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Vol. 79/No. 6      February 23, 2015

(front page)
Berlin, Paris keep squeeze
on Greece, workers suffer

Campaigning as a champion of easing the unemployment and economic hardship imposed on Greek workers in 2012 by Berlin, the European Union and the International Monetary Fund, Alexis Tsipras used Greek nationalist and anti-German rhetoric to lead the Coalition of the Radical Left party, known by its acronym Syriza, to power in the Jan. 25 elections.

The Greek government went bankrupt in 2010, buffeted by the sharp contraction of production and trade in 2008 and years of disadvantageous trade relations between southern Europe and the stronger capitalist powers in Berlin and Paris.

When Greece, a member of the EU, appealed for aid, representatives of finance capital — the so-called troika of the European Central Bank, the European Commission and the International Monetary Fund — issued a euphemistically named “Memorandum of Understanding” assuring payment to some Greek bondholders, while others took a “haircut.” In return for loans to the insolvent government, it required massive layoffs of government workers, wage cuts, limits on the right to unionize and steep property taxes that fell hard on workers and farmers.

The European Union is not a country, nor a federation of equals. It is a capitalist alliance with a single currency put together by Berlin and Paris in the 1990s as a counterweight to the domination of U.S. capital. Its members have divergent national interests.

The contradictions built into the EU, deepened by the 2008 world economic contraction, mean a number of weaker capitalist countries — Portugal, Italy, Ireland, Greece and Spain, described contemptuously by capitalist investors as the PIIGS — are being brutalized economically by the stronger European capitalist powers led by Germany.

‘Bailout’ devastating for workers
The abrupt implementation of massive social spending cuts has been devastating for working people. Some 28 percent of the working-age population in Greece and nearly 60 percent of youth are out of work.

“Greece’s dire finances have gutted its health care system,” a Feb. 7 New York Times article reports. “Universal coverage effectively ended under the austerity measures imposed under the terms of the country’s bailout.”

Restrictions on unions, layoffs, cutbacks, property taxes and other harsh actions stemmed the growth of government debt, but didn’t stop the free fall of production. The country’s debt is nearly twice what the toilers produce in a year.

Workers and farmers in Greece have tried to fight back — joining protests, selective national strikes and other actions. But the toilers, misled by Stalinist and social democratic political parties and trade union officials, have had no way to effectively combat the onslaught.

The crisis has led to polarization, and new political forces have pushed aside the Panhellenic Socialists and the New Democracy parties that took turns ruling since 1981. The ultrarightist, anti-immigrant Golden Dawn party has grown, and won 17 seats of 300 in the recent election.

In the context of the crisis, left social-democratic Syriza rose to power. Prime Minister Tsipras, 40, who formed a government by forging a coalition with the small, right-of-center Independent Greeks Party, campaigned with the slogan, “Hope is coming!”

Tsipras pledged to renegotiate the massive debt and tie repayment to economic growth, create 300,000 new jobs, raise the minimum wage from $658 to $853 per month, provide energy and food subsidies, end the tax on heating fuel and abolish the property tax.

‘Syriza win will liberate markets’
Syriza championed Greek nationalism, demanding billions of dollars in reparations from Germany for occupation and forced loans during World War II.

Greece “leaves behind five years of humiliation and anguish,” Tsipras told thousands of supporters in Athens as the election results came in.

“A Syriza victory will break the bad spell and liberate markets,” he told Reuters Dec. 18, promising the Greek propertied rulers he had no intention of challenging capitalism.

Tsipras and new Greek Finance Minister Yanis Varoufakis toured European capitals to press for relief from the memorandum. They were rebuffed. The European Central Bank declared Feb. 5 it would stop accepting Greek bonds as collateral for central bank loans, cutting off access to low-interest borrowing.

In the crucible of the crisis, right and left currents in bourgeois politics are converging. Identifying with Syriza’s anti-EU campaign, Marine LePen, leader of the right-wing National Front party in France, said that in the absence of a strong right-wing party in Greece, Syriza is her party there.

The German rulers face a predicament. If they maintain the onerous conditions of the memorandum, Greece may default on its debt and leave the European Union. The wealthy bondholders fear that “contagion” could spread to Spain, Ireland, Portugal and other countries on the wrong end of social relations in Europe. But they also fear those countries rulers would demand the equivalent of any concessions they might make to Athens.

Since the elections Tsipras has backtracked on campaign promises, hoping to find ground for some concession by Germany and the IMF. He calls for “fiscal space” to allow negotiations on restructuring the debt, and proposes that instead of taking the next troika bailout loan of $7.9 billion, Greece will swap existing interest-paying bonds with “growth bonds” that pay only if the economy grows.

While Syriza’s leaders, like many on Europe’s bourgeois left and right, have been infatuated with Russian President Vladimir Putin, the new government backed off its opposition to EU sanctions against Russia in another concession to European creditors.

It remains to be seen if Greece will stay in the European Union, leave or be expelled, and if it will default on or restructure the onerous debt that expresses the domination of more powerful capitalists.

What is certain is that workers and farmers will continue to bear the brunt.  
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