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Home » Clarion » 2015 » March 2015 » Viewpoint: Greece Against Austerity

Viewpoint: Greece Against Austerity

Thousands took to the streets in Greece to celebrate Syriza’s electoral victory.

The electoral victory of Syriza, Greece’s largest party of the anti-austerity left, has been felt far beyond Greece’s borders.

Syriza’s rise is a threat to European elites who fear that any success by Greece’s new government will strengthen forces of the anti-austerity left in other countries, such as Spain and Ireland. Forcing Syriza to fall in line with the austerity orthodoxy would, in contrast, lend credence to the claim that “there is no alternative” to the current set of policies. The stakes are high, and Syriza’s electoral victory has intensified the debate regarding the pitfalls of austerity across Europe, much as the Occupy movement transformed growing inequality from a taboo topic to a subject of heated political debate.

The brutal austerity measures imposed on Greece have attacked many of the values and principles that we as educators and PSC members hold dear. Draconian budget cuts have hit education and health care really hard. Schools and universities are understaffed, as teachers and administrative workers have been fired, while the ability of students to learn has been undermined by the rapid growth of hunger. If Greece changes course, it could set an example that would strengthen opponents of austerity elsewhere – not only in Europe, but also here in New York, where budget cuts remain the order of the day despite a $5 billion State surplus.

Global Crisis

The context for this confrontation is one that transcends the specific peculiarities of Greek society. Capitalism’s recurrent structural crises always give rise to social struggles that determine which social classes and groups will bear the brunt of these crises and whose interests will guide the institutional restructuring that resolving such crises requires. In the ongoing global capitalist crisis, Greece is an especially clear example of this dynamic. First, it is an example of the attempt to “solve” the crisis on the backs of those least responsible for it, namely ordinary citizens and the working class. But Greece is also an example of the social and political struggles that this attempt has unleashed.

The experience of the global crisis in Greece, as well as in other countries of the European periphery such as Italy, Spain, Portugal and Ireland, has been crucially shaped by their membership in the eurozone, a common currency area that encompasses 19 countries from across Europe. Even before the current crisis, the eurozone project had served to reorient European societies from a postwar social model distinguished by a substantial welfare state toward a neoliberal free-market model tailored to the needs of the European capitalist class and the financial sector. Similarly to what has happened in other parts of the world, including the US, this model generated rising inequalities, dramatic increases in poverty even in Europe’s economically stronger countries such as Germany, and a period of easy credit and financial and real estate bubbles that disproved the neoliberal faith in the rationality of financial (and other) markets, while paving the way for the sovereign debt crisis that began in Greece five years ago, only to spread to the other countries of the European periphery soon after.

By the time the sovereign debt crisis began, many of the large European banks were effectively bankrupt and had to be bailed out both directly and indirectly. Direct bailouts carried out by national governments led to the deterioration of government finances, thus feeding the sovereign debt crisis. In the case of Greece direct bailouts of the financial sector by the government were also accompanied by the indirect bailout of European banks that held much of the Greek debt.

The two massive bailout loans that Greece received from the European Union and the International Monetary Fund were not motivated by solidarity for the Greek people but by a determination to prevent the collapse of European banks and the global economy that a Greek default in 2010 would have likely triggered. Consistent with their long-standing practice, when faced with a debt crisis resulting from the bad decisions of creditors and borrowers alike, neoliberal elites decided to protect the former while directing all their wrath on the latter. This political choice, which is consistent with neoliberalism’s long-standing project of redistributing wealth and power upwards, was ideologically justified through a kind of racialization, by Northern European media, of the supposedly “lazy,” “profligate,” “corrupt” and “irresponsible” inhabitants of PIGS (a telling acronym used to describe Portugal, Italy, Ireland, Greece and Spain).

Austerity Measures

This ideological move had two effects. On one hand, it justified the imposition of brutal austerity measures on the highly indebted countries. On the other, it also created divisions within the European working class, thus making it possible to respond to the crisis of the neoliberal model through a seemingly paradoxical attempt to entrench this model even further. The result has been a brutal assault on the living standards of ordinary people, not just in Greece but throughout Europe.

In Greece, where this assault has been most extreme, budget cuts and austerity have led to over 25% unemployment, drastic reduction in people’s salaries and pensions and a systematic destruction of the social fabric expressing itself in dramatically increased levels of suicide, poverty, hunger and homelessness. Labor and collective bargaining rights have been decimated, while the growing levels of unemployment have further undermined the ability of Greek workers to resist the capitalist onslaught. As a result, even many of the Greeks who still have a job are owed months of back wages.

Political Scapegoats

Just as the imposition of brutal austerity on the European periphery has been justified in Northern Europe through a vilification of people in the highly indebted countries, similar ideological strategies have been used to keep working people divided within those countries. In Greece public-sector workers became a favorite scapegoat early in the crisis, as austerity was justified through wild exaggerations of the size of the Greek public sector. The vilification of the public sector has also justified the privatization of valuable public assets at a fraction of their true value, thus redistributing wealth from ordinary Greek citizens to business interests closely tied to the political elites ruling the country up to the January 25 election.

Immigrants have been another popular scapegoat. In fact, one of the most disturbing developments since the beginning of the Greek crisis has been the rapid rise of Golden Dawn, a neo-Nazi party with paramilitary units roaming until recently the streets of Greek cities in search of immigrants and anti-fascist activists to terrorize, assault and (on several occasions) even murder. The leaders of the conservative and socialist parties, which ruled in coalition until recently, have in the past pandered to neo-Nazi sympathizers, thus legitimizing the racist xenophobic agenda. The murder by a Golden Dawn member of Greek anti-fascist rapper Pavlos Fyssas, along with the massive anti-fascist protests that followed it, finally pushed the authorities to charge Golden Dawn leaders with heading a criminal organization. Despite the fact that its leaders were in jail waiting to be tried, Golden Dawn proved its resilience in the recent election, receiving 6% of the vote and becoming the third largest party in the Greek parliament.

Popular Resistance

The rise of Golden Dawn is only one example of austerity’s assault on democracy. As austerity measures have understandably led to intense popular resistance, police and state repression intensified and so did the attempt of European elites to seal entire countries’ fates without consulting with their citizens. In a famous example, the Greek prime minister George Papandreou, who initiated Greece’s austerity program, was unceremoniously deposed when Greek and European political elites came together to foil the referendum on Greece’s second bailout that he was “foolish” enough to announce. Soon afterward Greece, and then Italy, found themselves ruled by unelected prime ministers who were former bankers and enjoyed the trust of European economic and political elites.

Given all this, the magnitude of the challenge facing the new Syriza government is clear. From the very beginning, it has had to confront the weakening of democracy throughout Europe as it is coming under intense pressure from its European lenders to continue the exact same policies that the Greek voters have just rejected. Even its attempt to moderate (rather than reverse) austerity has been met with threats and stiff opposition.

To withstand these pressures from the outside, the new Syriza government will have to address one of the important contributing factors to Greece’s shaky finances, namely the ability of Greek oligarchs to evade taxes. Any progress on that front would lead to intense resistance from capitalist interests inside Greece but would contribute to a progressive redistribution of income, which would increase the government’s popularity, while also providing it with the fiscal room necessary to reverse some of the damage inflicted on the Greek welfare state (such as it is) and the country’s social fabric.

The success or failure of Greece’s new government will reverberate throughout Europe and beyond. If Greece charts a new direction, it will encourage others to do the same. If Syriza falls short, this could bolster challenges to the status quo that come not from the left but from the far right. The dramatic rise of Marine Le Pen’s National Front in France, Europe’s second largest economy, is just one example of this possibility.

What is clear is that the success or failure of the Syriza government will have a profound effect on social struggles outside Greece. And it will provide valuable lessons to all of us who are interested in understanding and transforming the capitalist socioeconomic system in which we live, work and struggle.


Costas Panayotakis is professor of sociology at City Tech and author of Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy.

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