International

On 25th January Syriza wrote a new page in Greece’s history, recording a famous victory. The party won the elections with more than 36% of the votes. Its message was that an end must be put to the austerity policies prescribed by the EU and the IMF as a condition of the support packages which the country had accepted. Syriza has during that same period developed into a symbol of the fresh, leftwards wind blowing through Mediterranean Europe, forming a break with the neoliberal thought that has prevailed during the crisis. The article below analyses the rise of Syriza in the context of the present European Union and shows why the party’s election victory concerns all Europeans. 

Syriza’s history is one which begins with an alliance of all sorts of left currents, from communists to social democrats, feminists and environmental activists. This movement’s goals included resisting the neoliberal policies already being pursued in the country, as well as encouraging critical debate around important social questions, such as the direction of the EU’s development. In 2004 Syriza, whose name stands for Coalition of the Radical Left, as well as meaning ‘from below’, was officially established in order to enable it to participate in general elections. As is often the case with young left parties, it was riven by rapidly increasing internal tensions amongst the various tendencies. It’s not unlikely that this process will continue in the next few years, partly depending on the extent of the space Syriza is granted to carry out its plans. But the fact is that Prime Minister Alexis Tsipras and flamboyant Finance Minister Yanis Varoufakis have allowed a fundamentally different voice to be heard around the EU negotiating table. In outspoken terms they have tried to break through Brussels’ technocratic logic with their political demands. Anyone who has heard the party’s leaders speak will have been struck, moreover, by the way in which the Greek people’s interests are continually brought to the fore. Given the austerity policies pursued by the previous government this is hardly surprising, but Tsipras and Varoufakis have certainly succeeded in bringing European politics into people’s homes. 

Although Syriza does not present itself as a eurosceptic party, and in common with the SP is affiliated to the United European Left/Nordic Green Left (GUE/NGL) in the European Parliament, where it has, however, always been seen as a europhile party, also in common with the SP it has always fought against the neoliberal consensus which in recent decades has exerted an ever-stronger stranglehold on the EU. More than ever ‘reforms’ and austerity have been presented as ‘necessary’, and the answer to growing Euroscepticism is ever more economic and fiscal integration. This development has an even longer back story. EU decision-makers have since the 1950s focused strongly on the strengthening of the internal market, an agenda driven above all by corporate capital. But with the signing of the Maastricht Treaty in 1991 the EU, which began as a project aimed at peace, stability and the common welfare, changed fundamentally in character. When the decision was taken to establish a monetary union within the EU, and to introduce the euro, there was no talk of a political union, though this is a precondition of any monetary union. It was taken for granted that this would inevitably follow, yet the opposite has occurred.

In the years since the introduction of the euro, the eurozone’s member states have grown further apart. The north has profited from a relatively ‘cheap’ euro, which has meant that the trade surplus of countries such as Germany and the Netherlands has risen explosively, while the Mediterranean countries have been burdened by an ‘expensive’ euro, which has meant that they have been able to sell fewer of their products abroad. To an extent this economic imbalance has been compensated for as a result of banks in the north lending money to these countries. In Spain, that led to a formidable bubble on the housing market. The Greek situation was a case apart: the country turned out to be carrying a much greater budget deficit than the former government had claimed, partly due to a bit of smart creative accounting by Goldman Sachs. When how Greece really stood came to light, this had negative consequences too for Spain and Portugal: the financial markets feared that these states would also no longer be able to meet their payment obligations.  The southern member states were drained financially, and the EU saw itself forced by necessity to intervene. A number of these Mediterranean countries received support packages from the EU, with the European Commission, the IMF, the European Central Bank (ECB) and the European Commission forming together what is called the ‘Troika’, the body which determines and monitors the conditions of this support. The recipients had in return to carry out swingeing cuts in spending. The same austerity policies were, for that matter, imposed on the better off countries, which had their own problems as a result of the eurocrisis, though these were less serious. This caused additional harm to the southern member states who had to start to reduce their deficits, in that their competitive position was further weakened. 

In the years following this, Greece borrowed astronomical sums in two tranches from the IMF, the ECB and the member states. Meanwhile massive cuts were made to public spending, state-owned industries were privatised and the country fell into an unprecedented economic malaise. The stats don’t lie: the Greek economy has, when compared with the period prior to the crisis, shrunk by 25%; one in three Greeks lives below the poverty line, a figure which includes a great many children; one in four has no job, with the proportion rising to 50% amongst young people; wages have plummeted, falling by 18%, almost a fifth, between 2008 and 2013, as has the minimum wage, lowered to €500 per month. Social provisions are being got rid of, access to health care is extremely restricted and many can no longer afford the medications they need. Home-owners are being evicted, unable to meet their mortgage payments, while the poorest section of the population is even being cut off from access to the most basic necessities, such as food and electricity. In fact, Greece has become a sort of third world state within the eurozone, with the troika playing the role taken by the IMF when it loans out money to developing countries in order to impose neoliberal policies on them. At the same time the Fund, which has been issuing extremely optimistic projections of the Greek economy admitted in an internal report that it had underestimated the effects of austerity and that private debts had been written off too late. A welcome confession, but it was too little, too late. 

Since the moment that Syriza managed to put together a government in just three days, intensive negotiations with the Eurogroup – the organisation within the EU responsible for coordinating the economic and monetary policies of the eurozone governments, and for cooperation with the troika - around debt settlement have been ongoing. Greece has chalked up a total debt with the eurozone countries of some €240 billion. A part of these loans can be repaid over a period of decades, but another part is made up of loans that have already reached term and must now be refinanced. Study Greece’s debt and you’ll be astonished. Although the stubborn cliché persists that Greece borrowed the money in order to maintain its ‘expensive’ welfare state, it is nevertheless a grave misunderstanding. More than a third of the money from the EU and IMF aid packages has gone to service other loans, a fifth on writing down the national debt, another fifth on bank rescues, and major sums on interest payments and compensation for private investors, who had to accept that they wouldn’t get all of their money back. Only 11% of the money from the loans was intended for government spending, and half of that went on overdue payments. 

And that isn’t the only cliché with which the Greeks have been confronted in recent years. In the media but also in political debate, during the crisis and sometimes since, systematic references have been made to ‘lazy Greeks’, who work little, don’t pay any taxes and can pick up their pensions as early as their fiftieth birthday. The Netherlands has certainly been no exception, with Wilders’ far right PVV taking the lead. These misconceptions are, however, easy to refute. Of workers in all member states of the OECD, only Mexicans work longer hours than Greeks, who work the longest in the EU, while the average Greek retirement age is 62, just as it is for Germans. Yet the image is one of a person living off his or her investments while swilling ouzo on the beach. It is true that the taxation system in Greece functions quite badly, but that is in the first place an institutional problem, not one caused by the people in general. Government after government has not dared to fight tax evasion and tax avoidance, the most disastrous for state revenues being that of the oligarchs. That goes equally for the governments which have taken office since the crisis, and under the supervising eye of the troika broken up the welfare state structurally, yet failed to rig up a tax office that might actually function. It is correct of Syriza to make its approach to corruption, smuggling, tax evasion and tax avoidance one of its central points. A successful approach would enable the Greek state to pull in billions to be spent on the country’s economic recovery.

What else does Syriza want? Although the break which Syriza is trying to effect with the policies of the troika can certainly be described as ‘radical’, the party’s programme is in the main classically social democratic in nature. Syriza’s aim is to fight poverty by providing people with emergency aid, social services and an adequate safety net. The party is also determined to fight to keep public goods in the hands of the people. It is striving to establish a system of taxation under which the strongest shoulders bear the heaviest load, and by means of which the poorest, who  sometimes have to struggle with massive debts, can be spared. In addition, Syriza is looking to stimulate the Greek economy with a job creation plan and an investment package (of which a development bank will form part), by professionalising Greek institutions and implementing a plan for democratic reforms. In other words, Syriza is striving towards a reasonable welfare state funded by a progressive tax system in a country in which institutions such as the national statistical bureau and the revenue service simply do their work. But ideas which are more radical and modernizing, such as an unconditional basic income and the encouragement of cooperative initiatives working with open source technology, form part of their thought. In this sense Syriza is certainly a modernizing and progressive party. 

Syriza’s slogan proclaims: “We are a way to hope”. And that is precisely what has been its motto since it entered into negotiations with the EU institutions. For Syriza to be unable to fulfil all of its election commitments is understandable, as is the fact that the new government can’t unilaterally break with the EU’s negotiators. From that perspective their acceptance of the current aid programme was less surprising and less disappointing than it appeared to much of the media, since in that way the further shrinking of the economy, a possible run on the banks and even an involuntary Grexit could be prevented. Moreover Syriza, despite what has been asserted in much of the media, has managed to perform a number of impressive feats during these negotiations.. The ECB’s emergency aid to the Greek banks has remained, and the EU has abandoned its demand for a high primary budget surplus to be achieved this year. This will give Syriza more space to work out its plans in more detail and bring them to fruition. More importantly, Syriza is practising a different form of politics and speaking a different political language than one is used to in Brussels. Varoufakis points, with some justice, to the ‘humanitarian crisis’ by which his country and its people are stricken, and submits that this is related to the austerity policies which the EU has imposed on Greece during the last five years.

Syriza has given many people in Europe new hope of conducting a truly left form of politics, one that grows from below, and by means of cooperative links enables us to work together, with a clear role for the citizenry, who thoroughly debate their ideas regarding the content of politics and policy. It is now a question of waiting for the next important phase of the negotiations: the end of June sees the termination of the extension of EU aid, and it will become clear how advanced the elaboration and realisation of Syriza’s plans are. It promises to be an exciting time.

Sara Murawski is Policy Advisor Development and Finance for the SP.

This article first appeared, in the original Dutch, in the SP monthly Spanning.