Greece: the eye of the storm?

Issue: 125

Panos Garganas

The social climate in Greece is charged with the electricity that you find in the air before a tropical storm.” That was the description by a leading columnist on Greece’s most popular daily newspaper. He is not alone in this view. Costas Karamanlis, the outgoing leader of the conservative New Democracy party, gave his reasons for calling an early parliamentary election in similar terms. His government could not push through the tough measures needed to deal with the economic crisis because of the “bad social climate”. The fact that he lost the election by a wide margin confirmed his fears. The prospect of a new uprising, similar to what happened last December when a police officer shot Alexis Gregoropoulos, a 16 year old schoolboy, dead, is hanging over Greek politics. Thousands of young people and many trade unionists took to the streets then and demanded the overthrow of that “government of murderers”. The Tory government may have survived the uprising by nine months but in the end it collapsed.

The new government of Pasok, a New Labour type party led by Giorgos Papandreou, is trying to defuse the social tension and at the same time cut the huge public deficit that is running above 12 percent of GDP. It is like trying to square a circle.

In the pre-election period Papandreou promised his government would not freeze wages and would rather provide a stimulus package to boost demand and push the economy out of recession. It was a promise that did not last for even 30 days. The preliminary budget plan for 2010 raises taxes by €3 billion and aims at cuts in public spending of another €4 billion. The government is sacking 40,000 temporary workers immediately under the pretext that they are not proper employees but are employed in training schemes. And there is to be a freeze on new employment in the public sector until a public watchdog can root out “clientelism” and ensure new recruits are employed “on merit”.

Even these draconian plans are not deemed sufficient by international bankers and the European Union. The Commission of the EU is viewing Greece as a basket case. According to the Financial Times:

The Commission identifies five countries as at particular risk—Greece, Ireland, Latvia, Spain and the UK—because their public finances will come under strain… This is particularly the case for Greece…its high debt ratio adds to concerns on sustainability… Greece’s public debt could hit 135.4 percent of GDP in 2011, a level for which there is no precedent since the euro’s creation in 1999.1

Both Jean Claude Trichet of the European Central Bank (ECB) and Joakin Almunia of the EU Commission attacked the unreliability of Greece’s economic statistics. Papandreou’s finance minister responded by rewriting his budget plan to make it tougher and by announcing plans to cut pensions and increase the retirement age.

Experienced parliamentarians are advising Pasok to crowd all the unpopular measures between now and next summer, while the government is still new and will have time to recover before the next election. Government ministers, however, have to look over their shoulders constantly because they are worried that anger might explode again despite the change in government.

They are right to do so. The signs are already there.

Temporary workers were the first to move. They held a very successful national demonstration in Athens on 5 November and are creating their own union network with a national coordinating committee. They plan to stay on the move with national demos every second week and local demos in between. This movement is putting pressure on trade unions to change tack and demand permanent jobs for all. Contract workers were the first group to confront the then newly elected Tory government back in 2004, so there is some experience in Greece of this kind of fight.

The first powerful group of organised workers that clashed with the new Pasok government are the dockers of Piraeus. The Karamanlis government had signed and ratified through parliament an agreement handing over large parts of the docks to a Chinese company, Cosco. The dockers’ union opposed the privatisation with a series of strikes. Pasok took the position that the deal was “neocolonial” and promised to renegotiate it when it comes into office. On 1 October, when Cosco was meant to take over the docks three days before the election, the dockers walked out and stayed out despite Pasok winning the election. The minister responsible for port authorities had to renew the promise of renegotiation before the dockers agreed to put the strike on hold after ten days. But instead of putting pressure on Cosco the government did a u-turn, so the strike started again. It took a court decision, ruling that the strike was illegal, plus a new promise to negotiate, for the strike action to be suspended again on 10 November. The dock privatisation scheme remains a testing ground for Papandreou’s ability to carry out his gyrations.

The most severe test, however, will come over the pension “reform” scheme. These so-called reforms have been attempted twice in the recent past and both times the governments have had to retreat in the face of generalised strike waves. In 2001 a general strike crippled the previous Pasok government of Costas Simitis. And in 2008 a series of strikes formed the background to the December uprising. Now the union of workers in local authorities has already announced a strike for 3 December demanding that plans to raise the age of retirement are dropped.

Any doubts about the radical mood prevailing particularly among young people were dispelled by the size and militancy of the demonstration on 17 November to commemorate the 36th anniversary of the polytechnic uprising against the military dictatorship. The turnout was bigger than anyone can remember for many years. And the march was led by contingents of the anti-capitalist left that constituted roughly one third of the total.

Two developments accelerated events in Greece in early December. The fiscal crisis became more acute after economic worries in Dubai, with credit rating agencies downgrading Greek debt. Papandreou has rushed to reassure the ECB that his government will restore credibility by slashing the budget deficit with “state of emergency” measures. The new government has effectively handed economic policy over to the bankers. According to press reports Papandreou had a secret meeting with the deputy governor of the ECB Loucas Papademos—who ran the Greek central bank ten years ago—to hammer out an agreement for wage cuts and sweeping privatisations.

But it remains to be seen whether the government can implement these attacks on living standards. The second development has been the anniversary of last December’s uprising, which was greeted by mass demonstrations on 6 and 7 December: not just in Athens but in most major cities. A huge police operation with two thousand preventive arrests failed to stop tens of thousands of students, school students and teachers from taking to the streets. Many faculties were occupied in response to police harassment. And despite the General Confederation of Greek Workers holding back, many trade unions were preparing for strike action on 17 December when the budget is debated in parliament. A rank and file revolt is unfolding and the bankers may not have it all their way after all.

To sum up, it is eyes to the left in Greece. Pasok was carried into office by a wave of radicalisation. New Democracy, the Tory opposition, is in tatters. The latest opinion polls put it at 22 percent. People expect the opposition to come from the left.

The leaderships of the parliamentary left, however, are inward looking at the moment. Syriza, the coalition of the old “eurocommunist” left with small groups coming from the far left, is embroiled in an internal fight over its constitution and there is tension between those who are open to consensus with Pasok and left wingers. The Communist KKE was shocked to discover that its vote dropped in the last election. Members are asking why this should be the case when there are so many opportunities for the left.

It will be up to the anti-capitalist left to take the initiative and lead the left into taking these opportunities. Antarsya, the anti-capitalist front, has made a promising start in that direction.


1: Financial Times, 9 November 2009.