Greece: Crisis, resistance and challenges for the left

February 20, 2010

"Got any thoughts on the bomb?" I asked breathlessly down the phone to a veteran Athens politics-watcher.

"There was a bomb?" he asked.

"The one at JP Morgan."

"Oh ... that bomb. Is that all?"

When a bank bombing occasions only mild interest, you know you're somewhere else entirely. The device had gone off about 8.30pm on February 16 at JP Morgan Chase's offices in the swish inner-city district of Kolonaki.

In traditional fashion, a warning had been phoned in a half-hour earlier, and the blast was small. The street was roped-off, and people stood around and waited for it to go off.

The cinema round the corner continued to play a mild Greek sex comedy. I asked the ticket-seller if they had considered evacuating the cinema. She looked at me as if I was mad.

The anarchist bank bomb has become something of a tradition in Greece, but there hadn't been one for a few months. With the country's prosperity now at the mercy of the global bond market and the European Union, many are surprised there haven't been more.

The Greek crisis, and the public protests and resistance to proposed government measures, are being presented on the world stage as further evidence of wild and crazy Greeks.

However, many on the Greek left are disappointed at the level of protest, and take it as an indication that the smooth Euro-politics of "modernisation" is limiting the ability of Greeks to resist the plan to surrender sovereignty to the markets and the bureaucrats in Brussels.


The resistance is real enough, and so is the crisis.

On February 10, the entire public service came out on a one-day strike, with rallies across the country. On February 24, the whole country will come out in a general strike.

The protests are against a series of austerity measures proposed by the ruling PASOK party. The measures are designed to deal with a galloping deficit and a perception of economic bankruptcy on the bond markets, which has added billions to Greece's interest bill on its public debt.

Announced by Prime Minister Georges Papandreou in early February, the moves include a freeze on all public service salaries and a reduction in the higher tier ones; raising the retirement age from 61 to 63; a crackdown on tax evasion in the cash economy; and public spending cuts.

The moves have been on the cards since PASOK was elected in October, defeating the right-wing New Democracy (ND) government.

At that time the country's dire economic position was becoming well-known — a decade of creative accounting on the public finances had concealed a deficit running at about 13%, and possibly higher.

Both the European Union and a number of global banks had actively assisted this process since Greece joined the eurozone in 2001, Brussels eager to expand the eurozone as rapidly as possible.

Euro countries are supposed to hold their deficits at 3% — few do — and to fill the potentially deflationary gap with "stabilisation" funds.

The theory is the unelected European Central Bank controls the money supply, the single currency encourages investment and the low deficits reassure the money markets that the currency is stable.

But the approach assumes a "level playing field". The reality — that northern Europe is an economic centre, southern Europe a periphery — creates different results.

Though the euro has made a larger degree of capital inflow investment possible, it also caused a huge jump in prices. This has reduced living standards for a section of the urban and rural low-waged in a permanent manner.

Manufacturing exports suffered, as did tourism, as places such as Turkey offered similar conditions for much lower prices.

Much of the new capital flowed into the consumer sector, with the centre of Athens becoming a chic European capital, filled with up-market chain stores that would not have found a sufficient market a decade or so earlier.

For Greece, investment-starved for decades, being drawn into this wider circuit of capital has had key benefits — one reason why Papandreou's determination to appease Brussels has met with broad support.

Nor has it created the inflationary bubble that has occurred, for example, in the Spanish property market.

But at a deeper level, it has stalled a genuine process of modernisation, pouring money into a society that retains high levels of patronage, inefficiency and organisational sclerosis.

Part of the reason for the wholesale rejection of the ND in 2009, which suffered a 10% swing against it, was its failure to tackle these problems, buying votes with an expansion of the bureaucracy and the use of stabilisation funds to reward favoured rural areas.


The persistence of such arrangements extends to tax. As much as a third of the economy is on a cash basis and untaxable — yet is also counted in the GDP as a way of making public expenditure seem less daunting.

The day after the public service strike, the taxi drivers came out, protesting at a government requirement that they issue receipts.

Though the drivers' association leader spoke of opposing the "global neoliberal agenda", there was less sympathy for a whole sector paying no tax.

Indeed, the taxi-drivers' strike illustrates the contradictions of the current Greek situation, and the social and economic divisions. On the one hand, a taxi-driver's margins are small. As everywhere, it is a tough way to make a living.

On the other hand, many waged workers subject to tax also have to work the 10-12 hours a day that many in the cash economy are also subject to, limiting sympathy.

The public service is a third area in its own right — in a country with threadbare social services, civil service positions have traditionally been a way of gaining solid support within a family network.

But at the same time, they occupy an ambiguous position as representatives of the Greek state.

"Greeks and the state — fehhhhh", says Stavros, in a cafe in the boho Exarchia district on the afternoon of the February 10 strike.

"The public servants will never get broad public support, because a Greek feels distant from the state."

With a half-century of dictatorship, war and repression up to the 1970s, activities such as the extension of tax-gathering powers — and the degree of financial surveillance that comes with it — have another edge to them.

Tellingly, the February 10 strike saw two rallies: one by the public servants, led by their fairly conservative union, and a separate one by the Greek Communist Party (KKE) and the far-left.

For the KKE, which controls 21 seats in the 300-seat parliament (a smaller left coalition SYRIZA has a further 13), the financial crunch is both an opportunity and a dilemma.

An opportunity because PASOK has identified itself thoroughly with the process of economic restructuring, and therefore the cuts, which will last at least three years on the EU timetable.

Left challenges

A dilemma because its left-nationalism, identifying the EU and the euro with NATO and the Western centre, seems archaic and fails to acknowledge the real and visible growth that has occurred over the past decade.

With no alternative model of development visible, many people accept Papandreou's analysis — that the old '80s PASOK approach of a public-funds dependent development locked the country out of investment flows.

Also in difficulty is Synaspismos, the largest party in the SYRIZA coalition, a break-off from the KKE in the '70s that adopted a pro-European euro-communist model.

The anti-democratic EU is not what Synaspismos had in mind as the "social Europe" it wished to see — and which now seems a pipe-dream.

For a broad middle-sector of Greek society, Europe is attractive precisely because it has offered a new consumerist economic tier.

"This is the start of something, not the end of it", former KKE MP Dimos Kombounis told the British Guardian on the day of the strike.

The KKE is counting on the not-unreasonable assumption that the steady rounds of cuts over the next few years will hit a majority of the population — and unify disparate sectors in opposition to government austerity.

Youth unemployment is high, and the boom has favoured the generations unevenly. The countryside has fallen further behind the city.

Should Europe's struggling economy collapse into a second-round of recession, the Greek economy will be hard hit.

There will undoubtedly be more bombs, but they are a distraction and a sideshow. What makes Greece interesting is the question as to whether the combination of the crisis of global capital with a well-organised residual left could make it a place from which a rallying point against the weakened and stumbling neoliberal vision might occur.

[Guy Rundle is the British and European correspondent for Crikey, and a former editor of Arena Magazine.]

You need Green Left, and we need you!

Green Left is funded by contributions from readers and supporters. Help us reach our funding target.

Make a One-off Donation or choose from one of our Monthly Donation options.

Become a supporter to get the digital edition for $5 per month or the print edition for $10 per month. One-time payment options are available.

You can also call 1800 634 206 to make a donation or to become a supporter. Thank you.