Millennium Post

The Grecian pain of austerity

More and more, people across the world are refusing to pay for the blunders and chicanery of the ruling classes. Be it the USA and the Occupy movement or Greece and the rise of the far left, Syrizia, there are newer political formations that are poised to bring in seminal change in the way the people are being ruled.

The capital’s over-reach to squeeze out the last dollar, last euro, last yen or the last yuan, or even the last rupee is increasingly now being challenged on the streets. This, with the combination of neo-liberalism’s own structural crises - seemingly terminal – is creating a global environment for substantial transformation of politics, and by extension, economies.

Take the case of Greece, which have produced some of the most moving and poignant pictures of popular mobilisation in the last two years. Those images have told a story of acute fear, anxiety and despair. But how did the Greeks descend to such an economic chaos that has created an unemployment rate of 22 per cent?

The story remains embedded in the way nation has been run since the end of military rule in 1974. While immediately after the military, ostensibly handed over power to the civilians, a national unity government was formed, which allowed the communist party (that had fought an insurgency for decades till its back was broken in the late 1940s) to come over-ground and participate in open politics.

But a power compact was created between a rightist, New Democracy party and a socialist, Pan-Hellenic Socialist Movement (PASOK), which dominated the politics of Greece. To possibly lure the people away from communist ideas and create a clientilist relationship with the electorate, both these parties created and backed a ‘welfare’ system that took care of the citizens from childhood to old age. Clearly, there was an economic cost for this.

If the Greek polity followed economic logic, they needed a taxation system that would have funded it. But that was not the case. Instead, the country had an inefficient and corrupt public sector bureaucracy, high levels of tax evasion, and low global competitiveness. The country’s already meagre production base in agriculture and manufacturing industry was killed off to make way for imports from other eurozone nations and billions of euros of loan that the European Union granted for Greece to modernise its production forces was spent by the government in giving loans to cronies, who promptly transferred the funds to banks in London, Switzerland and Cyprus.

Greece had a 29th rank in the United Nations Human Development Index and produced about 94 per cent of the European Union’s average gross domestic product. If one ignores for a moment, the moderately high HDI rank, the GDP figure did not evince any confidence that this was sustainable.

Yet, it continued and when the time came for Greece to enter the eurozone, the big neo-liberal idea for combining the individual European countries’ economic strengths to create a behemoth comparable with continental USA, all the pundits of new mammon only winked at Greece’s internal fault-lines.

The country’s participation in the eurozone created a larger area for it to tap into the debt market that could fund the binging at home as mentioned above. The crisis came eventually in 2008 when the Greek government ran out of money to service the debt. The crisis was more serious than it seemed, as it was coupled with a recession.

Every one in Europe expected a sort of rolling domino effect i.e. if Greece failed to repay, it will be followed by Spain and so on. In other words the problem in Europe was systemic.

For the time being, be that as it may, and continue with Greece. So when the crisis erupted, the International Monetary Fund and the European Central Bank stepped in as the two of temples of wisdom. They extended more credit in the name of a ‘bailout package.’ But more than the money they pumped in, much longer was their wish-list for Greece to fulfill in terms of so-called ‘reforms.’ Effectively, this meant the dismantling of the welfare system.

As the Greek government began to implement the package; very expansively called ‘austerity measures,’ the people began to feel the pain, so they asked, 'whose austerity?' On Sunday, yesterday, they would have answered their own question. It could well be a historic moment – a precursor of sorts.  

The two-power political compact, that of New Democracy and PASOK, is set to be broken on the anvil of their genuflection to the conditionalities imposed by the international financial institutions. The Greek official communist party, the Stalinist KKE, is marginalized with much of its strength depleted over decades. The new wild-card entry, Syriza, where according to one commentator, the eurocommunists, Trotskyites, Maoists, revolutionaries and reformists all commune together, is posing the greatest electoral challenge to the established system.

The party’s far-left position of ditching IMF and ECB conditionalities has naturally struck a major chord amongst the Greeks, youth especially. Their presence at each barricade, picket and demonstrations have endeared them to the people.

But their platform is so populist at the end, that if they form a government, whether stability will come to Greece is a question that is being evaluated in every capital of Europe and of course, Washington. But then, populism again should be measured in terms of people’s support in a democracy.

Despite this, the crucial contradiction that has emerged from the ground level is the challenge of rejecting the IMF and ECB conditionalities, while remaining within the Euro-zone. So, while the popular mobilisations continue, they are tempered by pragmatism.

Now how will this reflect in the ballot box, will be known by today, Monday. But the change in the political environment of Europe that only five years ago, elected the likes Nicholas Sarkozy, Angela Merkel and Silvio Berlusconi, is certain to shake the world. For, even a short stint by the Syriza, could actually fuel an entirely new thinking within the ambit of Marxism.

The alternative Marxist thinking that is even being considered and discussed in India is based on federalised structure with political power seeping through to the local levels where each local unit decide about resource generation, resource allocation, and the resultant surplus value being retained within the community.

This is a model that has promise to overwhelm the old ideas of centralism and being top-down. A new beginning now needs to be small.

Pinaki Bhattacharya is a senior journalist.
Next Story
Share it