Greek Left Review

Days of Strike

SOZ — Wed, 25 Jan 2012 22:52:58 +0000

Originally Published at http://whenthecrisishitthefan.com/

Here’s a short doc I produced with my colleague Giannis Vakrinos about the workers’ strike at Halyvourgia Ellados steel industry.

In mid-October, the owner of the company called the workers to sign an alteration in their contracts. Due to the financial crisis and the company’s losses, he asked them to reduce what in the rest of the world is common sense. They wouldn’t work 8 hrs per day and for 5 days a week anymore. The new working hours plan was 5hrs per day, 5 days a week and a 40% cut in their salaries which would mean that they’d earn around 500 euros.

As you can also see in the doc, there is a widespread belief that if the company’s proposals are passed in this factory, they’ll then spread all around the heavy industry with consequences even in the retail sector. The immense solidarity that you can see is owed to this fact. Workers of nearby factories and people from all around Greece are sending food and money to the strikers who have managed to last for more almost 2,5 months. The story is continuing and I will update on any developments of future posts.

Credits:

Script – Interviews: Kostas Kallergis, Giannis Vakrinos
Director of Photography: Alexandros Theofylaktou
Editors: Theodora Katrimpouza, Ilias Tsiampouris
Music: Andreas Koulouris (from the soundtrack of “To Rodi” by Christos Karteris)

Theo Angelopoulos dies in accident

SOZ — Wed, 25 Jan 2012 01:53:53 +0000

http://en.wikipedia.org/wiki/Theodoros_Angelopoulos

http://www.guardian.co.uk/film/2012/jan/24/filmmaker-theo-angelopoulos-dies-accident

Greece deal will be forgotten in the annals of history

SOZ — Mon, 23 Jan 2012 19:35:58 +0000

Greece deal will be forgotten in the annals of history

By Yanis Varoufakis*
Originally published at yanisvaroufakis.eu

SOZ — Sat, 21 Jan 2012 17:15:47 +0000

On The True Causes Behind France’s Downgrade

SOZ — Sat, 14 Jan 2012 08:51:33 +0000

By Yanis Varoufakis*
Originally published at yanisvaroufakis.eu

“[T]he financial problems facing the eurozone are as much a consequence of rising external imbalances and divergences in competitiveness between the eurozone’s core and the so-called “periphery.” As such, we believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues.”

S&P, extract from its rationale for downgrading France et al, 13^th January 2012

That S&P have been part and parcel of the fraud-ridden financialisation game which led us to this Crisis, is beyond doubt.
That S&P have, previously, downgraded both the United States and Japan, failing to appreciate that their large debts are perfectly sustainable under the present circumstances (which was confirmed by the observation that their downgrade had no appreciable effect on these two countries’ bond yields), is equally on the record.
That S&P’s rationale, see above, for downgrading France is precisely right, there is no smidgen of a misgiving

Our ongoing Crisis is a crisis of Europe’s banking sector which was, in turn, caused by the underlying trade and capital imbalances within the euro system. Greece’s public sector pains, Italy’s refinancing cul de sac, France’s current predicament, these are all epiphenomena of the Crisis. The deeper causes are two:

First came the outflow of capital from Germany to the periphery in the 1990s and beyond. It was the immediate repercussion of the Great German Experiment of the 1990s, when the growth rate of German labour unit costs was pushed well below that of German wages and of the equivalent French metric. In conjunction with German industry’s large investments into productivity enhancing capital goods, the wage-squeeze pushed German corporate profits through the roof. Unable to find a decent return within Germany, this capital headed South via the franco-german banks that jumped at the opportunity to expand into places no franco-german bank had gone before (and where interest rate premia abounded).
Second came the manner in which the franco-german banks mimicked Wall Street and the City in leveraging (with leverage ratios often in excess of 50:1) the mainly German capital outflows into the periphery, in some places targeting the private sector (e.g. Spain) while in other countries finding it easier to peddle their wares to the public sector (e.g. Greece).

Thus, when the Crash of 2008 hit us, it was inevitable that the deficit regions of the periphery would go bust, under the weight of these loans, and the silly franco-german banks would fall into the bosom of massive insolvency. And as if this were not enough, our politicians decided to prop both these ‘fallen’ partners up (the deficit states and the franco-german banks) by creating the mother of all CDOs: the EFSF. To see how the EFSF’s very structure foretold, and planned for, the eventual downgrading of France, see this post from last summer (in which I explained how the eurozone’s unraveling was guaranteed under the auspices of the toxic EFSF once the burden for the cheaper loans for the ‘fallen’ periphery states was placed on the EFSF’s shoulders).

In short, over the past two years, while the unraveling of the franco-german banks is the real game in town, the spotlight is on relatively insignificant ‘entities’ like Greece. The result is that the eurozone has now reached an advanced stage of disintegration. Markets are already planning for the post-euro era. So, why was only France downgraded? Why not Germany? (If I am right that the German banks are in similar straits.) The answer, of course, is that the breakup of the euro will lift German banks from the muddy seabed like a roaring tide (as capital flows into Germany courtesy of the fact that, in aggregate, Germany is a creditor state). As for France, it will be left tangled in the seabed’s mud, in between a few weedy posts that remind it of the lost dreams of becoming the command centre for a future federal Europe. This is inevitable now, unless the French elites wake up to their reality and demand of Germany something truly radical: a rational plan for exiting the Crisis before it is too late. One that resonates with the short paragraph with which this post began.

Radical Culture Research Collective

SOZ — Sat, 14 Jan 2012 03:12:48 +0000

(Ed. Note: This article was first published in Radical Philosophy 146 (November/December 2007).

The Sublime Whiff of Criticality: On the Functions of Documenta

Radical Culture Research Collective

Radical Culture Research Collective (RCRC) is a group of activists, artists, researchers and writers in Berlin, Hamburg, London (England), Montreal, London (Canada), New York, San Francisco, Tampa, Weimar and Vienna aiming to build structures and processes for critiquing the capitalist art system, reflecting on politicized artistic practices, and developing modes of a militant praxis within and without the field of art.

Our recent discussions have revolved around the ways in which criticality is recuperated through neo-liberal managerialism. This text, written for Radical Philosophy, briefly sketches some aspects of this problem using Documenta XII as a case study.

From Anti-Communism to Cultural Critique

Documenta, the widely publicized mega-exhibition of contemporary art held every five years in Kassel, Germany, has always had a political agenda. The first Documenta, organized by Arnold Bode in 1955, was intended to signal to the international art world that the dark days of Nazi philistinism were definitively over and that Germany’s demonstrative openness to “avant-garde” art could be taken as a clear confirmation of the Bonn republic’s reliability as a partner to its Cold War Western Allies. The democratic constitution imposed on West Germany did not necessarily produce the needed reflection on the fascist past. In many ways, the new democracy continued the imperative of anti-communism by other means. The first Documenta made the rehabilitation of the “Entartete Kunst” its main concern. But this was accomplished selectively: politically committed artists of the left were overlooked in favor of those using the language of abstraction. In the German national context, support for non-figurative art was a way of demonstrating a link back to the “degenerate” culture condemned by the Nazis—but without endorsing the anti-fascist avant-garde (Grosz, Heartfield, etc.). Internationally, meanwhile, alignment with New York-centered abstraction served the Cold War cultural strategy of opposing the alleged universality and vitality of capitalist art to East Bloc social realism. With only mild exceptions, this politically strategic cultural model was fostered by the Documentas through the following decades. The implicit logic of national restoration attracted increasing official and corporate sponsorship over the years.

The first real disturbance in this pattern was Catherine David’s Documenta X (1997), which imposed an unprecedented self-reflection upon the institution. Deliberately going beyond the bounds of the art system, David involved legions of critical theorists, in effect transforming the exhibition into an impressive and sustained event for reflection on the relations between politics and poetics after 1945. Five years later, Okwui Enwezor “globalized” Documenta to an unprecedented degree, also giving more focus to the critico-theoretical frame; the exhibition was wrapped by four discursive “platforms” that grappled with the problems of unrealized democracy, truth and reconciliation processes, and sprawling mega-cities beyond the capitalist core. We’re not claiming that these two Documentas were perfect or beyond critique, only that they broke with the prevailing logic of the Kassel exhibition in significant ways. However, neither of these Documentas scared away the official or corporate sponsors. Rather, they established the critical exhibition as a legitimate and acceptable form of cultural critique.

New Institutionalism and Token Criticality

While David and Enwezor tried to reject the politics of earlier Documentas by insisting on what had been deliberately omitted, Documenta XII Artistic Director Roger Buergel’s call in 2007 is for a return to a more traditional focus on aesthetic values. Back, that is, to the bourgeois aesthetics that underwrote the Documentas up to David’s. He announced the change in the International Herald Tribune: “For this year’s Documenta, you don’t need a sociology degree to understand the art.” While this shift at first seems to be a repudiation of the transformations in the logic of Documenta attempted by David and Enwezor, it in fact announces that these transformations—basically the valorization of criticality—have been successfully integrated into a new, neo-liberal cultural strategy. Criticality is retained and exhibited, but now in a merely token form. The critique of the institution and its logic has been converted into an asset of the very same institution. The practical result is that critique is in large part pre-empted: since the institution itself is already critical, it can be entrusted with the task of (self-)criticism.

In this, Documenta is hardly unique. It merely exemplifies what has been called the “New Institutionalism.” Currently a buzzword in discussions of curatorial practice, New Institutionalism is alleged to be a pathway for institutional transformation based on principles of participation. In “The Institution is Dead! Long Live the Institution!” (2004), Claire Doherty defines it as a curatorial tendency that “responds to (some might even say assimilates) the working methods of artistic practice and furthermore, artist-run initiatives, whilst maintaining a belief in the gallery, museum or arts centre, and by association their buildings, as a necessary locus of, or platform for, art.”

What are some of the ideologies that comprise New Institutionalism, and how do we see them at work in Documenta? First is professionalism, that is, the idea that institutions serve as better safeguards against the influences of the market than smaller, less established organizations, which are perceived to be unpredictable, amateurish and at times too dangerously sub-cultural and entrepreneurial. Larger institutions are seen as more professional, and thus are thought to be better suited to uphold standards for critical art practice and publishing. Second is the belief that larger, state-funded institutions (art or otherwise) are in a better position to defend the gains of women, minorities and other marginalized groups, than are smaller or more ad hoc organizations or social movements which lack institutional clout, respectability, skills or resources. Any conflict or dialectic between smaller and larger art institutions—and in the parallel terms of social movements, between grassroots activism and structures such as NGOs, political parties or the state—is sidestepped as unproductive and unnecessary. Under the regime of New Insitutionalism, self-organized initiatives become invisible, redundant and undesirable.

Institutions like Documenta thus tend to become hegemonic, incorporating the efforts of smaller organizations and individuals. Since Documenta incorporates everything, it can simultaneously claim the institutional authority of the museum and also the (formerly external) critical and oppositional position of smaller groups and organizations. Here we recognize the neo-liberal strategy of co-opting conflict and incorporating it into carefully controlled internal management—Tony Blair’s “One Big Tent” beneath which CEOs and people on welfare happily coexist. In this schema, conflict is simply counterproductive and inefficient. Its irruptions may be described as fits of immature and irrational pique, and eventually be associated with “terrorism.”

The Limits of Non-Economic Capital

Documenta exemplifies the ambiguous status of prestigious, non-market events and this is reflected in the limits of non-economic capital. This can be seen clearly in the publications project of Documenta XII, in which 90 independent art and theory magazines were invited to participate without economic remuneration. Instead of cheques that can pay the rent, the magazines had to settle for forms of recognition and other benefits that are generally characterized as non-economic forms of capital: symbolic, social, and cultural.

As developed by Bourdieu, the notion of non-monetary capital was a conceptual tool designed to unmask class domination. The degradation of this analytical concept by Richard Florida and others has turned it into a class-neutral shorthand for the non-profit sector. Today, Bourdieu’s terms are most often used to euphemize or normalize exploitative relations—and are conducive to making these relations acceptable even within critical contexts, such as Documenta.

One of our members, an editor of MALMOE, co-authored a critical response to the Documenta XII publication project (MALMOE 38). Our remarks here draw on and are stimulated by this critique. Most of the journals and magazines involved in the publications project are small, relatively marginal, non-profit or otherwise financially precarious organizations. But they are also potentially “the next big thing,” hot, radical, etc. Most of them have little choice but to accept opportunities offering visibility. This is particularly true of invitations to participate in Documenta, which enjoys the reputation of being the most critical and serious of all the international art events—a kind of global standard for criticality. This inherited reputation—what we can recognize as accumulated non-economic capital—is a primary element in the swirling mix of expectation and desire that makes Documenta such an appealing art world brand-name.

Small, precarious critical publications obviously find it difficult to be indifferent to Documenta’s offer. Most of them will have to agree to work for free, producing content for Documenta and thus confirming its critical reputation, in return for the mere possibility that they may be able to convert their participation into money or other opportunities in the future. Directly or indirectly, the effect of these forms of exchange is that contestational forms of criticality—especially those from radical or anti-institutional orientations—tend to be self-censored. One must “play nice” or at least “not make a stink,” in order to garner social capital (connections, opportunities), or so as not to endanger one’s place in a community. Artists from Vienna, the epicenter of this Documenta’s organization, experienced what is typical for local art scenes: One is acquainted with the people involved, one is part of the same networks, appreciates each other, sometimes is even dependent upon each other. This involvement makes it hard to maintain critical standards that one would hold firmly onto in other contexts. In any case, the tokenism of the criticality generated by the publication project is clear from the mode in which they are presented in Kassel: all the journals and magazines are exhibited as objects, in a way that strongly discourages actually reading them.

Beyond the Outsourcing of Risk

In emergent forms of capitalist business management, the integration of enterprises into the market is achieved by simultaneously concentrating control within administrative centers, and dispersing or outsourcing “creative labour” to individuals or smaller enterprises with a high tolerance for risk and casualized, project-based working environments. As a result, major consortia are buffered from market risk, which is borne exclusively by the individuals and small groups of project-based laborers. The dynamic is the same when work formerly done by trained employees is outsourced to large, generally unpaid groups of people through open calls, competitions and other “reality TV”-like scenarios. The result is a wholesale outsourcing of risk. What holds for business holds true for institutions as well.

Today, large and powerful art institutions such as Documenta, Tate Modern, the VanAbbe Museum or the Museu D’art Contemporani de Barcelona, can lay claim to both the consecrated and risky forms of cultural production. In this model, independent forms of cultural production are “networked” into larger institutions, instead of posing a challenge or presenting an alternative. As the Euromayday Hamburg activists observed, the institution now “takes up crucial mechanisms of self-organized projects” through incorporating their efforts. In this way, remote, marginal or emergent activities can be exploited, or better, conditions for self-exploitation can be created.

The question remains: why were the participating magazines and journals unable to generate a collective reflection and response to the exploitative outsourcing of research through this scheme? To answer this question, it is important to consider why, as previously mentioned, we feel we cannot afford to say no (or in other words, to withhold or withdraw our productive labor and the symbolic value it may have for institutions). In an increasingly competitive and precarious environment, there is a sense that any exposure, any reputation building, may finally lead to some financial stability; according to this logic, turning down any offer becomes a suicidal gesture.

The prevalence of exploitation and self-exploitation within the art field points to the necessity of a systemic analysis that can grasp these processes of neutralizing incorporation and their functions within contemporary global capitalism. But because our willing participation in these structures is due to the underlying feeling that we have no choice, the need for alternatives also becomes urgent. This means both articulating and enacting alternative values: those values that lead some people to decline participation, to put their investment in “symbolic capital” at risk by being critical and making trouble. Most of us desire recognition from our peers. This desire need not be converted and expressed in competitive terms. The art system is structured this way as an effect of institutional organization and the logic of markets.

To formulate alternatives, and build on past efforts, we need to consider questions such as: How can this desire for recognition be reconfigured in terms of solidarity, rather than fighting each other for the crumbs? How do we organize collectively, so that those who refuse to “play nice” do not do so alone? What can be learned from social movements and the histories of struggle, so that critique is not abstracted into a curatorial theme or seminar topic that leads to no actual change? In future texts, we will try to develop answers to these and related questions.

Red Zone

SOZ — Fri, 13 Jan 2012 23:21:03 +0000

Documentary Series Concerning Immigrants & Refugees living in Greece,

National Greek Television ERT

Production: Greek Directors Guilt http://www.greekdirectorsguild.gr/

Greece’s PSI is Dead on Arrival

The grapher — Fri, 13 Jan 2012 16:31:34 +0000

An error in search of a rationale but also a failure that may prove a harbinger for the Modest Proposal

By Yanis Varoufakis*
Originally published at yanisvaroufakis.eu

A brief history of Greece’s PSI

In the beginning there was Wholesale Denial. Then the Denial began to subside under the weight of circumstances. It did so slowly, agonizingly so, with the result that, in the process, Greece lost any capacity it might have had to rebound. It also caused the Crisis to spread like a bushfire throughout the eurozone, turning liquidity problems into unyielding insolvencies first in Ireland, then in Portugal. Still, to this day, Denial is in the air. But it cannot remain intact, without the whole eurosystem crashing and burning. The Greek PSI may be the harbinger of denial’s end. If not, it is hard to see what will stop the juggernaut of the Crisis from destroying the few chances the euro has of survival.

Taking things from the top, the Wholesale Denial began life two years ago when imploding Greece was issued a triple ‘Nein’: No bailout, no interest rate relief, no haircut.[1] A few months later, with a second credit crunch looming, one of these Neins was revoked. The calendar read May 2010 when a massive bailout was agreed. But, still, no interest rate relief to mention and, of course, no haircuts. A few short months later, when it became abundantly clear that the disease had spread to the Emerald Isle, and it was on its way to the Iberian peninsula, Germany decided that another of the three Neins ought to be revoked: There would be haircuts, but not until the creation of the permanent ESM in 2013. It took another eight months of so (early summer of 2011) before the Greek haircut was given a snazzy new acronym, PSI they called it[2] (making it sound as if it was the bright idea of the… private sector).

The idea was not without appeal: Why should the taxpayers of the surplus countries fork out untold zillions to shore up silly bankers, who knew quite well why they were receiving interest rate premia by lending to basketcases like Greece, without having the bankers themselves take a haircut too? How else would banks be given an incentive to think twice before lending to profligate states? Such talk sounded good in the Federal Parliament, in Berlin, but also in Athens, in Paris, wherever the politicians used these ‘lines’ to feign ‘toughness’ in front of an audience aching for the bankers’ blood.

Alas, in the era of, what I call, Bankruptocracy,[3] even a haircut imposed upon bankers can be a blessing in disguise for the most sinister operators of the runaway banking sector. After the Greek PSI was announced in July 2011, shadow banking (hedge funds, special vehicles et al) lived its finest hour. They bought en masse Greek government bonds, at basement prices, with a view to swapping them for fresh bonds of much greater value. Why? Because PSI Mk1 specified no face value loss but a drop of expected net present value (estimated at around 20%) due to a swap with new bonds of much longer maturity. So, hedge funds bought old Greek government bonds (GGBs) for 30% to 35% of their face value in order to exchange them with bonds whose value was estimated at 80% of the old ones’ net present value. A nice little earner. This was one of the reasons why PSI Mk 1 bombed out, leading to PSI Mk2 in October 2011. (The other was, of course, the fact that this pitiful diminution in Greece’s debt burden was neither here nor there given the viciousness of the Greek recession.)

Back to the drawing board, our European leaders came up with a deeper haircut in October 2011. They called it PSI Mk2 and even had the foolish Greek PM fall on his sword, to be replaced by a hitherto loyal ECB functionary, so as to ensure that PSI Mk 2 would become Greece’s new light on the hill; a beacon of the last glimmer of hope for a desperate nation. PSI Mk 2 envisaged an impressive sounding 50% reduction in the GGBs’ face value which, in present value terms, would result in a haircut no less than 60% (since the interest rates charged on the new bonds, that would be swapped with the old ones, could not exceed the interest rates charged by the ECB and the EU for the original bailout funds). In other words, holders of GGBs would be hair-cut in two ways: a 50% reduction in face value and an interest rate less than 5% which would cut further into the present value of the old GGBs.

Alas, there is never a dearth of silver linings for the shadowy universe of our modern financial sector. Even when facing such a substantial haircut, many financiers will find something to smile about. In the case of PSI Mk 2, their smiles can be traced to two reasons: First, many of them bought GGBs for something around 30%. If PSI Mk2 implies an overall (present value) haircut of less than 70%, they are home and dry. Secondly, hedge fund managers have had more playful thoughts: Given the EU’s zeal to keep the semblance of a voluntary haircut (a ‘private sector initiative’) alive, what is there to stop them from pursuing a legal battle against any compulsory expropriation of even a cent of the GGBs they hold? Already a major hedge fund has opted out of the negotiations with the Greek government over the terms of PSI Mk2, clearly preparing for a legal challenge or, more precisely, for extracting a nice little out of court settlement once the all-singing-all-dancing PSI Mk2 ‘concordat’ is announced by the Greek government and the EU.

In short, and so as not to overlabour the point, PSI Mk2 is dead in the water. The shenanigans of the shadow banking sector (which, lest we forget, includes not only the hedge funds but also, remarkably, the ‘proper’ banks shady Special Vehicles) plus the predictable deterioration of the Greek economy have put paid to it. The negotiations may go on for a little while longer, the announcement of a brilliant agreement may be made but, in truth, the idea that the Greek haircut will put Greece’s debt-to-GDP ratio back on a course towards 120% has sunk without trace. And if you need hard evidence for this, the European Summit of 9th December provided it even before 2011 was seen off: Officially, Europe’s great and good announced the end of PSI as a policy of the new ESM; Europe’s future central, permanent bailout fund. It had all been a mistake, they seemed to confess.

And now what?

This year’s first significant statement came from Athanasios Orphanides, the Central Bank of Cyprus’ Head and his country’s representative on the ECB’s Council. In a letter to the Financial Times, published on 5th January 2012,, Mr Orphanides wrote: “Government debt markets are about trust”, blaming the Crisis’ inexorable progress within the eurozone on “…[a] collective failure of euro-zone decision-makers.” So far so excellent. As for the PSI, Orphanides repeated that which many have said before him: It signalled to investors, especially non-Europeans, that “euro-zone sovereign debt should no longer be considered a safe asset with the implicit promise that it would be repaid in full.” Like I have been writing ad nauseum in this blog since PSI Mk1 was announced, back in July 2011, Orphanides agrees that the Greek PSI, rather than being the bankers’ scourge, has proven a bonanza for shadow bankers and mainstream banks’ Special Vehicles. [He mentions the example of funds that purchased GGBs 35 cents or 40 cents on the euro who now insist on an agreement that allows them to profit from the swap.]

Now, some will say, with considerable justification, that the Head of Cyprus’ Central Bank is saying all this because Cypriot banks are sinking in a mire of their own making, having bought oodles of GGBs. Still, the fact that Mr Orphanides has an ulterior motive in calling for an end of Greece’s PSI is not the reason why his argument is lacking. The reason is that he is making precisely the same mistake as that Mrs Merkel, Mr Sarkozy and, indeed, the Greek government have been making for almost two years now: They keep thinking of the Greek public debt crisis in isolation to (a) the deep malaise of Northern Europe’s banks and (b) the public debt difficulties of most eurozone states. The fact is that the Greek crisis cannot and will not be dealt with unless the ‘solution’ is part of a systemic redesign that deals with (a) and (b) as well as containing a program for stemming the tide of recession that is currently engulfing our continent.

As evidence of Mr Orphanides’ narrow focus, which detracts from his case against Greece’s PSI, I offer the alternative that he is proposing: Greece should be issued, in lieu of the failed PSI, thirty year loans at 3% interest rates. Similar suggestions come from different quarters (see here an article by George Zestos) canvassing the idea that, instead of the PSI, the ECB ought to guarantee GGBs (with the Greek government paying the ECB a small premium in return for these guarantees). The problem with such proposals is that they fail to incorporate their solutions to the Greek Problem within a broader plan for Europe. Mr Orhpanides cannot possibly believe (and I do not think he does believe) that 3% thirty year loans can be extended to Greece but not to Ireland, Portugal, Italy, Spain, Belgium even. And he cannot believe that the banks will be left with ECB loans but not be forced to recapitalise ‘big time’. But where will the trillions involved come from? He does not answer the question, leaving it to us to imply that he is in favour of eurobonds. But then the question becomes: What sort of eurobonds?

The continuing appeal of the Modest Proposal

So, we have returned to the question that this blog has been built upon over the past year and a half. We certainly need eurobonds. But we neither need nor want eurobonds jointly and severally issued and backed by member-states (for reasons that Mrs Merkel can explain better than anyone; namely that such bonds will sell at interest rates that are too high for Germany and not low enough for the periphery). And since we cannot have a Federal Treasury do this on Europe’s behalf (as opposed to member-states), it is imperative that it is the ECB that issues and backs such bonds so as to convert the Maastricht compliant part of the eurozone’s aggregate public debt into Union/Eurozone debt; a common pool of debt that is, however, to be serviced pro rata by member-states at interest rates reflecting not their individual credit ratings but those of the ECB that organises this debt conversion on the Union’s behalf. (For more see our Modest Proposal.)

Interestingly, George Zestos’ recent proposal (mentioned above) points in the Modest Proposal’s direction. Zestos’ idea that the ECB should guarantee new issues of GGBs is, in fact, more radical than our proposal for ECB bonds issued on behalf of each member-state and to be serviced in the long run by the member-state. While Zestos is asking of the ECB effectively to take on its books the new issues of Greek, Italian and Spanish bonds, the Modest Proposal, much more… modestly, suggests that the ECB issues debt on behalf of these member-states but then charges them for their servicing on the basis of some super-seniority baring loan agreement. In fact, the two ideas are close in spirit except that the Modest Proposal (i) gives more guarantees to the ECB that it will not have to print to service member-states’ debts and (ii) gives international investors more ground for confidence (since they would be much happier buying bonds issued by the ECB than bonds issued by Greece or Italy under a complicated insurance scheme backed by the ECB).

To recap, the Greek PSI was always an error in search of a rationale. It gave shadow banking a great new opportunity to profiteer at the expense of Greece and of Europe and escalated the latter’s Crisis rather than help tame it. The question is: What is the alternative? After two years of studying carefully all alternatives, I still believe that our Modest Proposal is the natural candidate. More recently, I had the dubious honour of talking to a hyper-smart Goldman Sachs apparatchik. He more or less agreed with the Modest Proposal’s basic thrust, albeit in a manner not at odds with the usual cynicism associated with his firm. This is how he put it: “Well, in the end your proposal will be adopted by default. Once the ECB has accumulated so many rubbish bonds, they will have to start borrowing to service them. Once they make it official, they will see the merits in charging the member-states for the cost of servicing what will effectively be ECB-bonds.” As they say, the Devil has the best of tunes.

[1] A fourth Nein was not even verbalised: A Nein to an exit from the eurozone.

[2] Private Sector Initiative/Participation

[3] The New Regime that emerged from the ashes of 2008 in which the greatest power to extract rents from the rest of the social economy was granted to the banks with the largest black holes in their assets’ books. See my Global Minotaur for more.

*Yanis Varoufakis is a prominent Economist and a professor at The University of Athens. He has been a credible, well heard globaly commentator since the starting of the economic crisis.

The euro or the drachma?

The grapher — Fri, 13 Jan 2012 12:22:34 +0000

By Antonis Davanellos*
Originally published at the Socialist Worker

The devastating debt crisis in Greece is raising a new question: What if Greece has to abandon the euro as its currency, in spite of the financial bailouts carried out by the European Union, European Central Bank and International Monetary Fund–known collectively as the “troika.” What would a return to the drachma mean for the people of Greece who have endured harsh austerity as a cost of the troika’s “rescues.”

THE EXPERIENCE of two years under the financial supervision of “the troika” and of consecutive and severe austerity programs has led to a meltdown of illusions about “Europeanism.” Ten years ago, under the influence of arguments made by both the right-wing New Democracy and the center-left PASOK, a wide consensus emerged in Greek society about the country’s relationship to Europe.

The consensus was based on the false hope that, with Greece becoming a member of the European Monetary Union and the eurozone, Greek capitalism would enter a stage of continual growth–and that in the process, working people would benefit. Workers were supposed to get their share from the increase in the total size of the pie.

Today, these hopes are crushed.

The debate about what comes next is very important. Thousands and thousands of workers are interested in it, and it is happening with an unexpected level of political urgency.

Important changes have taken place that will shape this debate and how it plays out.

On the one hand, there is the changed attitude of Europe’s most powerful countries. German Chancellor Angela Merkel and French President Nicolas Sarkozy take the prospect of a two-speed Europe and a two-speed euro for granted. Not only Greece, but also Spain, Portugal and Italy (the “PIGS” of the European South) are clearly being pushed to the back of the EU train.

But after the European summit meeting on December 9, there is now a possibility for the first time that “failed states” could be expelled from the EU. Clearly, this prospect is mostly to do with Greece right now.

On the other hand, the ruling class in Greece is beginning to alter its own position. The bankers, industrialists and ship owners still prefer to remain inside the euro club, and they proclaim that they are ready to continue the savage attacks against working people in order to achieve this.

But for the first time, they are now having to start making calculations about whether it is in their best interests to remain inside the eurozone, under the circumstances created by the international economic crisis and by the troika’s decisions about the handling of the debt crisis.

In the mainstream press, there have been articles reminding us that capitalism in Greece was capable of functioning before the euro–and so it could survive after the euro. The most insightful analysts can already detect some preparatory moves by the ruling class, which is hoping to retain the capacity to control the situation, even in the case of the massive financial turbulence that would make a return to the drachma necessary.

Political leaders like Finance Minister Evangelos Venizelos have underlined the point that such decisions are not just prospects for the distant future, but could be necessary in the coming months.

Of course, the debt crisis has undermined the power of Greek capitalists and restricted their ability to act independently from the bigger powers of Europe. But it has not eliminated this ability.

Greek capitalists and their state remain a force to be reckoned with in the Balkans and the eastern Mediterranean. The best proof of this is the Greek state’s political-military alliance with the state of Israel, which seeks to safeguard energy resources in the eastern Mediterranean and protect the geopolitical stability in the region, particularly in the aftermath of the rebellions in the Arab world and the change of policy by the Turkish state.

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THE DOMINANT view on the European left is that a majority of activists and working-class militants in the Greek anti-capitalist left support an exit from the eurozone and a return to the drachma. This isn’t exactly accurate.

The Communist Party, the largest organized force on the Greek left, has traditionally stood for exiting from the euro and the European Union. Today, however, the CP stresses that these aims are to be achieved only under a future regime of “popular power and a people’s economy.”

The CP leader Aleka Papariga says at every opportunity that if a return to the drachma happens under the current line-up of political and social forces, the result will be an unprecedented speculative attack and unprecedented pauperization of wage-earners and farmers.

I partly agree with her.

The reason I say “partly” is because I don’t understand where this stage of “popular power and a people’s economy,” placed between capitalism and socialism, comes from.

But I agree that a return to the drachma, if it happens under the direction of capitalists and their state, would have devastating results for the Greek population. The drachma would be undervalued from the start and would instantly lose even more value when it is introduced.

This would wreak havoc on the value of everything that is important to wage-earners (their wages, pensions, housing, etc.) and also farmers (the value of cultivable land). On the other hand, the capitalists–who would retain over 600 billion euros deposited abroad, more than twice the sum of the Greek debt–would be able to grab for just pennies public enterprises, hospitals, land and more.

This would represent a colossal transfer of wealth from the public to the private sector, comparable only to what happened in the countries of Eastern Europe after the fall of the Stalinist regimes in 1989.

Unfortunately, this “trap” for workers, spotted by the Communist Party, has not been detected by a section of the radical anti-capitalist left. At its recent conference, the ANTARSYA alliance of left organizations adapted the slogan “an anti-capitalist exit from the euro.”

This formulation isn’t honest about the facts.

If we are talking about an anti-capitalist overthrow of the existing system and the new system that would emerge from this, then a slogan about currency isn’t the best place to start. The slogan “all power to the workers’ councils” would be much better. But this only highlights the enormous distance between this goal and the current tasks and responsibilities of the anti-capitalist left.

For most of the comrades of ANTARSYA, the way to resolve the contradiction in their everyday political activity is to forget about the adjective “anti-capitalist” and speak only about an exit from the euro, pure and simple. They talk about Greece regaining the weapon of monetary policy in dealing with the economy, about a devaluation as a way to rebuild competitiveness, and about a reconstruction of the country.

This is a retreat toward the ideas of “realist” radical economists. For example, Costas Lapavitsas proposes an immediate return to the drachma and a systematic devaluation as the only way to strengthen the competitiveness of Greek enterprises and reinforce exports, which would make possible a general reconstruction of the country and the economy.

This “solution” has a very big weakness: The drachma won’t be alone in this road. It would likely be competing with the British pound, the Portuguese escudo, the Spanish peseta, the Turkish lira, etc. The battle over which country is the most “competitive” would be, in reality, an economic war, with workers as the victims and the profits going to the capitalists.

Lapavitsas is honest in admitting that if his position were adapted, in the medium term, working people would face major shortages in food, fuel, medicines, etc. This is a concession that no left-wing political force can or should make.

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SUCH PROPOSALS represent a return to past programs of mildly left-wing nationalist reformism.

In the early 1960s, an important section of radical economists–among them Andreas Papandreou, the founder of PASOK–suggested a similar road for Greek capitalism: nationalization of “strategic” sectors (energy, water, telecommunications, transport, etc.), an independent foreign policy, prioritization of heavy industry, and protectionist measures to support Greek products.

In theory, this was a program that could only be implemented by a left-wing government, and so its realization must therefore lead “objectively” toward some kind of socialism. In real life, these policies were partially implemented by the military junta of 1967-74 and even more so by the first right-wing governments that succeeded it under Kostantinos Karamanlis (who was denounced by other right-wing politicians for his “socialist mania”!).

Some on the left, making reference to the legacy of Trotskyism, describe their support for exiting the euro as part of a supposed “transitional program.” This is a very “flexible” way to interpret the meaning of a transitional program–and it underestimates the dangers of compromising with economic “realism” and nationalism, even in its most “mild” and “left-wing” variant.

Such policies fall far short of the tasks of the working class movement in Greece today.

Our main task is the overthrow of the politics of austerity. Through this struggle, we have to amass the forces–both in mass social movements and in the building of a political left–that can put forward in real terms the question of the overthrow of capitalism and the fight for socialism.

In this effort, we should have nothing to do with any policy that would force workers–after enduring the harsh measures of an “internal devaluation” under the euro–to pay the costs of a capitalist reconstruction under the drachma.

Many comrades on the left point out that the euro is not a neutral symbol anymore, and I totally agree–the euro represents the neoliberal politics that have dominated the EU over the last 25 years. But the drachma likewise is not a neutral symbol. What a currency “represents” at any point in time depends on who controls the economy and political power in society.

In the SYRIZA alliance, we are trying to organize around the slogan: “Not a single sacrifice for the euro, no illusions in the drachma.”

Our goal is a left-wing policy that confronts the vulgar “Europeanism” which legitimizes austerity policies today, but without taking responsibility for raising a call for an immediate return to the drachma.

In reality, a return to the drachma is no longer unlikely. But if this does happen under the current constellation of social and political forces, the results will be bitter for the Greek people–and devastating for the left, if it is caught politically and ideologically unprepared for such a development.

*Antonis Davanellos is a journalist, unionist and member of Internationalist Workers Left (DEA) a member of Colaition of the Rdical Left (SYRIZA) in Greece

Greece 2011: Society against Neo-Liberalism

The grapher — Fri, 13 Jan 2012 00:19:46 +0000

By Apostolis Fotiadis*
originally pubished at Betiko Fundazioa
Re-published here with the author’s license

Greece at the beginning of 2011

The beginning of 2011 found Greek society and its political system fighting with the ramifications brought about by the structural adjustment plan initiated by the agreement of Greece with IMF and its European partners in May 2010.

The structural adjustment plan like IMF has admitted itself was a copy paste of other austerity mechanisms implemented in Latin American and Eastern European countries mostly during the 90s. It was basically aiming to fiscal consolidation through tough spending cuts and heavy horizontal taxation. Consequently after half a year of rapid implementation only economic recession was already hitting hard major economic sectors like construction and third sector services.

Organised social movements had already reacted in various cases, especially through large unionized activity in days of general strikes without serious outcome. Throughout 2010 violent riots have been a standard side effect of large deconstruction, mostly by people participating in spontaneous Black Block’s appearances and stand offs with riots police forces. This was the heritage of 2008 events that followed Alexis Grigoropoulos murder by a police officer in Exarxia, the hub of anarchist and radical leftist activity, which quickly pushed into politics and rapidly radicalized a generation of youngsters. Such a riot has provoked the death of three people working for Marfin Bank in May 2010, during the biggest demonstration of the last decade, the days before the initial bailout agreement with IMF.

While it remains still unclear who committed the crime, given that it is informally proven that various parastatal and other interest groups often highjack riots, the event has frozen the reaction of public opinion and caused a submissiveness that lasted up to the end of 2010. A cohesive block of media, political and business interests has meanwhile orchestrated an ideological agenda to support the structural adjustment plan, which initially focused on quickly reducing the deficit by taxing the middle class, and rapidly deregulating the labour market in order, according to the neo-liberal justification, improve competitiveness.

A year of neo-liberal deconstruction begins violently

The implementation of harsh neo-liberal policies has gone hand in hand with the increased use of police force against organized social reaction. This was already evident at the beginning of the year after the brutality police demonstrated in a demo at the beginning of Dec 15th 2010. Police authority’s abuses already in the last few months of 2010 had begun to raise concerns among the public as well as within professional medical circles.

On Dec. 6, following riot violence, dozens of injured students were admitted to Evagellismos Hospital, located in the heart of the city. Panos Papanikolaou, a neurosurgeon from the Medical Union of Athens, remembered that day because so many injured pupils were admitted that the hospital had to open its emergency quarters. “At least 45 people were seen in emergency units around Athens,” Papanikolaou remembered. “Injuries were more and severer than before. Some people are not only beaten with batons, blows and kicks, but assaulted on the head with fire extinguishers police carry with them to blow off Molotov cocktails” ha said. During the first months of 2011 in addition to physical injuries, specialised doctors have witnessed an increase in the number of people seeking medical attention as a result of encountering tear gases and other chemicals. Olga Kosmopoulou, a specialist in infectious diseases, says that chemical methods of crowd control employed by police are leading to increased incidences of skin, eye, and respiratory problems caused by the toxic substances. Police violence and chemicals abuse have become concerning issues even for human rights organisations like Amnesty International. Another indication has been the deterioration on the frequency with which plainclothes police officers showed up in hospitals in order to identify beaten demonstrators and intimidate them in an effort to discourage retribution.

In addition to attacks against the citizenry, some members of riot police units are turning against journalists that cover incidents of abuse. The first case that attracted attention was that of Aris Messinis, an Agence France-Presse photographer in Athens, which alleged that he was the victim of a targeted attack on Nov. 17 2010 during a major demonstration commemorating the fall of a military junta. During 2011 photojournalists have been directly targeted by police on the street, obliging their union leader Marios Lolos to directly accuse the responsible ministry, in a couple of press conferences, for covering up such incidents of riot police “trying to hide the abuses in which they are involved”.

The Reporters Without Borders team visited Athens in the summer of 2011 to investigate the reasons behind the country’s decline in media freedom ratings. Greece fell sharply in the 2010 World Press Freedom index, ending up last in Europe in the 70th place (in the 2009 ranking it was in the 35th place), together with Bulgaria. Accounting for this worrying trend, the report concludes, is mainly the economic and financial crisis which exposed the weaknesses and malpractices of a defective media market which has been for years artificially supported.

The major question posed by analysts and human rights activists coming in contact with indication of deteriorating repression of media freedoms was whether this was the result of lost control by police, or a conscious choice for mounting suppression while austerity increased social turbulence.

Two important moments for the social movements in Greece

January would bring about two important cases of social reaction on the field of general administration and migration policy. The first was the hunger strike of 300 migrants that arrived to Athens from Crete and attempted to shut themselves in the law faculty in Athens. Initial negative reaction has isolated the migrants and political organizations that found refuge in an old antic building in the center of Athens. From there and for over a month they fought against negative publicity and a hostile public opinion and in the end managed to negotiate their way out. Without winning any of the maximalist aims they initially claimed but with shifting for the first time the migration policy agenda from the xenophobic discourse that dominated the issue in 2010 to a more pragmatic one about the challenges migration posed on Greek society. Unfortunately those gains would fade away very quickly. Under the pressure of austerity and with prospects of quality life diminishing rapidly in the center of Athens an anti-migrant breakout of the Greek public opinion is provoked on May 2011 because of the murder of a 44 year old Greek by three migrants attempting to rob him. Anti-migrant pogroms, high jacked by extreme right wing organizations, swept through Athens and other cities, attacks that in their majority remained unanswered by authorities and alter permanently the relation of Athenian with foreigners for the coming months and years.

The second event has been the popular revolt of the people residing in the outskirt of Athens named Keratea, against the planning of a garbage collection and depot point in their area. Keratea begun as a local argument between residents and civil authorities but was transformed into a symbolic standoff of independent citizens and political organizations against police forces that spent over four months violently confronting each other outside the village. The amount of attention and solidarity Keratea people attracted is unprecedented in modern Greek history and given that plans for installing the collection point have been postponed a somewhat victorious one. More important is that in this case people involved attempted a complete response to a coercive policy, from the field point where they resisted what they saw as oppressive state force, up to the judicial level where they tried to take on the government in the courts. Information campaigns let people understand the impact of organized business interest on waste management policy, investigative independent journalism exposed how the government collaborate in favor of great project contractors against the interests of citizens, and finally a big ‘Art Resistance Festival’ situated right between the village and the state forces proclaiming wide solidarity towards marked the memory of Keratea, as an event where well organized citizens have been able to face and stop the state machinery.

Both the Keratea case and the 300 hundreds hunger strike have been events where people voluntary have participated in solidarity political actions in order to achieve a specific aim against state authority. No matter the gains of those attempts they have set into place an innovative perspective about participation and political action that until then inhabited only the rooms of liberal anarchist groups as a theoretical issue or had found little practice in small political projects. The spirit of this en mass political mobilization, affected in debt by the wide delegitimisation of the Greek political system, would inspire a different approach to politics that would for the first time crystallize in the movement of ‘Greek Indignados’ that took over Syntagma square during June 2011.

The people’s square

The mass mobilization on central squares of other European capitals, which introduced the spirit of popular Arab revolts from the Magreb countries, into Europe, arrived in Athens late. Greeks were so much destructed from their own troubles and political dogfights that failed to see anything innovative in the popular but peaceful uprising of Europeans. In the beginning some people took the initiative through Facebook to invite for the take over of the Syntagma (Constitutional) Square. Many others dismissed the idea arguing that after so much violent riots failing to stop neo liberal politics a peaceful movement would be hopeless anyway. It took only a few days before the square was sinking under the burden of a hundred thousand demonstrators who returned again and again just to cheer against the gloomy parliament standing on the top of the square and the politicians inside. Then the square took its course into becoming a unique historical moment in modern Greek politics.

The mass gathered at Syntagma Square throughout June offered ground for reflecting on developing responses to the politics of crisis inside Greek society. The crowds where neither homogenous politically nor they coordinated actions or rhetoric’s during the protests. But they projected a cohesion regarding their expressed absolute rejection of mainstream politics. One could observe different scales of involvement as well as different dynamics developing on the square during the weeks of protest.

A crowd more interested in protesting against politicians and the political system in general demonstrated a tendency of gathering and cheering outside the parliament gates. Their slogans commented unpopular political personalities and emphasized their indignation with the corrupted political system. No specific social class was overrepresented in these crowds, which constituted a representative picture of Greek upper to lower middle class and working class people. A cohesive group of right wingers attempted to highjack a place in front of the parliament and give a ‘nationalist’ tone to the political slogans of the crowd. Despite many leftists believed that the process would derail and transform to a nationalist outbreak of rage, people instinctively isolated any radical elements, something proving how alienated mainstream people have become towards social forces over projecting violent behavior lately. Xenophobic slogans or behavior were merely absent from the square which was dominated entirely from references regarding the crisis. Other subjects related to feminist emancipation, human rights, citizens’ rights etc. were also remarkably absent from the topics raised around the square, whether in discussions or during demos.

People persisted on two things, the peaceful character of the demonstration and that no organization with a political agenda highjack’s the demonstrations. Animosity towards any form of organized political groups that appeared on the square has been acute and non negotiable, offering arguments to people who attempted to characterize the demonstration for lacking political substance or being exposed to political manipulation by major media and the government.

The rise of direct Democracy

A second large concentration of people gathered on the lower part of the square where it established a camp and engaged in the making of a community that dealt with all short of administrative issues. While days past this community which was represented every evening at 8 by an open assembly that lasted several hours found itself engaging in a real experiment of how to practice direct democracy, something that transformed on its major political demand and some cases mantra while the month approached to an end. People involved in the community and assembly organized cultural, political and social activities like introductory seminars on finance and economics, concerts, solidarity actions to strikers, a free kitchen, a cleaning team, a media group that to an extent managed to get the voice of the assembly to the public without being manipulated by big media. Those activities produced administrative challenges and offered an opportunity to many ‘beginners’, if one may say, to formulate an understanding of the challenges posed by the practice of politics. During participation in the assembly or activities people encouraged each other to get involved equally and don’t accept roles of leaders and leaded. Even though those have informally existed the central idea was that everyone on the square is equal and that power is exercised only after consensus. Those led many times to contradictions between theory and practice and created disagreements on which people struggled to compromise. Some theoretical weakness of the claim for direct participatory democracy appeared during that month and pushed further the debate on the issue. This was enhanced by the invitations the assembly sent to academics and intellectuals like the popular economist Giannis Varufakis, the constitutional lawyer Giorgos Katrugalos, the ex JP Morgan annalist Dimitris Kazakis and others which discuss with people about the austerity measures, the debt crisis and its political implications.

The big moment of the square

Not only by coincidence the square reached its prime in participation and political activity while the days for the vote of an interim austerity package on the 28 and 29th at the Greek parliament approached. The Troika demanded that the parliament ratified a program of odious taxes and spending cuts which have arranged public opinion upon announcement a month ago. Otherwise the next bailout loan money would not arrive in Athens. The assembly discussed extensively about its response to the vote and finally a decision was made to attempt a blockade of the parliament during those days. While the day approached amidst a polarized climate and given the violent past of demonstration on the square people expected two dramatic days. And so it was. The government mobilized an enormous police force and stopped public transportation to the square in an effort to discourage participation in the demos. Still tens of thousands showed up on the spot and were joined by the crowds of the Unions demos that arrived later during the day on the square. The confrontation that followed turned increasingly violent, with riot police forces attempting an evacuation of the square by the excessive use of force and CS gas. The videos and pictures that remain from these two days, material produced by eye witnesses, are proof that the spirit of solidarity and the cohesion achieved during June at the assembly was something more than just talk. People suffered aggression and attacks that are beyond the legitimate limits of a democratic regime exercising its monopoly on violence and to some extent legitimized the claim of many in Greece that blamed the government for authoritarianism. The government barely survived the tension of those days. The scale of violence exposed the lack of legitimacy Papandreou’s government suffered that forced the PM to attempted an exodus by visiting the President and offering his resignation as long as a national coalition government took the burden of ratifying the legislation necessary to guarantee that Greece would kept receiving bailout money.

The square was about to achieve an enormous victory able to galvanize the movement and crystallize it as a historical achievement, to take on a government and forestall, even so temporarily, the advance of neo-liberalist policy in the country. High rank members of PASOK interrupted Papandreou’s exodus and gathered quickly the fading support among the ranks of PASOK MPs in order to vote in the austerity package. Despite failing on their ultimate task, to stop the legislation, people felt that keeping the square and going on with the assembly had been a victory against police and the government. Still with the coming of August the majority of people abandoned the square which soon started decaying towards an irrelevant gathering of anti-mainstream individuals without any specific content.

Greek Crisis Reverberates Again throughout the World

Autumn brought more of the umbrella union’s general strikes still after a winter of discontent and ruthless confrontation with neo liberal forces people seemed to have lost the initiative. The political crisis unfolding in Athens at the end of October was more the product of internal power struggles and the fatigue of the political system than of social reaction. The narrow international credibility left to the country and its political system was fading dangerously, lettings its citizens wander what the future holds. One of those nights while walking through an empty ‘Constitutional’ square facing the parliament Dimitris Pagoulatos, employed by an insurance company that forced him to accept a 20 percent reduction on his wage during the summer, and preparing to pay an amount over 1000 Euros in emergency taxes broad up by this government from July to September, was describing how he has not been more pessimistic in his life ever before. “We listen to all those developments and think how detached from our reality those people inside the parliament are. We and them live in two different worlds” he narrated. “Those are dangerous times and we live through them without hope for tomorrow. It feels if like collective paranoia has dominated this society”.

Despite the financial incapacity and increasing international isolation of the country regarding its stance on the evolving debt crisis, Greece, by an irony of fate, was still holding in its hands tremendous power. The move of Papandreou to call a referendum on the decisions of Oct 27th 2011 Brussels summit about the Greek debt crisis has brought Greece, the country’s European membership, and the future of the monetary Union staring into the abyss.

On 27th of Oct. European leaders left from the Belgian capital feeling they had agreed on the best possible weaponry against the debt crisis. This is what George Papandreou announced upon his arrival in Greece the same day bracing his compatriots for further sacrifices in exchange of a 50 percent slash of Greek debt achieved with the assistance of major European partners who coerced bankers in accepting so big losses. The euro-zone member states also agreed to boost the impact of the euro backstop fund, the European Financial Stability Facility (EFSF), to around €1 trillion ($1.4 trillion).

Upon his return to Greece, Papandreou unpredictably decided to ask for a democratic approval of this deal from the Greek people. Immediately Merkel and Sarkozy summoned the Greek premier in Cannes, where the G20 have been holding their regular meeting, and made clear to him that a referendum could only address the answer whether Greeks still want to stay with their partners Euro zone or not. They also warned that Greece will not get more bailout money until it becomes clear it will adhere to all measures agreed on Oct. 27th in Brussels. The country’s cash reserves, according to the Finance Minister, would last up to Dec 15th. During the last two years of the debt crisis there has been no more obvious blackmail attempt to coerce a country accepting the austerity recipe of the European Commission the ECB and the IMF. The democratic deficit of Brussels and the coercive nature of the “Merkozi” axon were exposed more than ever.

With an explicit threat to get kicked out of the eurozone and bankruptcy hanging over the country Papandreou rushed back to Athens to face a full blown mutiny among the ministerial and MP ranks of his party. He spent some days fighting for political survival. After resisting pressures inside his party to submit his resignation and having abandoned the referendum idea, he asked for a confidence vote tonight in exchange for his resignation afterwards and the formation of national unity government.

The thriller unfolding in Athens was reverberating throughout the world sending stock markets sliding down. The Euro currency dropped 7,5, while the European Central Bank has thrown over 500 million Euros into the markets in order to stop a crisis contagion to other Southern European partners. Ironically the international bookmaker William Hill was putting the odds on a country leaving the euro by the end of 2012 at 11-10.

On demand of its international partners Greece had produced a coalition government joined by the two major traditional parties New Democracy and Pasok as well as the extreme right wing LAOS in order to secure that the Troika wouldn’t pull the plug on Greece. An acknowledged banker, Loukas Papademos, was invited to lead the new government and help the country implement its commitments in order to secure further international support in order to escape the looming default.

A Sad Moment for the Cause of Social Movements

While the system struggled to achieve a sensitive balance the supporters of leftist parties and the anarchist black block occupied again the Syntagma square. This time though cohesion was not achieved and the huge tension degenerated into a brutal confrontation between members of the Black Block and the Communist Union PAME. Greece is one of the last European countries where a traditional Soviet styled Communist party attracts about 8 percent of the electorate. It is a party with well organised structures and well established bonds with the leftovers of the working class in the industrial base of the country. The animosity between anarchists and communists goes back many decades and has historical and ideological dimensions. But the picture of people brutally attacking each other sent a very demoralising message to a large majority attending the demonstration. Police failed to intervene and control the crowds in this case, claiming that the leadership of the Communist party asked it not to. The idea that communist leader coordinated their street tactics with police officers was another negative point to this story. For many, who imagined that street politics have been more complicated that just a confrontation of world visions and ideologies, this would remain an awakening moment. Greek political history and the history of social movements in the country are indeed complicated and are characterised by a bitter internal struggle among the so called progressive forces. This is very well reflected on antagonisms between left leaning parliamentary parties as well as the inability of those forces to unite forces in projecting alternative political tasks. In the end of 2011 opinion polls shown the leftist parliamentary parties received around 30 percent of the electorate. Still the fragmentation among them dismisses any chance that they could formulate a serious political alternative that in combination with the enlarging social movements could challenge directly neo-liberal forces. This is something that will be proven costly in the years to come for Greek society.

Industries collapse, workers organise

End of 2011 illustrated a dire situation for the Greek economy. Recession has climbed at 6 percent and statistical unemployment is beyond 19 percent. Real one is much higher with youngsters up to 34 years old being hit the hardest with half of them being shut out of the labour market. This stark picture combines with the economic collapse of many businesses and an aggression on the side of the ones surviving which attempt to limit wage expenses and deregulate their employment standards further. In this was the steel industry ‘Xalivourgia’ at the end of November released 50 workers and asked from the rest to reduce working hours during the week for less money. The steel workers of ‘Xalivourgia’ shut down the plant and went on a long strike which still lasts, now over 60 days. The solidarity to them from all social levels in symbolic and material terms has been considerate in order to take on the company and this despite the veil of silence by major media that left the strike unnoticed from the public in the beginning. Still the workers of ‘Xalivourgia’ have lost a major ally in their struggle. The workers of the company’s twin plant in Volos, a central continental Greek urban centre, have agreed on terms with the company and kept working despite the attempts of their colleagues in Athens to persuade them join the strike. Thus their struggle has been led in a deadlock with the company, with both waiting to see who will last longer. The fate of problematic big newspaper publication has been different. ‘Eleftherotupia’ a historical centre leftist publication and ‘Ependytis’ a popular weekly publication have shut down during the Christmas holidays. Letting more than 1000 extra unemployed and a huge burden of debt obligations unobserved. Workers in both companies tried for months to resist the closures but have not managed to provide serious alternative business plans to keep them open. Truth is that in such negative economic conditions bringing about innovative political ideas is not an easy task. The fate of many more similar but smaller companies is the same.

End of the year, beginning of the biggest attack on labour market value and working rights

After two years of constant confrontation with anti-labour deregulation Greek workers are now going to face the most serious attack on their rights. And none can be about an optimistic response from organised collective bodies on their behalf. Unions, already demoralised and ineffective have lost a lot of their power. Strikes haven’t been always very successful and in case of major cases it has been difficult to crystallise gains. Working rights have faced a stampede of irregularities and labour market deregulation has been the only thing Greek governments have been loyal to last year. As Christina Kopsini, a major working law and labour market analists says, ‘the only measures predicted in the austerity packages that have been implemented without delays at all have been the ones deregulating the labour market and abolishing basic rights occurring from labour law’. During 2001 the ex Minister of Labour Louka Katseli had lengthy negotiations with Troika for the introduction of legislation that gave force to company contracts at the expense of sectror’s collective contracts. Thus giving extra power to employers and diminishing negotiating powers on the workers side. She later admitted that she followed this way in order to stop the Troika from putting up for negotiation with the Greek state more important issues like the National Collective Contract. Now it seems she failed, after having been politically isolated during the summer.

The Troika is returning prepared for another blackmail connecting the next bailout loan with measures that essentially target the National Collective Contract and minimum wages. Those include the reduction of wages in the private sector and the abolition of the 13th and 14th wage bonuses in order to advance further the internal devaluation. In the absence of an independent currency policy in which devaluation would be a feasible option for Greece to regain competitiveness, devaluation of labour market value is the only alternative for the Troika. They seem to believe that self-regulation of the markets will do the rest, ignoring that the attack on working rights is directly connected to increasing recession and reduction of national GDP.

What the Troika is doing in fact is to destroy any mechanism of capital redistribution and enforcing devaluation on labour market value that will reduce incomes of Greeks among the lowest in Europe. It is uncertain if workers are able to react effectively on this attack. Unions are confused and have been defeated consequently during the last two years, thus suffering serious drawbacks on member’s confidence. Workers are broken and survival in the market is becoming increasingly a personal and not a collective effort, something not very difficult to happen in a society that individualist standards have been popularised fro more than 20 years already. Employers have become more determined when pursuing reduction of salary expenses since survival in a climate of unending recession has become a tougher to achieve. Greece has not escaped of a regular or irregular default making people with jobs less demanding and eager to accept wage cuts and loss of working rights. Deregulation will go ahead rapidly while the working class is confused and disoriented. And it is difficult to stay optimistic in such a climate.

In need for a quick and accurate response civil society and organised workers will have to search for greater unite on their aims. Savvas Robolis, the head of the research institute of GSEE, the biggest labour union in the country, has warned that people should focus on stay united and coordinating action. As said before with organised leftist forces remaining fragmented over ideological or petty political aims. And with independent social movements not having the critical mass and necessary morale to take on the government 2012 won’t be a happy year for social forces in the country. But a big opportunity exists as long as those forces alternate somewhat their perspectives. Greece will be approaching the eventuality of an economic default, orderly or disorderly, this spring. This is at least the estimation of most major players, from faithful market forces like Goldman Sachs, to radical leftist economists. A critical moment will arise then given that the impact of economic collapse will reverberate throughout society and cause major social turbulence.

People, scared or not, will have to make choices regarding the character of this society. Neo Liberal forces will have to break them one last time before crystallising for the years to come their gains of power on the labour market and political power. Greeks, given their volatile political culture and the experience that have accumulated during the last two years, will fight back. Whether this will be an organised response aiming specific gains under a cohesive strategy or will be represented through chaos on the streets of Athens again remains to see. But the observer aside of the general outcomes in the months to come should focus on how details clusters of social activity will behave. Social media activists, very energetic the last two years, are preparing for another turbulent winter. Solidarity structures like the Doctors of the World have engaged with thousands of socially excluded citizens already, offering medical and substance food solidarity to them. While the state abandons sectors of the welfare state those awakened social forces most probably will move inside the picture and try to organise structures and respond to the neo-liberal destruction. Independent citizen forces from below will have a saying in the new picture and can make the difference given that the administrative capacity of centralise power is fading. They will have a role to play, small but critical, and organised leftist forces should attempt them to move in social spaces they control and accommodate their innovative initiatives without controlling them for electoral and petty political gains. Its going to be a fight for tomorrow and despite the pessimism of the days, they way it will be fought is important for the future. This everyone should remember when looking towards Greece during 2012.

*Apostolis Fotiadis is a Greek Journalist, based in Athens