29 Dec 2014

Crucial moment for Europe as Greece’s government falls

The coalition government that steered Greece through four years of the most bitter austerity in modern history has fallen. The Greek parliament just triggered a general election – and it could be a crucial moment: for Greece, for the eurozone and in global economics.

For months, the far-left opposition party, Syriza, has been ahead in the polls. If the polls stay the same, they’ll be the largest party and form a government come the end of January. The mainstream Greek newspapers are cranking out panic signals as if fuelled on 100% strength kaffe eleniko.

But people all over Europe who’ve opposed austerity see it as a turning point.

The Greek economic crisis has destroyed the prospects for much of a generation. Youth unemployment is 60 per cent. What this has done to people’s lives was well explored in a documentary I took part in this year –

Amid the sudden poverty and chaos, almost out of nowhere, a fascist party emerged that was getting 14 per cent in the polls. Last year it was busted by the Greek police, who accuse Golden Dawn of being a criminal operation. But it was a measure of how fragmented politics have become in Greece.

All the main parties were at some point clustered into the coalition – the ruling New Democracy, and the formerly large social democratic party Pasok, which has been more or less destroyed in the process. Other, minor parties were destroyed by their preparedness to sign up to austerity: LAOS, the Greek version of Ukip, and latterly the Democratic Left, a moderate left party.

So the crisis is a mincing machine of both ordinary people’s hopes and ordinary politics.

Now we will get extraordinary politics. Two years ago I sat in the HQ of Syriza waiting for a very close election result. “Thank god, we’ve lost. That’s great for us,” said one of the party’s journalists as they greeted me. You could see why: they were not prepared for power – the entire party records were in six or seven box files on the shelf next to me.

But in the past two years Syriza has professionalised, mounted a fairly consistently slick performance as the official parliamentary opposition, and moderated its demands. Instead of cancelling the debts to the EU and IMF, it wants to negotiate half of them away. It is pledged to something George Osborne will only achieve in 2018 – a balanced budget.

So even as the symbolism of moderate Marxism is plastered all over Syriza, in reality its programme for Greece is mainstream Keynesian economics.

If it wins, the question is: can the European institutions stomach it. The ECB, European Commission and IMF are all pledged to an economic doctrine that demands a further decade of austerity, tight finances, and cautious use of monetary policy and central bank tactics.

So at some point – especially if financial markets take fright – a Syriza government will clash with the orthodoxy of Europe.

But the bigger clash will be within the Greek political system. The main parties are run by old men and women, with leadership styles and personal networks steeped in a culture one former MP described to me as “Godfather III”. There are young, modernising MPs in the ruling New Democracy party, but they don’t run it. Such modernisers as existed inside Pasok have been wiped out as the party itself has collapsed – and some have gone over to Syriza.

So the more immediate issue for the upcoming Greek election is: can the Hellenic Republic’s governance system tolerate a leftist government – or will it rebel, like a body given an organ transplant that goes wrong?

There is skin in the game, obviously, for the whole left of centre in Europe. But also for the concept of the eurozone and the EU institutions themselves: they were set up around one economic orthodoxy. We will now see if they can work with and tolerate a different one.

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15 reader comments

  1. Philip Edwards says:

    So the fallen government wasn’t “far right.” That’ll be the same government that applied extremist Friedmanite and monetarist policies long ago exposed by J.K.Galbraith for the fraud they are – the same garbage that got Europe into its most recent capitalist mess. To say nothing of all the other “slumps,” with more on the way in due course.

    But Syriza is “far left.”

    You really do post the most ridiculous load of coprolite propaganda.

    With people like you in broadcast news we’ll soon have the new Cold War the West is looking for. At which point, of course, the Kiev Nazis won’t be “far right,” they’ll be “democrats supported by Washington.”

    I’ve seen some yapping journo poodles in my time but you take the monetarist biscuit.

  2. kOS says:

    “Crucial moment for Europe as Greece’s government falls”
    Europe is consisted by 27 different countries, with different history, language, ethics, religions, culture etc. What happens in Greece should not affect what happens in Germany. What happens in Spain should concern the Spanish and nobody else. Greeks will do what they want. The British will do what they want. End of story.

  3. David Preston says:

    A much bigger question is: could this be the start of a revolution against the current economic nonsense that see’s the elite few gaining massive ground while the paid slaves and left overs retreat back into the dark ages? Has enough hurt been done to the masses around Europe to make them rebel against the political puppets who are controlled through unelected bureaucrats in Belgium and the old families who own the banks that were saved by throwing our childrens futures into long term austerity instead of punishing the Elite and the thralls that serve them.

  4. John Davies says:

    We are entering a exciting political time, finally the possibilities for real change from the neoliberal gangsters who have destroyed so much. Both Spain and Greece have real alternatives. The world has to wake up to the environmental crisis brought on the the extraction industries, we have one boat and it’s sinking! We need to halt the momentum fuelled by avarice, share and look to what really makes us all human. To care for each other is not stupid, we all have the power to change with our vote.

  5. PhilD says:

    If a country in the EU cannot elect a government which is against neo-liberal economics then we will all be much the worse. Greece happens to be in the vanguard but the underlying trend to deflation, lower real wages and reducing demand faces all of the developed economies and must be addressed. Capital is accumulating in sectors where it is used to speculate in fixed markets rather than being used for productive purposes. As central banks now control all markets they must also address these issues rather than just propping up bankrupt banks and financial institutions.

  6. Tony Walker says:

    Syriza is not committed to leaving the Eurozone or abandoning the Euro. It has no intentions of leaving capitalism.

    I would like to see Syriza say to instruct workers to begin organising factory occupation committees; to encourage workers to commence preparations for taking control of businesses, production and the distribution of produce; for workers including agricultural workers to begin preparation for the establishment of social (and free) markets to distribute produce.

    But Tsipras won’t so he will follow the fate of Allende.

  7. VN Gelis says:

    The fact of the matter is that Samaras-ND and Venizelos-PASOK spent the whole of 2014 pretending Grecovery had set in place but no one saw it on the ground. They then went around in the last 3 months stating the Troika is over in Greece and had discussions with Merkel who told them to introduce more cuts until essentially Greece has Chinese wages and zero pensions. Unlike the Latin American caudillos or even those of the ex-satellite states of Russia when the going got tough Samaras and Venizelos chose to cut their leadership short by bringing forward the election of the President by two months instead of bringing about new cuts and creating massive civil unrest and being forced to evacuate by helicopter to …Miami.

    Syriza is a middle class party. It is soft at the edges. It has no real social base in Greek society. It believes that with nice words and correct arguments you can take on the banksters. It will give renewed hope to Greeks to fight and regain a life destroyed by collapsing capitalism. As such it will find it extremely difficult to govern as it cant send out riot police to break up protests like in the Gold mine area of Skouries. If Merkel and Brussels give no leeway they will end up with more militant Greeks and Syriza will be a transitional govt to something far worse for the point of view of the banksters.
    Others who voted for GD and Ind Greeks will also feel that the present govt opens new possibilities for them…. The main losers will be ND PASOK and the KKE from any new election.

  8. simon says:

    Its great something (anything) is happening by way of a disruptive political movement which has the potential to force change.

    I had become so desperate of late I even started welcoming the potential of ukip to shake things up.

    Putting a generation of our youth on the scrap heap tp prop up a system which has had its day was never going to be an acceptabke outcome. I was hoping things would change earlier, but in hindsight maybe it is no bad thing for political wheels to turn as slowky as they do.

    I wish them the best of luck and look forward to your coverage. Hopefully it will be a busy and interesting year for you for all the right reasons in 2015.

  9. adil says:

    I agree this could be a turning point for the better. The austerity program (perhaps experiment is closer to the truth) was an easy thing to demand: squeeze the lower echelons (that didn’t cause the problem) whilst minimising the effect on the upper echelons (that actually did contribute to the problem). It is a total nonsense dreamed up by people in denial of the real cause of the depression (do we really insist on calling it a prolonged recession).

    It seems that the option of negotiating a long-term postponement of some of the debt is the only viable alternative. I just hope that the new government doesn’t fall into the trap of previous governments and puts in place effective taxation measures eliminating the ability for the fat cats to get fatter.

  10. steve says:

    Thank you Paul. Could you please name the documentary?

  11. Ed McKeon says:

    Great reporting. The period since 2008 has felt unreal. Perhaps as never before has ‘getting back to normal’ been a public mantra with such little popular belief to back it. We have ‘the new normal’ instead. Well this looks like the next chapter in ‘the new normal’, hopefully its final chapter and the beginning of something genuinely meriting the adjective ‘new’.

    I’d be interested in Paul’s thoughts on Zizek’s comments that he doesn’t see such transformation happening in one country alone – that it would need a movement across several countries to have genuine transformative change. Podemos in Spain has been floated as a possibility. Is the desire for such change merely wishful thinking?

  12. julien jones says:

    It has posted a primary budget surplus which excludes debt interest.

    Were interest payments included the budget would be in massive deficit,

  13. Vassilis Fouskas says:
  14. VN Gelis says:

    The EU is a political project. Greece is a small part of it. To keep it going it has to appear to be going forwards. Mass austerity in Greece has destroyed the main political parties to the point that they have imploded and will be made extinct. To keep the EU project going, Merkel will give in. Throwing Greece out will unravel the whole process. In life one can go for the jugular and win or make a compromise (to not lose everything).

    In 2012 the elections in Greece were made in Germany (fear of Euro exit) the coming elections will be in Germany but set in Greece. Greeks have lost their fear and the corporate media no longer can sway an election as around 2m have already exited the Euro as they are unemployed and they have no source of income. Losing faith in the EU has already happened as it is under the EU Greece became bankrupt.

    There was no logic in reducing wages and pensions by 40%. You make a downturn into a downright depression. Anyone knows that. But someone had to be selected to be the whipping boy. They should have thought it through properly and done it like the old days. Banned elections and brought out the tanks.

  15. Jeffrey Newman says:

    Looking back, six months later, it is profoundly depressing to ask what has been achieved?

    Greece is in a far worse situation. Tsipras and Syriza may hold on but have been forced to concede so much that they have lost all credibility.

    Eurozone, if anything, is worse. Since it seems most unlikely that Greece’s debts can ever be repaid under the enforced austerity regime, it has merely maintained, at the cost of political farce, the appearance of the euro and the EU but without reference or concern for the spirit or heart of the European enterprise as it was conceived.

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