A Pyrrhic Victory

Two-thirds of the Greek Parliament last night voted for yet more austerity to be inflicted on the Greek people. Markets have risen on the news. As in the past, they are likely to fall again, sharply, when they consider exactly what the vote has achieved.

In reality, the vote was meaningless. Outside, as the Parliamentarians carried through an act of fantasy, the real world of Greece was burning. As has been the case in almost every country in Europe, where austerity has been imposed, the consequence has been to send the economy into a sharp downward spiral, which, in turn, exacerbates the problem of debt. There is not a single economist, in the world, who, currently, believes that Greece can repay its debts, and the current round of new austerity will only make that worse. In the real world, Greece has already defaulted on its debts. Greek Bondholders, many of them Greek Banks, are set to lose 70% of their investment.

Source: Wikipedia

Even if the Greek Parliamentarians could implement the policies they have now voted through, the consequence could only be further economic chaos. But, the Greek Parliamentarians are living in a fantasy world. They have completely lost the support of Greek society, which simply cannot contend with any more austerity. If the European Finance Ministers vote to give Greece the new bail-out money, based on this vote, then it means that either they are equally deluded, or else it means that they always intended to pay it in the end, after a piece of political pantomime. But, that is what we have been treated to by EU politicians for the last two years. It has been Greek theatre, alternating between tragedy and farce.

They would be deluding themselves for another reason. The latest opinion polls, show that the Governing parties have lost the support of the people, PASOK to a far greater extent than New Democracy. The polls show that the Greek Stalinists, together with the Greek Trotskyists, and others to the left of PASOK could become the largest group in Parliament. A couple of days ago, on Newsnight, Paul Mason estimated that the parties of the Left could have around 44% of seats in Parliament.

In that case, last night's vote is even more meaningless, as support for the Left is likely to rise even more between now and elections in April. Although, there are significant differences between the Stalinists, and the parties to their Left, and on past experience, the Left should treat the Stalinists as though they were a bourgeois party, because they are likely to sell-out the workers, if they feel they may be able to do some kind of bureaucratic deal, to avoid a revolutionary development, at another level, the parties of the Left should be able to establish a minimum of agreement, on the basis of overturning the proposed austerity measures.

The Stalinists, in typical nationalist fashion, seek to take Greece out of the EU. The Trotskyists and others maintain an internationalist position. But, there is no contradiction in a position that argues for continued membership of the EU, and rejection of austerity. It is precisely the kind of position that a Workers' Government should adopt. On that basis, and arguing that, like the US, the EU could adopt a different economic policy, even within the confines of Capitalism, based upon fiscal expansion, could act as a means of rallying workers across Europe, faced with similar attacks on their wages and conditions. That is not to say that, as Marxists, we have any faith in these Keynesian measures either, which can only bring temporary relief, and under other conditions, would not work, but they do show that the right-wing politicians lie, when they claim there is no alternative. Labour's Douglas Alexander at the weekend, chimed in with the many other voices, including the IMF, the OECD, S&P, who have said that the policy of austerity is not working, and is counter-productive.

Workers should not rely on Capitalist politicians implementing such policies. We should respond ourselves immediately by creating workers organisations across Europe - Europe wide Trades Unions, Workers' Parties and Co-operatives - that oppose the austerity measures on a co-ordinated basis. Businesses threatened with closure should be occupied by their workers, and turned into Co-operatives. Co-operatives should link up their activities, to form an alternative worker owned sector to the Capitalist sector. They should all be part of a Europe wide Co-op Federation, which plans and co-ordinates their action, investment and so on. The Trades Unions should take action industrially to prevent attacks on them by private Capitalists and the State, just as the Co-ops should support all workers in struggle, by providing strike funding, goods, supplies, transport etc. in the way the Co-op in Britain did during the Transport Strikes in 1920, and the General Strike in 1926. The Workers' Party should push for legislation in the European and national Parliament's to legitimate the actions of the workers and their Co-ops in taking over the private and State Capitalist businesses. In other words, they should act as a Workers' Government in waiting.

But, if the Capitalist Governments do follow the example of the US, and all those business organisations telling them to change course, then, of course, we should welcome that. In reality, what we have currently is a fight between Big Industrial Capital, and Money Capital. The latter has been top dog for the last 30 years, and its ideology of neo-Liberalism has ruled. But, its interests are not those of the Big Industrial Capitalists, that seeks to ensure that industrial production can be sustained.

The Greek Left, as such a Left anywhere else faced with the same conditions, should call the EU Finance Ministers' bluff. If Greece refused to implement the austerity measures, everyone knows that Merkozy would blink first. Merkozy, and their advisors, as well as the voices of Money Capital whispering in their ears, know that if Greece goes into a disorderly default, it would have massive repercussions for Money Capital throughout Europe, and probably the world. If the EU threw Greece out of the Euro, for defaulting, it would mean that Portugal, and Ireland would follow shortly after. The Credit Agencies at the weekend downgraded dozens more European Banks, particularly in Italy. The Credit Crunch that followed on from Greece, Portugal and Ireland defaulting would make 2008, look like a blip. It would mean that the bubbled up asset prices of stock markets, and property markets would collapse by anything up to 90%. It would mean that the attempts to prop up Spain and Italy on a sea of money printing by the ECB, in the form of the LTRO, would be doomed, and those countries would be forced to follow the road of Greece, Portugal, and Ireland. In short, it would mean the end not just of the Euro, but of the EC. That is why, Merkozy will not let it happen.

All those in massive amounts of debt, be it peripheral Eurozone countries, or the millions of people in Britain, who have £2 trillion of private debt should remember the old addage. If you owe the Bank £1,000, and can't pay, you have a problem, if you owe the bank £1 million, and can't pay, the Bank has a problem.