The Greek drama enters a new stage

The Greek drama becomes more intense by the day and by the hour, threatening the stability of the whole European Union. Yesterday amidst a mood of growing fury on the streets, the Papandreou government scraped through in a critical vote of confidence as tens of thousands of people gathered outside the parliament building in Athens chanting: "Thieves! Thieves!"

The anger of the people is directed not just against the austerity measures, but against politicians in general. One protester in Athens told the BBC: "There is great indignation that you see around you. There is a lot of desperation that is registered on the faces of the people around us. It means there is no future."

Prime Minister George Papandreou is struggling to win support for extra austerity measures aimed at avoiding a debt default. But no serious person now believes that a default can be avoided. "I believe we should go bankrupt and get it over with. These measures are slowly killing us," Efi Koloverou, a 22-year-old student, told the Reuters news agency. This view is shared in Brussels, no matter what they say in public. It is not a question of whether Greece will default but only when and in what conditions.

The new cabinet was approved in parliament by a very narrow margin: 155 votes to 143, with two abstentions. MPs will now be asked to approve 28bn euros (£25bn) of cuts, tax rises, fiscal reforms and privatization plans. Euro zone ministers say the legislation must be passed to receive a 12bn-euro loan Greece needs to pay its debts.

This is no longer a crisis of government: it is a crisis of the regime itself. Alarm bells are ringing in every government in Europe – and beyond.

Vote of confidence

The confidence vote took place early on Wednesday after a heated debate on Tuesday. All the political parties can feel the fire under their backsides. In an attempt to direct the flames away from their rear ends, sections of the opposition staged a brief and unconvincing walk out. But in the end they approved the vote of confidence. Naturally!

Papandreou had an ace card up his sleeve. The right wing do not want elections right now, because they fear they might win. The right wing does not want to occupy the hot seat – yet. They prefer Papandreou to carry on doing the dirty work for them.

Similarly, the threat of a revolt within the governing Panhellenic Socialist Movement (Pasok) evaporated like a drop of water on a hot stove. Having made a lot of noise, the Pasok MPs voted tamely along the lines laid down by the leadership. This underlines the real nature of left reformism. In the last analysis, the “Lefts” cannot have an independent position, but cling to the Right, who, as firm defenders of capitalism, cling to the bourgeoisie.

This is the eternal dilemma of the Social Democracy in all countries. Once in power they are faced with a stark choice: either defend the interests of the working class and attack Capital, or defend Capital and attack the working class. They inevitably take the second path. The right reformists do so eagerly and without hesitation. The “Lefts” do so reluctantly and hesitantly, but they do it anyway because they have no perspective of fundamental change in society and are organically incapable of maintaining a firm position on anything.

But winning a confidence vote is not the end of Papandreou’s problems. He must now persuade parliament to approve a five-year package of 28bn euros of tax increases and spending cuts by 28 June, otherwise, Brussels is threatening to withhold its new “aid” package. This is like threatening to cut the tubes that keep a patient alive in the intensive care unit.

Greece: Economic Crisis - Latuff The German government, and the governments of other creditor nations, faces a serious political problem. They call it “donator fatigue”, and it is the mirror image of the so-called “aid fatigue” in Greece. All over Europe, right-wing politicians are howling in unison: “don’t pay the Greeks!” By blaming the people of Greece, these demagogic chauvinists are attempting to draw attention away from the real culprits – the big banks and the capitalist system itself.

Since the collapse of 2008, governments all over the world have thrown trillions of euros at the banks to fill the black hole left by decades of speculation and swindling. They then inform the public that there is no money left for hospitals, schools and pensions and that “everyone must tighten their belt” (everyone except the bankers, of course).

So far they seemed to have gotten away with this gigantic swindle. But the Greek crisis has called their bluff. It has revealed the fraudulent nature of the eurozone. It is true that Greece is an extreme case, but in fact, every government in Europe is breaking the rules of the Maastricht agreement. Greece is only the scapegoat for the crisis of European capitalism. It is the weakest link in the chain. But there are many other weak links, and all are bound together and must fall together.

The working people of Greece have had the courage to stand up against the parasites and moneylenders. One Greek worker interviewed on British television said: “I work hard for a living, and so does everyone else here. I am not responsible for this crisis or the debts, so why should I pay?” That is a very good question, and one that millions of workers all over Europe should be asking themselves.

Keynes once said: if a man owes the bank a hundred pounds, that man has a problem, but if a man owes the bank a million pounds, the bank has a problem. Now the EU also has a very big problem. If Greece were to default on its debt – worth 150% of its annual GDP output – it would have to leave the 17-member eurozone. This would trigger massive losses for European banks that hold Greek debt, in the first place Germany and France.

It is an ominous sign that already three French banks have had their credit rating reduced because of their exposure to Greece. That is why the Germans and Greece’s other creditors, have no alternative but to send more money to Athens, while cursing under their breath. They know that in the event of a Greek default, the contagion would spread rapidly to the rest of Europe, placing the euro itself under unbearable stress and threatening the very future of the European Union.

“Contagion” does not only refer to the economy. It also applies to politics. The example of Greece is spreading. The demonstration of a quarter of a million people in Barcelona last Sunday shows that the movement in Spain is continuing. In Britain a massive wave of coordinated industrial action against the government’s pension plans has been called by public sector unions for 30 June.

EU Monetary Affairs Commissioner Rehn put this fear into words when he said: “We are in the worst crisis since the Second World War at a critical point.”

Revolutionary implications

The tone of the declarations from the EU chiefs is becoming ever more threatening: you must cut to the bone and privatize everything – or else. Buckling under relentless pressure, Papandreou has reshuffled his cabinet and replaced his finance minister last week, following weeks of mass demonstrations.

The EU package, which is to be outlined by early July, will include loans from other euro zone countries. It will also feature a voluntary contribution from private investors, who will be invited to purchase new Greek bonds as old ones mature. Officials said this money had to be freely given, or it would be seen as technical default on Greece's debt repayments. But whatever they do now will be wrong.

The objective is to reduce the Greek government's borrowing needs and make its debt sustainable. But the package is opposed by the mass of the population, and it is not even clear it can get approved by the Greek parliament. The opposition and some members of Papandreou's own party disagree with some of the spending cuts.

While acknowledging that the austerity measures were tough, Papandreou insists that “there is no alternative” (which, on a capitalist basis is true) and constantly repeats that the last thing Greece needed now is an election. By “Greece”, of course, what he means is the Greek bankers and capitalists. "At this time of pain I want to send a message to all Greeks," he said. "Yes, the course is difficult but there is light at the end of the tunnel.” What he failed to mention was that the light was an express train heading in the opposite direction.

"We all have to agree that we will put an end to deficits. We want to make a leaner, healthier state, because otherwise our country cannot take the burden," the Pasok leader pleaded. But these are empty words. Even if Papandreou manages to maintain the repayments for the immediate future, the financial markets already assume that Greece will at some stage fail to repay its debts in full and on time. Standard and Poor, the credit agency, has downgraded Greece’s credit rating to CCC – the lowest possible before default and the worst rating of any country in the world.

Just to pay the interest on its debt would cripple Greece. Further austerity, with massive wage reductions, sackings and cuts in pensions and other social services, will only deepen the recession and further reduce tax receipts, making the debt even more impossible to pay. Greece would enter into a downward spiral with no end in sight.

But the main fear of the ruling class is the prospect of a ferocious reaction on the streets, which will make everything that has gone before seem tame by comparison. The protesters are determined to turn the day of the vote into a major day of action that will shake Greece to its foundations. The unions are talking of a 48 hour general strike. The strike of the electricity workers shows that this one section alone has enough industrial muscle to paralyze the whole economy.

The situation is crying out for revolutionary leadership. But that is precisely what is missing. Alexis Tsipras of Syriza, the Left Coalition, said correctly: "This is not a programme to salvage the economy, it's a programme for pillage before bankruptcy," That is an accurate assessment. But unfortunately, Synaspismos, Tsipras’ party, has not offered any revolutionary perspective to the mass protest movement. Instead it has tail-ended it.

The position of the leaders of the Communist Party (KKE) is even worse. They have done all in their power to split the movement and keep the Communist workers away from it. The Stalinists distrust every movement that is not under their bureaucratic control. In the best case, they see the mass protests as a means of furthering their own parliamentary ambitions. In the worse case, they consider it as “reactionary”.

This shows just how far the leaders of the “Left” are out of touch with the real mood of society. The mass organizations of the working class, and above all their leaders, are lagging far behind. Therefore, it is not surprising that the new layers who are moving into struggle look upon them with suspicion or even outright hostility. This is not “anarchism” but an entirely justified reaction against the bureaucratic reformist tendency, which appears as merely part of the Establishment against which the masses are rebelling.

The movements in Greece and Spain have exposed the slanderous lie that the youth are “apathetic”. They are neither apathetic nor apolitical. They are willing to fight, but they are alienated by the existing political parties and leaderships. And, given their record, who can blame them? If we have to choose between the parliamentary careerists and union bureaucrats and the young people protesting in Syntagma Square and the Plaza de Catalunya, we stand unconditionally with the latter.

True, the movement is raw and inexperienced. As a result of inexperience, it makes mistakes. These mistakes can be corrected with time, especially with the aid of patient and friendly criticism by experienced revolutionary Marxists. But the new generation does not wish to be controlled by bureaucratic apparatuses, or manipulated or dictated to by those sects who are “Marxist” in words but share the same bureaucratic and arrogant traits of the old reformist and Stalinist leaders.

The intervention of the Greek Marxists has been a model of how to approach the mass movement: a combination of theoretical and principled firmness with extreme tactical flexibility. We must intervene in the mass movement and fight to make it successful. But we must also point out its shortcomings and convince the best fighters of the need for a consistent revolutionary policy. That is the way to proceed! The Marxists all over Europe should learn a lesson from this great example, and follow the same line. That is the only way to succeed.

London, 22 June, 2011