Greece: SYRIZA on brink of split over new bail out deal

Left Platform leader Panagiotis Lafazanis.
Friday, August 14, 2015

By any logic, Greece's SYRIZA-led government should be sinking in the opinion polls.

At the Brussels Eurosummit of Eurozone leaders on July 12, SYRIZA Prime Minister Alexis Tsipras agreed to a set of draconian preconditions for obtaining a third €86 billion bailout. The decision effectively reversed the opposition to austerity on which SYRIZA was elected in January.

Surely the Greek public would feel, as SYRIZA’s internal critics in its Left Platform do, that by caving in to the European establishment, Tsipras and finance minister Euclid Tsakalotos had betrayed the Greek people’s 61.3% vote against such austerity measures at the July 5 referendum?

Not if the most recent Greek opinion polls are anything to go by. The July 24 Bridging Europe poll put support for SYRIZA at 41.2%, up from the 36.3% it won in January 25. The July 24 Metron Analysis poll reported the same result, while a July 18 Palmos poll put support for the radical coalition at 42.5%.

All three polls had support for the conservative opposition New Democracy (ND) falling by between 4.7% and 6.3% to the low 20s.

SYRIZA is now in coalition with the nationalist ANEL party. Under the Greek electoral system, which awards fifty extra seats to the party winning most votes, these polls would give SYRIZA an absolute majority in the 300-seat parliament, allowing it to govern alone. Support for Tsipras as prime minister stands at about 60%.

What explains the steady, even rising, support for SYRIZA and Tsipras in a country whose economy has again fallen into recession, whose banking system has been deliberately strangled by the European Central Bank and whose government was elected to oppose — not agree to — austerity?

One source may be relief that an end is in sight to the financial strangulation and capital controls that have been in place since June 29. These have sped up the return to recession and, according to the August 10 Kathimerini, were largely responsible for more than 16,000 job losses in July.

However, support springs most of all from the feeling that in half a year of warfare with the “Troika” of the European Central Bank, European Commission and International Monetary Fund, the Tsipras government has done everything humanly possible to force an acceptable deal from the powers-that-be.

The final result may be very bad, but it is broadly felt to be the best any Greek politician or party could have achieved.

A July 14 New York Times article said: “Many Greeks seem to have no trouble separating their distaste for the deal from their feelings for Mr. Tsipras. Analysts say he would easily win re-election even now, with many Greeks seeing him as a man who gave everything he had to make things better, even if he did not succeed.”

There also seems to be a strong sentiment that with SYRIZA and not Greece’s corrupt old parties running government, there is a chance that the new “memorandum” will be implemented in a way that — to the best of SYRIZA's ability within the constrains it operates in — puts the interests of average Greeks ahead of the rich, particularly the oligarchs.

Tsipras’s message the day after returning from the July 12 defeat in Brussels was: “We’ll ensure the burden is distributed with social justice. This time, those who got away in the past will shoulder the burden.”

Tsipras added that Greece needs “radical reforms that benefit society and not the oligarchs who led us here”.

It has also become increasingly clear to that still-large majority of Greeks who want their country to remain in the eurozone that unconditional opposition to austerity must — given the present balance of political forces in Europe — lead to “Grexit”.

While the eurozone is run according to the brutal “debts-must-be-paid” criteria of German finance minister Wolfgang Schäuble and the conservative majority of eurozone member-states, an isolated country pledged to fight austerity faces expulsion from the euro club.

In this context, the alternative policy of SYRIZA’s Left Platform — outright rejection of the bailout — is associated with “Grexit” and a return to the drachma.

This impression was strengthened by an August 3 report in the daily To Vima. It claimed Left Platform spokesperson Panagiotis Lafazanis had called for Tsipras to accept an offer from Schäuble for a controlled Grexit. The article said Tsipras rejected this course on the grounds that SYRIZA had no mandate for it.

Memorandum revealed

On August 11, details of the memorandum agreed between the Troika and the Greek negotiators was published by the Financial Times. The deal was accepted by Greek parliament on August 14, with 64 MPs voting against. Of SYRIZA's 149 MPs, 32 voted no to the deal – including Lafazanis and former finance minister Yanis Varoufakis – and 11 abstained, with one MP absent.

As its content becomes more widely known and its harsh measures begin to be applied, it is hard to see how the SYRIZA-led government can possibly maintain its present level of support.

More importantly, it is hard to see how SYRIZA can avoid conflict with key sections of its social base, originally won over by its opposition to previous pro-austerity governments.

The government has agreed to measures that cross what SYRIZA had set out as its “red-line” issues — involving pensions, sales tax, privatisations and labour rights.

Another potential point of conflict will be proposed measures against non-performing loans, including mortgages. At the end of last year, this amounted to 34.3% of all loans. Any move to evict those who cannot pay would seem certain to provoke a movement of resistance.

The most important feature of the 29-page document is its obsessive detailing of tasks and commandments for the Greek government. The goal is to cut as much “wriggle-room” available to Athens as possible.

At the same time, the release of loan funds to Athens will depend strictly on the government’s compliance, quarter by quarter, with memorandum targets and “conditionalities”. These are to be policed by the “Quadroika” — the hated Troika plus the European Stability Mechanism (EMS), the European Union’s bailout fund.

The memorandum’s assumption is that if the Greeks are given any chance to “misbehave”, they will. Athens has been made to surrender basic powers in key areas of economic and social policymaking.

Particularly sickening is the Troika's overlordship of Greece's banking sector. With the country suffocating under capital controls and banks fighting for survival under a pile of bad debt, the Troika now has direct influence over bank sector rescue.

The memorandum says: “No unilateral fiscal or other policy actions will be taken by the [Greek] authorities. All measures, legislative or otherwise, taken during the programme period, which may have an impact on banks’ operations, solvency, liquidity or asset quality should be taken in close consultation [with the Troika].”

Two other examples of the memorandum’s commandments:
• “The Government will not intervene in the management, decision-making and commercial operations of banks, which will continue to operate strictly in accordance with market principles.”
• “A new independent fund … will be established and have in its possession valuable Greek assets. The overarching objective of the Fund is to manage valuable Greek assets; and to protect, create and ultimately maximise their value which it will monetise through privatisations and other means.”

This last arrangement will force Greece to sell its family silver, with the “compensation” that it can keep an eighth of the proceeds for an “investment fund”.

Recovery? Protest?

How will this increased austerity and pillaging of the Greek economy create growth? The Troika program involves a “fiscal adjustment” of up to 5% of Greek GDP when the economy is expected to slump by at least 2.3% this year and 1.3% next year.

Jonathon Loynes of Capital Economics said: “Recent survey evidence suggests the economic impact of capital controls has been catastrophic, leading to a collapse in economic activity to levels way below those seen even when the economy was contracting at annual rates of 9% in 2010-11.”

Little wonder Varoufakis, who opposed the deal, told BBC Radio 1 on August 12: “Ask anyone who knows anything about Greece's finances and they will tell you this deal is not going to work.

“We have the astonishing situation where the finance minister of Germany goes to the Bundestag and effectively confesses that the deal is not going to work … The International Monetary Fund … is throwing up its arms in the air, collectively despairing at a program that is simply founded on unsustainable debt …

“And yet this is a program that everybody is working towards implementing.”

The potential fragility of the deal was shown by comments by anonymous EU officials cited by the August 13 Guardian. They were anxious that German insistence on even nastier measures will stimulate Greek resistance.

Such resistance is already growing. On August 13, Lafazanis publicly called for the creation of a new movement to satisfy “the people’s desire for democracy and social justice”.

In a statement called “No to the new bailout — A call for struggle and popular mobilisation throughout the country”, Lafazanis and 11 other signatories called for the “political and social formation of a broad, Panhellenic movement” and “the creation of struggle committees against the new bail-out, austerity and the county’s tutelage”.

The statement chimes in with the mood in key parts of the Greek working class, such as the Piraeus waterside workers, who are resisting privatisation. According to an August 11 Real News interview with Giorgos Gogos, SYRIZA central committee member and union organiser in Piraeus: “We’re going to start organising ourselves to fight against [port privatisation].

“It's very strange because a left party’s in power … it’s very contradictory. But the goal remains the same — these measures should not be implemented.”

[Dick Nichols is Green Left Weekly’s European correspondent based in Barcelona. A longer version of this article will be posted at Links International Journal of Socialist Renewal.]

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