Greece's Syriza government imposes harsh austerity measures
27 May 2016
On Tuesday evening, the finance ministers of the Eurogroup agreed to provide the Greek government with €10.3 billion from the European Stability Mechanism (ESM). The first €7.5 billion will be paid out at the end of July. This tranche is part of a credit agreement that the Syriza government negotiated with the International Monetary Fund (IMF) last summer.
In the foreseeable future, there will be no comprehensive debt relief, although even the IMF has called for such a measure in order to make Greece’s state debts manageable. The ministers made decisions about debt relief dependent on whether the credit programme can be ended successfully by 2018—i.e., whether the Syriza government continues to adhere to the current brutal austerity course.
In this way, the Euro countries have made it clear that they will accept no other way of dealing with the debt crisis other than continuing radical attacks on the living conditions of the workers. Greece will be forced into decades of dependency on the lenders. According to the calculations of the IMF, the debt burden will grow to 176 percent of GDP by 2020 as a consequence of European Union (EU) austerity and horrendous interest rates.
The rapid decision of the Eurogroup has a symbolic character. The governments of the Euro countries are closing their ranks in order to enforce the dictatorship of the banks over the entire continent. The agreement is the ruling elite’s answer to the growing opposition of the working class to social cuts and war.
The events in France have provided a major shock to the European powers. The mass strikes against the Hollande government’s job market reform is an expression of the deep opposition of the workers on the entire continent to the attacks on social and democratic rights. The strikes in France could spread quickly and become part of a larger movement encompassing the entire continent.
Under these conditions, the representatives of the Eurogroup governments have laid aside their differences and, without any significant conflicts, carried forward their austerity plans for Greece. “Even if the discussions were long, the atmosphere was always extremely relaxed,” said French finance minister Michel Sapin after the meeting in Brussels. Greek finance minister Euclid Tsakalotos said that in spite of the exploitation of his country, there was “reason for optimism.”
The Coalition of the Radical Left (Syriza), which rules Greece in a coalition with the right-wing populist party Independent Greeks (ANEL), plays the most important role in this united front of the European ruling class.
Since the beginning of the credit programme in 2010, every Greek government has tried to weaken the austerity measures of the EU or at least to delay them. Whenever it was time to pay the next tranche of credits and the austerity policies were examined, there was an agreement with the creditors shortly before state bankruptcy. This was true of the conservative New Democracy (ND) as well as the social democratic PASOK and even the technocrat cabinet of Loukas Padimos that was installed by the EU.
This was not the case with Syriza, however. In the past few weeks, the party has pushed through parliament every law demanded by the EU within the framework of credit agreement. This includes increases in mass taxes, pension cuts and privatisations, which together weigh even more heavily on the poorest of the poor. A third of Greek households already live in poverty.
Last Sunday, Syriza even passed the so-called Mechanism of Budget Adaptation, which brings about automatic budget cuts when the Greek government fails to reach the unrealistic budget goals that the EU has set. These measures were not part of last summer’s agreement, but were added on by the EU representatives. Although Syriza regards the law as a violation of the constitution, it is implementing it anyway.
Like no government before it, Syriza can count on the loyalty of its parliamentary representatives. While social democratic prime minister Giorgos Papandreou and his conservative successor Andonis Samaras had to leave their positions, because the number of dissidents in their own faction increased from one vote to the next, all government representatives have voted in favour of the most recent brutal austerity measures.
The government of Premier Alexis Tsipras has also made it clear that worker protests against anti-social policies will be put down with violence if necessary. When workers paralysed the country with a general strike two weeks ago and marched before parliament to protest against the austerity policies, the government cleared the area with tear gas and stun grenades. Syriza has attacked defenceless refugees with the same brutality.
Under the Syriza government, Greece has become the pioneer of EU austerity reform. Eurogroup president Jeroen Dijsselbloem praised the eagerness of Syriza for reform even before the meeting in Brussels. “I think that the Greek government has already done a lot of work,” said the Eurogroup head.
Syriza’s shift to the right is a reaction to the intensifying class struggles in Europe. From the very beginning, the party’s aim has been to defend the EU and European capitalism. It has always rejected any mobilisation of the European working class against the austerity demands of Brussels.
Instead, it hoped that within this framework it could win a few concessions for its well-off clientele, which also enjoys close connections with the EU. During the election campaign, Tsipras called French president François Hollande his role model and hoped that he could use Hollande’s differences with Germany to his advantage.
This quickly proved to be an illusion. Shortly after the election in January 2015, Syriza betrayed all of its election campaign promises to end austerity and began to negotiate an austerity deal with the EU. In spite of the overwhelming “no” in the July referendum, it implemented austerity policies without compromise. Similar measures are now to be imposed on the rest of the European working class.
Tsipras now stands side by side with the French president. Hollande is confronted with serious opposition to his reactionary job market reform, and Syriza is providing him with rear cover. With its policy of precipitous grovelling, Syriza hopes to prevent a situation in which the struggles in France could meet up with the anger of the Greek workers. A scandal at the meeting of the Eurogroup had to be prevented at all costs.