Economy

The Global Significance of Greek Elections


Jon Kofas*

Kokomo (Indiana), February 11, 2014 (Alochonaa): The global significance of the election in Greece is the symbolism of popular opposition to:

  1. a) Western-imposed austerity that results in income redistribution from the bottom 80% the population to the top 20%;
  1. b) Blatant disregard for national sovereignty of debtor nations by the hegemonic creditor governments that represent finance capital;
  1. c) Popular democracy can prevail despite the massive propaganda by the mainstream media demonizing any political party or movement appealing for social justice;
  1. d) Contagion effect, as other political movements, PODEMOS in Spain for example, will follow the precedent set by the Greek election
  1. e) A major blow to the neoliberal model of development under globalization that the West has been presenting as “the only way” to conduct economic and social policy.
  1. f) The EU and the US will exert immense pressure on the newly-elected government to pursue neoliberal policies with some watered down version of social and economic policies that take into account the working class and waning middle class. In short, a strategy of co-optation has already begun, so that the center-left party becomes in essence a neoliberal one in policy but remains center-left in rhetoric.
  1. g) If co-optation fails, the challenge of the financial and political elites now is to prevent popular political parties in other nations asserting national sovereignty and social justice as cornerstones of their platform. This means that there will be an international overt – media propaganda – and covert efforts through political and economic means – to undermine, discredit and topple the elected government and bring about regime change.

On 25 January 2015, Greece elected SYRIZA, a left-of-center regime opposed to the harsh austerity measures that the IMF and EU had imposed along with a series of policies that essentially resulted in the super-concentration of wealth in the hands of a few thousand families while 50% of youth were unemployed in an economy where “formal unemployment” remains at 26% and the poverty rates at one third of the population. These are Great Depression conditions, but the defenders of austerity and neoliberalism insist that there is no alternative.

The initial Western press reaction ranged from panic to caution about SYRIZA that people chose to lead them. Nothing about the process of democracy working, nothing about popular sovereignty, nothing about the sense of hope, real or not, that the new government instills in a country that has seen its income drop by one-third and the middle class destroyed. The only issue is that neoliberalism now threatened beyond Greece, in Spain, Italy, Portugal and other debtor nations that will dare choose governments representing the majority and not banks and corporations.

Some media outlets called SYRIZA Communist, others radical left, others populist left. Not a single mainstream media outlet bothered to explain the ideological orientation of the political party or its platform, other than to state it opposes austerity, opposition that right wing political parties across Europe also share. Instead of stating the ideological position and specific platform of the party, the mainstream Western media simply warned that SYRIZA poses a threat to markets and to EU’s stability, as though the EU has been stable in the past five years when SYRIZA was in the opposition.

SYRIZA is a coalition of Socialist and reformist centrist political elements that rests on an ideology of reformism within the system. Its ideology has roots in European Socialism, with strong elements of the Euro-Communism of the 1970s. Eclectic and rooted in the concept of social justice that entails creating a strong social welfare safety net, the ideology of SYRIZA is classic European social democratic, despite rhetoric that tends to carry over to Socialism. The party platform includes private sector backed by the state, a multi-dimensional foreign trade policy and a foreign policy rooted in national interests rather than Western imperial interests intended to destabilize the Middle East and Balkans.

The triumph of neoliberalism – a trend that started under the conservative governments of Margaret Thatcher and Ronald Reagan in the 1980s – was complete with the downfall of the Communist bloc and the global economic integration in which Communist China became the engine for global growth since the 1990s.

The symbolic significance of SYRIZA winning the election has shocked the neoliberals across Europe, because they fear national sovereignty and popular resistance to globalization. Throughout the 20th century, the Western countries tried everything from political and economic pressure to military coercion to pursue their interests in non-Western countries as well as the periphery of Europe. The goal was always integration under the patron-client model, a model of hegemony by the Western countries – the patrons – over the rest they see as client states serving Western economic, political and military interests. The anathema for the West has always been a strong state representing national interests and opposed to the patron-client integration model.

How did Greece along with many other EU and non-EU countries fall into debt? The number one culprit was that the fiscal system favored the top income earners, the financial elites foreign and domestic, forcing the state to engage in heavy borrowing to meet its needs, among them a very expensive defense program that added nothing to the productive capacity of the economy. The austerity and neo-liberal solution resulted in a sharp rise of the public debt which cannot possibly be serviced under any conditions short of a 50% haircut with the investors taking the loss.

The economy has been experiencing negative growth under austerity, unemployment and poverty rates are the highest in the EU, and the prospects for development are almost nil in the absence of massive investment that has been absent. Despite this reality, the representatives of the Western financial elites have already condemned SYRIZA even before it has had the chance to take power.

Defending neo-liberalism and corporate welfare, which means massive transfer of public funds from social programs to corporations, a number of bank representatives have argued that SYRIZA must either comply with IMF-EU austerity, or face the consequences of no credit from the European Central Bank. Naturally, this means that Greece must accept integration under the German-imposed patron-client model, or face a possible exodus from the euro.

Saxo Bank chief economist Simon Smith argued that: “The troika (ECB, EU & IMF) are now in a bind. If they cede to [Greece’s] demands, then markets will display no faith in the ability of other eurozone members to stick to austerity policies. If they stand their ground and Greece leaves, then the irreversible nature of the single currency would have been broken, which would make other peripheral nations more vulnerable as investors would be prepared to price in exit in certain circumstances.”
The rating agency Standard and Poor’s immediately warned the new government of a possible downgrade if it deviates from the IMF-EU austerity program and neo-liberal policies. Similar warning have come pouring in from official circles and banks across Europe. These are reminders that Greece has no leverage and that the patron-client integration model, austerity and neo-liberalism will remain exactly as the G-7 and financial markets dictate. By contrast, the new prime minister Alexis Tsipras visited the memorial site of Nazi war-crime victims, symbolically reminding Germany that it owes billions in war reparations to Greece, while reminding the West about the absence of justice when it comes to relations between core countries and periphery within the EU. Of course, the EU and US will try both co-optation and coersion and will even threaten to isolate Greece if it dares defy austerity measures and neo-liberalism.

The Europeans know very well that if Greece leaves the euro it will be even more costly for the creditor nations and the markets than if it remains and cuts a deal to reduce its public debt and payments it cannot possibly afford to make unless it impoverishes more than half of its population. The financial and political elites have major challenges not because SYRIZA won the election in January 2015, for that may prove highly symbolic victory for popular democracy, but because the rest of the world, especially the rest of EU, needed a concrete example to point the way to an alternative that at least addresses some social justice and gross socioeconomic inequality issues. If Spain follows the Greek example, that will not be just a symbolic defeat for neo-liberalism, but a substantive one with serious political and economic consequences for the EU. Fear and dread of popular democracy and national sovereignty on the part of the financial elites and mainstream political parties remains very strong motivator for the strategies they adopt to combat any efforts to water down neo-liberalism and the patron-client integration model on a world scale.

In foreign policy, SYRIZA will try to pursue a policy that tries to take into account the roles of China and Russia, while remaining part of the Western sphere of influence.  Greek foreign policy government will depend on many factors. It is true that SYRIZA, like PASOK in the early 1980s, will have a rhetorical commitment of a more balanced foreign policy that takes into account Russia’s interests in Greece and throughout the EU. In the last analysis, Greece is a NATO member, it is an EU member and it has constrictive conditions placed on it. On the other hand, Turkey is also a NATO member, but does not necessarily follow whatever the EU and US dictate. My guess is a foreign policy that at least takes into account China and Russia, while making accommodations to the West without submitting completely to the West as have previous regimes. One last caveat here, there is a huge difference between rhetoric politicians use for domestic and international consumption and what measures they take. SYRIZA has what I call “non-aligned” rhetoric employed, but in the end it will have to accommodate the West more than its leaders now realize.

 

*Jon Kofas is a retired Professor . He has published many works including; Independence From America: Global Integration And Inequality, Under the Eagle’s Claw: Exceptionalism in Postwar U.S, Greek Relations and The Sword of Damocles, and The IMF, the World Bank, and U.S. Foreign Policy in Colombia and Chile, 1950-1970.

** Alochonaa.com is not responsible for any factual mistakes (if any) of this analysis. This analysis further is not necessarily representative of Alochonaa.com’s view. We’re happy to facilitate further evidence-based submissions on this topic. Please send us your submission at alochonaa@gmail.com

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