Impending default and the new wave of working class revolt in Greece

The financial crisis in Greece is constantly in the headlines and focusing everyone’ attention on what it could lead to. As we have explained before, the reason for this is not due to the objective economic weight of the Greek economy within European and world capitalism. In absolute terms Greece only accounts for 2% of the European Union’s GDP and even its public debt is only 3% of the total public debt of the Eurozone. The point is, however, that Greece is the weakest link in European capitalism which is now at the centre of the global capitalist crisis.

On Wednesday, October 6, there was yet another massive 24-hour strike of the public sector workers against the austerity measures. Flights and ferry services were cancelled; schools, government offices and tourist sites were closed, and hospitals were working with minimal essential services being provided. Air traffic controllers, tax workers, public transport workers, police and other emergency workers also came out on strike.

This strike was the first since the government announced its latest round of austerity measures including the new property tax and the sacking of 30,000 public sector workers. The government says these measures are necessary to reduce the state deficit and meet the requirements of the EU that would allow Greece to get further loans. The government is in a desperate situation as it claims it has only enough money to pay pensions, salaries of government workers and bondholders until mid-November. And yet in spite of unprecedented cuts in spending and massive tax increases the government is proving incapable of meeting the target imposed on Greece to reduce the budget deficit to 7.5% of GDP. Instead it looks likely to be no lower than 8.5%. What this means is that even more stringent austerity measures are being sought.

Greek workers have had enough

But the Greek workers and youth have had enough. They are being asked to pay for a crisis not of their making and they are reacting by mobilizing in a big way. The strike saw the biggest participation of the last 18 months, with very big rallies as well and also a big presence of university and school students. In Athens there were over 30,000 people on the streets. At the same time we have the occupations of the three finance ministries, transport ministries as well as the ministry of education, where the workers decided to continue the occupation despite the intervention of the new ADEDY president.

After the end of the demonstration the police fired tear gas at protesters attacking them brutally. In the process they also lashed out at many journalists and photographers. In reaction to this police brutality the ESIEA, the Union of the Journalists, launched a campaign yesterday against police violence, appearing on state television to make their case.

However, the Greek debt is not an isolated phenomenon. The huge increase in public debt across the whole of Europe flows from the fact that the capitalists have been desperately attempting to avoid entering into deep recession. Now, however, the problem is escalating, as the world economy is entering into another and much deeper recession than in 2009 and while at the same time the parasitic capitalist class is speculating with Eurozone debts. The explosion of Greek public debt is a reflection of the global crisis of capitalism and the impact it is having on weak Greek capitalism together with the extreme parasitic and state dependent nature of the Greek bourgeoisie.

The fact is that the Greek state has defaulted four times since achieving independence (1843, 1860, 1894 and 1932). The 1932 default actually lasted until 1964, the longest of any of the country's five defaults. However, none of these previous defaults caused any real long term damage to the global economy.

Today, however, things are very different. Greece is part of the euro and foreign banks own Greek bonds to a value of 195 billion euros, with the French and German banks being the two major owners of Greek bonds. So if Greece defaults it will produce a domino effect which will hit at the very heart of the international banking system, destabilizing the euro and with it the entire world capitalist system.

All this explains why the main capitalist powers want to avoid at all costs a Greek default by introducing two “rescue packages” for Greece. In reality, as we have previously explained, these so-called “rescue packages” are designed in such a way as to prevent a collapse of the banks, the euro and world capitalism by placing the burden of paying for the debt mainly on the shoulders of the Greek working class.

During the past 18 months the Greek government has introduced five major austerity packages which have destroyed the living standards of the Greek working class. As a result of all these cuts the consumption levels of the workers in Greece have fallen back to the levels of 1983 and unemployment has shot up to the levels of 1961.

Since late 2009 onwards the Greek government has introduced what probably amounts to the biggest cuts packages ever seen in recent world history with the target of reducing the annual budget deficit by 25 billion euros. Taking into account the difference in size of the economy this would be the equivalent of making cuts of over 250 billion euros in Germany!

Two weeks ago the government passed new measures. Taxes imposed on the workers, the poor and small house owners are rising to levels that are impossible for the ordinary working people to pay. This month people are expected to pay a so-called extra “solidarity” tax of 2 to 5 per cent of their annual income as well as the separate property tax. Furthermore, there have been more cuts in pensions and the wages of public sector workers (the total overall fall since 2010 is now near to 40%) and, as explained above, there is the latest announcement of a programme of 30,000 public sector redundancies for this year alone.

Unbearable pressure

Such is the unbearable pressure that is being brought to bear on the Greek working people that an “I won’t pay” popular movement has developed. Angry protesters across Greece last week publicly burned the documents they had received from the tax authorities requesting payment of the new solidarity contribution.

However, the pressure to cut even more is relentless. It is due to the deep and long lasting recession that Greece is in that the annual budget deficit is stuck at 8.5%, well above target, and the Minister of Finance, Evangelos Venizelos, has even hinted that if tax revenue collection does not improve it could be as high as 9%. Therefore the Troika [EU, European central bank and the IMF] is asking for even “more blood”: 150,000 jobs to be cut in the public sector, the abolition of the National Collective Bargaining Agreement between the Trade Unions and the employers which had previously established a minimum wage of €750 in the private sector, and a huge cut in the legal minimum wage, probably to 500 euros!

Conditions are dramatically worsening in Greece for ordinary working people. The children of Greek workers in state schools have no books, the Universities have no money to function, many hospitals are lacking basic medicines and supplies, and due the huge number of redundancies the main underground metro line of Athens now only has a train running every 30 minutes!

In contrast to this desperate situation facing the workers, we have the disgusting scenario whereby Greece’s private ship owners have emerged this year as champions in the world league table in buying and selling boats worldwide, investing more than 12 billion euros, 10 billion more than the Chinese! Also the main Greek banks have been financed by the state with more than 100 billion euros in cash and guarantees, although the total of their present stock market value is only 9.4 billion euros.

Greek public debt now stands at 167% of GDP and is expected to rise to 179% by the end of 2012. An indication of how dramatic the situation is can be seen in the following figures. 1) The interest on debt alone for 2012 amounts to 18 billion, which is much more than the expected 2012 primary government deficit [i.e. before interest] of 14.659 billion (according to the Troika’s calculations) and only slightly less than the central government deficit which is expected to reach 19 billion! 2) It is more than the overall cost of government workers’ wages and pensions of € 17.5 billion! 3) It is also much larger than the 15.9 billion the state is expected to spend in 2012 on insurance, healthcare and social security! 4) And finally, it is approximately 40% of the planned primary expenditure of the State (!) and exceeds 1/3 of the projected state tax revenues.

The dilemma of the bourgeois is that the stringent austerity measures are making it impossible for Greece to climb out of the recessionary spiral it has been sucked into. The more they cut wages, reduce jobs and increase taxes, the less is available for consumption. The more the economy spirals downwards the less the state collects in taxes and so on, simply exacerbating the situation.

The deep recession that Greece is in is underlined by the fact that GDP has fallen this year by close to 6% and will continue to fall next year by at least 2.5%. Next year will be the fourth consecutive year of recession in Greece, with a total fall of GDP from 2009 to 2012 near to 15%, the deepest fall since the end of the Greek civil war. This year alone, 2011, the government officially estimates that private consumption will fall by 6.5%, investments by 12.9%, and employment by 5.6%.

Greek default inevitable at some stage

Now all serious analysts have concluded that a Greek default is inevitable. It is no longer a question of if but of when. The EU plan patched together last July, which only served to delay the default for some months, is now under dispute, as one North European country after another is demanding guarantees before they will contribute to the new loan. The problem they are faced with is that the longer they postpone a bigger cut in the Greek debt, the closer they bring an uncontrolled default on the part of Greece. But the problem for Europe’s bourgeois leaders is that, unfortunately for them, Greece is not the only country in danger of default.

Real living experience has proven that they cannot build a Chinese wall around Greece to limit the danger of default spreading from one country to another. The cost of saving Greece, and also Portugal and Ireland, is relatively low compared to what it would cost to save Italy and Spain, which are also seeing their cost of lending go up day by day. The cost of saving the third and fourth biggest economies in the EU would be enormous and well beyond the capabilities of even a major lender like Germany.

This impasse has provoked an open conflict within the European bourgeoisie and the question now is: who will pay for all this? In the last analysis, the major European powers are faced with the following huge dilemma. Should they accept taking on the cost of saving all the countries in severe debt through selective defaults and new loans, accepting thereby the danger of an immediate transfer of the perspective of default from the Southern to the North European countries or should they stop all further loans and push the weakest national economies “consensually” out of the eurozone after having found a solution to save the banks, and thereby put in dispute the future of the common currency itself?

There is, of course, another very possible scenario: a domino effect of uncontrolled defaults and the winding up of the eurozone, with all the disastrous consequences this would have for all the EU member states involving massive falls in GDP. Whichever of these scenarios we will see, Greece remains the number one candidate for an uncontrolled default and expulsion from the eurozone. The return to the drachma in conditions of deep recession would, however, push Greece into a situation like that faced by Germany in the early 1920s with soaring inflation, a collapse in investments and massive unemployment.

New wave of revolt of the working class

The crisis was reflected first in Greece, as it is the weakest link of European capitalism, but it is also providing a vivid picture of what the immediate future of the class straggle in the rest of the Europe will be like. The mass movement we experienced from May 25 to early July of this year marked Greece officially entering a pre-revolutionary period where the masses have started to enter the scene of history. We must remember that such a situation was prepared by two mass student movements in 2006 and 2007, by a youth – mainly school student – uprising in December 2008 and by a series of 24-hour general strikes since 2007.

Student demonstration, September 15. Photo: Odysseas Gp All the main elements of a revolutionary situation as described by Lenin long ago have been maturing in Greece. The ruling class has begun to realise that they cannot govern as they did in the past, with peaceful and "democratic" means. They are confused and in crisis as they see their parties the New Democracy (ND) and the more populist right-wing LAOS both incapable of increasing their support among the population.

The Greek bourgeoisie is very weak at this stage and cannot move in the direction of open reaction. That explains why it is compelled to impose its programme by leaning on the PASOK leaders and the trade union bureaucracy. The reason for this is that an open bonapartist confrontation with the working class, rather than solving their problems, would compound them. During the past 18 months the working class has shown its readiness to struggle again and again, by participating in 13 general strikes, one of them a 48-hour general strike.

The traditional mainstay of the bourgeoisie, the middle classes have been radicalized and are now on the streets. All sections of society are in the process of moving into action (even what used to be traditionally political reactionary layers are mobilizing, such as the truck drivers, the shopkeepers, the taxi drivers, etc).

The one thing that is lacking is a clear revolutionary programme and firm revolutionary leadership with deep roots among the masses. That is what would be required to transform the pre-revolutionary situation into a victorious revolution. The task before us is to build such a leadership.

The fact remains that the austerity measures, were passed in parliament in spite of the huge mobilisations. The masses cannot be constantly on the move, and this inevitably led to a temporary decline in the mass movement. However, it is also a fact that the mass movement has radically changed the consciousness of millions, and this has already created a new tradition of struggle.

Although the movement that we saw in the summer in the main squares is now over, the popular assemblies created during that movement continue to exist in the Athens neighbourhoods. At the same time we also saw recently a marvellous mass movement of the University students which at its peak led to the occupation of 350 University Faculties and now this has been followed by a big movement of the school students, with the occupation of 750 high schools.

After the initial shock of the new austerity measures, the workers have started to react in a very dynamic fashion. All the workers in the public sector are mobilising. Workers in all the public services and companies have organized mass assemblies. In the state hospitals the workers have organized the biggest assemblies ever seen in the last 20 years, where they decided to organize a campaign of non-payment of the new heavy taxes.

We also have the first symptoms of a clear political radicalisation. For example in the Greek Defence Industry (EAV) for the first time we have seen the Left forces (Communist Party, Synaspismos...) win a majority among the workers.

As we have already seen, on Wednesday the Greek state was once again paralysed as a result of the joint strike of the public sector workers called by the GSEE and ADEDY trade union confederations. As a result of the big pressure from below the GSEE leaders have now also been forced to call another 24-hour general strike for October 19. But after the official announcement of the plans to abolish the present National Collective Bargaining Agreement in order to cut wages, the pressure of the rank and file on the trade union bureaucracy for an all-out long term general strike is mounting with each day that passes.

The political situation

Inevitably a new wave of revolt of the workers’ movement is being prepared and this time it is very possible that the government could fall and new elections would have to be called. This is placing immense pressure on the PASOK, with growing opposition to the government from the party’s own rank and file. This is affecting in particular the party’s base within the trade unions and among the youth. The PASOK is organised inside the unions in PASKE, which is its recognised faction within the unions, and the leaders of this faction are placed where t he pressure is the highest. Now PASKE inside the teachers’ and the municipal workers’ unions has split from the PASOK. PASP, the PASOK University student organisation, its main base among the youth, has split down the middle during the latest big student movement. In many Universities PASP members have asked to create a common front with the other left student organisations in support of the occupations and as a result large numbers of the PASOK’s students have been expelled from the party.

Also many PASOK MPs in recent weeks have come out with statements that they are “at the limit” and that they will not accept voting for new austerity measures. Thus we can see how the position of the government is becoming more and more untenable and the rumours that Papandreou may be thinking of going for early elections, published two days ago in the German edition of the Financial Times, may in fact be more than mere rumours.

The opinion polls reveal that it is very possible that no single party will be able to form a government on its own after the elections. The PASOK stands presently at less than 20% and the New Democracy at only 26-27%, which is in fact much lower than its previous historical low of 32% in the last elections. That is why the bourgeoisie may possibly have to go for a coalition government between the PASOK and ND, i.e. a government of “national unity”. But such a government would inevitably be a government of crisis. With the policies it would have to carry out on the basis of a default and a possible return to the drachma, it will provoke a massive left split within the PASOK which in turn will lead to a sharp turn to the left in Greek society as a whole. On the far right, the right-wing LAOS party is failing to cash in on the present crisis, mustering a mere 7%.

To the left of the PASOK the “traditional Left”, the KKE (Communist Party) and SYRIZA/Synaspismos, is expected to get 20%, surpassing in some opinion polls the vote of the PASOK. However, it is also true to say that the Left leaderships are failing to meet the needs of the moment.

The leadership of the KKE, rather than preparing the party for power, have been organising a nationwide campaign to restore the image of Nikos Zachariadis, (General Secretary of the party between 1931 and 1956) the political leader of Greek Stalinism and the man who carried out in Greece the most extreme bureaucratic and adventurist tactics of international Stalinism.

In line with their already established method, instead of taking steps to prepare a struggle for power, they continue to hold separate demonstrations on the days of action decided by the GSEE and ADEDY. Instead of offering a programme to the masses with a socialist and internationalist perspective, they repeat monotonously their call for “popular power and a popular economy” as a separate first stage before the building of socialism and only within the narrow national limitations of Greece.

The leadership of Synaspismos, on the other hand, limit their demands to calling for support for the idea of Eurobonds together with a general anti-neoliberal rhetoric. The internal party opposition, the tendency led by Panagiotis Lafazanis, is strongly putting forward exit from the euro as a solution to the crisis. But, as we have already explained, this is not a solution. It would simply be the inevitable, final and fatal outcome of the crisis of Greek capitalism and the social conditions that would flow from it would mark a very sharp downturn in workers’ living conditions, on top of the already disastrous fall we have witnessed so far.

The only way forward

Faced with the immensity of the present attack on everything the working class has gained in the past decades, a 24-hour general strike ends up being simply an occasion to hold a few demonstrations, while the government inexorably marches on in its offensive against the Greek labour movement. The trade union leaders cannot stop the attacks with periodic one day general strikes. The crisis is far too serious to allow for any kind of compromise on the part of the government. Instead of such general strikes, what is required is a well organised programme of strikes escalating into an all-out prolonged general strike, combined with occupations in the factories and offices where workers are being laid off and where wage cuts are being imposed. After thirteen, mostly 24-hour, general strikes that have had no effect, the only way forward is a serious organisation of the mass movement for an all out struggle where all the forces of the working class are united as one to paralyse the whole country.

The trade unions are among the most valuable weapons we have at our disposal in such a struggle. The glaring contradiction in all this, however, is that the leadership of the GSEE and ADEDY blatantly refuse to engage in such a struggle. The reason for this is abundantly clear, for such a widespread and generalised struggle would naturally lead to a questioning of the government and would raise the question of power. The present leaders are imbued with the idea of concessions and negotiations with the government and the ruling class. Unfortunately for them there are no concessions that will be forthcoming. The lack of will on the part of these leaders to organise and win such a battle is the most serious obstacle to a successful movement of the workers.

This obstacle can be overcome only by bold and massive initiatives in the workplaces. There is no need to start from “zero”. The movement can start from those sections that are already on strike, such as the transport workers, teachers, professors, public utility workers, etc., who should coordinate their action and start a campaign within the labour movement for an all-out long lasting general strike. The slogan should be one of “no workers' unions in separate actions; coordinate and unite all workplaces that are or will be affected by the cuts.” This means a common day of strike action and joint marches whose aim should be to work for unity of action throughout the labour movement to organize an all-out general strike.

However, the calling of an all-out general strike is a very serious matter. First, it requires the necessary time and good preparation in all the workplaces. Also, the fact that such action would have to be organised against the will of the union leadership does not at all mean that the movement should abandon the idea of getting it officially called under the banner of the GSEE and ADEDY, the recognised and traditional collective trade union confederations of the Greek working class. In order for such general strike action to be long lasting and achieve the maximum impact, the rank and file of the trade unions must bring enormous pressure to bear on the leaders of the GSEE and ADEDY. This means that the question of an all-out general strike should first be discussed in mass meetings in each workplace and resolutions need to be passed calling on the union leaders to proclaim such action immediately.

Regardless of the position of the union leaders, the campaign for the general strike must be organised with the active participation of workers in each workplace. Such assemblies should elect strike committees and create self-defence groups to protect the mobilised workers. These elected workplace committees should be coordinated into a central nationwide strike committee, which would take upon itself responsibility for organising the action, also coordinating with the popular assemblies in the neighbourhoods, and also with the school and university student movement and poor in general.

An all-out general strike in conditions of widespread poverty involves big sacrifices for the working class. That is why it is necessary to ensure that the strikers and their families are not threatened by hunger. In every workplace and neighbourhood, the leadership of the strike movement should set up strike funds and soup kitchens. And attacks by the police and agents provocateurs or fascist actions can only be addressed by establishing picket lines and central strike defence squads, equipped with the necessary tools.

An all-out general strike, as we have repeatedly pointed out, inevitably raises the question of power and of who governs the country. If the government under pressure from the movement were to fall and announce elections, then the attention of the masses would shift to the electoral front. In such circumstances all those mass political forces involved in the movement (KKE, SYRIZA, PASOK oppositionist tendencies) would have the duty to form a political alliance that would assert its authority on the basis of the only programme that can offer a solution to the crisis, namely a socialist programme of nationalization under democratic workers’ control and management of all the key sectors of the economy with the aim of establishing a democratically planned economy.

If the government refuses to take back all the austerity measures and persists with its programme of draconian cuts, and also responds with violent police confrontation, determined to stay in power without any real formal legitimacy, then the central nationwide strike committee, in a united front of all of the mass left political forces (KKE, SYRIZA, PASOK left opposition  tendencies) involved in the movement, should pose itself the task of taking power, based on the democratically organized working people in the neighbourhoods and workplaces in order to implement a socialist programme.

And in the final analysis any victory of such a movement would have to be accompanied by an immediate call for solidarity and action on the part of the working class in all countries of Europe and throughout the world. For the problem is not merely a Greek. The struggle has to be spread to workers around the world as it is the whole system which everywhere is in crisis and decline.

Such an agenda is in our opinion the only effective way of fighting this ruthless class war against austerity, poverty and unemployment that the Greek workers and youth have declared against the Greek capitalists and the Troika that stands behind them. We urge all militant labour movement activists and the youth to fight for the adoption of such an agenda by all the organisations of the working class.

What programme?

The complete cancellation of the debt and the stopping of all payments to domestic and international loan sharks is a fundamental starting point in the programme that the Left should take up today. The mere rescheduling and partial cancellation of the debt is not enough to meet the pressing needs of the working masses. However, in and of itself, even the total cancellation of the debt alone cannot lead to a solid and long lasting solution to the crisis. It must also be accompanied by the introduction of a socialist programme to establish a socialised planned economy through the consolidation and the movement towards public ownership under workers' control and management of all the large enterprises, with the creation of a single national bank and the introduction of a state monopoly of foreign trade.

In implementing this programme, of decisive importance would be the overthrow of the current wasteful and corrupt political system of power and its replacement with a democratic power of the workers and the poor people, which would abolish all class privilege, would guarantee the election of all officials with the right of recall, and lay the basis for the running of the economy according to social needs and not profit.

However, in the long run, even the application of a socialist programme in one country, although it would be a huge step forward, could not lead by itself to socialism, a fact that was amply demonstrated by the fate of the USSR and China. It was impossible to build socialism within these huge powerful countries; it would be even less possible in an economy with such small productive forces as Greece.

Present day capitalist Greece is an integral part of a highly developed international division of labour in modern globalized capitalism. That is why the Greek socialist revolution is an integral part of the European and world socialist revolution. Precisely for this reason, the leaders of the labour movement and the Left should patiently explain to the working class – starting with the most advanced layers – that an internationalist approach is required if one wishes to carry out the task of socialist change. There is no other way out of this crisis.

The tragedy facing the Greek workers is that none of the left parties has a leadership up to task. Therefore what is required is a struggle to win the mass organisations to the programme and perspective outlined above. There are no shortcuts to achieving this objective. The most advanced workers and youth must organise within the mass parties of the left and within the trade unions with the aim of working for this perspective. In the conditions of Greece today, once a genuine revolutionary mass tendency based on the ideas of Marxism is established, it would very rapidly win the masses. Then no force on earth would be able to stop the Greek workers. That is what the comrades of Marxistiki Foni are working to achieve.

Marxistiki Foni Editorial Board