The Crisis of Greek Capitalism

Last October, the leader of PASOK (Pan-Hellenic Socialist Movement) George Papandreou, and recently elected prime minister announced that Greece’s public finances were much worse than he expected.

Six months later he announced that in order to balance the budget it was necessary to embrace an austerity programme drawn up in collaboration with the IMF and the EU. Yet as recently as March this year the IMF chief, Strauss Kahn declared Greece didn’t require a bailout. Yet now we have lived through the biggest EU “bailout” in history; how did it come to this?

Thirty years membership of the European Union has brought Greece to the verge of economic collapse. A predominantly agricultural producer it never industrialised to the extent of the northern countries of the EU as during the 19th century Greece itself was a colony of the Ottoman Empire and after ‘liberation’ after 1918 was under the joint supervision of France, Britain and Russia.

After the second world war the EU was sold to the Greek people as a way of the country being developed. Instead the exact opposite has occurred, irrespective of the fact that certain infrastructure projects have occurred during this period – including airports, roads and telecommunications.

Having medium-sized heavy industries predominantly in shipping repairs, bus manufacturing and solar panels it has lost almost all its manufacturing in a de-industrialisation frenzy that would make Thatcher proud. Globalisation has brought it to its knees as almost all the shipping crews of one of the world’s largest shipping fleets replaced their crews in the 1970s with lower paid labour from third world countries like the Philippines.

Agriculture and the EU were sold to the Greek people as the path along which Greek producers would increase their exports; but instead via the domination of the supply chain by multinational supermarkets, non-EU imports have increased exponentially to the detriment of Greek produce.

The crippling forest fires and the destruction of olive trees, as well as the heat waves of the last few years, have meant agriculture is on the verge of meltdown. For the last 20 years the sector is staffed by workers who live in huts with the animals and are paid third-world subsistence wages. Agriculture now constitutes a very small percentage of GDP around 8%, unlike the 1970s when it was around 28%.

The mass building boom in holiday flats led to huge oversupply; thousands of properties remain unsold and building activity has dropped by 45% since the credit crunch. Historically the building workers in the 1960s and 1970s were the wage setters for the whole of the labour movement but their union organisation was broken in the early 1990s and the workforce was replaced on the whole by cheap immigrant labour, initially from neighbouring countries.

Average wages are about €50 a day for more than eight-hours work. Insurance cover is non-existent and health and safety measures rarely count. The 2004 Olympics “boom” led to many building workers’ deaths and hundreds of millions spent on infrastructure which for the most part is now rotting or has been handed over to shipowners for free.

Health and education sectors have not fared much better. Whilst an “NHS” was created in the 1980s successive cost reductions over the last decade (due to syphonining money off to pay for the Olympics and arms budgets) many Greek islands no longer have national hospital facilities and people die on the way or while waiting for helicopters to take them off. Doctors only function with a “bribe” – a way of aiding their exceptionally low average government salaries.

Educational provision has expanded with many universities having been built (16 in total) but without basic infrastructure linked to them. Universities in name they exist to mask the dreadful youth unemployment figures which hover around the 20-40% mark. Unable to get decent jobs many are forced to live with their parents throughout their 20s and 30s.

Most of the secondary schools in the Athens regions continue to have two shifts as there is not enough class room space to handle the volume of pupils. Pupils spend most of their time either at school or in night classes which they have to pay for to cover the course work they were supposed to have done in the day; it is the only way of having a realistic chance of passing the exams.

Insofar as job opportunities and conditions were constantly deteriorating in the private sector, people sought refuge in the public sector. That kept the working poor afloat, since if one person in a family had someone working for the government then the family could survive. But in the last few years the privatisation of OTE-Telecommunications, Olympic Airways, together with the subcontracting of many public sector posts in the railways, post-offices, water company etc, many Greeks were offered part-time posts on different rates of pay to the full-timers as well as some doing fulltime work on part-time rates.

Role of the Left

The Greek TUC (GSEE) and the ADEDY (public sector workers’ union) have traditionally been PASOK fiefdoms with the leaders appointed by PASOK. Often, after being a leader of GSEE or ADEDY then one “graduates” to becomes a PASOK MP.

The other union federation is PAME – belonging to the Stalinist KKE party. It split from GSEE a few years ago, claiming it is building class struggle union. In the last six months they say they have got the majority of 85 union federations on their side and the demonstration on 15 May – where about 200,000 took part – certainly backed this up. Both Federations have called a series of 24-hour strikes, sometimes extending for as long as 48-hours.

The austerity packages

The measures announced have included basic across-the-board pay cuts of about 10% and pension entitlement reductions. These have been pushed through at the same time as petrol prices have soared 100% in a few months, prices of basic foodstuffs have risen by anything between 10-20% and unemployment is skyrocketing as many small businesses are going out of businesses.

Basic pensions for those who have contributed to them are about €500-700 euros a month; those who haven’t paid in contributions receive about €300euros but without a contribution to their housing costs. Unemployment pay only exists for those who have contributed at least a year and then it only lasts for six months, so many bosses hire people then sack them, as they know they will get money from the state and the bosses a subsidy if they take on people sent from the dole office. So long term work has become a thing of the past or only for those who still have state jobs.

The fightback

Once the measures were announced a very large demo – on a scale not seen since the pension battle of 2001 – of around 250,000 people congregated outside parliament in Athens. It was to be a typical demo of the unions whereby the GSEE members would meet in one square (Sintagma) and march to another (Omonia) while the PAME-KKE contingents would do exactly the reverse.

The General Strike of 5-6 May, however, didn’t take the normal course of events of marching from a to b, listening to the standard rhetorical speeches promising militancy in the future, but not here and now. The police didn’t expect the KKE-PAME ranks to become uncontrollable as they have strong stewards, but the ranks of working class people who happened to be on the demo far outnumbered the organised columns of the KKE-PAME.

People showed a determination and a willingness to encircle parliament even to break through inside and not allow the politicians to leave. Individual workers shouted very militant slogans about “hanging traitors and burning down parliament”. Some workers confronted the police individually with a determination not seen for many years.

Whilst these developments were occurring something else was happening in another part of town. A bank, belonging to the businessman who bought out Olympic Airways, was allegedly burnt down by anarchists. Three bank workers were burnt to death. This event was used as an excuse by the KKE-PAME to ask people to dissolve and go home after they were tear gassed by the police on the steps of parliament.

The day after the KKE announced that those who tried to storm parliament were the Greek equivalent of the fascist BNP and “provocateurs”, language quite familiar to the KKE’s pro-establishment history from the murder of their guerrilla leader Velouhiotis during World War Two, to the student killed in the July days of the 1960’s Petrula, to the occupation of the Polytechnic on 17 November 1973 which triggered the fall of the junta.

So, despite having gained a majority in the unions and having impressive numbers at their command, the KKE only continued the policies of GSEE – calling 24-hour token protests. Every opportunity was squandered or demobilized on the pretext of their being a provocation led by …extremists.

Parliament passes the attacks

A week later the austerity measures were voted for by the Greek parliament During the evening the KKE deliberately marched from Sintagma square (where parliament is) to Omonia and the GSEE marched the other way with the ex-eurostalinists and other leftists behind them (SIRIZA (Eurostalinists) and NAR, EEK, SWP gathered under the organisational framework of Antarsya).

Whilst this time 30,000 refused to leave parliament and wanted to block the MPs’ exit the left put down their banners and asked via their loudhailers for the people to go home – thus adopting the policies of the KKE which they are allegedly against. The hundreds of thousands willing to fight that day found no leadership worthy of the name, just endless speeches about how the measures will be beaten in the future.

Despite having been offered loans at 1% by both the Russia and China, Papandreou is dead set on implementing the wishes and desires of the hedge funds. No doubt when his job here is done he will relocate to Switzerland or New York to work for them. The hope is that his exit from government will be provoked by some spark that will truly light a fire and he will suffer the same fate as some Latin American politicians who in the space of hours ended up in private jets trying to get out of their country after a mass rebellion.

For Greece to survive even in the short term, it has to abandon the Euro, try to control imports in particular agricultural ones, cancel all the foreign debts and embark on a programme of nationalisation without compensation of the major industries and banks. It should stop paying €7bn annually to European arms’ manufacturers and demand restitution for all damage inflicted on the economy from WW2. Without a militant fighting programme that doesn’t limit itself to 24 and 48-hour token protests there will be no hope within the EU.

The first signs of this starting are two events. PASOK politicians have been reported to have been abused in public and women have started a protest in Thessalonika banging their cooking pots demanding food Argentinian style. Let us work for a movement such as rocked that country in 2001-2002.