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Greek Forum Update by Natassa Romanou
February 25, 2015
In the past two weeks intense negotiations between the newly elected government in Greece and the lenders have concluded into a broad compromise. Greece will continue to receive more financial assistance from Europe so that it does not default on its external debt – a default that neither Greece nor its creditors want, but for different reasons. On the other hand, the Greek government will proceed with reforms in the country’s economy and society that, although have to be agreed upon by the EU leadership, are not dictated by them.
In my view, the result is a broad compromise that can be adjusted and implemented in a number of ways, between Syriza’s electoral mandate, viz debt restructuring and reversing austerity, and the EU’s demands for adherence to Troika’s austerity. The agreement reached late Friday night, February 20, nearly a month after the elections, extends the current program by four more months, which will release another installment of the loans to Greece. The terms of the agreement were revealed in a list of policy changes Finance Minister Varoufakis sent to the Eurogroup on the following Monday and which was approved immediately by the EU.
Key elements of the agreement are:
- Greek banks will continue to be recapitalized and the economy will not suffocate. This is important, as for the first time, Greece managed to distinguish “debt” and “memoranda”; the loan installment was agreed before any new measures were implemented.
- The interim program, for the upcoming four months, will not contain new austerity measures. It allows for policy changes that aim to raise public revenues. These new policies will be dictated by the Greek government, not, as in the past, by the Troika, which makes possible fair, equitable and socially conscious policy changes – though the EU institutions will have to agree to these changes.
- Since the EU-imposed annual budget surplus was lowered (for 2016 at least); public spending will kick in to support some important elements of the Thessaloniki program (e.g. red-loans, re-hirings of laid-off workers and raising the minimum wage, etc. which will have to be done gradually.)
- The part of the Thessaloniki program that aims to relieve the humanitarian crisis will be implemented immediately.
Going forward however, the fight is still on and the conflicts with the EU will continue and multiply. Greece will still have to demand debt restructuring or payment extensions, will have to maintain surpluses to be able to fund its own internal program, and will have to find ways to recapitalize its banks after the four month period. Syriza will have to resist further privatizations or general taxes (such as VAT, ENFIA, etc.) which EU demands.
It is therefore critical that during this period a new type of public discourse be initiated. The Syriza parliamentary group, the Central Committee, the party members, as well as the broader base need to remain engaged in a wide social dialogue about what the next steps are and what the alternatives are. Not just what Greece will do if the Troika wants more austerity, but more importantly, what Greece will do if the radical changes that Syriza was elected for cannot be implemented within the tight fiscal and political EU controls. While supporting the government, the members of this Greek Parliament, with the left and left-leaning majority, must guarantee that the proposed legislature aligns with the spirit of the Thessaloniki program and the Greek people’s mandate, otherwise it should be voted down.
Syriza is now able, with the elections behind it, and without the scaremongering tactics of the right, to assess and discuss publicly, on its own terms, all options that exist, from the low-key-self-imposed-austerity to the Grexit, inside or outside the EU, parallel currencies or capital controls. All are legitimate choices that can be considered, but need to be decided only when the social majority is aware of them, understands them and embraces them. At the same time, Syriza will be able to appraise the changes in the current political background in Europe, and seek alliances with the emerging left, anti-austerity parties in the periphery, such as Podemos in Spain, which can influence effectively the political attitude of the EU.
The EU’s Democratic Deficit
Very importantly, even if the negotiations and the measures are only a smaller-than-wished step away from austerity for Greece, they have been crucial in raising the awareness in Europe that the EU, as we know it, has an enormous democratic deficit. There is no structure for real solidarity among the countries; the bureaucratic apparatus of the EU is controlled by the vested interests of the right and unelected technocrats can impose their opinions on elected officials from the peripheral countries at any time. The very public EU attack on the Greek people can provide the anti-austerity, pro-democracy movements in Europe and globally with evidence for the need for an alternative for Greece, for Europe, and for the world.
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