And now what? Greece after its official creditor-led default

March 14th, 2012

Published on openDemocracy, by Vassilis K. Fouskas, 12 March 2012.

Following Greece’s recent mammoth 206-billion-euro bond swap, people wrongly believe that the private bondholders of the Greek debt lost money and that the country is on a path to recovery. The only solution for Greece remains a debtor-led default and exit from the euro-zone under the leadership of a radical democrat political movement … //

… Elements of a programme for a united radical left:    

Those discredited parties and leaders currently in power in Greece herald the events of the last month or so as a triumph. Nothing can be more misleading. Once the deal with the PSI was close to completion on Friday evening, 9 March 2012, the euro slipped 1.3% against the dollar, whereas British sterling gained 0.4% against the euro. This is an indicator ‘from above’, so to speak.

The indicators ‘from below’ are, nevertheless, those that count most. More than 3.5 million Greek people now live at risk of poverty or social exclusion (data from Eurostat). There are hundreds of soup kitchens operating across the country; barter is widespread; and street clinics are visible in Athens and other urban centres, as hospitals cannot cope with emergencies. Mass lay-offs and wage and pension cuts continue and will continue with no end in sight as long as growth is elusive. If you visit the country you feel that ‘nothing is moving’. People are depressed and suicide rates have increased dramatically. There is a sharp devaluation of assets (property, land, etc.), yet price inflation remains as high as 3%. Greece is still an expensive country for the average tourist.

Having said this, the truth of the matter is quite the opposite of what has been envisaged by the bankers and their political representatives in Greece and Europe: by 2020 the private bondholder and the banks will be richer, whereas the Greek and, for that matter, the average European and British taxpayer, will be poorer. But no cow can go on supplying milk for ever without either dying of exhaustion or killing the milker with a sudden kick.

It is as clear as dawn that the current ruling elites cannot deliver economic growth. As a consequence, they cannot reverse the plight of Greek society. All these austerity measures they have taken, and no doubt will continue to take at the behest of the ‘troika’, have sawed off the branch upon which they themselves sit, that is the middle and lower middle classes of Greece – what Marx used to call ‘the classes-pillars of a regime’. That is why in the forthcoming election these elites will be voted down: already opinion polls indicate the collapse of PASOK (11%) and ND (28%), disabling them from forming a majority government. In their stead, the parties of the left are forecast to poll more than 40%. The Greek people cannot vote for those who are responsible for the creation of the debt and the international humiliation of their country. Moreover, they cannot accept this insult to their intelligence, inasmuch as the ruling elites are asking the people to pay for the debt the elites created.

The radical political programme of democratic forces must be clear, unambiguous and realistic. Any united front of a radical left in Greece, which is not yet a political reality, should be formed on the following key premises:

  • Auditing of the debt and immediate default on the country’s debt obligations, especially of the so-called ‘odious debt’.
  • Immediate exit from the euro-zone and denomination of debt into new drachma
  • Nationalisation of banks and imposition of capital controls to avoid hard currencies entering the new Greek economy buying assets indiscriminately, while encouraging FDI from abroad in the productive sectors of the economy in order to promote export-led growth
  • Investment in solar energy and green projects, especially reviving organic farming in order to boost exports
  • State intervention into aggregate demand management by boosting wages and purchasing power, thus offsetting the negative impact of devaluation on households, especially the poor ones
  • Taxing large estates, especially those held by the Church, as well as Greek shipping capital
  • Drastic cuts in the country’s defence budget and the re-orientation of Greek foreign policy towards its Balkan neighbours, Turkey, Cyprus, NATO, Russia, China and the Arab world. The key aim here must be the demilitarisation of the Aegean and the Eastern Mediterranean and the development of regional organisations and NGOs promoting the fraternity and solidarity of all peoples of the former Ottoman and Soviet spaces

This re-launched Hellenism in the European periphery and beyond is the only way to herald a new post-socialist Enlightenment, which does not separate the Asian from the European and the ‘civilised French’ from the ‘barbaric Turk’. To me, there is nothing more obvious than the fact that the ruling elites cannot deliver any of the above, so the forthcoming election will herald their long overdue downfall. My humble message is that the Greek left must unite in order to face the challenge and begin to put itself in a position of power to deliver the above programme. (full text).


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