Greeks vote No to austerity; Creditors threaten to pull the plug

After Greek voters on July 5 overwhelmingly voted No to harsher austerity measures demanded by their foreign creditors, European trade unions urged European leaders to reach a “sensible compromise” with the Greek government in order to end the current crisis in Greece.

The No vote came after Greek creditors on June 25 issued an ultimatum that Greece accept more austerity measures or be denied new loans needed to deal with the country’s current crisis.

After the No vote, Greece submitted a new loan request that Greek Prime Minister Alexis Tsipras told the European Parliament addresses some of the objections raised by Greece’s creditors and provides a path toward reaching a “viable agreement.”

Whether European leaders and Greece’s creditors are willing to reach a compromise agreement remains highly problematic.

They said that they will make a decision on the Greek proposal on Sunday (July 11) night.

Since January when Greek voters voted in a new government led by Syriza, or the Coalition of the Radical Left, Greeks have been trying to renegotiate the terms of loans made to the country in 2010 after a financial crisis caused their economy to implode.

In return for the loans, the European Commission, the European Central Bank, and the International Monetary Fund demanded that the country impose austerity measures that reduced social spending on health and human services, cut pensions, privatized government resources, and forced the government to reduce other services.

The result has been a disaster. Five years after the austerity measures were implemented the unemployment rate remains above 25 percent, 40 percent of Greece’s children live in poverty, people’s access to health care has been curtailed, spending on education has been reduced, and the promises of the renewal that austerity was supposed to bring have proved to be empty.

To make matters worse, much of the money from the loans has been used to service debt from previous loans.

“The money that was given to Greece never went to the people,” said Tsipras in his speech to the European Parliament. “The money was given to save Greek and European banks.”

European leaders and Greek creditors, however, have insisted that in return for any new loans, Greeks must double down on the failed austerity measures.

When creditors issued their June 25 ultimatum, The Greek government called for a referendum on whether to accept the creditors’ demands.

Greek voters voted No by a margin of 61 percent to 39 percent.

The No vote, said former Greek Finance Minister Yanis Varoufakis, restored dignity to the people of Greece.

The No vote was also “a loud yes to the vision of a Eurozone offering the prospect of social justice and shared prosperity for all Europeans,” writes Varoufakis on his blog.

The European Trade Union Confederation, whose members represent 60 million European workers, urged European leaders to respect the No vote.

“Greek people have voted against austerity, unemployment, and poverty that made Greek debt unsustainable.  They have not voted against the EU or against the Euro,” reads a letter from the confederation addressed to European leaders.

“EU leaders have now an unavoidable responsibility to find a sensible compromise,” continues the letter.

But so far the EU leaders including the bankers who lead the European Central Bank have shown no inclination to compromise.

Among the creditors, Germany has been the most intransigent about insisting on more austerity measures as a condition of debt relief.

Germany’s intransigence is ironic. In 1953, Germany was suffering from an unsustainable national debt resulting from its aggression that started World War II.

Its debt burden impoverished ordinary Germans trying to recover from the aftermath of the war and made an economic recovery unattainable.

Germany’s creditors recognized the problems created by unsustainable debt and agreed to forgive 50 percent of the German’s debt obligation.

The debt relief allowed Germany the breathing space needed to rebuild its economy, which became the largest in Europe.

One of the features that made the German economic recovery possible was the fact that the government created a strong system of social welfare and insurance and implemented labor laws that protected worker rights.

Today Germany is demanding that Greece slash its social spending and jettison laws that protect worker rights.

The Greeks on the other hand are asking for relief not dissimilar to the relief that creditors offered Germany in 1953.

“The splendid No vote (must be) invested immediately into a Yes (for) a proper resolution,” writes Varoufakis. “To an agreement that involves debt restructuring, less austerity, redistribution in favor of the needy, and real reforms.”

SYRIZA keeps anti-austerity promise by rehiring civil servants

The Greek Parliament on May 6 voted to reinstate nearly 4,000 civil servants laid off two years ago as part of the austerity measures imposed on Greece by the nation’s creditors.

SYRIZA, the leftist party that won the Greek elections in January on an anti-austerity platform and now leads the government, promised after it was elected that it would rehire those civil servants who had been laid off in violation of the country’s constitution.

Those who will be rehired include municipal police officers, public school janitors, as well as other civil servants.

The new law also reestablishes the country’s public broadcasting network and calls for the rehiring of its employees who were laid off.

Among those who will be returning to work are 32 women custodial workers who until two years worked for the Ministry of Finance.

After being laid off, the women, who became known as “the cleaning ladies,” set up a protest camp near the Ministry’s offices and vowed to maintain the camp until they were rehired.

The SYRIZA-led government said that more re-hirings and other anti-austerity measures will follow.

“This is not our last word, it’s the first step of (administrative) reforms we’re going to make that won’t be neoliberal but will have a social aspect,” said Giorgos Katrougalos, the deputy minister for administrative reform to the Financial Times.

After learning that their jobs would be restored, the cleaning ladies held a celebration at their protest camp.

“I’m very, very happy (to get) my job back,” said Irene Chantzi to the BBC at the protest camp after learning the news.

Chantzi and the other cleaning ladies were joined by some cabinet members who belong to SYRIZA, including Katrougalos, Nadia Valavani, deputy finance minister, and Nikos Voutsis, interior minister.

The cleaning ladies’ protest camp became a symbol of Greek outrage at the austerity programs imposed on the country.

Last December the cleaning ladies gained wider fame when they traveled to Strasbourg, France and confronted the European Commission about the hardships that they and their fellow countrymen had endured as part of the austerity regime demanded by banks and other Greek creditors.

Greek President Alex Tsipras congratulated the cleaning ladies on their victory and said that they had played an important role in making Europe aware of the hardships caused by the austerity measures.

“Even the Chancellor (Germany’s Chancellor Angela Merkel), in a meeting that we had and without me bringing it up, referred to how unfair what the previous government did to you was,” said Tsipras to the group. “Your fight was known abroad because it was a fair fight.”

The current Minister of Finance, Yanis Varoufakis also expressed support for the cleaning ladies and said that when the SYRIZA-led government speaks of reform it means change that will help people like the cleaning ladies not change that satisfies the desires of capital.

“We remind (creditors) that our government has a different perception of what constitutes a reform,” Mr Varoufakis the Wall Street Journal.

Greece has been in negotiations with other European countries to reach an agreement on changes that Greece must make in order to receive €7.2 billion in loans that Greece needs to stabilize its economy, which crashed in 2010 when creditors demanded that their loans be repaid immediately.

The troika is demanding changes to the economy that will weaken unions, privatize more government services and resources, reduce pensions, and give the demands of creditors priority over the needs of the people.

Greece in return is demanding that it be allowed to carry out its anti-austerity proposals that were emphatically endorsed by the Greek public when in January it elected SYRIZA to lead the country.

Varoufakis and Tsipras have expressed confidence that the two sides can find some common ground that will make it possible for Greece to receive the €7.2 billion.

On May 12, Greece made a €750 million loan repayment to its creditors that the government sees as a good faith gesture that will help it secure the money it needs.

On May 11, Varoufakis met in Brussels with other European finance ministers in hopes of sealing a deal.

No agreement was reached, but Varoufakis said that some progress was made thanks to efforts by the Greek government.

“In recent weeks there has been considerable convergence, primarily due to our government’s great efforts and major concessions during the Brussels Group negotiations,” said Varoufakis at a media briefing. “Today’s Eurogroup meeting has acknowledged the strides we have made, and was conducted in a thoroughly positive atmosphere.”

Union leaders urge support for democracy in Greece and an end to austerity measures

European labor leaders are urging European leaders to recognize that the election of the new Greek government in January was a popular rejection of the austerity measures imposed on Greece by its lenders and to give Greece some breathing space as the country’s newly elected government led by Syriza, the Coalition of the Radical Left, tries to carry out its popular mandate to end the austerity measures that have shattered the Greek economy and caused widespread misery.

“The people of Greece have taken a democratic decision that five years of austerity, of hardship and of pain have failed, and they have chosen a new path,” said Oliver Roethig, a regional secretary for UNI Global Union, an international federation of 900 unions representing 20 million workers in the skills and services industries. . . . “Greece must be given time and space to obtain the financial means to fairly negotiate its debt. A program bridge until June this year is the best pathway to achieving this.”

“The new Greek Government must be given time to put in place new policies,” said Bernadette Ségol, general secretary of the European Trade Union Confederation. “It is vital for Europe’s democracy that the Greek people’s clearly expressed wish for an end to austerity is respected.”

Greece in 2010 was forced to implement austerity measures in return for €240 billion in loans to deal with a financial crisis that began when foreign lenders started calling in loans owed by Greek investors.

The austerity measures included a reduction of public spending, lower pensions, cutbacks in public health and health care, and new labor laws that weakened unions and collective bargaining.

These measures were supposed to improve the Greek economy, but since 2010 the Greek gross domestic product has shrunk by 25 percent, the unemployment rate increased to 25 percent (50 percent among the youth), national income is down 21 percent, health and human services have been drastically reduced, and one-third of the population lives in poverty.

Hundreds of thousands of Greek workers have lost their jobs, homes, and access to health care.

Much of the€240 billion that was lent to Greece has been used to pay foreign lenders.

The Syriza-led Greek government wants to restructure the loans so that it can use some of the money being siphoned off to foreign banks to restore basic health and human services and make public investments that can revive the Greek economy.

Greece’s lenders appear to be willing to offer some debt relief, but they are demanding that Greece adhere to the austerity measures imposed by the European Union, the European Central Bank, and the World Bank, or the troika as they have come to be known, as a condition for receiving the loans.

On February 16, European finance ministers demanded that Greece submit by February 20 a proposal for extending the loans that come due on February 28 and that the proposal must pledge that the Greek government will continue to enforce the troika’s austerity measures.

Greece’s Finance Minister Yanis Varoufakis said that Greece would not accept such an ultimatum. The new Greek government, said Varoufakis, has drawn a red line that will not be crossed. That red line prevents Greece from returning to the austerity policies of the troika and the old government.

On February 18, Greek Prime Minister Alex Tsipras in a speech to Parliament said that Greece would submit a proposal for extending the loans but do so on its own terms.

Tsipras in the same speech pledged to “end the medieval regulation of the labor market created by the troika to serve the interests of the oligarchs.”

Those regulations have crippled unions and eliminated collective bargaining.

Tsipras has said that strong unions and real collective bargaining are essential to building a prosperous and sustainable economy that can reverse the effects of austerity.

While European leaders continue to pressure Greece to maintain the troika-imposed austerity measures, unions throughout Europe have been expressing support for the Greek government’s stance against austerity.

At a February 15 Solidarity with Greece rally attended by more than 3,000 people in London, Billy Hayes speaking for the British Trades Union Council (TUC) said that, “The TUC both in this country and internationally, has said this: the international financial institutions and European authorities need to respect the voice of the Greek people.”

In Germany where national leaders have taken the hardest line against Greece, union leaders and others have signed a declaration of solidarity with the new Greek government authored by Riner Hoffmann, president of the German Trade Union Federation (DBG, its German acronym).

“Serious negotiations with the new Greek government must get under way, without any attempts at blackmail, in order to open up economic and social prospects for the country beyond the failed austerity policy,” reads Hoffmann’s declaration.

“Anyone who now demands that the country simply continue along the previous, so-called ‘path to reform’ is in fact denying the Greek people the right to a democratically legitimized change of policy in their country,” continues Hoffmann.

In his statement, Hoffmann called for an end to all European austerity policies that have led to anemic economic growth since the Great Recession of 2008.

“The European project will not be furthered by austerity dictates but only by a bottom-up democratic initiative in favor of economic regeneration and greater social justice,” said Hoffmann. “This initiative must be supported now in the interests of the Greek people. At the same time, it will help to kick-start the process of policy change across Europe as a whole. The political upheaval in Greece must be turned into an opportunity to establish a democratic and social Europe!”

Syriza wins, now the hard work begins

The results of Greek national election on January 25 were clear: the Greeks are fed up with the austerity program imposed on them in 2010 by the International Monetary Fund, the European Central Bank, and the European Union, also known as the troika.

The Coalition of the Radical Left, or more commonly known as Syriza, won a decisive victory by promising to end the austerity program that during the last five years has caused widespread misery and eviscerated the Greek economy.

Syriza won 36 percent of the vote, well ahead on New Democracy, the conservative party that has ruled Greece since 2012.

Addressing an election night audience in Athens, Alex Tsipras, Syriza’s leader, told supporters that Syriza’s election means that “Greece has turned a page. Greece is leaving behind destructive austerity, fear and authoritarianism. It is leaving behind five years of humiliation and pain.”

The atmosphere at Syriza’s post election rallies was filled with jubilation and optimism, but the new government will be inheriting an imposing set of problems.

In 2010, a financial crisis caused the Greek government to seek loans from the European Union to keep the Greek economy from cratering.

The loans came with a high price. The troika, demanded that the government reduce spending on social services, privatize government owned assets, reduce the public sector, reduce the minimum wage, cut pensions, and revise labor laws to reduce the power of unions.

The so-called reforms were supposed to produce investor confidence and get the Greek economy on the road to prosperity.

Five years later, almost one-third of the Greek population live below the poverty line, one-third have no access to health care, 18 percent can’t afford to pay for basic food needs, the unemployment rate is 25 percent (50 percent among young people), and the national debt is 175 percent of Gross Domestic Product.

In his victory speech, Tsipras said that he will enter into negotiations to rewrite the terms of the loans that have left his country in shambles, but he will likely encounter stiff resistances from Greeks debtors.

Should the debtors balk at restructuring the loans in a way that allows the government to make the public investments needed to alleviate Greek misery and kick start the moribund economy, Syriza will have a tough choice to make–agree to a loan deal that keeps the current austerity measures in place or default on the loans.

A default would likely lead to Greece exiting the eurozone, the countries that use the euro as their currency.

Exiting the eurozone would have immediate repercussions on the Greek economy, but it may be the price that Greece will have to pay to get out from under the thumb of the troika.

Syriza is also offering an economic program that breaks with neoliberal orthodoxy. It wants to increase the minimum wage, rebuild the country’s health care system decimated by austerity cuts, return the country’s social security system to pre-austerity levels, eliminate unfair taxes dictated by the troika, restore electricity to all homes whose power was cut because they couldn’t afford to pay their bills, and restart the economy by expanding public investment.

Unlike the neoliberal orthodoxy, which holds that public policy should only consider the needs of business, Syriza wants to “relaunch the economy in a way that suits social and environmental needs,”said Syriza Central Committee member Stathis Kourelakis .

Doing so, “will not be easy and we should be prepared for a serious battle,’ said Kourelakis in an extensive interview with Jacobin.

Syriza’s success will likely depend on its ability to keep its internal components united and to mobilize grassroots support for its ambitious program.

As its name implies, Syriza is a coalition of radical left groups that have united as a political party.

These groups include eurocommunist and other groups that broke away from the Communist Party of Greece such as Synaspismo and Renewing Communist Ecological Left as well as Maoist and Trotskyist organizations.

An equally important component of the coalition are groups from the social justice movements, including those of environmentalists, lesbians and gays, feminists, immigrants, and minority rights groups like those of the Muslims and Turks in Thrace.

Syriza gained prominence in 2008 when its members joined the poor and young people of Athens demonstrating in the streets too protest the police shooting of a 15-year old boy.

In 2011, Syriza joined the Occupy protesters at their encampments where protesters called for an end to the rule of privilege by a self appointed elite.

During the austerity crisis, Syriza established solidarity networks to help the working class deal with the savage impact of austerity.

Through these networks, people in need received health care, low-cost food, legal advice, education, help starting collective businesses, and cultural activities.

The combination of these solidarity networks, Syriza’s work with social movements, and its anti-austerity message gave Syriza a mass following.

In the 2012 elections, it came in second and was the leading opposition group in Parliament.

In 2013, the coalition formally constituted itself as a political party.

After becoming a political party, it retained many of the features of the coalition that preceded the party.

The parties that came together as a coalition maintained their own identity and status. The social movements did so as well.

Instead of trying to incorporate the social movements into Syriza, Syriza recognized and encouraged the autonomy of these movements.

While Syriza’s election victory is not without peril, it is also not without hope–hope that not just a better Greece but a better world can be created.

“Greek democracy today chose to stop going gently into the night,” writes Greece’s new finance minister Yanis Varoufakis on his blog. “Greek democracy resolved to rage against the dying of the light. Fresh from receiving our democratic mandate, we call upon the people of Europe and, indeed, the world over, to join us in a realm of shared, sustainable prosperity.”