will implement a socialist program!
  • For a socialist Greece and the United Socialist States of Europe!
  • Get organized with the Communist Tendency of SYRIZA!


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