Greece: government's proposals to the Troika turning OXI into YES

The next few hours are, again, crucial in Greece. The victory of the OXI in the referendum is being quickly turned into its opposite. The government has sent a proposal to the Troika which in essence represents accepting what people rejected in the referendum on Sunday. This in exchange for a new, third, bailout it has requested from the European Stability Mechanism, which is thought to be worth 70bn euro. It remains to be seen if this will be enough for the Troika Minotaur. Opposition is also growing in the ranks of Syriza and beyond, among the Greek working masses aroused by their victory in the referendum, but the government has worked to secure the support of bourgeois opposition parties.

Late on July 9, the government sent a package of proposals to the Troika which is thought to include 12 to 13bn euro worth of tax rises, cuts and savings. This is more than the 8bn euro package proposed by the government on June 22. The reason is the worsening of Greece's economic prospects (from 0.5% GDP growth to -3%, though that's probably optimistic). The proposal is composed of a covering letter from Tsipras, a letter from Finance Minister Tsakalotos promising that some of these measures will be passed by Parliament “even before the negotiation process begins in earnest”, and finally a 10 point list of detailed “prior actions”.

Remember that the June 22 proposal was already a breach of government "red lines", but at least those proposals attempted to put some of the burden on businesses, through increasing corporation tax to 29% and introducing a one-off 12% tax on profits. The troika rejected that and Tsipras finally agreed to most of the Troika's demands (with a few amendments). That's the basis of yesterday’s proposal, but with an additional 4bn euro on top of it, 50% more than what Tsipras had accepted under duress before the referendum.

When the negotiations broke down between the Greek government and the Troika on June 26 which led Tsipras to call the referendum the differences between the two parts were not that big as far as the concrete measures in the package were concerned. The few stumbling blocks have now been smoothed by Greece accepting the Troika demands on the substance of all points.  VAT reduction for the islands will be scrapped, starting with the bigger islands and only exempting “the most remote ones”. Retirement age will be increased to 67 years by 2022 and the EKAS top up payment to poorer pensioners will be progressively phased out until 2019 as the Troika demanded. As for privatisations, all the ones which have already started will be completed without any changes in their terms (including regional airports, the ports of Piraeus and Thessaloniki, the old Hellenikon airport, railway company Trainose, the Egnatia toll motorway) and a few new ones (to be detailed in a separate Technical document) including the electricity grid company ADMIE.

Syriza’s unofficial newspaper Avgi had a headline proclaiming how these proposals were “an opportunity to put the burden on the rich”, but the reality is the opposite. The overwhelming majority of these proposals, which account for the bulk of the 13bn euro, will fall on working people (through regressive taxation), pensioners (current and future) and the public sector. In reality, the proposal is basically the same which the Greek people rejected with a resounding 61.3% when they said OXI (NO) in the referendum on Sunday July 5.

In exchange for all of this, the Greek government is requesting a loan from the European Stability Mechanism which is thought to amount to 70bn euro. All the arguments made over the last 5 years still apply today. Implementing recessionary measures to an economy already in free fall will only make the situation worse and will prevent even the stated aims of the proposal (in terms of primary surplus and debt repayment) impossible to meet.

This is of course a Greek government proposal. It now needs to be accepted by the Troika. Germany will be reluctant to offer any debt relief. Positions have hardened on that side over last week of the referendum. Some of German capitalist strategists are calculating that it is now cheaper to kick Greece out of the euro and provide some humanitarian relief aid, than continue to engage in a formal bailout. A French publication reported that the Greek negotiation team was asked by Schäuble “how much money do you want to leave the euro”. France, the US and the IMF have a different position, probably worried about the impact Grexit would have on a very fragile world economy. Also, the US and the IMF are not as exposed as Germany and European institutions to a Greek default, so in effect they are asking Germany to bear the cost.

There is yet another variable. The workers' movement in Greece and its reflection inside Syriza, its Left Platform, parliamentary group and ministers.

It is very significant that Minister Panagiotis Lafazanis, who is also the leading figure in Syriza’s Left Platform was one of only two ministers not to sign the proposal. In the last 48 hours he has made statements along the lines that "the NO at the referendum cannot be turned into a YES to austerity". At the time of writing these lines, he remains a member of a government.

The other Minister who didn’t sign the proposal was the leader of the Independent Greeks (ANEL), Kammenos. ANEL had insisted all along on their opposition to ending VAT reductions for the island and also opposed further cuts in Defence spending (Kammenos portfolio) which have now been agreed.

Syriza CC member Stathis Kouvelakis has compared the situation to the vote for war credits in the Reichstag in 1914 and appealed for pressure to be exerted on Syriza MPs to vote against. He has described the proposal as a capitulation and a “betrayal of the popular mandate”. In an appeal to Syriza MPs he has asked them to "refuse to trample the popular mandate under foot, and save the honour. Refuse this humiliation of democracy. Don't forget the fate of members who voted for previous memoranda, and that have been registered in the people's conscience. Together with the people who want to stand up and live, raise up, say "no"!”

The Communist Tendency of Syriza has rejected the proposals and described them by their proper name: a new Memorandum. The comrades have correctly described the situation as one of a parliamentary coup, in which parliament will be used to pass proposals that directly contradict the democratic will of the people expressed at the referendum and have called on Syriza MPs to vote against and for people to mobilise.

The president of the parliament, Zoe Konstantopoulo, also a prominent Syriza member has also said that she will oppose the passage of a new austerity memorandum through parliament. However, Greek media reported a 3.5 h meeting between her and Tsipras last night. The Left Platform has around 30 MPs in the Parliamentary group. As these lines are written a joint meeting of Syriza's parliamentary group and Political Secretariat is being held to discuss the proposals. Syriza's CC will meet on Saturday. Today in the evening there will be a vote in Parliament. The way in which this will be done has been calculated in order to minimise opposition. Instead of voting on the actual proposals being sent to the Troika, Parliament will be asked to give Tsipras, vice PM Dragasakis and Finance Minister Tsakalotos authority to negotiate along the lines of the letter, but the letter itself will not be put to the vote. The idea is that this will be presented as a personal vote of confidence in Tsipras, minimising a potential revolt in the parliamentary group. The Guardian reported how "Syriza MPs have been telling our Helena Smith that the big no received in the referendum on Sunday was a 'confidence vote' in Tsipras who like no other prime minister before now has the popular support to enforce such punitive measures."

Whatever the formula used in the vote,Tsipras has already been preparing for the eventuality that 30-40 Syriza MPs might vote against. On Monday there was a closed meeting between Tsipras, the leaders of opposition parties and the [right wing] President of the Republic. They all agreed a statement (with the exception of the KKE) along the lines of the proposal made today. This means that now Tsipras is in a de facto alliance with the same parties (ND, Pasok and To Potami) which all along supported the previous Memoranda which Syriza strenuously opposed. Leaders of the opposition have been kept informed of every step of the negotiations. Between Thursday and Friday, European Commission president Juncker would have met with leaders of ND, PASOK and To Potami. There have been strong rumours of ANEL leaving the government and being replaced by To Potami. The main plan is to split the left away from Syriza and join with pro-European parties in some government of national unity.

This is what is happening at the top, but then there is the reaction of the masses in the streets. Tsipras became extremely popular in the last days of the referendum campaign, but on the basis of a NO to austerity and standing up to the troika. Working people feel confident, having won, through a mass grassroots mobilisation, a resounding victory against the Troika. If they are now told to accept a deal worse than last week's, the reaction could be furious. We cannot underestimate the level of politicisation achieved last week which has not gone away.

If you want to understand the depth of the movement which was aroused by the referendum campaign it is useful to look at how scared was the ruling class. An interesting opinion article in Kathimerini described it graphically in terms of “barbarity”. What the author sees as barbarity is "the collapse of the traditional political system that grew during the the period after the fall of the 1967-74 military junta"; the "extremely dangerous behavior on the part of the electorate, which expressed itself along class lines" and "a rift between the haves and have-nots has not been seen since before the time of Andreas Papandreou" and above all "bringing a conflict that should have remained confined to the Parliament and, perhaps, television shows into the streets. This was a political crime." This is what they are afraid of: the “direct interference of the masses in historical events” to use Trotsky’s expression.

The article conclusion was also very interesting: “the only way to avoid the civil strife that is looming is for Alexis Tsipras, the prime minister of a left-wing party, to sign a deal that will keep Greece in the eurozone.” The ruling class in Greece has been dealt some serious blows (in the election on January 25 and at the referendum on July 5). Its political parties have suffered as a result and have no legitimacy nor popular support to pass the measures the ruling class deems necessary. The only way forward for them is that Tsipras uses all his political capital to implement their policies. This will have one consequence: that political capital will be spent.

There are demonstrations called already for tonight in Athens and Thessaloniki. One is a Syriza demonstration which had already been planned to celebrate the referendum victory at Syntagma Sq. Now other forces, including Antarsya are planning to join in. There is also an appeal by 6 members of the leadership of civil servants union (ADEDY) to mobilise to defend the NO. The KKE is calling for a protest separately at Omonia Sq.

In understanding the behaviour of Tsipras and Varoufakis (and also Tsakalotos) a crucial factor is the fact that they cannot see any alternative to remaining in the EU and the euro. As a result, they are forced to move further and further away from their original illusion of the possibility of an "honourable deal" and make ever greater concessions to the troika.

There are therefore basically three main variables in the equation. The Greek government. The Troika (and particularly German capital). The Greek working people. The relative strength exercised by these three forces will determine the outcome. This is a struggle of living forces and nothing is decided yet.

However, it is also necessary to make a provisional balance sheet. This was all along a battle of opposing class interests: those of working people in Greece, and across Europe on one side; those of the capitalist class in Europe (dominated by Germany’s bankers and capitalists) and their class brothers and sisters in Greece. On our side, our weakest point have been the generals of our army. It has to be said. Tsipras could have followed a completely different course of decisively breaking with the Troika, repudiating the debt and challenging the logic of capitalism. He had massive popular support (80% in February, 62% at the referendum) which would have allowed him to embark on such a course of action. He refused. It was never part of his strategy.

Lafazanis and the Left Platform in general have been hopelessly unprepared for the battle. Lafazanis has shied away from any open opposition for 5 months, and the Left Platform has never operated as a coherent force, responding to the different compromises and concessions and mobilising against, which could have changed the course of events, or prepared better the battle. Finally, even the more advanced elements within it seem to lack a clear understanding of what the alternative can be, limiting themselves to the idea of a return to the drachma within the limits of capitalism (with the inevitable nationalisation of the banks). This is a hindrance, since a large section of workers are, correctly, scared of the consequences of Grexit, which would lead to a frightful collapse of the economy on top of everything else they have already suffered in the last 5 years.

The KKE leadership, while making many correct criticisms has been locked in sectarian isolation, unable to pursue a proper Leninist united front approach to Syriza, which would have allowed it now to replace it having won over a sizeable chunk of Syriza’s members and supporters.

The Communist Tendency of Syriza, has been constantly explaining and warning. But its forces are still very small and its voice can barely be heard. It cannot determine the course of events. At most it can be a small contributing factor.

The battle in Athens is not over yet. It is not ruled out that Germany will put its foot down and reject any new bail out. The immediate task in Greece is to oppose these proposals, to exert pressure on Syriza MPs to vote against and to mobilise the widest possible layers in the streets against, and then to resist the implementation of these measures.

Beyond Greece there are important lessons to be learnt, particularly as parties like Podemos in Spain come closer to power. There is no way to break with austerity, it is not possible to implement even modest measures in defence of the living standards of working people within the limits of capitalism in crisis. In order to end austerity we must break with capitalism.