Syriza’s Only Choice: A Radical Step Forward

Published on The Bullet, Socialist Project’s E-Bulletin No. 1089, by Spyros Lapatsioras, John Milios and Dimitris P. Sotiropoulos, March 11, 2015.

1. Introduction

The transitional “bridge Agreement” of the 20th of February is a truce intended by the Greek government and welcomed by the other side (the European “institutions”). Within the truce period (the next four months), the conditions for negotiating the next agreement will be shaped. This could mean that everything is still open. However, that is not true for two reasons. First, the very transitional agreement changes the balance of power. Second, the “hostilities” will continue in the course of the next four months (i.e. the review of the commitments and the re-interpretation of the terms by each party).

2. The Agreement of February 20: A First Step on Slippery Ground

2.1 Negotiation targets:

In the first substantive phase of negotiations at the Eurogroup of the 12th February, the Greek government sought an agreement on a new “bridge program” stating that it would be impossible to extend the existing program on the grounds that it has been rejected by the Greek people:

  • The “bridge program” would not involve conditions, reviews and so on, but should be an official manifestation of the willingness of all parties to negotiate without pressure and blackmail and without any unilateral action.
  • In the above context, Greece would forgo the remaining installments of the previous program, with the exception of the return of the €1.9-billion that the ECB and the rest of Eurozone’s national central banks gained from the holding of Greek bonds (programs SMP and ANFA). Greek authorities could issue treasury bills beyond the limit of €15-billion to cover any liquidity emergencies.
  • At the end of this transitional period: (a) Greece would submit its final proposals, which according to the program of the government would include a new fiscal framework for the next 3-4 years and a new national plan for reforms; (b) the issue of a sovereign debt restructuring-reduction would come to the negotiating table.

The German government and the “institutions” (EU, ECB, IMF) came to the negotiations with the position that Greece had to request a six-month “technical extension” of the existing program – renamed as the “existing arrangement” – to enable its successful completion.

2.2 The outcome of the negotiation: … //

… 3. Is There Still Room to Challenge Neoliberalism? … //

3.2 How did we get there: On the tactics and strategy of the negotiation:

The main question about the importance of the agreement of the 20th of February is what room it leaves to the government to implement its program. To answer this question we need first to analyze the “difficulties” that led the government to the compromise of the 20th of February.

The agreement was apparently determined by external factors – the given and known neoliberal context of the “institutions” – and internal factors, which played finally the most important role.

It was only of secondary importance the weak preparation of the government, along with the contradictory tactics of the Ministry of Finance:

  • The absence of any reliable plan based on numbers and analysis. The superficial level is obvious in the technical Annex of the “non-paper” prepared by the Greek government for the Eurogroup meeting of February 16. More importantly, in the same Annex the crucial assumption is made that debt sustainability can be associated with long-term primary surpluses. This argument is an important strategic retreat.
  • The release of some general principles of the proposal for debt reduction from London. This was a tactical mistake: Without any prior meeting with the ECB, a proposal is announced from a non Eurozone country that involves a swap of bonds held by the ECB. This proposal requires a change in the ECB rules and invokes, without any second thought, a negative response by the ECB. The negative response by the ECB is related not only to its policy and the existing delicate balance on the board, but also to the criticisms it received for rules violation after the recent decision to embark on quantitative easing. It is also obvious that the ECB does not need to be directly involved in such an agreement. The same result could be reached by alternative ways that are not incompatible with current political balances. The other part of the proposal concerning the loans of the EFSF linked to growth rates is too abstract and vague and definitely concerns the next round of the negotiations.
  • It seemed that the government gave too much emphasis to communications management of the negotiation as opposed to other important aspects of it. This was a negative signal, both domestically and abroad. For instance, the incident with [Eurozone finance chief Jeroen] Dijsselbloem apparently stimulated “national sentiment,” but also took away considerable bargaining power: the Greek government spent the whole weekend calming down the markets before Monday’s critical opening. This fact widely signaled that the Greek government might not not have any stable negotiation strategy.

We can easily see that this weakly planned negotiation by the Greek side, despite the time spent by the protagonists, was practically a blind jump. Several mishandlings and shifts showed the partners that the Greek side is susceptible to manipulation.

Nevertheless, what finally determined the outcome of the negotiation was neither the tactical moves nor the “external” front, but the front within the Greek society. What determined the retreat of the Greek side was the strategic decision to represent on the political level the social strata which perceive as unthinkable any disruption of market stability – even though everyone was aware of the actual historical stake of the confrontation. The much discussed scenario of a bank-run should be defined and examined (despite the technical mechanisms available to prevent it) always within the context of the social relations of power. At the same time, it is a fatal mistake to adopt the argument that a Grexit necessarily follows from a supposed “collapse” of banks. This is a zero-probability scenario, which simply was the argument used by the previous conservative Papandreou-Papademos-Samaras governments to present memoranda as the only choice to the Greek society. This argument always remains a “weapon” of extreme neoliberals like Schäuble.[5]

3.3 The challenge: Nothing can change or another world is possible? … //

… (full text and endnotes).

  • (Spyros Lapatsioras is Assistant Professor of Political Economy, University of Crete, Member of the Central Committee of Syriza.
  • John Milios is Professor of Political Economy, National Technical University of Athens, Member of the Central Committee of Syriza.
  • Dimitris P. Sotiropoulos is Senior Lecturer at the Open University Business School in the UK and member of Syriza.)

Again my [yesterday's] comment: all this debt arrangements are nice, but the only way to overcome this mess and re-start a real development for all – including the lost ones, the real underdogs, nobodies, refugees, analphabets, all not-integrated and homeless people … is to make a CONSCIOUSLY LEAD CRASH (worldwide) and restart with a total, absolute quittance for every one … and never more pay back to banks any virtual money and its taxes, but putting the money into a big pot, used for the community … and, if still money has to circulate, there must be a minimal income guaranty for every one, together with price regulation … oh yes, capitalist freedom has to be over … and courageously we all decide give our genie to invent, create, achieve a real exchange society … oh, I’m so sorry for the rich ones … but you can sleep some more nights, this humanity (means our rainmakers and their puppets) will not be able to make this step, therefore WE MAY HAVE NEXT A NOT CONTROLLED CRASH – Heidi.
See also once again my evergreen statement, on this blog, by Heidi, March 12).

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… and this – Barbara Streisand:

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