23 Jun 2015

Greece: could debt deal be scuppered from above?

There’s Che Guevara, Joseph Stalin and some very angry pensioners. I’m on the first of the street demonstrations – there will be many more – to take place since Alexis Tsipras attempted to sign a deal with the IMF and ECB over Greece’s debt repayments.

This demonstration, which is 2-3,000 strong, has been called by the Greek Communist Party, the KKE. They bussed in pensioners from over 70 towns in Greece to oppose one of the measures and indeed most of the measures in a deal Tsipras has signed up to.

As far as we know, because the documents are neither finalised nor official, Syriza has signed up to a further 1bn euros of austerity to bridge the gap between it and its lenders, and the new measures include asking people to contribute more towards their pensions, including employers’ contributions but also workers’, and some cuts at the top end of pension provision.


That’s been enough to bring the communists on to the street. They got 5 per cent of the vote in the last election and if this is all Alexis Tsipras has to worry about, he’s home and dry.

But many of his own rank and file, including many young people, also oppose the deal. The left wing of Tsipras’ own party – because his party is a coalition of communists and socialists – have put out a statement denouncing the deal, saying it contains terrible concessions

The question tonight then as the pressure comes on from the party rank and file is whether or not the negotiators in Brussels can hold their nerve because they are also under pressure from the IMF, which, although it is part of the so-called Troika, has a very different attitude to the deal from the European Commission and the ECB.

Because the IMF cannot sign up to deals that are non-sustainable and many objective economists believe this deal is non-sustainable, a stop gap.

The banks remain open because the European Central Bank is keeping them open, and the bank run has lessened today – only 400m euros out of the banks, compared with 1.4bn the day before.

But the level of pressure that’s being exerted on Syriza right now, I don’t think is enough to derail a deal from below. The biggest concern remains whether the IMF’s pressure for more assurance, and more what’s called debt sustainability, will actually scupper it from above.

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