From a World to Win News Service:

Greece: What is the problem Syriza is supposed to solve?

February 9, 2015 | Revolution Newspaper |


January 26, 2015. A World to Win News Service. The electoral victory of the Syriza party and the formation of a government with its leader Alexis Tsipras as prime minister is an important event, not just for Greece, but for Europe. This is not only because of the potential economic consequences for the European Union, but also because Syriza and Tsipras claim to represent a solution to the hardships that Greeks and many other Europeans have endured since the 2008 world financial crisis. “Far left” and ultra-right parties in Spain and France have seen the Syriza victory as heralding their own future electoral triumph.

For historical reasons that have to do with the late, weak and foreign-dominated development of capitalism in Greece, it has long been economically and politically subordinated to the big capitalist powers. Much of its ruling class, especially concentrated in shipping and banking (with major investments in the Middle East and later the Balkans), has been particularly intertwined with big-power capital, especially the UK and Germany, at various times and in various combinations, and the U.S.

This dominance has been violently enforced. Germany seized Greece in World War 2. Britain sent Winston Churchill and troops to support the Greek fascists facing a communist-led rebellion at the end of the war. When civil war broke out, the U.S. sent CIA advisers to direct the anti-guerilla strategy later applied in Vietnam: to defeat the guerrillas by emptying much of the countryside. The king went from being a British intermediary to an American one.

Greece did not follow the trajectory of the bigger and more developed European powers, for whom the three post-war decades were a period of vigorous economic growth and a fairly broad rise in living standards. Massive emigration and exile played a major role in transforming Greece from a rural to a modern urban country. Much of the country’s ruling capitalist bourgeoisie was and is concentrated in shipping and banks (major investors in the Middle East and later the Balkans), with a political base among the many traditionally-minded family business owners and self-employed professionals. It was not until the 1980s that the state was able to bring greater political stability through government spending and employment and the kind of social welfare measures implemented elsewhere in Europe.

The integration of Greece into the European and international market, and especially the international capital market, accelerating after Greece’s entry into the eurozone in 2001, brought about economic growth. Yet this process and its particular forms in Greece laid the basis for the particularly Greek severity of the later crisis. Government spending was to a large extent sustained by loans. The prosperity of the Greek economy actually weakened it structurally. Imports towered over exports. The big trade deficit, too, required loans to bridge the gap. That growth itself was fueled by foreign investment, including in the form of private bank loans.

German and French banks lent the Greek government money spent to import goods from Germany and buy war planes and other arms from France and the U.S. (amounting to 40 percent of Greek imports in the last decade). In effect, Greece was subsidizing the profitability of German, French and U.S. business. Further, of course, these loans were a form of investment which themselves yielded profits for capital based in other countries.

It has been charged that Greece became addicted to foreign credits. But at the same time, foreign finance capital became addicted to loaning money to Greece. The Greek government already had a high level of debt when Greece joined the eurozone, but its books were “cooked” to conceal the situation by the U.S. financial firm Goldman Sachs. This was not because of “corruption” but a consensus among all the big powers—the monopoly capitalist ruling classes and their governments—not to forgo the profits that could be gained by extending even more loans to Greece. Nor was this just a question of greed. None could afford not to grab when their rivals were grabbing profits to inject into their own economies. Some big French banks invested 40 percent of their capital in Greece. This pyramid scheme—debt paid for by borrowing and expanding debt—was a bonanza for foreign and Greek finance capital alike. High risks meant higher “spreads”—higher potential profits for those who bought into it.

The U.S. Lehman Brothers bank got the Greek government to agree to a derivative scheme, a restructuring of part of Greek government bonds, which became even more attractive for financial speculation with the country’s infrastructure (airports, seaports, etc.) as the collateral. Agreeing to these debt instruments was a short-term solution for the Greek government and its debtors, but ensured that the long-term debt could never be repaid under any imaginable circumstances. A competition-driven profit system that destroys the earth we live on can’t be expected to factor in other long-term consequences.

In 2008, when a financial meltdown swept the globalized economy, a process was launched in which Greece was lent more and more money in so-called “bailouts” so that its government could continue making payments on its debts to foreign and domestic banks and other creditors. In exchange, the “troika” formed in 2010 by the European Commission, the International Monetary Fund and the European Central Bank (now headed by Mario Draghi, formerly of Goldman Sachs) imposed draconian restrictions on Greek government spending. These cutbacks sent the Greek economy into a tailspin and its economy shrank by about a quarter. Even as some of its debt was paid down, its continuing payments soared in relation to its ability to pay through government revenues.

Salaries and pensions were slashed or simply went unpaid. Millions of jobs were lost. Hospitals and other vital public facilities closed. Many Greeks could no longer afford even electricity. They shivered in the winter and survived on charity food or by their wits while foreign financial companies fattened and Greek shipping companies and the large land holdings of the Greek Orthodox Church continued to enjoy tax exemptions.

To call this “austerity” doesn’t begin to describe the hardships imposed on Greeks. It is the worst collapse in living standards modern Europe has ever seen in peacetime. The main traditional ruling class parties, one historically rooted in the monarchy and fascism, the other social democratic, saw their attractiveness and credibility in tatters. Elected governments had trouble claiming to represent the will of the people when basic decisions were clearly out of their hands. In 2011, when Greek Prime Minister George Papandreou announced he would call a referendum on the country’s debt, he was publicly humiliated by German Chancellor Angela Merkel and French President Nicolas Sarkozy, who told him otherwise. His social democratic government was followed by a rightist government led by a former vice-president of the European Central Bank. This is the background to Syriza’s rise.

If the situation is understood in this light, then even without trying to predict how events will unfold it is clear that Tsipras’s proposals (chiefly negotiating a debt reduction and making more government spending possible) cannot possibly bring about a basic resolution to the situation. Regardless of whether or not Greece leaves the eurozone—which Tsipras says he does not want—Greece is structurally dependent on its relations with capital based in the world’s biggest powers and the imperialist world economy as a whole. Further, Tsipras’ proposed continuing links with the EU and NATO are meant to keep Greece firmly on the dominating side of the Mediterranean.

This reactionary nationalism explains why his party formed a governing coalition with the Greek Orthodox, Greek-chauvinist, immigrant-bashing ANEL (the Independent Greeks party), which was given the key ministry of defence. That nationalism also explains the apparently paradoxical fact that Syriza is being hailed by both rightist and “leftist” parties in imperialist France and Spain, parties whose programme is not to overthrow the monopoly capitalist ruling classes in those countries but to bring back the social welfare schemes and living standards of the days when imperialism seemed to be thriving in Europe, even while crushing much of the rest of the world.

The situation in Greece is in many ways a concentration of the global contradiction between the “severe imbalances built up between the financial system—and its expectations of future profits—and the accumulation of capital, that is, the structures and actual production of profit based on exploitation of wage-labor.,” to quote Raymond Lotta (“Financial Meltdown and the Madness of Imperialism”, Revolution, 23 September 2008). How can capitalism in Greece unzip itself from the global, competition-driven profit system—which is not Syriza’s intention anyway? How could radical change in Greece—or anywhere else, for that matter—take place except as part of a country by country but ultimately worldwide revolution whose ultimate aim is the abolition of all exploitation and all the oppressive relations of class society?

To free Greece from this system would require a new kind of state, born of a revolutionary movement with the material power to shatter the state apparatus of the capitalist ruling class and then entirely reorganize the economy step by step, creating an economic, social and political system where the people could actually and increasingly have say over their lives, which is not at all the case in Greece, with or without Syriza. The ruling classes of Europe were frightened by the mass tumult and rejection of the measures imposed on Greeks. A revolutionary movement in Greece—and especially a revolution—could help transform the regional and even world political situation, which in turn would make a breakthrough in Greece more possible to achieve and sustain.

When “austerity”—a nice name for brutal mass impoverishment—first hit Greece, some commentators predicted that would spell the end of “democracy” there. The thinking was that a political system based on elections (and the whole traditional state apparatus that implies) could not survive if millions of people no longer believed in it. Among other things, the electoral triumph of Syriza represents a rebirth of false hope in the political and economic system that brought Greece to where it is today. Reformists in other European countries and elsewhere are placing their own hopes for a share in power, or at least government, on bolstering the illusion that radical problems can be solved by reformist means. The experience of the elected, self-proclaimed socialist government of Salvador Allende in Chile, overthrown by a U.S.-organized military coup in 1973, showed how raising hopes that a government is in no position to deliver on, imperialist economic pressure that a populist government has no plan to stand up to, and the resulting divisions among the people who united around it or accepted it, can pave the way for the fiercest repression.

The palpable failure of the old order, the discrediting of its institutions and the collapse of the daily routine that limits people’s horizons that Greece is experiencing today provide conditions for rapid revolutionary advance—if this situation is really used to do that. Syriza, which calls for an adjustment and not a revolutionary rupture, is serving as a main channel for people’s rage in Greece at the moment.

Our point here is not that Syriza could bring stability to Greek capitalism, although some representatives of foreign capital may think that some kind of deal with Syriza is in their best interests right now. Political and social stability is the least likely of all possible outcomes, not only in Greece but worldwide. But no matter what happens, fostering hope in the possibility of repairing and patching up the existing system is part of the problem, not the solution.

Within the political hodgepodge that is Syriza and among its supporters internationally, too, many leftists and people who consider themselves opponents of capitalism are, once again, suspending their once real or professed disbelief in the parliamentary and electoral path. Rather than help Greeks find a solution, they are themselves creating further obstacles and leaving people helpless in the face of what is likely to come: the further squeezing by the capitalist imperialist system and rapid and dangerous political gyrations.

(Among other sources, this article draws on the work of Stathis Kouvelakis, political philosophy lecturer at King’s College in London and Syriza central committee member, for both information and insight and some of the thinking that we critique here. [See New Left Review 72, November/December 2011 and Jacobin Magazine, January 2015.])


A World to Win News Service is put out by A World to Win magazine, a political and theoretical review inspired by the formation of the Revolutionary Internationalist Movement, the embryonic center of the world's Marxist-Leninist-Maoist parties and organizations.


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