by Antonis Davenellos   March 11, 2010  Socialist Workers

GREECE'S SOCIAL democratic government announced "extra measures" on March 3 aimed at reducing the government deficit and raising money, mainly to service the public debt.

 

For working people, the measures were a shock: a freeze on pensions for the second year in a row, salary cuts for public employees that will also transfer immediately to the private sector, a freeze on hiring in the public sector, plus tax increases--including a sales tax hike that will raise the price of basic products like food, gas, etc.--which will further cut into the living standards of Greek workers.

 

What happened in Greece to lead to such dramatic measures?

The Greek government--both when it was led by PASOK in the decade leading up to 2004, and when the right-wing New Democracy ran it 2004 to 2009--allowed corporations to withhold taxes owed to the state and contributions owed to workers' pension funds. Over the last five years, corporate profits were inflated due to this tax evasion to the tune of 2.7 billion Euros and to sales tax withholdings of 11 billion euros. During the same period, unpaid contributions to pension funds reached 12 billion euros.

 

This corporate plundering had disastrous consequences on public finances. The situation got dramatically worse with the outbreak of the economic crisis in the past two years, and a government intervention to support the banks and businesses. Under right-wing former Prime Minister Kostas Karamanlis, government backing for the banks totaled 28 billion euros--a colossal amount for an economy the size of Greece.

 

This is the bill that workers are being asked to pay by the PASOK government--under the threat of national bankruptcy.

 

The announcement of the new austerity measures provoked a storm of reactions. The previously scheduled public-sector strike on March 5 was joined by a host of other workers. Large demonstrations took place in many major cities across the country. During the session when parliament voted on the measures, the building was surrounded by tens of thousands of angry workers.

 

During the clashes that followed, riot police attacked demonstrators with excessive use of chemicals. They didn't even hesitate to pepper spray an 88-year-old resistance fighter, a living legend of the fight against the Nazis, who was at the head of the protest as a leading member of SYRIZA, a broad coalition of the radical left.

 

The picture of the unconscious veteran fighter on the ground sent a shocking message to the whole country and forced the government and police to issue a public apology.

 

THERE IS certain to be mass workers' resistance to the measures. The social democratic leadership of the unions won't succeed in containing it--though it has been trying systematically to do so.

 

The private-sector General Confederation of Greek Workers (GSEE) has already been forced to reverse its decision and call for its members to join public-sector employees in a general strike on March 11 that is expected to shake the whole country. The chairman of GSEE, a leading member of PASOK, attempted to address strikers in front of the parliament building on March 5. His speech was cut short after he was jeered and pelted with eggs and yogurt by the angry crowd.

 

There is already a serious reaction taking place inside PASOK. Costas Skandalidis, a previous secretary of PASOK, declared that the measures pushed by the current prime minister, Georgios Papandreou, are "outside the political framework and ideology of PASOK."

 

In parliament, Christos Papoutsis, leader of the PASOK deputies in parliament, criticized the Papandreou government, demanding concrete measures to promote economic development. Inside PASKE, the PASOK organization within the unions, each meeting has become an open confrontation between supporters of austerity measures and those prepared to fight against them.

 

We've seen this scenario play out before in Greece: In 1985 to 1987, the social democratic government of Andreas Papandreou (father of the current prime minister) also decided on a harsh "stabilization" program. PASOK split, with a large section of its trade unionists moved to the left, followed by a couple years full of bitter strike confrontations that forced finally Papandreou into retreat.

 

Again in 2001, the social democratic government of Prime Minister Konstantinos Simitis was determined to push through a severe cutback of the public pension system. It provoked an unprecedented general strike--with the participation of PASOK trade unionists--that paralyzed the country and forced Simitis into a disorderly retreat.

 

Today, the harshness of the measures is such that even in the mainstream press, there is a growing skepticism that PASOK will be able to survive as a party. But the situation inside the party or within PASOK's social base is only part of the growing headaches of the government and the ruling class.

An even more troubling threat to them is the new labor militancy spreading by the day and focused on resistance to these austerity measures. As this article was being written, the National Printing Office is still being occupied by workers, preventing the publication of the new measures in the government newspaper (the final step in legislation becoming a law).

Left-wing activists from SYRIZA or the Communist Party have occupied a number of government buildings, headquarters of pension funds and the offices of the European Union in Greece. Most importantly, there are even more frequent labor actions against layoffs.

 

These are clear warnings of an oncoming storm. Whether there will be a "workers' December"--an uprising like the youth explosion in December 2008 against a police murder--is the subject of discussion by a substantial section of the left.

 

AS HAS happened in a number of cases across Europe, a social democratic government elected on the promise of defending workers has in reality adapted harsh neoliberal programs that the right wouldn't dare to attempt.

In the case of Greece, though, there is reason for optimism, because usually, this sort of attack doesn't lead to stability, and they are rarely successful. As a result, the eyes of all Europe--where other governments are preparing similar austerity plans--are literally fixed on the streets and workplaces of Athens. Greece has been turned into a laboratory, where the possible future developments for Spain, Portugal, Italy and eventually all of Europe are being tested.

 

Papandreou defends as "absolutely necessary" the extreme neoliberal measures he has proposed in order to secure the backing of the EU big powers and appease the forces of the financial markets that provide loans to the country.

 

In his most recent meeting with German Chancellor Angela Merkel, he received only vague promises of support. At his meeting with French President Nicolas Sarkozy--who sees that French capitalism could soon be facing similar problems--Papandreou got a bit warmer reception, but still just promises.

 

Meanwhile, the loan sharks of the international financial markets remain thirsty for blood. After the announcement of the extra austerity measures, the Greek government asked to borrow 5 billion euros by issuing new bonds. Loan offers exceeded the asking amount by more than three times, but with a predatory interest rate of 6.37 percent.

 

The big banks proved once again that the politics of the public debt are nothing other than a sure way of safe and easy profits for them. They are indifferent to the cruel way in which the government has taken resources and badly needed social spending away from working people.

 

Greek workers and youth have to stand up against the government measures. In the process, they will also have to deal with broader issues--how should we deal with debt, what to do about deficits, how we can defend our basic needs in the face of such an open attack of capitalist greed.

The answer to these questions requires the growth of an anti-capitalist left with greater strength and clearer politics. The organization International Workers Left carries out this struggle from the ranks of SYRIZA.

The growth of this left and the extent to which it connected with the social base of the social democracy--which today is rebelling against its party in greater numbers--will determine the future of the country.