What now for Greece – collapse or resurrection?




The reporting of the Greek tragedy over the last couple of years gives the impression that economics is a master science. Yet, the mainstream economists who gave Lehman Brothers a certificate of rude health just before its collapse, predicted tat by 2012 the Greek economy would start growing. The economy shrank by 7% last year and a further 6% contraction is predicted for this year, with worse to come. This is the fastest slump in recent times. The discipline of this type of economics is often closer to a confidence trick than a science.

Both Carl Schmitt and Hannah Arendt drew a dark picture of the times when economics trump politics. Has their prediction come to pass? The slow death of Greece was a political project from the start, with politicians accepting the prescriptions of neoliberal economics. The country has become the guinea pig for the future of a Europe ruled by German capital and Eurocrats. The economic measures were planned in Berlin and Brussels and are implemented in Athens by pliant politicians. They aim to reduce violently the standard of living of ordinary people, abolish the few remaining social safeguards and create third world working conditions. Greek politics, meanwhile, has become an experiment in how to bring about the collapse of a system of power.

Opinion polls put the Greek Pasok party at around 10% – down from 44% in the last elections – and the New Democracy party, which has alternated with Pasok in government, at around 30%, with the three left parties, Coalition of the Radical Left (SYRIZA), Communists (KKE) and Democratic Left standing at over 40%. The popularity dive of Pasok and New Democracy is understandable: the sorry state of Greece is the result of their combined policies. For the last 40 years, the two parties inflated the public sector they now attack by giving jobs to clients and contracts to sponsors. They turned a blind eye to tax evasion and created the most generous system of tax avoidance for the rich. They ran up the deficit and the debt and continued doing so well after the problems became clear. Both parties in government altered the statistical returns of their predecessors, giving rise to the term “Greek statistics”. Papandreou, after his 2009 victory, had the deficit increased – falsely, according to prosecutor Grigoris Peponis– by 3%, inviting the IMF-EU tutelage. The elites willed the deficit, the debt and their consequences and, if they could, they would have introduced the austerity measures without the intervention of the troika of IMF, EU and the European Central Bank.

The wholesale destruction of the weak welfare state, the massive transfer of public assets to private hands at bargain basement prices, the largest internal devaluation since the 1930s and the loss of national independence are part of the necessary re-arrangement of capitalism for a period of low growth and popular militancy. The supposed “rescue” is a test run for a new type of predatory capitalism after the failure of growth through the financial bubble.

The arrogance of Greek politicians made them unable, perhaps, to understand that by doing the bidding of their European partners, they would hasten their own political demise. George Papandreou, the only Greek prime minister ever to resign despite once having a strong parliamentary majority, was the third premier in his family and was appointed to his first ministerial post in 1985. The leader of New Democracy, Antonis Samaras also comes from a political family and became a minister in 1989. Many members of the current government are reaching what a mature democracy would consider political retirement age. The ploys used by the two parties to distance themselves from the unpopular measures while accepting them offer a textbook case of systemic and cynical panic. Let me list some.

New Democracy, the official neoliberal party, voted against the first austerity package in order to improve its poll ratings. But when the EU, IMF and the European Right set as precondition for the second package that its leader, Antonis Samaras sign up, the party returned to form and joined the Papademos government. The right-wing nationalist LAOS party on the other hand supported the measures from the start until its ratings started plummeting. At that point, it abandoned the government and voted against the second package. But these somersaults cannot prevent the disintegration of the parties. Over 43 coalition MPs have defied their party’s whip and have been expelled from their respective governmental parties. Five splinter parties have emerged so far and more are expected in the next few days.

The appointment of the unelected banker Lucas Papademos to the premiership was aimed at capitalising on the prestige of mainstream economists, and reversing the distrust for politicians. When the Papademos government was formed last November, it was announced that elections would take place next April. Despite the bonus of 50 MPs the Greek electoral system awards the winners, it seems that no single party will have a working majority after the next elections. This unprecedented uncertainty has increased the anxiety of politicians, many of whom are asking for a postponement of the elections and the continuation of the unelected government.

Once the politicians had failed in their efforts to convince people that the destruction of their lives was unavoidable, democracy itself became the target. Holding elections has now become the main problem for a government which, paraphrasing Bertold Brecht, would prefer to elect a new people.

The postponement of elections following the earlier cancellation of a referendum on the euro by Merkel and Sarkozy is part of set of measures that have turned Greece into little more than a colony. The proposal that a commissioner should be appointed to run the Greek economy was more than a little insensitive for a country that has suffered a brutal Nazi occupation. The proposal was scrapped; instead, there is to be a task force of inspectors based in the main ministries and a special ring-fenced account where the loan money will be deposited beyond Greek control, to be used exclusively for repaying the loans.

As in 2008, the European taxpayers are bailing out European banks, with Greece becoming a temporary stopping point. As if this was not enough, the prioritising of loan repayments over pensions and salaries will be inserted into the constitution, turning sectarian ideology into legal dogma for the first time since the collapse of the Soviet Union.

Additionally, the two party leaders have signed a letter agreeing to pursue the austerity measures after the elections. Thus the most important issue in recent Greek history will not be open for debate or voting. Social democratic, Keynesian and socialist ideas have effectively been banned.

This is one of those rare occasions where the distance between the public and mainstream politicians has become a chasm. The next few weeks will decide whether this is the final stage in the decay of democracy and independence, or whether a new politics will develop. Unfortunately, the parties of the Left still refuse to collaborate. SYRIZA promotes a broad anti-austerity front within Europe, but cannot convince the other two. The Greek Communist party, the most dogmatic in Europe, participates in parliamentary politics but is not interested in power unless it has full monopoly. The europhile Democratic Left prefers to act as a receptacle for disappointed Pasok voters. The Greek left, like the Conservative party, cannot overcome its deep trauma over Europe.

But the Greek people who filled Syntagma and the other squares last year, practicing civil disobedience and direct democracy, have other options. The mainstream media present the political collapse as the end of the post-dictatorship regime, hoping that the politicians who brought Greece to its knees can engineer its reform. But the reality is different. Post-civil war Greece was founded on the exclusion and persecution of the Left, and this culminated in Colonel Papadopoulos’s dictatorship. This divide is now coming to an end as both working people and modernisers realise that the political elite has betrayed them. For the first time, new types of political action are on the agenda. A hegemonic bloc combining the defence of the welfare state, democracy and national independence can bring together parts of the population who were historically on opposing sides but now express their indignation together. The necessary reform of the state, robust tax collection and punishment of the culprits can only succeed if undertaken by people who are not responsible for widespread corruption and mindless consumption. The task in hand is to rescue Greece from its “rescuers” and to create a new model for democracy in Europe.