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Posts Tagged ‘Syriza’

Austerity, Democracy, left-leaning and right wing parties, Greece and Spain

Posted by: on: February 2, 2015

 

 

Austerity, Democracy, left and right wing parties, Greece (Syriza) and Spain (Podemos, we can)

In extended time of austerity due to after war conditions or financial default problems, people feelings swing to extremes: either the people opt for a left-leaning social reforms or they retract to their cocoon of right wing tendencies that lead to authoritarian political systems.

It may be odd to use a Roman metaphor to describe a Greek political event, but in this case, it’s apt.

Just as Julius Caesar crossed the Rubicon river because he could, in spite of the warnings of the Roman Senate not to, so Alex Tsipras, leader of the anti-austerity party, Syriza, has decided to try to end austerity in Greece, in spite of Europe’s leaders saying he shouldn’t.

Whether Tsipras will succeed is still unclear, but whatever happens, his victory represents a crucial turning point for Europe—a signal that time has run out on austerity policies.

Spain is following suit as Europe is facing an extended period of deflation and social unrest.

Give people jobs and they quiet down. How to reform a capitalist system so that worthy and honourable jobs can be created and sustained?

Austerity vs. Democracy in Greece

By Mark Blyth and Cornel Ban this Feb. 1, 2015

A “Tsipras” had to happen somewhere eventually, because there’s only so long you can ask people to vote for impoverishment today based on promises of a better tomorrow that never arrives.

If voting for impoverishment brings only more impoverishment, eventually people will stop voting for it—and the timing of “eventually” will depend on when people’s assets run out.

In the Greek case, backers of the incumbent New Democracy party and its austerity policies constitute that quarter of the electorate who still have assets (pensions, paper, and portfolios) after 5 years of depression and who want to preserve what they have.

The 36% that voted for Syriza were the young, the asset-less, and the unemployed—people who either lost what they once had or never had much to begin with.

Greece’s 1.9 percent of growth last year means essentially nothing to a society that has lost nearly 30 percent of GDP in a little over half a decade.

On the current course, it would take, by latest estimates, two generations for the country to get back above water.

Syriza’s victory presents two lessons for the rest of Europe.

First, no one votes for a 15-year-long recession.

Second, you can’t run a gold standard in a democracy. Either the gold standard goes, or democracy goes, and that is the choice Europe may face sooner than it thinks. (Why? Is the USA system truly a democracy after they flaunted the gold standard in 1968?)

The Euro is the gold standard that pretends that it’s not one—and therein lies the rub. While Europe has a plethora of national parliaments and free and fair elections, as well as a European parliament and multiple institutions with delegated power to represent the interests of citizens, once a country is a member of the eurozone, certain things happen that bypass any possible democratic checks.

On the upside, its credit history gets rewritten. Greece and Italy get to borrow like Germany (with predictable results). On the downside, when a eurozone country is hit with an economic shock, it cannot respond to it through the exchange rate (devaluation) or by using the printing press (inflation).  (Only Germany has the monopoly of printing the Euro money)

It must choose between default, which is not allowed, and balancing its books through internal devaluation (austerity).

And if that means a couple of constitutional coups d’état have to happen in the heart of democracy to get the policies through, as happened in Italy and Greece in 2011, then so be it.

So austerity becomes the only game in town. Although it may be rational for any one country to be austere, when multiple countries that share the same currency with no common fiscal policy do so, the result can only be a massive contraction of GDP and a corresponding increase in debt—which is exactly what has happened in Europe in recent years.

The boost in consumer and investor confidence that austerity was supposed to provide never materialized, and the eurozone as a whole slid into recession, and then, in the periphery, into depression and deflation. Now that all of this has occurred, however, the politics of sustaining the euro have changed, and changed utterly.

Until now, Eurozone policymakers’ obsession with fighting inflation has given them a one-sided understanding of politics. (Why Europe has to fight deflation too? It is good for the common people to survive their daily expenses)

In fact, Europe has not had an inflation problem of any magnitude since the 1970s. What it now faces is deflation—and since the politics of inflation and deflation are very different, the wrong policy choices produce Syrizas.

Inflation, after all, is not a general malaise that hurts all members of society equally, but a class-specific tax.

Those with assets, particularly paper assets, lose harder and faster than other groups that can pressure the state to accommodate them, which is why under inflation creditors suffer and debtors prosper. (Not in the USA)

Consequently, periods of inflation produce a type of politics where creditor interests come to the fore and the state is forced to retreat. The 1920s were one such period and the 1970s another—which is when Europe, and the euro, began to take their current form.

Deflation is different. Rather than creditors losing and debtors benefitting, in a deflation almost everyone loses, regardless of asset class.

Consider the choice of whether to work. A worker who decides to take a pay cut to price herself into a job is individually rational. But collectively, if all workers try this, the result is a collapse in consumption. (If the price of commodities drop commensurate to the pay cut, there is no problem. Common people will refrain from taking vacations abroad and patronize their own sceneries).

Employers get cheaper labor, to be sure, but also less demand for their products. Their logical individual responses are to cut prices to spur sales—but once again, the aggregate effect of such responses is to lower prices further. This increases real wages at a time when the economy is shrinking, which leads to more layoffs (Cannot comprehend this logic).

In such a world, with practically everyone losing, calls ring out for state intervention to stop the bleeding, and eventually, they are heard. It happened in the 1930s, and it is happening once again today.

This is what Tsipras and Syriza represent: the moment Europe drifted from ever-deeper and ever-wider open capital markets and institutionalized neoliberalism to a system in which the state comes back to reassert sovereignty over markets. (What if investors are reluctant to buy State properties as in Greece, on the assumption that the State will eventually lower its asking price?)

At that point, either democracy trumps markets, which need not be a progressive move, as Syriza’s immediate choice of coalition partners demonstrates, or markets undermine democracy to protect their asset values.

Which course European countries choose will be determined in the next few years, but a glance around the continent suggests that such a choice is indeed coming.

Greece may have crossed the Rubicon first, but due to its size in the European economy, Spain may be the game changer.

In Spain, Podemos is likely to form a winning left-wing coalition after that country’s general elections this fall, especially after the demonstration effect of Syriza.

In Ireland, Sinn Fein is cut from the same anti-austerity cloth and has risen substantially in the polls.

Although such parties are often called extreme, it is important to stress that their support bases, regardless of their leader’s dodgy connections, are democratic political forces whose core claims—­an end to self-defeating austerity and impoverishing wage policies—echo mainstream social democracy and the recommendations of many prominent economists on both sides of the Atlantic.

With regard to debt relief, these parties are merely restating the standard economic case that their countries’ debt overhangs are too big for investment to be resuscitated to levels that would permit high growth.  (The time of big countries waging wars against defaulting countries as during the colonial period is a tenuous alternative. Actually, big countries foment civil wars to buy very cheap State properties in exchange of the default debt)

Maturities can be extended indefinitely, but unless growth is restored, the game is over, and not just for Greece.

For those who fear Syriza and its left-wing counterparts, it is worth looking at the alternatives on the radical right.

From Britain to Hungary, political parties—whose ideology spans the spectrum from the explicitly Nazi (the Golden Dawn in Greece) to the nationalist–populist (the United Kingdom Independence Party and the French National Front)—are busy working to channel public anger in a different direction.

Harkening back to Europe’s darkest days, they translate negotiable conflicts over economic policy into non-negotiable conflicts over ethnic identity. They attack European integration even more than the left-wing parties, question the democratic rights of existing citizens, and fan the flames of xenophobia toward ethnic minorities and immigrants.

If Europe’s ruling elites want to save the European project, and the Euro at the heart of it, they need to start actively engaging with democratic left-wing parties such as Syriza and Podemos rather than shunning them.

If they don’t, they will drive some of these parties into volatile left–right alliances, or, if they fail in their mandates, leave the stage open to political forces whose goals will be far more radical than mere debt restructuring and opposition to austerity.

What is at stake now is not simply Syriza’s next moves or even a possible “Grexit.” These are symptoms, not causes.

The problem is that European authorities, driven by Germany, are enforcing a politics of deflation under a pseudo-gold standard, expecting citizens to vote indefinitely for their own impoverishment in order to save the asset values of creditors.

In such a world, both radical left- and right-wing forces can only stand to gain ground across many supposedly stable countries, and quicker than we think. To avoid that fate, the continent’s powerbrokers should make some sort of deal with Syriza now—because what may follow it may be far worse.

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You won the election by a landslide: What’s the next step for winning power?

Posted by: on: January 28, 2015

 

 

 

Winning an Election Does Not Mean Winning Power

Podemos leader Pablo Iglesias on Syriza and the struggle for a better Europe.

by

Alexis Tsipras and Pablo Iglesias at a Syriza rally this month. Yannis Behrakis / Reuters

Alexis Tsipras and Pablo Iglesias at a Syriza rally this month. Yannis Behrakis / Reuters

Syriza’s expected victory in tomorrow’s Greek elections is part of a crescendo of anti-austerity movements across Europe. Throughout the upsurge, many formations have connected with one another, secure in the knowledge that they’re fighting the same enemy.

Though the approaches of the two parties differ, Syriza’s Alexis Tsipras has developed a particularly close relationship with his counterpart in Spain, Podemos leader Pablo Iglesias, appearing at demonstrations together and conferring in private.

The following, translated by Dan DiMaggio and edited for clarity, is a speech Iglesias delivered at a Syriza event in October.

Good evening. Change is in the air in Greece. Change is in the air in Southern Europe. Brothers and sisters, it’s an honor to speak in front of you today.

It’s an honor to be in Athens just a few months before this country will finally have a popular government headed by Alexis Tsipras. This government will be the first in a series of governments which are destined to recover the sovereignty and dignity of the people of Southern Europe.

Brothers and sisters, we are called upon to reconstruct democracy — European democracy — against the totalitarianism of the market.

Some will want to call us euroskeptics. To all those hypocrites, I want to remind them today, from Greece, from a country that was a model of anti-Nazi resistance, that the best of the European democratic tradition is antifascism.

And that our program to recover our social benefits and our sovereignty is inspired by the example of our grandparents who confronted this horror and fought for a democratic Europe that could only be based on social justice and liberty.

Many things unite the Greek and Spanish people to lead a new European project. But today I want to highlight the historic example of our populations in the antifascist resistance and the struggle for liberty and democracy.

They’ve wanted to look down on us as “Mediterraneans.”

They’ve called us “PIGS.” They’ve wanted to turn us into a periphery.

They want us to be countries of cheap labor forces.

They want our young people to be the servants of rich tourists.

Today we say that we are proud to be from the South, and that from the South we are going to return to Europe and to all its peoples the dignity that they deserve.

But I don’t want my speech today to be a compendium of sterile encouragement. We are among comrades, and it’s time now to accept responsibility for the difficulty of the tasks confronting us.

I just got back from Latin America.

There I was able to meet with Evo Morales, with Rafael Correa, and with Pepe Mujica. I am sure that many of you were excited when you saw State of Siege by Costas Gavras and learned about the Tupamaros. Today, an ex-guerrilla, a Tupamaro, is president of Uruguay.

I also met with many government ministers and political leaders. Among them was the son of Miguel Enriquez, leader of the MIR, who died in combat in 1974 in Chile. It was moving to remember the Chilean experience — the experience of democratic socialism to which we also aspire.

But upon seeing the son of Enriquez, I remembered what Salvador Allende said to the young members of the MIR: “We haven’t chosen the terrain. We have inherited it.

We have the government, but we don’t have power.” That bitter clarity of Allende is something I also found among our brother-presidents in Latin America.

What we have ahead of us is not going to be an easy road. We first have to win the elections — and only afterwards will the real difficulties begin.

The polls say that in Greece Syriza will win the next election. In Spain the polls say that we have already passed the Socialist Party, that we are competing to become the second strongest electoral force in the country, and that every day we are seen more and more as the real opposition force.

We already have more than 130,000 members, and we will leave our constituent assembly next month with our organizational muscle ready. It will be hard, but it’s entirely possible that Podemos in Spain, like Syriza in Greece and Sinn Fein in Ireland, will lead a political change. But it is essential that we understand that winning an election does not mean winning power.

To speak of fiscal reform, an audit of the national debt, of collective control over the strategic sectors of the economy, of defense and improvement of public services, of the recovery of sovereign powers and our industrial fabric, of employment policies through investment, of favoring consumption, and of ensuring that public financial entities protect small and medium enterprises and families is what any social democrat in Western Europe would have talked about thirty or 40 years ago.

But today, a program like this means a threat to the global financial powers. There is a worldwide party that is much stronger than the Third International was. It’s the party of Wall Street, which has functionaries everywhere. These functionaries have many ID cards.

Some have cards from New Democracy, others from Pasok, others from Merkel’s CDU, others from the Socialist Party in Spain or France. Juncker, Merkel, Rajoy, Samaras, Hollande, and Renzi are all members of the same party — the party of Wall Street. They are the Finance International.

This is why, no matter how modest our objectives are, no matter how wide the consensus in our societies regarding them is, we must not lose sight that we are confronting a minority with a lot of power, with very few scruples, and fearful of the electoral results when their parties don’t win. Don’t forget that the powerful almost never accept the results of elections when they don’t like them.

Brothers and sisters, we have a historic task of enormous dimensions ahead of us. What we have to do goes far beyond getting electoral support. We are called upon to defend democracy and sovereignty, but what’s more, we have to defend them on a terrain, like Allende said, that we ourselves have not chosen.

That’s why we have to deal with sectarians strictly. Revolutionaries are not defined by the t-shirts that they wear. They are not defined by converting theoretical tools into a religion. The duty of a revolutionary is not to take pictures of themselves with a hammer and sickle — the duty of a revolutionary is to win.

That’s why our duty is to get closer to civil society. We need the best with us. We need the best economists, the best scientists, the best public sector workers, in order to manage the administration and carry out viable and effective public policies.

Patriotism is not threatening someone, or believing you are better because you have another skin color, or because you speak a language, or because you were born where your mother’s water broke.

The true patriots know that to be proud of your country is to see that all the children — no matter where they come from — go to schools clean, clothed, well-fed, and with shoes on their feet. To love your country is to defend that your grandparents have a pension and that if they get sick that they are attended to in the best public hospitals.

We also need to strengthen our ties with workers in the public finance office, and all other public offices. Some believe that it’s the leaders who make the hospitals, schools, media, and transportation work. They are not the ones who make sure that public facilities are clean, so that they can be used — it’s a lie.

It’s workers who take countries forward. And I know that many who work in public administration wish that people like us were governing, so that they could do their jobs, and that they are sick of corrupt and useless leaders, like we have had up until now.

We must finally work together — in Europe and for Europe. It’s not necessary to read Karl Marx to know that there are no definitive solutions within the framework of the nation-state. For that reason we must help each other and make ourselves be seen as an alternative for all of Europe.

Winning elections is far from winning power. That’s why we must bring together everyone who is committed to change and decency, which is nothing more than turning the Universal Declaration of Human Rights into a manual for government.

Our aim today, unfortunately, is not the withering away of the state, or the disappearance of prisons, or that Earth become a paradise.

But we do aim, as I said, to make it so that all children go to public schools clean and well-fed; that all the elderly receive a pension and be taken care of in the best hospitals; that any young person — independently of who their parents are — be able to go to college; that nobody have their heat turned off in the winter because they can’t pay their bill; that no bank be allowed to leave a family in the street without alternative housing; that everyone be able to work in decent conditions without having to accept shameful wages or conditions; that the production of information in newspapers and on television not be a privilege of multi-millionaires; that a country not have to kneel down before foreign speculators.

In one word: that a society be able to provide the basic material conditions that make happiness and dignity possible.

These modest objectives that today seem so radical simply represent democracy. Tomorrow is ours, brothers and sisters.

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