Cognord: The Syriza trilogy

is unfortunate enough to have been born in Greece, and fortunate enough to have participated in the social movements which attempted to put a halt to the capitalist devaluation of that country. Shortly after the farewell party of the movement (the magnificent general strike and intense riots of February 12th, 2012) he left Greece and settled in a cold place. Occasionally, he writes articles about his native land. He is also a member of the Communists in Situ collective, whose blog everyone should check out.

In my opinion, Cognord’s articles provide far and away the best Marxist analysis of Syriza and Greece.

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Is it possible to win the war after losing all the battles?

Brooklyn Rail
February 2015

Prehistory of a success

The announcement of national elections in Greece, roughly two years before the coalition government of New Democracy and Pasok completed their term, immediately sparked a renewed interest in this southern and economically peripheral European country. The relative silence that preceded this novel attention for the last two years was, at least in media terms, understandable. If Greece enjoyed an earlier moment of fame, it was primarily due to the unprecedented austerity measures imposed by the troika — the European Commission, European Central Bank (ECB), and International Monetary Fund (IMF) — in exchange for new loans, designed to “assist” the Greek state after it officially announced, in April 2010, that it was unable to repay its existing, “non-viable” sovereign debt (120 percent of GDP at the time). The reactions to the implementation of the austerity program were also pivotal in bringing Greece into the spotlight: general strikes, violent demonstrations, and the movement of the squares ensured, between 2010 and 2012, that the future of Greece’s “fiscal consolidation program” (to borrow the official economic jargon) was seriously threatened. Along with the memorandum imposed by the troika, what came under attack was the legitimacy of the political system,1 generating wild speculation about the future of Greece’s membership in the Eurozone, as well as the unpredictable consequences this could have for the EU, not to mention the global economy.

However, the movement which tried to halt the austerity program failed. The reasons are varied, and it is not within the scope of this article to explain them in detail. Suffice it to say that, as in every other social movement, this failure should be traced to both the violent determination of the government(s) to proceed with austerity at all costs (for which the ruling factions have paid a price) and the inability of the movement to transform itself from a defensive mobilization to protect existing conditions into an offensive attack on the conditions that created the crisis.

Nonetheless, the attention that Greece received was justifiable. Without exaggeration, one could argue that many of the political strategies of resistance which the international left has only read about in books were tried and tested in Greece in the years after the crisis: general strikes with massive participation, bringing economic activities to a halt; militant and violent demonstrations with constantly growing numbers of participation; neighborhood assemblies that sought to act as minuscule formations of self-organization, attempting to deal with immediate issues caused by the crisis; one of the most militant squares movements, which managed to call for two successful general strikes; a climate of continuous antagonism that gradually but steadily involved more and more people.

It is, however, no exaggeration to say that none of these inspiring moments managed to counteract the effects of the crisis and its management by the state. However exhilarating, promising, and tense these outbreaks were for those of us who participated in them, it has become imperative to understand their failure to achieve even a small (however reformist) victory.

In official terms, the crisis has only become worse in the last years. Overall unemployment has risen to 27 percent (from 12.5 percent in 2010), primarily hitting young people (60.6 percent for those aged 17-25); wage cuts across the public sector are between 30 and 40 percent, while in the private sector the number is only slightly lower (25 percent on average).2 Small businesses (the backbone of the Greek economy, constituting around 95 percent of all business activity) have been devastated by the crisis and the austerity measures (more than 250,000 have been closed), while cuts in the Health and Education budgets amount to more than 25 percent. Total GDP losses amount to 24 percent, while despite these cuts (or, as some would say, as a result of them), state debt in Greece has dramatically risen from 120 percent in 2010 to 176 percent of GDP today.

Unofficially, the situation is much worse. In the last two years, on top of reduced wages or forced unemployment, a nearly destroyed health system, and the alarming rise of neo-Nazis as significant players in the political landscape, people have had to live with the defeat of a social movement which gave many participants the hopeful feeling of making a leap into the open air of historical change. It was the disappearance of these antagonisms, followed by generalized feelings of disappointment and depression, that should serve as the background against which the recent elections should be considered. It is precisely the failure of the social movements to counteract austerity and the brutal devaluation that brought Syriza to today’s position. And while Syriza likes to present itself as the continuation of these movements, it is more accurate to explain its strength as a result of their weakness.

In this context of defeat, Syriza had come to represent for many people the last hope for any alleviation of the effects of austerity. This is also the line that has been predominantly adopted by the left media in Greece and abroad. A bombardment of positive and enthusiastic articles and reports in the last few weeks in left and progressive media outlets have created an atmosphere almost implying that Greece is in the brink of a social revolution. This is, however, quite clearly not the case.

Having said that, it makes no sense to critique Syriza and its program on the basis of abstract criteria of radicalism, anti-capitalism, etc. The reason is quite simple: Syriza is not, and never has been, an anti-capitalist party. It was never part of its program, its understanding of the world, and its expressed policies to question the capitalist system or its political representation. To say this is not to attempt to discredit Syriza, but to give an honest evaluation that takes into consideration Syriza’s own self-understanding, its historical role, and its practice as a parliamentary party within Greece’s political spectrum. It is beside the point to argue that Syriza has betrayed or fails to deliver a program that was never part of its politics in the first place.3

What is needed is not an analysis on the basis of a non-existent theoretical framework (Syriza’s supposed radicalism), but a sober understanding of the historical context of Syriza’s rise to fame, the objective forces that it is facing, and its own proposed remedies. It is only in this way that one can have a clear idea of what is at stake. Ideological battles and straw-men are clearly pointless at the moment.

Basic banalities

Until 2009, Syriza was an insignificant player on the Greek political scene. It barely made the 3 percent threshold required to enter parliament, something that seriously undermined its influence within that institution. But things were not much better outside of parliament. For those of us who have been active in the Greek left and radical scene for more than 20 years, Syriza was never a force to be reckoned with. And though Syriza repeatedly attempted to draw forces away from social movements towards its parliamentary aspirations, none of these attempts were ever successful.4

It was only after the elections of 2012, which marked the downfall of Pasok as the government responsible for initiating the troika bailout and austerity program, that Syriza suddenly found itself with 17 percent of the votes, a result that caught everyone by surprise — even Syriza members themselves, who would have been content with 7-8 percent. It was then that Syriza first started contemplating the possibility of forming a government and started understanding that, from now on, what they formulate as policies will have to be realistic and realizable.5

Mesmerized by its unprecedented rise in the electoral ranks, Syriza used every opportunity to build support, widen its social alliances, and prepare itself to create the first left-leaning government in Greece since Pasok’s victory in 1981. However, as is the case with every left-wing party, Syriza is very suspicious of social movements that it cannot directly control. Thus, in parallel to the increase in its electoral support, Syriza took care not to support outbreaks of social antagonism, even at moments when those seemed in a position to bring the government down and put a halt to austerity, as they continually promised.6 The official explanations by Syriza officials in relation to these incidents was typical: denying any wrongdoing, Syriza hid behind the excuse that “the people” (this abused and nonsensical phrase) were not ready for an escalation. A more intelligent approach would be to recognize that a political party which sees parliament as the center of political activity is not interested in allowing the uncontrollable and radical potential of a social movement to determine developments or its policies. Today, almost two years after the last expression of street-level subversion, Syriza can sweep the floor and capitalize on the defeat of a movement, content with the thought that the majority of people have shown that they prefer to place their hopes in political representation rather than their own activities.

Instructions for contemporary social-democrats

Trying to find out what exactly Syriza has planned for the day after the elections is, however, no easy matter. Looking at the various statements and proclamations of Tsipras, Syriza M.P.s, central committee members, and sympathizers, one could easily drive oneself crazy trying to extract a coherent position from an abundance of contradictory and self-refuting opinions. (This is something that the right wing tried to capitalize on in order to show that Syriza has no program after all.7) However, because Syriza will be forced to deal with the real economy, its European counterparts, and the global economic system (and not some imaginary movement), Syriza’s proclamations when addressing exactly those is a relatively safe way to understand its actual policies.

The main thrust of Syriza’s political and economic program, as its spokesmen spelled out at the Thessaloniki Expo in September 2014 (and have repeated ever since), boils down to four key points: first, the immediate management of the humanitarian crisis in Greece; second, immediate measures for re-boosting the economy; third, a national plan for “regaining labor”; and finally, an institutional and democratic restructuring of the political system. These programmatic theses require, according to Syriza, that certain things be in place: a restructuring of Greece’s sovereign debt; a direct connection between loan repayments and growth; a disentanglement of public spending from the memorandum agreed to with the troika; and a European “New Deal,” i.e., the introduction of Quantitative Easing by the ECB.

The program for dealing with the humanitarian crisis aims at tackling some of the devastating realities of post-memorandum society, by reconnecting electricity and providing food vouchers for 300,000 families; providing free healthcare for all; ensuring housing for all; and supporting low-income pensioners. The plan to regenerate the economy rests on an ambitious program of restructuring the tax system to ensure the collection of unpaid taxes; an immediate stop of foreclosures (for the main house of a family); the abolition of the recent heavy tax on property; the writing-off of debts (36 percent according to banks) with no possibility of repayment; the return of the minimum wage to 751 euros monthly, something that is supposed to increase GDP by 0.5 percent. The idea of “regaining labor” has to do with the return of pre-memorandum work relations, and in particular the re-introduction of collective bargaining and an end to unlimited layoffs; and the ambitious creation of 300,000 new jobs and 300,000 unemployment beneficiaries. Finally, in terms of the democratic restructuring of the political system, Syriza aims at abolishing M.P. privileges, a thorough examination of the licenses of the mainstream media, and the reopening of the state television (ERT).

Leaving aside certain (quite important) details8 and the parts of the program that concern the “democratization” of the political system, an immediate question concerns the exact cost of this program and where the money is going to come from. According to Syriza’s own calculations,9 the cost of this program is 11.36 billion euros. And where will the money come from? This is where it gets difficult.

Captive words

There are two main pillars upon which Syriza plans to finance its program: debt restructuring and the introduction of Quantitative Easing. Not surprisingly, these are the most controversial aspects of the forthcoming negotiations.

  1. Debt restructuring: At the moment, Greece’s sovereign debt is at around 176 percent of GDP. (around 321 billion euros). The interest that this debt creates is paid by the new loans that the troika provides, since the Greek economy does not produce a surplus. This means, among other things, that in relation to the budget of the Greek state, both the debt and its interest are irrelevant. The question immediately arises: Why is it then important to reduce the debt? The answer to that was given by Giorgos Stathakis, chief economic policy maker for Syriza:

    The markets do not lend to Greece because the state debt is non-viable. Since, in order for Greece to repay the debt, a surplus of 4.5 percent is needed, it is clear that we cannot achieve any growth within this framework. It is that simple and understandable, and our international colleagues know this. Thus, when the debt is rendered viable again with a deal that a strong Syriza government will make, the markets will start lending to Greece at reasonable interest rates.10

    Do you get it? The master plan behind the idea of debt reduction is to allow Greece to borrow again, and thus increase its debt.11 Genius.

    But even if we accept this lapse of reason, other problems arise. Why would the troika agree to restructuring and give Greece the opportunity to ease the debt burden? This topic has received a lot of attention and responses vary significantly. On the one hand, we have a chorus that explains that debt restructuring is entirely out of the question, adding that Greece should feel lucky that any money is actually given in order to save it from complete bankruptcy. This is a view shared (officially) by the German government, and the right-wing government in Greece. On the other side, we have the argument that debt restructuring is absolutely necessary for Greece to exit the downward economic spiral. Plus, the argument goes, “debt restructuring” is not a bad word. It has been done many times before (Syriza’s favorite example is the 1953 write-off to help Germany’s economic recovery) and it is considered by many economists as imperative to avoid default and to boost growth. This position is held, among others, by numerous economists and Syriza.12

    Leaving aside these primarily ideological debates, the truth is that it is not entirely unlikely that the debt could be restructured (as it was before, in the far distant past of 2012), and the main reason is that everyone knows that its actual full repayment is more or less impossible. But — and this is the key point — as in 2012, this restructuring will probably occur in a way that ensures the lenders’ finances,13 and with a clause that requires some form of austerity to continue (even if it gets a more catchy name like “national reconstruction plan”). At the moment, and because the enthusiasm of the left seems to require a counter-argument from the right, debt restructuring is proclaimed by the EU to be unimaginable. But, reading between the lines, it seems that the EU is willing to consider a generous extension, which for anyone not completely confused by economic jargon, essentially means the same thing.

  2. Quantitative easing (QE): The idea is simple. What is the most important means by which harsh austerity and economic restructuring is imposed on Greece by the troika? Sovereign debt. Greece’s inability to finance the repayment of previous loans or bonds means that the markets are unwilling to lend money to Greece. Given that within the Eurozone and the euro currency Greece is not able to devalue, default, or do something similar (as Argentina or Iceland did), the Greek government should be given the money to repay its loans from the IMF and the ECB, in exchange for a “consolidation” program, i.e. austerity.

    If Greece was in a position to create a surplus, issue new state bonds, sell them to the ECB, and finance its repayment scheme (with a generous extension in place), there would be no need for austerity. Syriza would thus be in a position to decide exactly what it wants in terms of the internal budget, allocate spending and income on the basis of its own agenda, and even re-enter the market with new bonds. Quantitative easing is, however, premised on exactly this idea: that the ECB will purchase state bonds, lock them away in a dungeon in Brussels, and forget their existence. It is for this reason that the economic powers pushing for austerity and restructuring (with Germany at the lead) specifically rejected the possibility of QE, as it would cause them to lose the bargaining leverage they have for imposing these policies.

    The January 22 announcement by Draghi that the ECB will actually introduce QE in the Eurozone, a program which will engage in sovereign bond purchases, does indeed mark a relative change of policy in the Eurozone.14 But the devil is in the details, and one had to sit through the Q&A session after the announcement, to hear Draghi explain what everyone more or less suspected: Greece will not be part of this QE, or at least, it will participate only to the extent that it keeps implementing the measures spelled out by the troika.15

    We see that both pillars of Syriza’s financing program from external sources, though not necessarily unrealistic in themselves, are premised on a continuation of austerity that undermines any enthusiasm for the future, at least in terms of the forthcoming negotiations. And it becomes more and more obvious that at a political level, some agreements can be made (allowing Greece in the QE program and renaming debt restructuring “extension,” in exchange for a certain continuation of austerity) allowing both parties of the “negotiation” to save political face and appear as victors.

    The question then arises, how Syriza will be able to justify such a deviation from its anti-austerity program. The internal financial problems shed some light on this. To begin with, for Greece to be able to sort out its economic chaos, a balanced budget is absolutely critical. And though Samaras’ government (with the assistance of the European Commission) announced a surplus budget in April 2014, in reality no such surplus existed.16 As a result, the budget at the moment is (more or less) at 3 billion euros, an amount that has to be found immediately, before Syriza even starts contemplating how to secure the funds for its €12 billion program. On top of this three billion euros, Greece has to come up with 31 billion euros to meet old and new loans from the troika (shared by the IMF and the ECB and maturing between late February and August 2015). So where will Syriza get the money for all this? The answer is not easily found. And most probably, the reason is that there is no answer. Syriza’s own plan, so far, for securing these funds consists of reforming the tax system; attracting foreign investments and encouraging private ones in order to generate growth; and increasing the minimum wage.

The problem with these proposals is manifold. On the one hand, a reform of the tax system could potentially secure some funds but it is a strategy that many governments have promised without any success. But even if Syriza did manage some tax restructuring, it would take a minimum of two years for this ambitious idea to produce actual income for the state. And in terms of growth, it remains to be explained how foreign or private investment will proceed when banks have stopped issuing (or are unable, in the case of Greek banks, to issue) new loans. Last but not least, even in its most optimistic scenario, the increase of the minimum wage only affects a small part of the workforce, its contribution to GDP is minimal, and it raises the uncomfortable question of what will happen to the rest of the wages. If we trust Stathakis’ claim made almost a year ago, they will be frozen at today’s levels.

The explosion-point of illusions

In terms of the negotiations with the EU, Syriza has made clear that it wishes to remain within the Eurozone; it has clarified that it will not make any unilateral decisions — it knows that it needs the EU’s money to keep coming; and all that while renegotiating the terms of the bailout. At the same time, to its voters and to the left, it has promised a (minimal but still ambitious) semi-Keynesian public spending, low-income support, job-creating program, without taxing the rich or redistributing wealth.

It is clear that it is not possible for both of these scenarios to play out. For a negotiation to take place, both sides need bargaining cards. Syriza does not have one. But what it does have is the certainty that nobody in Europe wants a chaotic situation, the possibility of Greece exiting the Eurozone,17 or the uncertainty that would emerge from such drastic changes. If we add the fact that, upon closer examination, none of Syriza’s internal policies (that some people wish to present as radical, but in actuality seem to have a scary resemblance to the first memorandum agreement of 2010)18 are such as would prompt the EU to interpret Syriza’s government as, for example, Jacobin presents it, the situation becomes somewhat clearer.19

In line with Europe’s strategy in the crisis so far (i.e. kicking the can down the road), and far from the enthusiasm that sees Syriza’s victory as a turning point against European austerity, the following months will most likely be characterized by a cat and mouse charade: Syriza will ask for more time to re-adjust its program to the economic chaos it inherited from the previous government; it will ask for more time for QE to reach Greece; it will ask for more time until their (only) ally in Europe (the Spanish Podemos party) actually wins an election in December 2015 (if it does). In the meantime, it can implement a few spectacular policies that will be empty of actual content (such as the increase of the minimum wage) to give the impression that it is actually changing things. And if the EU has decided to play along (and so far they seem to be on board), they can extend the same courtesy to Syriza as they did to New Democracy and create an atmosphere of economic recovery with fictitious surplus budgets and exits to the market. Meanwhile it seems that a certain form of austerity will continue, but in a way that only a left-government could get away with.


  1. Between 2010-12, the social movement that emerged significantly challenged politics as a separate activity. It was not only the parliament that was consistently seen as a legitimate target (with its MPs harassed, even violently, whenever seen in public), but also traditional institutions of mediation (such as trade unions, the mass media, etc.) which saw their ability to create consensus seriously undermined. Syriza, however, worked in the opposite direction: An endorsement of a critique of existing political institutions and their legitimacy would be entirely contradictory and nonsensical for a parliamentary political party. And as soon as the possibility of forming a government started becoming increasingly realistic, Syriza did its best to forge alliances with representatives of the existing power mechanisms.
  2. Keeping in mind that private sector wages were significantly lower than the public sector.
  3. There have been, of course, some grandiose statements by Syriza members. See for example, S. Kouvelakis’ interview on the history of Syriza in the January 2015 issue of Jacobin or Milios’ statements about how Syriza is a “Marxist” party published in December in Berliner Zeitung (in German). But these are selective statements, made to outlets who already support Syriza, and are aimed at discussions within left-wing circles and expectations.
  4. Before the 2009 elections, Syriza tried to draw support from the previous December uprising, centering its propaganda around the slogan “from the streets to the ballot box.” The result was embarrassing, and yet indicative of Syriza’s influence: 4.13 percent of the votes, almost 1 percent less than in the elections of 2007.
  5. It is interesting to note that the spectacular jump from 4 percent to 17 percent was made with a relative semblance of radicalism. Syriza comprehended that a large part of the population in Greece was expressing its anger against austerity, the troika agreements and the political apparatus as it stood. It thus adopted a harsh rhetoric calling for a unilateral refusal of the memorandum agreements, a rejection of austerity measures, and a call for an end to the continuous devaluation of the Greek economy. But the more Syriza’s percentages grew, the more this rhetoric was replaced with more “sober” and Realpolitik announcements. At the same time, Syriza started attracting Pasok’s disgruntled voters, inheriting in this way the people and mechanisms that Pasok’s almost 30-year rule had created.
  6. The two most obvious examples were the proposed teachers’ strike and the shutdown of State Television (ERT) in the summer of 2013. In the first case, a planned strike by teachers during the highly important national exams was pre-emptively made illegal by the government, who pledged at the same time that if the strike went on, the government would resign. Though more than 90 percent of local teachers’ unions defied the threat and voted to go on strike, the (Syriza-led) central union cancelled the strike claiming “conditions are not ripe.” A couple of weeks later, when E.R.T. was suddenly shut down, the shock wave brought thousands of people in the street, making it impossible for the government to stop the broadcasting which immediately transpired. With State Television on its side, Syriza could have at least enjoyed a pre-election campaign with unconditional support from the largest broadcaster of Greece, which had been occupied and promptly transformed into an outright anti-government propaganda mouthpiece. Alexis Tsipras was invited on the first days of the occupation to appear, and asked to explain Syriza’s policies to the 2.5 million viewers (the highest number ever reached by ERT). His answer was indicative: “this is not the time.”
  7. Of course, this line of argument contradicts the equally dominant one that Syriza actually has a program, but one that necessarily means that Greece will be forced out of the EU, the drachma will return as currency, Greeks will have no toilet paper to wipe their ass, and Satan will prevail. But then again, pre-election periods are hardly benchmarks of consistency.
  8. Electricity will be reconnected only after applicants arrange a repayment-through-installments deal with the electricity company, with Syriza guaranteeing to pay the first installment. Applicants have to prove their “poor” status by submitting detailed tax statements. The same goes for the program for ensuring housing: Syriza will subsidize rent, at three euros per square meter. Moving on, the restructuring of the tax system has been promised by every single government ever since the creation of the Greek state, leaving little hope that this time round it will be successful. Foreclosures on people’s homes have not actually been carried out so far. A law forbids them until January 2015, but the main obstacle for implementing foreclosures is the banks themselves: if a bank declares a loan as non-refundable, they have to add it to their losses, thus increasing their overall bankrupt state. The return of the minimum wage only affects 10 percent of the workforce (and the latest agreed number was 640 euros not 751 euros), out of which those on part-time employment will see a 70 euros per month increase. The exact explanation why this measure will increase GDP by 0.5 percent is nowhere to be found in Syriza’s texts, and it seems that it is nothing but wishful thinking. Lastly, it is unclear whether collective bargaining will be re-introduced immediately or gradually in the next 4 years. However, the creation of 300,000 new jobs plus new unemployment beneficiaries is clearly a long-term plan for the next four years.
  9. For those who can read Greek, the cost of Syriza’s program is systematically analyzed here. Unfortunately, the source of funding for this cost do not receive a similarly detailed expose.
  10. G. Stathakis, interview in Naftemporiki, December 22, 2014.
  11. Assuming for a second that the troika agrees to reduce Greece sovereign debt from 176 percent of GDP to 100 percent, i.e. a 50 percent reduction and assuming that repayment is given a low rate of 2 percent, interest repayment reaches a 3.5 billion euros per year. Since Greece has no surplus, it will have to borrow money to repay that. In just 4 years, an additional 14 billion euros will be added to the sovereign debt.
  12. In reality, the concept of “sovereign debt” is nothing but a useful ideological tool of economic discipline, that only has effect in special situations, such as the Eurozone, where states share common currency (but not common monetary policy) and are thus unable to devalue or default on existing debt. Similar to other economic theory jargon, “sovereign debt” is irrelevant to the extent that the economy has the ability to generate growth. In fact, most economically advanced countries in the world enjoy large sovereign debts (U.S. is now at 75 percent of GDP, Japan is at 214 percent, Italy at 124 percent, France at 90 percent, and Germany at 87 percent), without this ever translating into austerity and harsh consolidation programs.
  13. The 2012 P.S.I. agreement (the official term given for debt restructuring) was structured in such a way that it essentially swapped old bonds with new ones, with the burden falling on Greek insurance funds who suffered immense losses (the Journalists’ Fund, for example, lost around 50 percent of its assets) without even been given the choice to participate in the swap. Apart from that, the end result was in fact an actual increase in sovereign debt.
  14. In this context, and because Syriza had already said that the introduction of QE is part of its own plan for financing its anti-austerity program, Draghi’s announcement was greeted positively by Syriza. In fact, it was New Democracy that was further ridiculed, because Samaras had said that QE is a stupid idea that will not become ECB policy — furthering the impression that New Democracy was more out of touch with the EU than Syriza.
  15. Since participation in the QE program will be proportionate to each state’s contribution, assuming that Greece (with a 2 percent contribution) is given the chance to participate it would be entitled to 1.2-1.7 billion euros per month or 34 billion euros per year, since Draghi said that QE will start gradually, with 60 billion euros each month. What was not announced, however, was what percentage of the 60 billion euros will go towards purchasing state bonds or other assets. An informed guess would say “not that many,” but feeling generous, let us just say that half of that will be in fact used for state bonds. That means, for Greece, 17 billion euros per year (0.6-0.8 billion euros per month). In a more realistic scenario, these 17 billion euros will actually be used to buy already issued bonds (Draghi clarified that), which probably means that they will be used to buy Greek bonds which are now in the hands of foreign banks who are trying to get rid of them.
  16. The surplus was actually calculated using non-traditional measures, excluding a number of crucial payments that should have been made. The economic spokesman of the E.C. admitted that a certain “leeway” was given to Greece, making it clear that the decision to confirm a surplus was a political one. It bought time for the Samaras government, while at the same time giving the possibility to Germany to claim that there is “light at the end of the tunnel of austerity.”
  17. Regardless of the official statements of Germany about the ongoing risk of a Greek exit, the fact is that no one is in a position to estimate the consequences that such a move would have for the EU. And since neither Syriza nor anyone else has any willingness to dive deep into the waters of uncertainty, it seems more likely that a common agreement will be found.
  18. The first memorandum was focused on a restructuring of the tax system, labor reforms that would attract foreign investments, generous support for the bank system, EU loans that would eventually allow Greece to re-enter the markets, and a clause on being especially sensitive to low-income/poor families. Sound familiar? With the exception of wage cuts (Syriza will not cut wages, but will not raise them either), the rest could well have been taken out of a Stathakis interview.
  19. The announcement that Syriza will form a coalition government with the Independent Greeks (a far-right, anti-immigration, and anti-Semitic party) as a result of its failure to secure an absolute majority, simply on the basis of its anti-memorandum rhetoric, is already an embarrassing development.

TOPSHOTS Syriza leftist party supporters attend an election meeting in central Athens on January 22, 2015. Greeks go to polls for general elections on January 25. AFP PHOTO / LOUISA GOULIAMAKI

If Syriza is the answer, then the question was wrong

Brooklyn Rail
March 2015

On predictions

Predictions are often problematic. The complexity of the issues, the variety of important factors, and the unpredictability of social subjects forbid such attempts, and usually discredit those who make them. This realization, however, has ended up opening a space in which people feel free to say anything at all, with few consequences. This is what happened lately with Syriza: the left found a long awaited rallying-point to proclaim the “last chance to end austerity,” while the right warned against irresponsible “radicalism.” Both were, once again, wrong.

It was remarkable, though not really surprising, that hardly any of the willing supporters of Syriza took the time to examine its expressed economic program. Repeating a few key phrases was enough to render Syriza the hope for the future of Greece (and Europe, for that matter), while any detailed analysis of Syriza’s proposed remedies was postponed to an indefinite moment in the future.1 It was as if the left thought it impolite to present Syriza as a social-democratic party with progressive sensitivities, treating a close look at its expressed program as unnecessary — if not intrusive.

The present age prefers the appearance to the essence, as was said a long time ago, and the greatest illusion is defended as vigorously as possible. Syriza came to represent something almost sacred for today’s disoriented left, and the rules for talking about Syriza’s past, present, and future were set from the beginning: it is a sympathetic and small Marxist party, far from the dogmatism of the Stalinist KKE; a bearer of the hopes of the tormented Greek people to catch a breath outside of the suffocating grasp of austerity; an honest fighter which will do its best to alleviate the worst effects of the crisis. If anyone criticized Syriza, they were surely ultra-left inhabitants of the ivory tower. Evoking the need to be “painfully realistic” and down to earth, Syriza’s supporters paradoxically scorned any actual attempt to be realistic. It seems as if no contradiction was allowed to spoil this commonsensical approach. Apart from the actual facts, that is.

In essence, and taking the best-case scenario, Syriza was merely proposing a Keynesian model of dealing with the crisis. For people like Paul Krugman or Joseph Stiglitz, this is as radical as it gets. Building a straw man of German-led invariance, Keynesian policies came to represent an oasis in the desert of neoliberalism. But what gives credit to all these pro-Keynesian writers (i.e. their hostility towards neoliberalism) masks certain easily-forgotten historical realities about social-democracy: its starting point is to urge capital to understand labor both as a cost and an investment; it prefers to see workers as both consumers and partners; it rejects the necessity of confronting the totality of social relations, insisting instead that the solution for the problems that capitalist social relations create lies within capitalism itself. On the bottom line, its goal is to liberate the potentials which neoliberal hard-headedness has undermined, promising that it is in a better position to manage capital. What it fails to realize is a very simple fact: Keynesianism already tried to save capitalism, and it ended in failure. Why this is considered such an offensive thing to say, is hard to understand.

If you still want to be social democrats

In my article in the February 2015 issue of the Rail I tried to explain that beyond the enthusiasm and the wishful-thinking, a Syriza government would be forced from day one to at least secure the funds to implement its program (however minimal it was). Given that the Greek economy has been under the close scrutiny of the troika (EU, ECB, IMF) for the last five years, the choices with respect to debt repayment and public spending are limited. International lenders, who seek to ensure their money and to enforce austerity, have spelled out a set of rules. Of course these rules are subject to change, and would definitely be hard to apply if and when an insubordinate population decided (unilaterally, to use a catch phrase of late) to proceed with a non-payment campaign at all levels that would disrupt any possible negotiation. But no such movement has emerged, and Syriza had made it clear that it is not interested in defying these rules. As a result, the development of recent negotiations was not so hard to predict.

The main argument in the previous article was that Syriza did not have any serious bargaining cards. It wished to remain within the Eurozone, it needed the money of the EU (both to keep making interest payments, as well as to finance its own program), and it was not willing to take any unilateral actions. At the same time, Syriza was hoping for an easing of the terms and a chance to effect certain changes (such as “dealing with the humanitarian crisis”) that would have no immediate fiscal costs and would thus be irrelevant to the troika.2 The only possible card that Syriza had to play was the fact that nobody wanted to even consider a Grexit (a Greek exit from the Eurozone), as the consequences of this remain entirely unpredictable and most likely catastrophic for the Eurozone as a whole. If there was any question during the last few weeks, it was whether Syriza was prepared to play this card to the end.3

The choice of Yanis Varoufakis as finance minister added a lot of suspense to the upcoming negotiations, giving the opportunity for a number of reports to create an atmosphere of upcoming conflict. The main reason for this was Varoufakis’ chosen form of diplomacy: instead of deliberating behind closed doors and following the approach of the previous government (signing “agreements” with their eyes closed), he decided to bring Syriza’s agenda out in the open: the repayment of Greece’s debt was proclaimed an obvious impossibility for a country that has a debt ratio of 175 percent of GDP and is in its sixth year of recession. Consequently, another way had to be found and if a debt haircut was out of the question, a debt extension would have to be agreed upon. At the same time, the troika would have to be abolished as an institution and austerity would have to be re-examined. In only a few days, Varoufakis emerged as a veritable celebrity whose wardrobe choices received as many comments as his economic proposals, both described as radical and uncompromising. Once again, neither of the two are true.

Varoufakis was simply smart enough to realize that the only chance to get any leeway was to force European leaders to publicly oppose his commonsensical approach, risking in this way to present themselves as complete idiots (no one in their right mind could possibly claim that Greece’s debt is viable). His second provocative claim, the abolition of the troika, was a non-threat: it was already suggested a day before Varoufakis’ infamous press conference by Pierre Moscovici of the European Commission. And as far as a debt extension was concerned, it was seen as a reasonable demand, supported even by Finland — whose opposition to bailing out Greece has been even stronger than Germany’s.

Until Monday the 16th of February, and despite the various war cries from left and right, anyone interested could see a lot of signs to verify the almost general acceptance of the above script. Syriza had already watered down its pre-election “Thessaloniki” program,4 any discussion of the debt was framed around a possible extension, and Varoufakis openly said that 60 to 70 percent of the previous memorandum agreements were acceptable to Syriza, as they contained measures they were happy to implement themselves. The stage was set for a deal that would allow everyone to walk away a winner.

Inadequate critique of an inadequate program

As if wishing to prove that politicians still have a role to play, the Monday meeting of the Eurogroup suddenly and unexpectedly turned into a complete flop. Instead of reaching an agreement based on a text that more or less reflected the above-mentioned consensus, Greece was suddenly presented with a text that even the Samaras government would have had difficulty in accepting. It not only rejected all of Syriza’s compromises, but it essentially demanded that Syriza would have to pretend that it was never elected. This development was indeed quite a shock. Not because it ridiculed democratic procedures and elections, as some commentators argued, or because it demonstrated Germany’s will to humiliate its opponents and supporters (one should not forget that the rest of Europe had also agreed to follow the script). The main reason was that this sudden change of heart was entirely unnecessary.

Leaving aside the spectacular presentation of Syriza as the enemy par excellence of austerity and the incarnation of hope in Europe, the details of the original and rejected agreement draft were more than enough to give all players the chance to present themselves as winners—while continuing pre-existing policies. Syriza could pretend to have negotiated hard (winning what it could in the process), Germany could present itself as invariant as before, and Europe as a whole could continue its favorite game of “kicking the can down the road.”

One could speculate endlessly about the possible reasons behind this diplomatic breakdown. Nonetheless, it makes no difference. For after a week of suspense, orchestrated panic, and secret documents, a final agreement was reached that was, well, more or less the same as the one rejected on Monday. Once again, in this endless saga of the Euro crisis, Grexit was avoided in the eleventh hour, the markets were relieved, and life could go on as before.

Unity and division within appearance

On the part of Syriza, the main aim of the negotiations was to achieve some kind of extension, meaning a period of grace which would officially allow them to work out the best way out of recession (or the best way to present their departure from their program). Furthermore, for reasons unknown, the abolition of the troika was deemed crucial, and Greece was only to negotiate with “the institutions.”5 Varoufakis was also insisting that no further checks and controls would be accepted, in order to evaluate the effectiveness of the reforms. Last, but not least, it was hoped that the negotiation would achieve a reduction of the surplus budget expectation (3 percent this year, 4.5 percent next year) to a level which reflects the actual potential of the economy.

On the other hand, the Europeans (assigning Germany the role of the bad cop, while the rest pretended to be good cops) wanted some written confirmation that Greece would honor its obligations (i.e. ensure that it will do its best to repay its debts and continue some form of austerity), that it would not start to implement its (minimal) program in a way that runs counter to these obligations, and that it would refrain from unilateral actions.

Looking at the final signed document, as it came out on Friday, the 20th of February, one would have a hard time convincing any reasonable person that one side of the “conflict” lost. Greece is allowed to draw up its own program of reforms, but they need to be accepted by the “institutions.” The troika’s bureaucrats are deprived of their frequent visits to Athens to evaluate the implementation of the program, only because Greece will send the results on its own. The money that Greece was receiving will keep coming — in order to be used to pay back interest — but only after the evaluation is complete. Finally, the plus-three percent surplus budget goal is replaced by one which is considered “appropriate” for 2015, whatever that means. Syriza agreed not to make any unilateral decisions, and it has earned a four-month extension during which it will not be “bothered” by Europe. Ah, and the word “bridge” was added to signify the transition from the one situation to the next.

Make no mistake: this is a rather embarrassing deal for Syriza (and even more so for its supporters), and one which may in time threaten the coherence and popular support that its government enjoys at the moment. But this much was clear long before the agreement was signed. If one had bothered to read the initial document that Varoufakis was prepared to sign on Monday, it was obvious that much of what had excited the left (for no clear reason, by the way) was already out of the equation.

Notes to serve as a history of our future

Most analyses after the past weeks’ suspense tried to make sense of what happened by evoking a number of narratives. The more simplified ones would point at Germany’s reluctance to accept any kind of deviation from its program, as well as its capacity to enforce its will on the whole of Europe. Syriza was seen as a threat to Germany’s pro-austerity ideology, and this was an attitude that could only be dealt with by humiliation. On a slightly more sophisticated level than this (borderline psychotic) explanation, is the argument that Greece’s insubordination would trigger more significant players in Europe6 to bet against austerity, possibly with better chances to win.

In any case, the explanations claimed that Syriza’s compromise was founded on its inability to withstand pressure from the key players in Europe, while the much-advertised early signs of a bank run were eventually identified as the main reason behind Syriza’s capitulation. All narratives concluded in the same way: Syriza’s bluff was not credible enough for the experienced German economic advisers, the economic situation of Greece was too weak to demand any kind of changes, Germany’s superiority too strong to allow any deviations. Syriza must now try to justify the agreement to its voters, and it must also prepare them for the worst.7

None of the above explanations are in themselves entirely wrong, but they all share a common fallacy. They explain recent developments by, paradoxically, ignoring the fundamental background upon which all these discussions and negotiations are based: the continued economic crisis in the Eurozone.

What about the crisis?

The ability to struggle against the devaluation and immiseration caused by capitalist crisis (and its management) is not determined by high-profile Eurogroup meetings, ECB decisions, and good (or bad) diplomatic exchanges. At best, when these meetings do not simply represent an attempt to reinforce the necessity and legitimacy of the political class, they come to reflect existing dynamics and contradictions of existing struggles. When there is an absence of struggles that would otherwise force politicians to mediate and manage conflicting interests, these encounters are merely useful in maintaining politics as a separate sphere, left to the devices of experts.

There is no upsurge of struggles in Greece. Perhaps more important, there are no struggles in other parts of Europe that could potentially link up with each other and render the Eurogroup and other gangs obsolete. This crucial realization means that negotiations at a European level reflect a discourse which is centered around different approaches on how to manage capitalism, and more especially, how to manage the continuing economic crisis.

It is at this level that one should understand the “failure” of the recent negotiations. Explaining the results by pointing at Germany’s arrogance or Greece’s weakness only serves to mystify the fact that it is not national pride which is in conflict but opposing strategies of crisis management.

What Varoufakis clarified at every opportunity was that his proposals are not merely proposals which would get Greece out of the gridlock it was in, but solutions for the Eurozone crisis as a whole. Austerity was under attack not merely for destroying the Greek economy but because it was, according to Varoufakis, destructive for the Eurozone as a whole. Instead, what was proposed was a Keynesian model of a “surplus recycling mechanism” which would correct structural fault lines, and would allow for the transfer of surplus profits from surplus nations (like Germany) to depreciated ones (like Greece).8

Among other things, this approach indicates a very particular understanding of European integration (albeit different from the dominant one), a proposed change in its structural setup, and an aggressive way of dealing with the crisis at the moment. It also claims to call into question the priority of short-term economic hegemony over long-term capitalist sustainability.9

It was therefore as an alternative capitalist strategy for the crisis that Syriza’s suggestions were rejected, indicating that the current form of crisis management, though it might create some “statistical anomalies” in the South,10 remains dominant and uncontested. And while it is well outside the scope of this article to elaborate on the Keynesian “solution” to the crisis, or to deliberate on different strategies as to how to save capitalism from its internal contradictions, suffice to say that the Keynesian model refuses to recognize that its form of capitalist management has already failed and it is in part responsible for the prolonged deterioration of capitalist profits which led to the crisis.11

The bitter victory

Occasionally, in the streets and barricades of Athens in 2010 and 2011, a complaint would be voiced: Why are we Greeks so divided? (This approach was directed to the cops as well: “We are also struggling for you,” some used to shout at them.) Syriza’s rise to power has in fact managed to give strength to this ridiculous idea, rather than defeat it. As a result, and rallying behind the specter of national unity and a “national liberation” struggle against Germany, the crisis and its solution can be portrayed as a matter of national dignity. For anyone who retains any common sense, an appeal to patriotism is the exact opposite of a strong social movement capable of defeating capital’s imperatives, for there is historically no bigger obstacle to the development of class struggle than national identification. But this is exactly what Syriza has achieved, possibly more than anything else.12

However, this development is not merely an ideological victory of left patriotism. It accurately reflects a material reality, which seems to be the predominant result of the trajectory of the European Union. For while it took centuries of trade, political unification, cultural exchange, and wars to form the European nations, the economic development of the EU and its crisis seem to point towards the reappearance of archaisms that had supposedly been eradicated. There is no deviation here. As Dauve argues, “[o]ne of the objectives of liberalization, after 1980, was to do away with this protective national framework: the strongest English union will always be less influential in Brussels than in London.” In response, as soon as the crisis shook the foundations and expectations that a near-decade of stability and growth had created, centrifugal dynamics have been busy dismantling the European dream. Some of the oldest European nations see the emergence of local separatist movements (Spain, Brussels), while others mobilize their populations by appealing to national fronts (France, Greece) against EU directives. All in all, and faced with the abstract influence of the “global market,” European countries attempt to protect themselves from the crisis by reverting to protectionism and/or xenophobia,13 and even though this might allow for a temporary truce from social antagonisms, it is hard not to recognize that these are clear signs of deterioration.

No matter what last week’s developments will mean for Greece, Germany, or the Eurozone, the dynamic that has been unleashed by the crisis and its management points towards a dissolution of this monetary union. The strategy of kicking the can down the road will reach its limits, and the ability to “pretend and extend” cannot go on indefinitely. Instead, no matter how many extensions are given, and no matter how these will be digested by the populations that have already lost too much, it should not come as a surprise if an economically more significant country of the Eurozone (Italy would be the prime example) decided that its chances as a pole of value creation are better outside the euro. Irrespective of how successful European leaders feel the latest agreement with Greece has been, and how Syriza will be able (or not) to sustain itself within this compromise, no one should ignore the unavoidable conclusion: the only thing that was achieved in the end was to convince a country with the highest rate of approval for the EU to accept a fragile extension, while continuing an already devastating deterioration of their conditions. With or without the threat of Keynesianism, it is nonetheless clear that the continuation of the existing strategy for dealing with the crisis, if implemented in Italy or France, will have an outcome that will not allow everyone to keep grinning like idiots.


  1. One should also note that a similar reluctance was found in many radical critiques of Syriza. It seemed enough to express Syriza’s acceptance of parliamentary politics, the State, or other unacceptable concepts, to evoke a Pavlovian rejection. Though its heart might be in the right place, this approach tends to overlook significant aspects of social-democracy (above all, its rejuvenated ability to get electoral support) and ends up describing itself rather than its object of critique.
  2. The whole discussion of the debt extension had this aim: to spread out repayments and thus make the burden less harsh. On the other hand, non-fiscal measures would include things like granting citizenship to second generation immigrants, refrain from opening up new types of prisons (C-type), or rehiring 3,000-4,000 sacked public employees. To the extent that such measures were not driving the Greek budget away from its obligations, the troika had no reason to disagree.
  3. The fact that Syriza was not willing to play this card meant that its strongest bargaining position (the Grexit and its unimaginable consequences) could actually be used against it during the negotiations.
  4. For example, the increase of the minimum wage was moved to 2016, as businesses would be “shocked” if it was introduced suddenly, as Minister of Economy Giorges Stathakis claimed. Moreover, opposition to privatizations was replaced by promises of a “review” of specific projects, while certain private interventions could “make use of public assets … to the extent that there exist guarantees of the respect of labor and environmental regulations, as well as a business plan that proves that the investment is in favor and not against public interest” (Tsipras’ programmatic statement of the government, February 7th, 2015). All in all, the measures that were designed to deal with the immediate threat of the “humanitarian crisis” were also postponed.
  5. Don’t try to look for the difference between the two, there is none.
  6. Spain’s Podemos party is steadily increasing its percentages in view of the December national elections, while France’s Le Pen is already considered a veritable threat. Italy is also a key player in these narratives, as it is one of the strongest economies in the Eurozone and one with little reason to remain within it.
  7. The recent agreement concerns, as mentioned, a four-month period. When this period is over, a new financial loan agreement will have to be drawn up, as debt obligations will actually increase come July and August, thus making it clear that not only is the memorandum saga not over, it has just received a generous upgrade.
  8. The “surplus recycling mechanism” is a notion devised by Keynes in the 1940s, which was meant to force creditor nations to increase domestic prices and reinvest their surpluses. By applying equal pressure on creditor and debtor nations to adjust trade imbalances, debtor nations would have their debt burdens eased. The problem, however, is that surplus nations have little reason to accept such mechanisms, their benefits being only long-term (by investing in depreciated areas, they support the creation of markets for future exports) and conditional. And it implies a penalty mechanism for countries which chose to allow their trade surplus to exceed their trade volume.
  9. If there is one element of truth in the accusations about Varoufakis’ arrogance, this has nothing to do with his wardrobe selections. It has to do with a common feature of contemporary Keynesians, which is the notion that they know best how to save capitalism.
  10. “Just as money is crystalized labor and not a mere entry on a screen, credit has meaning only because it is supported by future gains, by possible value creation, therefore by profitable work: if that support is lacking or insufficient, credit loses its reality. Some countries deeply in debt (Russia, Algeria) have managed to pay back their creditors, thanks to a rentier position because of their having gas and oil in their soil. Most other debtors have to cut back their budget, or to privatize. Minimizing social services reduces public debt but ultimately weakens productive potential. Selling key sectors to private business brings in quick money, but here again there is no guarantee that these activities will be run more efficiently in the interest of capitalism as a whole.” (Gilles Dauve, In for a Storm: Crisis on the Way.)
  11. On this topic, I would suggest Andrew Kliman’s excellent work A Failure of Capitalist Production: Underlying Causes of the Great Recession (2012 Pluto Press).
  12. For some commentators, the degree of national unity that has been expressed in the last few weeks surpasses that achieved during the Olympic Games of 2004. Contrary to various falsifications, and in line with Syriza’s choice of the Independent Greeks party as their coalition partner, the patriotism of Syriza (and the left in general) is not a strategic, lesser-evil choice. It is part and parcel of the foundational myths of the left in Greece.
  13. Belgium and Germany recently passed laws to deter migration from other European countries. At face value, these are just attempts to “protect” their welfare systems from being “abused” from (primarily) southern Europeans who are forced to abandon the economic devastation of their countries. But in essence, such measures are de facto cancelling the foundational structure of the EU.


Changing of the guards

Brooklyn Rail
July 2015

Questions and answers

It appeared that the endless saga of the negotiations between the Syriza government and the European lenders had come to an end. After five months of ferocious zigzags, suspense, and fear, a certain deal had been reached. A sense of relief was radiating from the world press, the technocrats, and government bureaucrats. Whether the deal would be a success or not, however, seemed to depend on whom you ask. For those who wanted to ensure that austerity would continue, the deal was certainly to their liking. Curiously, for those who claimed to be on a mission to end austerity, the deal was also favorable. For those who will be immediately affected by the proposed measures, it seemed that not much had changed. The devil is in the details, some say, and many would have preferred those details to get lost amidst the obscure technicalities. Unfortunately for them, however, even Lorca knew that “ […] under the multiplications, the divisions, and the additions […] there is a river of blood.” The relief and satisfaction that the deal brought about could only have been short-lived. In fact, it could only have provided some gratification to the extent that it remained on paper. For as soon as its measures would have been implemented, the party would have been over.

Gentlemen, we don’t need your organization

In the February 2015 issue of the Brooklyn Rail, I described Syriza’s infamous Thessaloniki Program (its veritable pre-election box of promises) as a minimal Keynesian program, with no real chance of reversing the catastrophic consequences of five years of violent devaluation. Back then, to say this was nothing short of blasphemy. An enthusiastic left was roaming around the globe speaking of a radical left, proclaiming an end to austerity, blowing a wind of change. Criticisms of Syriza and its economic program were cast aside as indications of an unrealistic and arrogant ultra-leftist dogmatism.

Today, the very people who supported Syriza in widely read articles and interviews are forced to admit a certain “moderate Keynesianism”1 in the initial program as well as a real distance between that program and today’s agreement. The happy chorus has stopped singing about the “end of austerity/troika/etc.,” and has made a hard landing onto the desert of the real.2

It seems it took five months to openly admit what was already clear from the February 20th agreement. And while for those who put their trust in Syriza it is somewhat understandable that hope dies last, for those close to the decision-making process of the Greek government, such naïveté is, to say the least, suspicious. For if something has become crystal clear in the last few months, it is that Syriza was not negotiating with European officials; it was actually negotiating the ways through which the continuation of austerity will be accepted by its own members and by those who will be forced to endure its consequences.

Decline and fall of the spectacle of negotiations

From the February 20th agreement in the Eurogroup onwards, it had become clear that Syriza was in no position to implement its Thessaloniki Program. After it became clear that they had no leverage to impose a discussion on debt reduction and an admission of Greece into the Qualitative Easing program of the ECB (European Central Bank),3 Syriza’s last chance was to rely on a show of good will from the troika (which was kind enough to accept a ridiculous name change into “Brussels Group”), in exchange for social and political stability in Greece’s troubled territory. A clearly misunderstood version of the “extend and pretend” policy that the Eurozone has been following since the beginning of the crisis was seen by Syriza as a possible win-win for everyone: both the troika and Syriza would pretend that austerity is minimized, while its essential character would remain unchanged.

However, a combination of the orchestrated irritation caused by Finance Minister Yanis Varoufakis and his inconsistencies, and the more substantial fact that any lenience towards Greece might spiral down towards Eurozone countries with more significant GDPs, meant that this sort of divergence from austerity was out of the question.

The only remaining way to salvage the spectacle of “negotiations” was to engage in a PR campaign which would offer different narratives to different audiences. In this process, what was a series of humiliating compromises in the Eurozone meetings was constantly transformed into a “harsh negotiation” for the Greek audience. Varoufakis became a cause célèbre, whose ability to annoy German Finance Minister Schäuble became a source of national pride in Greece. A mixture of hope beyond proof, disbelief, and the non-existence of political opposition made the task even easier for Syriza’s think-tanks. To top it up, one only needed to throw in a series of incomprehensible figures and decimal points. The self-evident truth of the abandonment of any prospect of minimizing austerity consequences was mystified through a steady production of numbers and statistics which left even experienced “experts” baffled.

Who gives a fuck about an Oxford comma?

In the last few weeks, the “drama” of the negotiations reached its zenith. Back and forth in Brussels, during meetings upon meetings, technical details and strong words were exchanged. It seemed like both sides did their best to uphold a continuously climactic situation, offering cliffhanger after cliffhanger to the addicted spectators. Will a deal be reached? Will we see a Grexit? Is austerity going to continue, or will the “radical left” government of Syriza restore democracy in Europe? How will the markets, these guardians of truth, react?

As soon as one took a closer look at the negotiations, the disagreements and the actual source of this endless conflict, a cloud of boredom descended. Will the fiscal surplus be 0.6%, 0.8%, or 1%? Will Value Added Tax (VAT) be raised by 2% or 3%, and which exact commodities will these increases affect? Will parametric measures equal 2% or 2.5% of GDP? And what about administrative measures? Will there be an ESM-ECB debt swap?

The ease with which both Syriza and the troika threw around these numbers was nothing but an indication of their contempt for their actual meaning. For what was there to see behind these numbers but imaginative variations which denoted tax increases, direct and indirect wage and pension cuts, and privatizations? How could one possibly miss the accord between the “radical left” and “neoliberal Europe” in their discussions about the need to modernize, to make the economy competitive, to perform a series of structural reforms that, as we were informed by Mr. Varoufakis, are essential for Greece to “stand once again on its own feet”? Can someone really remain confused after the announcement that paying the (hated and formerly to be abolished by Syriza) property tax of ENFIA was “the patriotic duty of Greek citizens”?

The narrative chosen for the internal audience of Greece in order to transform apples into oranges was not only based on the “creative ambiguity” of the Finance Minister. On the side, the PR hacks of Syriza started cultivating the idea that the lenders were treating them so unfairly that not a single unilateral law can be passed by Greek parliament without the approval of the Brussels Group. And thus, in a simple twist, collective bargaining, the increase of the minimum wage, and other measures aimed at tackling the “humanitarian crisis” were put on ice and delegated to a distant future.

To a certain extent, this intransigence of the troika was, of course, evident. But it was also clear that Syriza selectively used this fact as a useful alibi. For a lot of people failed to understand how, while any measure that was supposed to relieve impoverished proletarians was blocked by the troika’s intransigence, this never stopped Syriza from making long-term economic deals with Greece’s most important capitalists.

How can Syriza’s members and fervent supporters explain, for example, the recent handing out of lucrative public works like waste management to Bobolas’ company Ellaktor?4 Or maybe offer some reasonable justification why Bobolas’ contract to financially exploit the highway tolls was extended to forty-five years? Are we really meant to swallow the idea that the reason behind the new agreement between the Attica local municipality and Siemens (a company under investigation by Syriza’s government for money laundering and corruption) was simply that the deal was “already at an advanced level and could not be stopped? Last but not least, we would be really interested to hear someone explain (in radical-left fashion, please) the statement by deputy Finance Minister Nantia Valavani that any increase in the taxation of wealthy ship-owners runs against the Greek Constitution.

What was initially only felt as a glitch in the screen of the “first-ever-left-government” soon became a inevitable conclusion. Syriza’s government had decided that its allegiance rested not with those who believed that austerity would stop, but with those (inside Greece and in Europe) who were afraid that a left-wing government might prove unable to implement the “necessary” restructuring that austerity is meant to deliver.

A brief look at the language chosen by Greek officials in the course of the “negotiation” reveals as much. Moving away from the abolition of the troika, the reduction of debt, the series of immediate measures to deal with the “humanitarian crisis,” the Newspeak of Varoufakis was indicative of their self-understanding and selling point:

A common fallacy pervades coverage by the world’s media of the negotiations between the Greek government and its creditors. The fallacy, exemplified in a recent commentary by Philip Stephens of the Financial Times, is that “Athens is unable or unwilling — or both — to implement an economic reform program.” Once this fallacy is presented as fact, it is only natural that coverage highlights how our government is, in Stephens’ words, “squandering the trust and goodwill of its Eurozone partners.

But the reality of the talks is very different. Our government is keen to implement an agenda that includes all of the economic reforms emphasized by European economic think tanks. Moreover, we are uniquely able to maintain the Greek public’s support for a sound economic program.

Consider what that means: an independent tax agency; reasonable primary fiscal surpluses forever; a sensible and ambitious privatization program, combined with a development agency that harnesses public assets to create investment flows; genuine pension reform that ensures the social-security system’s long-term sustainability; liberalization of markets for goods and services, etc.

So, if our government is willing to embrace the reforms that our partners expect, why have the negotiations not produced an agreement?5

Inside Greece, however, the narrative was strangely different. Syriza was proclaiming that it would never cross its “red lines” and would not agree to a program that ignores its mandate, while it started circulating the notion that the aim of the troika was to bring down the government. This spectacle of a government strongly committed to fulfilling its pre-electoral promises (repeated extensively by the foreign press) was in stark contradiction with the fact that that government had entirely abandoned them, but it did serve a purpose: Syriza’s support increased, while it skilfully pre-empted any ridicule of the “negotiation” process.

Interestingly, the Brussels Group and interested parties played along with this narrative. Article after article and statement after statement highlighted the unwillingness of the Syriza government to fulfill its obligations to the lenders, its fragile commitment to the “necessary” reforms, its denial of restructuring.6 When these explanations appeared to lose their effectiveness, the go-to-villain was ready at hand: Syriza’s internal opposition.

There is really no other way to explain the latest stage of “negotiations” than as a veritable piece of theatre, meant to convince both sides (and the public glued to the screens) that there is such a thing as a “negotiation” — even though its exact characteristics are somewhat slippery. The roles were interchangeable: sometimes it was Syriza who raised the flag of no-compromise; in another case, the “negotiations” were torpedoed by the IMF, which curiously echoed Syriza’s (long-abandoned) demand for a debt restructuring as a prerequisite for any deal. And when in May Syriza came up with a forty-seven page proposal officially declaring their will to continue with austerity, the negotiations collapsed after Eurogroup counter-proposals demanded further cuts at a level not ever demanded in the last five years of non-negotiated austerity.7 Notions like irrationality and absurdity were hard to keep contained.

Post mortem ante facto

For the past weeks, spectators found themselves trapped in a “groundhog day” experiment: every Eurogroup meeting was announced as “the meeting to end all meetings,” every inability to reach a conclusion was seen as a straight path to Grexit, every time the “markets” reacted negatively to the continued instability … and every single time, the conclusion was a pre-recorded message which proclaimed that “progress has been made, but a lot of work is still needed.”

In this race to the finish, and despite the nonsensical comments, it became clear that what was at stake was merely the ability of Syriza to pass further austerity measures as either a victory or an inevitability. Or both. When it started to surface that Syriza’s own proposal would not be easily accepted by all its members (and, perhaps more importantly, by those who would pay for it), stronger means were employed. The ECB joined the dance, threatening a cut of ELA funds, a move that would force the Greek government to impose capital controls (and essentially pave the way for Grexit), while a variety of European officials started proclaiming that a possible Grexit would not have the devastating results that people think.8

Whether this was a conscious decision or not is slightly beyond the point. But the result of this spectacle of absurd intransigence on behalf of the troika produced a very specific outcome: Syriza found itself in a position to present the basis of its forty-seven-page proposal as the “only realistic ground for any negotiation,” while violently rejecting the (absurd) counter-proposals. This portrayal of Syriza as actually defending “red lines” (both internally and externally), while accepting further austerity, seems to have broken the spell. For the first time, all interested parties seem to agree that a deal has been reached and can be signed by all.

At the moment (this was written on June 28th), all eyes are now on the question whether Syriza will manage to pass this proposal in parliament. Some of Syriza’s own ministers and MPs, have publicly declared that the latest deal is in fact worse than the one the previous government rejected, and proclaim that they will refrain from voting it in. It is debatable whether Syriza will actually manage to convince its “rebels” that the deal is a victory and an inevitable outcome of the “negotiations,” let alone make them adopt an approach that says that this deal “buys Syriza time to focus on the defeat of neoliberal policies.” But here is the catch: this does not change much.

If Tsipras believes that the agreement will not pass in parliament, it is very likely that he will call for elections. At the moment, reasonable polls put Syriza well ahead of any other party, and obviously in a position to gain an overwhelming majority. As a result, elections at the moment would only help Syriza consolidate its position and, more importantly, form a government with the explicit and democratically verified mandate to[…] sign the previous agreement. And this time without any internal opposition.

The only problem with this whole saga lies elsewhere. The agreement signed (either now or after a new election) will impose crippling taxation; it will reduce pensions; it will proceed with privatizations; in short, it will aggravate the very reasons why Greece has been in turmoil (in one way or another) for the last five years. Looking beyond the insignificance of political games and spectacular “negotiations,” the agreement that Syriza wishes to implement might make its European counterparts happy, but does nothing to stop or even minimize the actual crisis and its social consequences. What the last five months have shown is only that the “extend and pretend” policy works well inside the Eurozone. But its troubled times are far, very far from being over.

Update (July 2)

Just when a deal seemed finally to have been reached between Syriza’s government and the troika, all hell broke loose. Negotiations broke down, Greece defiantly rejected the troika’s latest proposal and on June 27th Tsipras announced that a referendum is to be held on July 5th, which many have (mis)interpreted as a referendum on whether Greece will remain in the Eurozone or not. To top it all, banks were closed (until the referendum) and capital controls were put in place forbidding money transfers abroad and limiting daily withdrawals to €60 per day.

As I explained in the article, a deal of this sort would have been very difficult to pass. And this is exactly what Merkel herself hinted to on June 25th, just before everyone was about to sign, when she proclaimed that the real problem is whether it will be signed off on by the Greek parliament (i.e. whether Tsipras can guarantee the compliance of his own party). At the moment, it became quite clear that this was not very likely.

In what can only be explained as the troika giving a (risky yet) helping hand to Tsipras, the signing of this deal was sabotaged by the last-minute addition of a number of inexplicable measures that Syriza had already rejected (while incorporating a series of harsh austerity measures in its own forty-seven-point proposal). Suddenly, Syriza landed back in the seat of a defiant, left-wing government and the troika appeared once again as an intransigent, neoliberal evil lender.

On the morning of June 27th people woke up to meet a Syriza reminiscent of its pre-election bravado: defiant, drawing red lines that will-not-be-crossed, denouncing European anti-democratic procedures. Only difference, for those who cared to notice, was that this time round, Syriza’s “red lines” included an explicit continuation of austerity with pension cuts, new taxes, and privatizations. Varoufakis had used Syriza’s continued public support as an important selling point. But it looked like this was not entirely ensured.

The announcement of the referendum seems to have the purpose of ensuring this “public support.” And though everyone appeared to be taken by surprise by this development, a closer look at what is at stake reveals quite a lot. The question of the referendum is whether Greek citizens approve of or reject the proposal of the Institutions (troika) made on June 25th. Not Syriza’s counter-proposal, not a previous troika proposal (there have been many), nothing of the last five months. Now this means very specific things.

A “yes” vote is quite clear-cut. It essentially means that the majority of the Greek population is willing to allow the troika to continue shaping its economic policies, with the government reduced to its previous role of simply and hastily ratifying the already-made decisions. A “no” vote, on the other hand (which is what Syriza is propagating), is not as clear. It includes those who wish a Grexit; those who want to continue negotiations; those who would accept an “honorable compromise” with slightly less austerity, and a whole number of others that fall somewhere in between these categories.

Now if a “yes” answer prevails, Syriza will resign (they have already announced that much), since while they will respect the democratic decision of the referendum, they are unwilling to be the ones to implement its consequences. Thus, and most probably, a temporary coalition government will be formed (most likely with the participation of New Democracy, PASOK, and Potami) who will then be charged with implementing the harsh austerity that the troika’s latest deal included. In the meantime, Syriza can enjoy a position of a very sizeable official opposition, eat popcorn, and wait for the temporary government to announce elections a few months down the road (with Syriza’s victory a most probable outcome). If a “no” answer prevails, Syriza is more or less given a free hand to interpret the result as it sees fit. It can push for a Grexit and a return to the drachma (though they have explicitly said this is not what they want), it can restart negotiations (either from their own forty-seven-point program or from scratch), it can make use of “creative ambiguity” to reach some other deal.

In short, the situation seems to be a win-win scenario for Syriza, something that has not escaped the attention of the main opposition parties which, after trying (and failing) to get the referendum cancelled, are now engaged in a vicious (and mostly hyperbolic) propaganda war which results in stark polarization of Greek society and the adding of votes to the “no” side.

One might chose to believe that European counterparts were genuinely surprised by these developments or not. In any case, their reaction has so far been rather conciliatory: the non-payment of the IMF was officially not treated as a sovereign default, capital controls were not interpreted as a direct path to Grexit, and they seem awfully pre-occupied to ensure everyone that they will do their best for Greece to remain in  the Eurozone. The only exception seems to be Germany, whose go-to narrative in relation to the Greek crisis seems to have backfired on them. The constant propaganda that lazy Greeks are being fed German hard-earned money, without committing to any of the reforms and their obligations, has led many in Germany to wish for Greece to be kicked out of the Eurozone. Useful as this fairy-tale might have been in the past, it now appears to have the opposite effect. And Merkel might soon have to come clean and explain that, in fact, Germany will lose its money and start paying for this crisis only if Greece exits the Eurozone.


  1. C. Lapavitsas, “The Looming Austerity Package,” Jacobin, June 12, 2015.
  2. It is peculiar to note that those on the left of Syriza (like Lapavitsas), only recently re-discovered their opposition to the euro and the EU. In their new role as Syriza’s MPs and internal opposition, they urge (whom exactly, is not very clear) a fresh examination of alternatives. As far as we have seen, this anti-EU alternative is precisely what they have been propagating for the last five years. So, in reality, they have a five-year-long background in this quest for the holy grail, giving them a decent head-start and the opportunity to finally present their
  3. Any debt reduction, or any ability of the Greek state to issue bonds and finance itself, would single-handedly eliminate the troika’s leverage for imposing austerity.
  4. Bobolas, one of the best-known capitalists of Greece, was recently “arrested” by Syriza’s government on tax evasion charges of approximately €.4 million. He immediately paid less than half of that (€1.8million) and was released with all charges dropped.
  5. Y. Varoufakis, “Austerity is the only deal-breaker,” Project Syndicate, May 25, 2015.
  6. Within Germany, Greece’s primary opponent during the negotiations, many members of the Christian Democratic Union of Germany (CDU) party of Angela Merkel openly called Syriza a “communist” government.
  7. One of those newly added demands was an abolition of the Pensioners’ Social Solidarity Benefit (EKAS) benefit, which amounts to a minuscule financial assistance (between €100-€150) for those who receive pensions of less than €300 a month.
  8. It has become a common absurdity to claim that a Grexit would have minimal consequences. As Frances Coppola correctly put it recently, “If Greece were to leave, others would be likely to follow, either because of speculative attacks as in 1992, or because of popular unrest and political change. This would threaten the very existence of the Euro. The oft-expressed view that the rest of the Eurozone is “firewalled” from contagion was never credible and is now evidently false: bond yields are already spiking in other Eurozone periphery countries. The ECB cannot be seen to force out one country while protecting the rest from contagion. That would destroy its credibility as an independent body immune from political influence.” (F. Coppola, “The Greek Negotiations: Many Angry Words And No Way Forward,” Forbes, June 19, 2015).

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