Surrender! Capitulation! Betrayal! Syriza hasn’t even been in office for a month, but already the obituaries are being written.
Some on the left, of course, had written them long before January’s election. Syriza, you see, has failed to declare the revolution. So far, so familiar. But over the last few days some more sensible forces seem – as with the coalition deal in the early days of the Syriza government – to have got a little carried away in their horror at this week’s debt deal, believing the German government’s crowing rhetoric that Syriza has suffered total humiliation.
This is a deal that has been described in quite the opposite terms by Greek prime minister Alexis Tspiras: he called it ‘a decisive step, leaving austerity, the bailouts and the troika’. Unless he has quite suddenly and unexpectedly taken leave of planet Earth, there is more going on here than meets the eye.
To discover the truth we need to not only look at the deal, or even the media spin around the deal, but examine what the text they have signed up to will mean in practice.
Much of the reporting of the deal led on the claim that Syriza has ‘signed up to austerity’ – and that would be a massive U-turn if it were true. But this rests on some mischief with the terminology.
What the Greek government has signed up to is to continue running a budget surplus, as opposed to a deficit. That is not, in itself, austerity. Austerity is the practice of balancing budgets through cuts in public spending.
Yet the agreement, as Tsipras has said, cancels the previous Greek government’s planned cuts to pensions, as well as scrapping VAT rises on food and medicine. The reforms Syriza will submit as part of its end of the deal look set to include a massive crackdown on tax evasion and corruption – meaning a shift away from spending cuts towards raising the revenue through taxation.
The Eurogroup statement also includes some flexibility for surpluses to be ‘appropriate’ given economic conditions. In other words, until the Greek economy returns to growth, the punishing targets of the previous government can be eased back – meaning there wouldn’t be as much money to raise as previously. This should free up some cash to tackle Greece’s humanitarian crisis, through Syriza’s promised measures such as free electricity and meal subsidies for the poorest.
And Greek finance minister Yanis Varoufakis has added a very important and under-reported rider: ‘Nobody is going to ask us to impose upon our economy and society measures that we don’t agree with… If the list of reforms is not agreed, this agreement is dead.’
Of course, this is hardly anyone’s ideal programme for government. While it is not true that the hated ‘Troika’ has returned, Greece must still deal with ‘the institutions’ (the European Central Bank, European Commission and IMF) – the distinction being that it now has the potential to negotiate with the different institutions one by one. Greek democracy remains partially suspended, at least for the four-month duration of the deal, subject to negotiation and oversight.
But look at the situation Syriza were in before you condemn. Multiple credible sources claim that, if they had not agreed to the deal, Greece’s banks would have collapsed within days – and Syriza would have got the blame for taking the country into a new crisis. As Varoufakis said, ‘Greeks were being told that if we were elected and we stayed in power for more than just a few days the ATMs will cease functioning… Today’s decision puts an end to this fear.’
Defaulting on the debts and leaving the euro might be preferable in the long term – though support for that course of action among Greece’s people remains very low – but it would mean huge short-term chaos and pain that Syriza’s negotiation has managed to avoid.
In any case, the deal is not signed in blood. It can be ended if it goes as badly as some commentators are saying. The option of ‘Grexit’ and default hasn’t gone away. It is clear, though, that it is not currently part of Syriza’s mandate, and those who put forward that alternative in the election received only a fraction of Syriza’s votes. Default was always going to be a last resort, not an opening gambit: it will only be politically possible if no alternative remains.
Insofar as the Syriza government is having to compromise – and clearly it is making compromises short of surrender – that represents not so much their failure as our own. Syriza has always been clear that we cannot expect Greece to defeat austerity alone.
The various European ministers on the other end of the continuing negotiation with the Greek government need to be feeling the pressure. We need a huge movement across Europe in solidarity with Greece, and we need to be throwing ourselves into building that movement, not reclining in our armchairs ready to say ‘I told you so’.
We must put everything we can muster into shifting the political balance of forces across Europe. We now have four months of space in which to do so: we need to make them count.
There is clearly a division among the elite now over the issue of austerity, with the US government, the Adam Smith Institute and various prominent economists not usually associated with the left backing Greece’s proposals. That crack is waiting to be forced open.
This battle is a very long way from over. There are more key moments this week, and no doubt there are many weeks and months of crunch points still to come. The last thing we should be doing is abandoning Syriza because it hasn’t fulfilled all our hopes in the first few weeks after its election. And it’s also no use flipping backwards and forwards between enthusiasm and dejection based on each day’s round of negotiations.
The future of austerity across Europe now rests on what happens in Greece. If we give up on them, we are giving up on our own struggle too.
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