Yesterday, Greece said no (or oxi) to austerity. 61.3% of the vote rejected the repayment terms put forward by its creditors – the Troika, the European Central Bank (ECB) & the International Monetary Fund (IMF). Greece is now in default to the IMF.
Many commentators have noted the significance of this. It isn’t hard to miss. Austerity has, ostensibly, been rejected in Europe.
However, I use the word ostensibly politically. Whilst working-class voters certainly rejected austerity – whilst working-class voters in Greece rejected European Imperialism’s contravention of the country’s sovereignty – Syriza stands upon less certain ground.
Prior to the vote, Syriza prevaricated. On 26 June, Yanis Varoufakis (the, now former, economic minister) unsuccessfully sought an extension on the IMF loan due last week. He asked for a mere week. Greek Prime Minister Alex Tsipras stated that he was willing to concede to the Troika’s demands on pension cuts & VAT rises, if they were spread out over 2 years. Merkel dismissed this &, in the process, prevented the potential capitulation offered by Syriza.
To me, only Snapchat has succeeded in capturing the magnitude of what occurred in Athens last night. Video after video showed Oxi campaigners celebrating. Snapchat succeeded where other media sources failed because it was able to capture the forces on the ground in Greece. The loan terms were rejected, not by Syriza, but by the working-class in Greece. Syriza will only remain at the head of this movement if it does not capitulate. A line has been drawn in the sand.
However, if Syriza fails in this task, the result would be devastating. The strategy of the European ruling-class has been that of economic coup d’etat, mixed with media assault. The closure of banks in Greece exemplifies this point: it serves as attempt to distance Syriza from its electoral & political base. The defeat of Syriza in this fashion could set the movement back years.
- Greece accounts for 2% of the European economy.
- Greece has defaulted on an IMF loan repayment worth €1.6bn. This is the 1st time in history that an advanced Capitalist country has defaulted on such a loan.
- Greece owes a repayment of €3.5bn on 20 July, to the ECB.
- 26% of Greece’s workforce is unemployed.
- 30% of the population live below the poverty line.
- 17% of the population cannot afford their daily food needs.
- 3.1m people in Greece do not have health insurance.
- Greece has a youth unemployment rate of over 60%.
- 11,000 people have committed suicide in Greece since 2008.
- 40% of Greek children live below the poverty line.
- The original loan agreement to Greece (2010) amounted to €240bn. 90% of this has gone to banks, to repay other loans.
- Since the Oxi result, the Euro fell in value to $1.0970. Varoufakis’ resignation saw a rise, to $1.1095. There was a further fall of 0.7% as Wall Street entered proceedings.
- The FTSE Eurofirst 300 fell by 0.7% as a result of the vote.
- British banks have a total of $3.2bn exposure to Greece, according to the Bank of England.
- HSBC is the only British bank with ‘material exposure’ in Greece. Last year, this amounted to $6bn. This had been reduced to $3.5bn by the end of March.
Understanding the Political Crisis in Greece
It is of a fundamental importance to recognise the significance of the Crisis in Greece. Lenin is of absolute significance in this regard.
Lenin: ‘The revolution is impossible without a complete national crisis (affecting both exploited and exploiters).’
Lukács: ‘If the proletariat wants to win this struggle, it must encourage and support every tendency which contributes to the break-up of bourgeois society, and do its utmost to enlist every upsurge – no matter how instinctive of confused – into the revolutionary process as a whole.‘
The Oxi vote represents the depth of the economic & political crisis in Greece. The situation is the epitome of a revolutionary maxim: the “lower-classes” do not want the old way (however embryonic) & the “ruling-classes” cannot carry on in the old way. The Grecian political crisis is developing into a potentially revolutionary situation.
Today, outside of the ECB, workers are taking down a statue. It represents the single currency, the Euro. The European bourgeoisie are intending to force Greece out of the EU.
The working-class of Greece have struck a devastating blow against the European bourgeoisie:
- They demonstrate that resistance to austerity is possible;
- They demonstrate that this resistance requires militancy & mass movement;
- They are kicking the European bourgeoisie out of Greece.
The ramifications of the Grecian crisis – or “Grexit”, to use a stupid phrase – remain to be seen. All that is certain is that Greece has entered a new phase in the struggle.
The spectre of Communism again hangs over Europe.
- Assorted Financial Times articles.
- Michael MacGregor, ‘Greece: fighting an economic coup d’etat‘, Fight Racism! Fight Imperialism! website: 3 July, 2015.
- Georg Lukács, Lenin: a Study on the Unity of His Thought.