The Problem of Greece Is Not Only a Tragedy. It Is a Lie.

By John Pilger

Global Research, July 13, 2015

An historic betrayal has consumed Greece. Having set aside the mandate of the Greek electorate, the Syriza government has willfully ignored last week’s landslide “No” vote and secretly agreed a raft of repressive, impoverishing measures in return for a “bailout” that means sinister foreign control and a warning to the world.

Prime Minister Alexis Tsipras has pushed through parliament a proposal to cut at least 13 billion euros from the public purse – 4 billion euros more than the “austerity” figure rejected overwhelmingly by the majority of the Greek population in a referendum on 5 July.

These reportedly include a 50 per cent increase in the cost of healthcare for pensioners, almost 40 per cent of whom live in poverty; deep cuts in public sector wages; the complete privatization of public facilities such as airports and ports; a rise in value added tax to 23 per cent, now applied to the Greek islands where people struggle to eke out a living. There is more to come.

“Anti-austerity party sweeps to stunning victory”, declared a Guardian headline on January 25. “Radical leftists” the paper called Tsipras and his impressively-educated comrades. They wore open neck shirts, and the finance minister rode a motorbike and was described as a “rock star of economics”. It was a façade. They were not radical in any sense of that cliched label, neither were they “anti austerity”.

For six months Tsipras and the recently discarded finance minister, Yanis Varoufakis, shuttled between Athens and Brussels, Berlin and the other centres of European money power. Instead of social justice for Greece, they achieved a new indebtedness, a deeper impoverishment that would merely replace a systemic rottenness based on the theft of tax revenue by the Greek super-wealthy – in accordance with European “neo-liberal” values ­ and cheap, highly profitable loans from those now seeking Greece’s scalp.

Greece’s debt, reports an audit by the Greek parliament, “is illegal, illegitimate and odious”. Proportionally, it is less than 30 per cent that of the debit of Germany, its major creditor. It is less than the debt of European banks whose “bailout” in 2007-8 was barely controversial and unpunished.

For a small country such as Greece, the euro is a colonial currency: a tether to a capitalist ideology so extreme that even the Pope pronounces it “intolerable” and “the dung of the devil”. The euro is to Greece what the US dollar is to remote territories in the Pacific, whose poverty and servility is guaranteed by their dependency.

In their travels to the court of the mighty in Brussels and Berlin, Tsipras and Varoufakis presented themselves neither as radicals nor “leftists” nor even honest social democrats, but as two slightly upstart supplicants in their pleas and demands. Without underestimating the hostility they faced, it is fair to say they displayed no political courage. More than once, the Greek people found out about their “secret austerity plans” in leaks to the media: such as a 30 June letter published in the Financial Times, in which Tsipras promised the heads of the EU, the European Central Bank and the IMF to accept their basic, most vicious demands – which he has now accepted.

When the Greek electorate voted “no” on 5 July to this very kind of rotten deal, Tsipras said, “Come Monday and the Greek government will be at the negotiating table after the referendum with better terms for the Greek people”. Greeks had not voted for “better terms”. They had voted for justice and for sovereignty, as they had done on January 25.

The day after the January election a truly democratic and, yes, radical government would have stopped every euro leaving the country, repudiated the “illegal and odious” debt – as Argentina did successfully ­ and expedited a plan to leave the crippling Eurozone. But there was no plan. There was only a willingness to be “at the table” seeking “better terms”.

The true nature of Syriza has been seldom examined and explained. To the foreign media it is no more than “leftist” or “far left” or “hardline” – the usual misleading spray. Some of Syriza’s international supporters have reached, at times, levels of cheer leading reminiscent of the rise of Barack Obama. Few have asked: Who are these “radicals”? What do they believe in?

In 2013, Yanis Varoufakis wrote:

“Should we welcome this crisis of European capitalism as an opportunity to replace it with a better system? Or should we be so worried about it as to embark upon a campaign for stabilising capitalism? To me, the answer is clear. Europe’s crisis is far less likely to give birth to a better alternative to capitalism …

“I bow to the criticism that I have campaigned on an agenda founded on the assumption that the left was, and remains, squarely defeated …. Yes, I would love to put forward [a] radical agenda. But, no, I am not prepared to commit the [error of the British Labour Party following Thatcher’s victory].

“What good did we achieve in Britain in the early 1980s by promoting an agenda of socialist change that British society scorned while falling headlong into Thatcher’s neoliberal trip? Precisely none. What good will it do today to call for a dismantling of the Eurozone, of the European Union itself …?”

Varoufakis omits all mention of the Social Democratic Party that split the Labour vote and led to Blairism. In suggesting people in Britain “scorned socialist change” – when they were given no real opportunity to bring about that change – he echoes Blair.

The leaders of Syriza are revolutionaries of a kind – but their revolution is the perverse, familiar appropriation of social democratic and parliamentary movements by liberals groomed to comply with neo-liberal drivel and a social engineering whose authentic face is that of Wolfgang Schauble, Germany’s finance minister, an imperial thug. Like the Labour Party in Britain and its equivalents among those former social democratic parties still describing themselves as “liberal” or even “left”, Syriza is the product of an affluent, highly privileged, educated middle class, “schooled in postmodernism”, as Alex Lantier wrote.

For them, class is the unmentionable, let alone an enduring struggle, regardless of the reality of the lives of most human beings. Syriza’s luminaries are well-groomed; they lead not the resistance that ordinary people crave, as the Greek electorate has so bravely demonstrated, but “better terms” of a venal status quo that corrals and punishes the poor. When merged with “identity politics” and its insidious distractions, the consequence is not resistance, but subservience. “Mainstream” political life in Britain exemplifies this.

This is not inevitable, a done deal, if we wake up from the long, postmodern coma and reject the myths and deceptions of those who claim to represent us, and fight.

A Fighting Strategy for Greece

by Mitchel Cohen

I agree with Pilger here, except for his recommendation to expedite a plan for Greece to leave the Eurozone.

If a fundamental principle of Marxism is that you can’t have socialism in one country — especially in a small country like Greece, in this global capitalist system — then how can one argue that Greece should voluntarily leave the Euro and the European Union and go it alone, as though that would bring Greece closer towards establishing a socialist state?

My approach would be to do everything Pilger says, and more — cancel the debt unilaterally, accept NO austerity, nationalize the banks, expose Germany’s non-payment of its own loans after WW2 and its much larger debt burden (the U.S., remember, is the largest debtor nation in the world!), apply for loans from competing capitalist sectors (Russia, China) and play them off against the German bankers — while intensively propagandizing the people of Greece, prepare them for being thrown out of the EU but do not leave voluntarily — issue no statement about leaving the EU, which as I understand it has no way of throwing out a member country.

In other words, force the contradiction. Force them to throw you out, if that’s what the EU will do. It will create a huge fracture. And appeal to the working class in Europe to do the same in their own countries.

I don’t understand what would be gained by voluntarily leaving the EU and going back onto the drachma. Bring the fight INTO the European Union and the centers of global capital.

Grexit or Jubilee? How Greek Debt Can Be Annulled

The crushing Greek debt could be canceled the way it was made – by sleight of hand. But saving the Greek people and their economy is evidently not in the game plan of the Eurocrats.

Greece’s creditors have finally brought the country to its knees, forcing President Alexis Tsipras to agree to austerity and privatization measures more severe than those overwhelmingly rejected by popular vote a week earlier. No write-down of Greece’s debt was included in the deal, although the IMF has warned that the current debt is unsustainable.

Former Greek finance minister Yanis Varoufakis calls the deal “a new Versailles Treaty” and “the politics of humiliation.” Greek defense minister Panos Kammenos calls it a “coup d’état” done by “blackmailing the Greek prime minister with collapse of the banks and a complete haircut on deposits.”

“Blackmail” is not too strong a word. The European Central Bank has turned off its liquidity tap for Greece’s banks, something all banks need, as explained earlier here. All banks are technically insolvent, lending money they don’t have. They don’t lend their deposits but create deposits when they make loans, as the Bank of England recently confirmed. When the depositors and borrowers come for their money at the same time, the bank must borrow from other banks; and if that liquidity runs dry, the bank turns to the central bank, the lender of last resort empowered to create money at will. Without the central bank’s backstop, banks must steal from their depositors with “haircuts” or they will collapse.

What did Greece do to deserve this coup d’état? According to former World Bank economist Peter Koenig:

[T]he Greek people, the citizens of a sovereign country . . . have had the audacity to democratically elect a socialist government. Now they have to suffer. They do not conform to the self-imposed rules of the neoliberal empire of unrestricted globalized privatization of public services and public properties from which the elite is maximizing profits – for themselves, of course. It is outright theft of public property.

According to a July 5th article titled “Greece – The One Biggest Lie You’re Being Told By The Media,” the country did not fail on its own. It was made to fail:

[T]he banks wrecked the Greek government, and then deliberately pushed it into unsustainable debt . . . while revenue-generating public assets were sold off to oligarchs and international corporations.

A Truth Committee convened by the Greek parliament reported in June that a major portion of the country’s €320 billion debt is “illegal, illegitimate and odious” and should not be paid.

How to Cut the Debt Without Loss to the Bondholders

The debt cannot be paid and should not be paid, but EU leaders justify their hard line as necessary to save the creditors from having to pay – the European taxpayers, governments, institutions, and banks holding Greek bonds. It is quite possible to grant debt relief, however,

without hurting the bondholders. US banks were bailed out by the US Federal Reserve to the tune of more than $16 trillion in virtually interest-free loans, without drawing on taxes. Central banks have a printing press that allows them to create money at will.

The ECB has already embarked on this sort of debt purchasing program. In January, it announced it would purchase 60 billion euros of debt assets per month beginning in March, continuing to at least September 2016, for a total of €1.14 trillion of asset purchases. These assets are being purchased through “quantitative easing” – expanding the monetary base simply with accounting entries on the ECB’s books.

The IMF estimates that Greece needs debt relief of €60 billion – a mere one month of the ECB’s quantitative easing program. The ECB could solve Greece’s problem with a few computer keystrokes. Moreover, in today’s deflationary environment, the effect would actually be to stimulate the European economy. As financial writer Richard Duncan observes:

When a central bank prints money and buys a government bond, it is the same thing as cancelling that bond (so long as the central bank does not sell the bond back to the public).

. . . The European Central Bank’s plans to create €1.1 trillion over the next 20 months will effectively cancel the combined budget deficits of the Eurozone national governments in both 2015 and 2016, with a considerable amount left over.

Quantitative Easing has only been possible because it has occurred at a time when Globalization is driving down the price of labor and industrial goods. The combination of fiat money and Globalization creates a unique moment in history where the governments of the developed economies can print money on an aggressive scale without causing inflation.

They should take advantage of this once-in-history opportunity to borrow more in order to invest in new industries and technologies, to restructure their economies and to retrain and educate their workforce at the post-graduate level. If they do, they could not only end the global economic crisis, but also ensure that the standard of living in the developed world continues to improve, rather than sinking down to third world levels.

That is how it works for Germany after World War II. According to economist Michael Hudson, the most successful debt jubilee in recent times was gifted to Germany, the country now most opposed to doing the same for Greece. The German Economic Miracle followed massive debt forgiveness by the Allies:

All domestic German debts were annulled, except employer wage debts to their labor force, and basic working balances. Later, in 1953, its international debts were written down.

Why not do the same for the Greeks? Hudson writes:

It was easy to write down debts that were owed to Nazis. It is much harder to do so when the debts are owed to powerful and entrenched institutions – especially to banks.

Loans Created with Accounting Entries Can Be Canceled with Accounting Entries

That may be true for non-bank creditors. But for banks, recall that the money owed to them is not taken from the accounts of depositors. It is simply created with accounting entries on the books. The loans could be canceled the same way. To the extent that the Greek debt is owed to the ECB, the IMF and other financial institutions, that is another option for canceling it.

British economist Michael Rowbotham explored that possibility in 1998 for the onerous Third World debts owed to the World Bank and IMF. He wrote that of the $2.2 trillion debt then outstanding, the vast majority was money simply created by commercial banks. It represented a liability on the banks’ books only because the rules of banking said their books must be balanced.  He suggested two ways the rules might be changed to liquidate unfair and oppressive debts:

The first option is to remove the obligation on banks to maintain parity between assets and liabilities, or, to be more precise, to allow banks to hold reduced levels of assets equivalent to the Third World debt bonds they cancel.  Thus, if a commercial bank held $10 billion worth of developing country debt bonds, after cancellation it would be permitted in perpetuity to have a $10 billion dollar deficit in its assets.  This is a simple matter of record-keeping.

The second option, and in accountancy terms probably the more satisfactory (although it amounts to the same policy), is to cancel the debt bonds, yet permit banks to retain them for purposes of accountancy.

The Real Roadblock Is Political

The Eurocrats could end the economic crisis by writing off odious unrepayable debt either through quantitative easing or by changing bank accounting rules. But ending the crisis is evidently not what they are up to. As Michael Hudson puts it, “finance has become the modern-day mode of warfare. Its objectives are the same: acquisition of land, raw materials and monopolies.” He writes:

Greece, Spain, Portugal, Italy and other debtor countries have been under the same mode of attack that was waged by the IMF and its austerity doctrine that bankrupted Latin America from the 1970s onward.

Prof. Richard Werner, who was on the scene as the European Union evolved, maintains that the intent for the EU from the start was the abandonment of national sovereignty in favor of a single-currency system controlled by eurocrats doing the bidding of international financiers. The model was flawed from the beginning. The solution, he says, is for EU countries to regain their national sovereignty by leaving the euro en masse. He writes:

By abandoning the euro, each country would regain control over monetary policy and could thus solve their own particular predicament. Some, such as Greece, may default, but its central bank could limit the damage by purchasing the dud bonds from banks at face value and keeping them on its balance sheet without marking to market (central banks have this option, as the Fed showed again in October 2008). Banks would then have stronger balance sheets than ever, they could create credit again, and in exchange for this costless bailout central banks could insist that bank credit – which creates new money – is only allowed for transactions that contribute to GDP in a sustainable way. Growth without crises and large-scale unemployment could then be arranged.

But Dr. Werner acknowledges that this is not likely to happen soon. Brussels has been instructed by President Obama, no doubt instructed by Wall Street, to hold the euro together at all costs.

The Promise and Perils of Grexit

The creditors may have won this round, but Greece’s financial woes are far from resolved. After the next financial crisis, it could still find itself out of the EU. If the Greek parliament fails to endorse the deal just agreed to by its president, “Grexit” could happen even earlier. And that could be the Black Swan event that ultimately breaks up the EU. It might be in the interests of the creditors to consider a debt jubilee to avoid that result, just as the Allies felt it was in their interests to expunge German debts after World War II.

For Greece, leaving the EU may be perilous; but it opens provocative possibilities. The government could nationalize its insolvent banks along with its central bank, and start generating the credit the country desperately needs to get back on its feet. If it chose, it could do this while still using the euro, just as Ecuador uses the US dollar without being part of the US. (For more on how this could work, see here.)

If Greece switches to drachmas, the funding possibilities are even greater. It could generate the money for a national dividend, guaranteed employment for all, expanded social services, and widespread investment in infrastructure, clean energy, and local business. Freed from its Eurocrat oppressors, Greece could model for the world what can be achieved by a sovereign country using publicly-owned banks and publicly-issued currency for the benefit of its own economy and its own people.
Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at
Statement by ‘Blockupy goes Athens’, July 12

Understanding the Defeat Means Preparing a Victory

12 Jul 15

The Greek Dilemma and Us. Nine provisional considerations after both the popular Oxi and Syriza’s Yes to the Memorandum. This is being written after the vote in the Greek parliament and before the final decision of the Eurogroup. At the moment, everything is open, and we are certain of only a couple of things. Almost everything can change, but some things will remain true.


1. From blackmail to coup

The alternative of Grexit or a third Memorandum is not the same as reform or revolution; it is only a matter of the lack of alternatives dictated by the creditors. It corresponds to the relation of forces within Europe, which can at the moment only produce defeats.

The blackmailing of Greece by the creditors leaves open two paths, both of which would be defeats. This is unavoidable. First, Grexit: It means: ‘We’ll take from you the possibility of carrying out Europe’s class conflict within European political space. If you want to keep fighting, then fight for your survival at home and let the world watch the hopelessness of your struggle. If you want to keep on fighting in the name of your population, then your population is going to suffer the consequences.’ A Grexit makes the problem of inner-European politics into one of developmental and humanitarian aid. It isolates the political conflict in Europe, limiting it to Greek territory. Second, a new Memorandum: This means staying with the EU structures as they are, although at the cost of complete subjugation and now, in addition, the political oversight that is being insisted on. The Eurogroup’s and IMF’s programme amounts not only to an administration of debt and insolvency but also the attempt at nation building from outside – trusteeship as a shadow government. Its goal is a new Greek body politic in the economic-technocratic sense: deregulation, privatization, capitalism with ‘Asiatic values’ (Žižek).

2. Political submission as strategy

Apparently, the SYRIZA government has decided, on strategic grounds, to end the policy of negotiations with a symbolic defeat in order to ‘pacify’ the fiscal and economic situation. It changes nothing in terms of social devastation.

The events of recent days catapulted SYRIZA into a new decision-making arena in a completely contradictory situation: The emphatic liberatory act of the popular ‘No’ (Oxi) occurred simultaneously with the intensified vulnerability to fiscal blackmail of the state (bank closures, state bankruptcy). Complete collapse would occur in a matter of days. Money was running out. In the last days, the preliminary outer limits of this institutional national uprising against the European ‘institutions’ were reached. The negotiations were at an end, and the economic war against the Greek government reached its preliminary high point. Tsipras hoped a new aid package would ease the dramatic situation. And there are not a few that are hoping now for time to prepare a Grexit for real.

It is questionable whether this strategy can work. SYRIZA hoped a Memorandum would give it breathing space and the possibility of preparing a new political offensive. The creditors, therefore, have set themselves the goal of moving from fiscal blackmail to direct political control – in the event it cannot manage, despite all, to bring down the SYRIZA government. They are formulating not only the contractual framework of Greek politics but now want to tie the next disbursements to the government’s political obedience and oversee it permanently. They will try to prevent Greece getting even an atom of manoeuvring space for a new offensive. From now on Brussels is no longer interested merely in economic subjugation under a third Memorandum; the creditors are forcing Tsipras to prove his ‘credibility’ by doing everything they ask of him: to stand up to the population, to the ‘dissenters’, to the party. This is blackmail whose conditions are now the public-image destruction of political unity. It leaves no room for strategic retreat, no possible future offensive. The submission achieved so far can and must be criticised. However, those who see this as a break with a political project and the death of reformism should hold their fire. Because what is now in the air – the Eurogroup’s ‘No’ to the current level of Greece’s submission – will not only decide SYRIZA’s future but also the future configuration of Europe. Whether there is Grexit or a Memorandum, on Monday we will all know that there is most probably no possibility of even the slightest improvement of Greece’s situation if this is done in concert with the creditors. And since the referendum a break has become an option for society. Starting Monday there will be a new political process in Greece, which will put the left and the party to the test.

3. Government and collective process

The government is taking on an identity distinct from the party and the movement. The negotiation process hampers the democratic process and concentrates power in the hands of a few, whom people have to trust. It is precisely the popular aspect of the referendum that has paradoxically reinforced this concentration: The masses of young and poor people, who are not activists and not organised, have tied themselves directly to the government and to Alexis Tsipras as a person.

Through its campaign in the urban peripheries and poor neighbourhoods, SYRIZA reached all those who yearned for ‘life with dignity’; but the population did not want this to occur in the form of a permanent general assembly of the people, which required them to make permanent decisions affecting precisely the one person whom they consciously empowered for this purpose through their ‘No’: Alexis Tsipras. They not only said ‘No’ but also placed their trust in Tsipras so that he could end their suffering. This reinforced his possibilities of acting unilaterally.

At the same time, this highlighted a vacuum in the movement of the streets. The democracy of the squares consciously rejected centralist politics and, in so doing, the figure of a charismatic leadership. How do movements speak to those who are not a movement and don’t want to be one? How do we deal with the possible difference between the plebiscite of the assemblies and the supposed common will of all? The societal factor of the non-represented and the ‘invisible’ does not necessarily seek happiness through grassroots movements and engaged self-organisation. How do movements act if real majorities are not only possible under conditions of contemporary post-representation but are also decisive? The SYRIZA experiment has freshly put the open question of societal and popular collectivism on the table. And that’s a good thing!

4. First get food, then go for the big challenge

The biggest problem with the major submission to the European status quo is not the betrayal of a decrepit concept of revolution espoused by the KKE or other radical ‘revolutionaries’. The biggest problem is that Greece and its poorest citizens find themselves in a situation of immediate urgency. The social catastrophe cannot be resolved with a five-year plan.

In this sense, in the coming months, what will show us whether SYRIZA has really capitulated is the policies of the government, not a piece of paper. In this process, the required measures can also take place in a legal grey area, or they can produce the next public arena of struggle. What’s important is that this arena is defined and opened up. ‘Absurd’, ‘capitulation’, ‘traders in hope’ – all those who are now basing their own radicalism on SYRIZA’s ‘failure’ should think hard about what they would have done if it were up them. Almost all ‘radical leftists’ within SYRIZA have approved this Memorandum, precisely because they are against it. For the moment it appears to be the only option for keeping the other options open. It was a strategic mistake to not have contemplated other options earlier on. But in order to be able to take the leap into the unknown – a controlled Grexit and the options of nationalising production and the banks – it is not only time and real majorities that are needed but also ‘breathing space’ right now. SYRIZA was not prepared for this step. Nobody was.

5. Grexit as the solution?

The discussion of Grexit in the German left is romantic. In great part it adheres to an old party-communist political conception: A process of rupture is not to occur socially, as social transformation and political movement; rather, it is to be enacted through a decree and according to a technical discussion of social models undertaken by the government. What is more, the demand is irresponsible because – and this is what is most important – it does not correspond to the actual political process.

With their ‘No’, people voted not for exit but to reject the ‘liberal’ politics of fear; in their readiness for battle they went a good distance in the direction of a real break, but they did not formulate the momentum of a revolutionary wish – whether or not we would have wanted them to. A Grexit at this moment would also be irresponsible because it has not been prepared – either by SYRIZA as a government or a party, or by municipal and local social councils, not to mention by assemblies and movements. And so questions of further strategy and the next steps are on the table. But for now we have to understand that a break with Europe’s fiscal regime would aggravate the social disaster, and the plebiscitary moment of the ‘Oxi’ vote would be transformed into a guided democracy and then into the authoritarianism of a left government, which would govern the social catastrophe in an increasingly authoritarian way and would have to reorganise the state and economy against the social majority. Those who argue for a revolutionary Grexit are doing so at a comfortable distance and are, in the last analysis, ignoring those who have fought, starved, suffered, and hoped in the last six years. All of these people deserve time to breathe. They, and not SYRIZA’s Central Committee or a distant revolutionary romanticism, need to decide on the right point in time.

6. Necessary failure?

Whatever the ideologies and false conceptions of the possibility of reforms might have been at work in SYRIZA, its line in the last months corresponded to the tendency of the will of the majority. The hope for a solution within the framework of the European treaties has been the point of departure of SYRIZA’s political strategy. In acting on this basis it has managed to radicalise society.

The government has the people behind it and has absorbed this wish and, together with the public throughout Europe, learned from experience that this wish is just as unrealistic as the neoliberal order is obdurate. If they had chosen to make this insight possessed by a revolutionary minority into the point of departure of their politics they would have failed spectacularly. The last months have made it possible for the whole world to experience the real concrete existence of this antagonism, to see it, to feel it. SYRIZA has not stoked reformist desires but destroyed them in a series of practical object-lessons – whether they wanted to or not. In so doing, the real possibility of a break, about which people throughout the whole of society are now talking seriously for the first time, has become an option. Nobody could have presupposed the experience that has by now been gained without alienating the population and the party. SYRIZA did not take its own truths as a point of departure; instead it looked to the level of consciousness of the population and radicalised it. In this sense, they initiated a revolutionary process – something that those who always knew better and what was coming are not in a position to do. The question now is whether the government will be in sync with this process.

7. Movement and government

After almost six months SYRIZA has come up against the limits of being a protest government. Now the party has to actually take ‘governmental responsibility’. It cannot fall back on programmatic positions but has to face the real dilemma for which there is no pragmatic solution. This also necessarily entails political alienation of the movements from the government.

But this is a good and far from being a bad thing. Movements, in the best sense of the concept, also act for themselves; they have to do so in their immediate struggles and radical demands, which do not always incorporate social majorities – for example, solidarity with refugees in Greece, the struggle against special prisons, police violence, the fascist danger, and against ruinous extractivism (gold mining). Left parties that do not enter government based solely on their own strength, but also because the political caste of an austerity regime has imploded, should try to develop left politics for majorities, and they need to concretely improve the daily conditions of life of many people. Especially under conditions of the nightmarish impoverishment and plunge into the void caused by the Troika’s two Memoranda.

In its feverish week of permanent mobilisation, the ‘Oxi’ campaign, too, lived not from a central leadership but from the free self-empowerment of innumerable activists who created, multiplied, and consequently also socialised their own Oxi via social media and in the streets.

Can this kind of mobilisation still be called upon? It probably can. The disillusion is palpable. Does it have to stay that way? Does the tremendously arid game of parliamentary reformism versus radical movements that want more have to start again? Maybe, but there is something else. The relationship between broad parts of the movement and the government still exists; it has been humiliated but not broken. What will be decisive is how SYRIZA not only explains its decision in this situation but makes it into a point of departure for further mobilisation. Only at this point could a possible capitulation be spelled out. However, what is also decisive is whether the movements continue to exert pressure on their government; whether they are actually in a position not only to think through the question of socialising the break with the existing fiscal regime, embodied in part by the euro, but also to organise around it as a social process involving many people. We have no specific advice on how to do this and are consciously refraining from giving any. However, two things seem equally clear to us: it is possible under present conditions to govern unpragmatically, and, at the same time, the movements must not subordinate themselves or be subordinate to the logic of governing.

8. A reorganising of the political

Whatever happens, the referendum has re-measured political space not only in Greece but also in Europe. In almost every conceivable way, it has politicised the crisis and European governance. The technocratic veils are falling away and the brute force of politics is becoming apparent. Their natural laws determine the laws of their policies, but their laws can be called into question. ‘There is no alternative’ is now being confronted by social democracy.

The parties of the old ‘left’, whether in France, Spain, Italy, England – or especially Germany (the SPD) – are by now nothing more than ‘managers of global capitalism’ (Badiou). Their ‘Yes’ against SYRIZA and the Greek population extinguished from their memory the last vestiges of Keynesianism and the last elements of social-democratic solidarity. They marshalled all means at their disposal to repel the first powerful counter-offensive to neoliberalism and its austerity. It was a declaration of war against the new and any attempt to burst the bounds of the current order. Many were able to understand this, and many were outraged at how openly democratic self-empowerment was subjected to intimidation and manipulation through ‘fiscal structural reform’. Europe is no longer what it was. It is now only a question of time before the demand for a European referendum on TTIP will come into focus and before other excluded groups demand their rights. For decades now, the crisis of representation has only seen a right-wing response: Hungary, Le Pen, Denmark, Pegida. Now it has a left response, which can no longer disappear in the medium term, whatever concrete form it takes. It positioned itself as a political force way before the 34 per cent of the January election. And even in the parliamentary systems there is – at least in the long run – the possibility of rebellious actions. OXI remains the central political antagonism of the years to come and is at the same time ten years ahead of the rest of the movements in Europe.

9. The empire is being destroyed from inside, not from outside.

Those who say that the European empire cannot be reformed should not conclude that one should leave it. Of course, there is nothing to be expected from Merkel. She is a real warrior for her class. But it is just as self-evident that one has to be and stay precisely where the enemy is, where one’s own enmity can be brought to bear.

Ultimately, we fight in the factory and in the city neighbourhood and not in a place where the relations of domination are absent. In any case, there is and will be no such place, even in Greece after a Grexit. Whether inside or outside the euro and the EU, the European reality forms the objective boundaries of the Greek breakthrough. This is where the responsibility of the European movements begins, especially in Germany. Crossing borders is now in our hands. This involves all social movements and political struggles for a Europe of rights for all and true democracy. It involves anchors of transnational protest like Blockupy, as well as other cross-border connections of the radical left. And, of course, it involves the Party of the European Left around Die LINKE. Everyone has to change something; everyone has to reassess their policies and ask: How can we internationalise the Greek cause and Europeanise the OXI vote? Together, separately, united, in each place, in each form. We have to modernise our practice – within this constellation.

And one more thing: SYRIZA doesn’t need a fan club. We should appreciate the great value of a left government, without being ‘faithful to Moscow’. ‘Unfortunately, small steps forward still require big sacrifices’, is what a Diktio comrade texted us from deep inside the government during the Friday in which the momentous decision was made. Yes, it’s a lot of rubbish. Just carry on.  What else?

PS: As a team we are now ending our report and going back into action. Whatever happens from now on we have already been changed by the recent events. In Athens we fought to the point of exhaustion along with others, but also spoke with far-sighted comrades and courageous common people who told us the reasons for their OXI. We saw how much we desired more Greek friendship against Germany’s order. It was exciting and historic, and we learned a lot.

PPS:  All our basic assessments still stand up, though many things could turn out differently in the next hours and days. ‘There is no alternative’ is supposed to win – shock and awe, nothing is to survive. If the enormous level of submission is insufficient then Greek society will have to risk the great leap into the unknown. Either they remain in a repeatedly produced void or they are to go under. Then for the moment something will again have occurred. But that will be decided not by the government alone; then all the stakes will really be in the streets.

This text first appeared in German in the blog ‘Blockupy goes Athens’.

Translation by Eric Canepa

Greece: What’s Happening?

by Mitchel Cohen
July 12, 2015

The two articles below — one from a Left writer and the other from the NY Times — are fascinating in where they contradict each other …. which is everywhere. Here’s my short version (without going into the long history) of what’s happening since the landslide vote last week rejecting the European Union’s central banks’ program to impose severe austerity on Greece.

First, the EU bankers wanted a change in Greece’s finance minister. Syriza acquiesced and replaced the aggressive Varoufakis with Tsakalotos. Instead of being sufficiently appeased, that just whetted the bankers’ appetite and they sharpened their knives.

Greek Prime Minister Tsipras was empowered by the landslide vote “No!” He wanted that in his pocket. Then, instead of playing hardball (by inviting Russia to lend Greece the funds needed to ease the social misery, which would throw the EU bankers into panic), he went on to concede almost all of the EU’s and IMF’s austerity measures in an attempt to translate that (and the “No” vote) into a large European bailout for Greece of between $50 billion and $72 billion. The idea is that the impact caused by accepting such horrible austerity measures — such measures have elsewhere been termed “Structural Adjustment Programs” or (SAPs) — would be bufferred by the bailout, which would ease, at least temporarily, the suffering in Greece.

A large majority of the Greek parliament voted Friday to authorize the Greek government to proceed to negotiate along the lines Tsipras proposed, with acceptance of hard austerity measures:
250 yes (Syriza, ND, Pasok, To Potami, Anel)
32 no (Golden Dawn (fascists), KKE (Communist Party) + 2 Syriza)
8 present/abstain – Syriza Left Platform (including Lapavitsas, Lafazanis, Stratoulis)
10 absent

The corporate media had framed last week’s referendum as a vote to exit the Euro (Greek Exit, or “Grexit”). That was most definitely not the point nor even the implication of the referendum, despite the fact that many commentators see it that way.

But there’s no logical nor legal reason (there may be good or bad political reasons) for the Greek government to leave the EU and the Euro; they can remain inside and keep pressing their case. They know they are up against cutthroat capitalists. They also know that there is no administrative way to ameliorate this crisis. Perhaps they hope to hold on long enough to spark the working class in other countries facing a similar situation to join in revolt, and make it impossible for the bankers to single out Greece.

(One thing to note that few are mentioning: Over the last 7 years, the private corporate banks have transferred almost all of their previously-owned debt to publicly-financed banks, which makes the working classes in Europe legally responsible for paying any bailout and debt relief. So, it is argued — not without merit, given the way things are currently structured — that any bailout of the Greek people will come at the expense of workers elsewhere, making cross-class unity throughout Europe extremely difficult, unless “who owns the debt” is addressed.)

If that’s indeed the case, Syriza needs to state that explicitly. Otherwise, they are simply appearing to be sellouts, caving-in to the pressure of the EuroBankers. Next stop: Fascism.

That’s my own tentative quick summary, which is open to correction and discussion. (I appreciate your feedback!) Please also read at least the first article, below.

– Mitchel Cohen

Syriza. Defeat. Victory. Defeat.

by Richard Seymour
Friday, July 10, 2015

It is gut-wrenching, watching Syriza beg, and plead with the creditors not to crush Greece. Too late did they realise that they weren’t negotiating. They had nothing to do negotiate with, no cards to play. They went looking for the ‘good euro’, and found only ruthless, mercenary capitalist enforcers. They sought compromise and were given fiscal strangulation. Even after their big deal with the creditors in February, wherein they gave up most of their emergency programme, none of the money they expected was forthcoming. Their means of raising money were cut off. For months, and months, they made concessions; the troika made none. Finally, they were all set to sign up to a deal considerably worse than any imposed on previous governments. The troika demanded more, on pain of destroying the banking system.

Now, it seems, Syriza has caved and proposed a deal which is even worse than the worst. Cuts. Privatisations. Pension ‘reforms’. VAT increases. Recessionary measures. Barely a trace of a progressive agenda left here, notwithstanding the strenuous and heartbreaking efforts of euro-leftists to give it a gloss. In some respects, they have delivered, after months of fighting, a more complete victory to the neoliberal managers of Europe than the latter could have won on their own account. The social catastrophe that has befallen Greece is now going to be prolonged — the suicides, the premature deaths, the medicine shortages, the starvation, the wage losses, unemployment — but without any possible conviction that, say, a new radical left government might be elected and put an end to the misery. What sort of political forces might stand to gain in that terrain is obviously undecided; but we have seen what the worst of it could be.

In a way, none of this is surprising. The only possible coherent basis for any alternative to austerity was a Grexit prepared for early on, both in terms of public opinion and effective war-readiness. There was nothing else coming down the pipeline. The dominant forces in the Syriza leadership wouldn’t have it. Not for a second would Tsipras, Dragasakis, or the recently appointed negotiator Tsakalotos, allow this outcome. For them, Grexit was worse than austerity. Of course, even if they thought that was true, the failure to even plan for such a contingency, to wargame the possible outcomes and get people in the state apparatuses ready to act, was a huge mistake.

I am not forgetting that they are a left government trying to operate within the confines of a capitalist state penetrated by imperialism. I am not oblivious of the fact that the permanent state apparatuses may have sabotaged and undermined them at every turn — certainly, the constant leaks undermining the previous commitments against privatisation suggest civil service lobbying. So it’s quite possible that a Syriza government trying to prepare for a situation tantamount to war — Grexit being a huge national effort, not something a few technocrats can manage — would have been subverted and sabotaged quickly. But from what I can see, all efforts have been obsessively focused on negotiations, and those have delivered precisely worse than nothing.

So what was the meaning of last week’s referendum? Why did they call it, and what happened to ‘Oxi’? It is fair to say that the Syriza leadership never expected 61% of Greeks to actually support them. Neither did I. The ‘Oxi’ rallies were enormous, but the fact of this translating into such a tremendous surge at the ballots, mostly coming from the working class and from younger voters — but actually spread across all the districts of Greece, the rural as much as the urban — bespeaks a revolt on the scale of the ‘national-popular’. No one could have anticipated it. So what did they anticipate? We could infer the answer from their behaviour. On the day after the referendum, Varoufakis was relieved of his negotiating duties (leaving aside his generally right-cleaving positions, the creditors evidently hate him), and instead a new team including delegates from To Potami and Pasok was sent to discuss the terms of surrender. Tsakalotos sent a letter pleading for a new bailout, with a promise of a new memorandum. This move would have made much more sense had there been a narrow vote for ‘Yes’, or even a narrow ‘No’. It makes no sense at all now. It is at least plausible that Syriza leaders would have preferred to lose and be forced to resign, rather than take responsibility for this deal. It is also plausible, lest we overlook the option, that the Syriza leadership is utterly at sea, pulled hither and thither by tides and winds it knows nothing of.

Whatever the reason, the referendum did happen and the result was astonishing. The majority of Greeks did come out to clearly reject austerity. The public protests and rallies building to it, against the ferocious pressure of the reactionary media and the threats of the Eurogroup, almost had the character of a social movement. If we’re fortunate, they were the beginning of one. This introduces a significant cleavage between the government and its base. Objectively, that is the basis of a political split. Whether anyone in Syriza will recognise that remains to be seen.

As I write, we’re waiting to see what the parliamentary votes will look like. There is immense pressure on Syriza MPs to give Tsipras the authority to negotiate and finalise a deal on this basis. There are all sorts of lures being dangled. Maybe the Eurogroup will sink it. Maybe if the final deal is terrible you can oppose it then. Hold tight for now, and things will look better in a few days. And rods being wielded. Don’t make Tsipras look bad. Don’t bring the government down. Don’t let the European masters have that victory.

So it is important to be clear: if Syriza supports and implements this deal, it is over. It will not recover. It may exist as a party, but as a force of the radical left it will be all but redundant. It may as well be a centrist, austerian coalition. A left that goes along with this will be committing suicide. And finally, don’t put your faith in the idea that maybe if Syriza hangs in there, does what it’s told, eventually, after a while, Podemos will come, maybe some other radical left formations will come, and the balance of power will tilt. Even if that was how the European institutions work — and they have proven they aren’t susceptible to that kind of pressure — this outcome will seriously undercut the chances for the European radical left.

Be clear that we are looking a world-historic defeat in the eye. And act accordingly.


Meeting on Greece Debt Breaks Up With No Deal

JULY 11, 2015

BRUSSELS — ­ A meeting of European finance ministers broke up late Saturday with no agreement on whether Greece should be granted its third bailout since 2010, reflecting deep divides over whether the Athens government can be trusted to repay huge new loans and leaving the Continent hours from what could be a historic rupture.

The finance ministers planned to reconvene on Sunday, just before European national leaders are scheduled to meet in Brussels for what they have said would be a final decision on whether Greece should qualify for a new aid package, a step aimed at determining whether the country can remain in the euro currency union.

The failure by the finance ministers to reach an agreement, after nearly nine hours of talks, belied the optimism that followed the approval early Saturday by the Greek Parliament of a package of pension cuts, higher taxes and other policy changes long sought by Greece’s international creditors. In a remarkable turnabout, Prime Minister Alexis Tsipras had pushed the package through the legislature despite having led his country into a referendum six days earlier that overwhelmingly rejected much the same terms.

Despite Greece’s capitulation on those terms, many countries came into this weekend’s final round of negotiations skeptical of the Tsipras government’s commitment to seeing through the changes and putting his country on firmer financial footing ­ and weary of the constant brinkmanship that has characterized the months of negotiations over Greece’s latest crisis.

Instead of working through the night to hammer out a statement on requirements for Greece, as had been expected, the meeting was suddenly called off shortly before midnight, and ministers left without even holding a formal news conference.

“The issue of credibility and trust was discussed, and also of course the financial issues involved,” Jeroen Dijsselbloem of the Netherlands, the head of the so-called Eurogroup of ministers, told reporters. “It is still very difficult. but work is still in progress,” he said, adding that discussions would continue later Sunday morning.

From the start, it was clear that Mr. Tsipras’s gambit had not entirely won over Germany and other countries that have been skeptical about giving a new round of loans to Greece after years in which successive governments in Athens have struggled to carry out changes that creditors have demanded as a condition of the bailouts.

“We will have exceptionally difficult negotiations,” Wolfgang Schäuble, the hard-nosed German finance minister, said on Saturday before the meeting. “We won’t be able to rely on promises.”

His prediction proved accurate, as he and fellow ministers wrangled with little apparent progress, seeking more assurances from Greece that it was committed to changing its ways, and weighing the desires of France and Italy for a deal against the more skeptical stance of Germany and the possibility of outright opposition from Finland.

During their talks, the finance ministers called on their Greek counterpart, Euclid Tsakalotos, to put the package proposed by his government into swift effect to prove its willingness to make deep and lasting changes to the nation’s faltering economy. Greece, in turn, continued to seek some assurance that it would win the right to renegotiate the terms of its debt repayment.

It was not clear that the finance ministers’ meeting on Sunday morning would yield a consensus about how to proceed, increasing the possibility that they would leave final decisions to their national leaders, who are to gather in Brussels in the afternoon.

“I am still hopeful,” Pierre Moscovici, the European commissioner for economic affairs, told reporters as he left the Eurogroup meeting.

In an apparent effort to raise the pressure on Greece, some officials earlier in the day were informally passing around a one-page position paper, reportedly drawn up by the German finance ministry as a possible option for the negotiations, saying the Greek proposal fell short and suggesting options that included ideas like having the country leave the eurozone for five years and reapply for membership.

The idea of a break from the euro was not openly discussed at the meeting, according to one of the officials with direct knowledge of the talks, who like others spoke on the condition of anonymity because the discussions were private.

Mr. Schäuble, however, referred repeatedly to a plan drafted by German officials that would require Athens to transfer state assets into a trust fund to pay down its debt in order to stay in the eurozone, according to two people with direct knowledge of the discussions. Mr. Schäuble did not refer explicitly to the idea of a temporary Greek departure from the eurozone, these people said. But the tough approach by the German minister, they said, appeared designed to make clear that he now favors a Greek exit.

The European leaders have set this weekend as a deadline for settling the issue of whether to keep Greece solvent or cut off further aid, a step that would almost certainly result in forcing Athens to abandon the euro.

An exit by Greece would be a blow to Europe’s goal of ever-closer integration.

Greece’s banks are teetering on insolvency, the government is running out of cash to meet day-to-day obligations, and without an infusion, additional payments to international creditors will be missed in coming weeks.

Experts who reviewed Greece’s request for a third bailout program informed Eurogroup ministers that about €74 billion is needed to cover its financing needs for the next three years, according to a person with direct knowledge of the experts’ findings. That is far more than the €53.5 billion, or about $59 billion, that Athens has requested.

If loans for Greece are eventually approved, the majority will probably be covered by a new loan from the European Stability Mechanism, the European bailout fund. Other sources could include loans from the International Monetary Fund, funds raised through Greek government revenue and, eventually, new debt issued by Greece.

That discrepancy between what Greece had requested and the new estimate of its bailout needs may have further reinforced the doubts of those who wonder if the Greek government has a handle on its finances and will be able to carry out promised changes.

“Many governments ­ mine, too ­ have serious concerns about the commitment of the Greek government,” the Dutch state secretary for finance, Eric Wiebes, told reporters in Brussels before Saturday’s meeting. “After all, we are discussing a proposal from the Greek government that was fiercely rejected less than a week ago, and that is a serious concern.”

While no signed bailout deal was expected this weekend, the question is whether Europe will decide to continue negotiating a rescue with Greece, or leave its banks to collapse and its virtually bankrupt government to default. European leaders have said their Sunday evening meeting could be used to reach that decision.

The fear of Greece and its supporters, which include the French government, is that without an agreement to continue negotiations, Greek banks could collapse next week, raising the prospect that the country would quickly have to abandon the euro.

Mr. Moscovici, the European economic affairs commissioner who is a former finance minister of France, said as he entered Saturday’s meeting that the “Greek government has made significant gestures.” He said the Greek proposals form “a basis for a new program” of loans.

Before the meeting, the finance ministers received assessments of the Tsipras plan by experts representing the creditors.

“The papers of the Greek authorities contain positive elements, issues where clarification is needed, and some issues where the institutions wish to see stronger commitment to reform,” said a person with direct knowledge of experts’ findings. But this person also warned: “Negotiations will be tough. The chances for a deal are 50-50.”

The Eurogroup, with its 19 eurozone finance ministers, has some outspoken critics of Greece, irritated by the Tsipras government’s negotiating style and Mr. Tsipras’s decision the week before last to break off negotiations and call for the referendum. Mr. Tsipras surprised many in his own country and party on Thursday when he presented a plan containing many of the elements ­ including austerity measures ­ that the voters had just rejected by a wide margin.

The creditors now want strong evidence that Greece will honor its latest set of economic promises if it gets the new loans it is seeking, and an agreement to ease the burden of its current debt, which at €317 billion is equivalent to 177 percent of the country’s gross domestic product. By that measure, only Japan’s debt, at 245 percent, is higher among the world’s economies.

Melissa Eddy contributed reporting from Berlin.

A version of this article appears in print on July 12, 2015, on page A1 of the New York edition with the headline: Finance Leaders Call It a Night Without a Deal.


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