Facebook Instagram Twitter YouTube

Greece in default, Tsipras’ red lines and the significance of the referendum

Greece has been declared to be “in arrears” after missing a deadline for a €1.5 billion payment to the IMF. As a result, worldwide markets trembled for the last few days. Banks throughout Greece are closed to prevent capital outflow and the people are on the streets. The SYRIZA government has called for a national referendum to vote on the Troika’s draconian proposal, urging the public to vote NO in order to return to the negotiating table.

Juan Cruz Ferre

July 2, 2015
Facebook Twitter Share

Greece’s failure to make the €1.5 billion ($1.7 billion) payment on Tuesday evening was the largest-ever default on IMF loans, occurring after months of negotiations between the Troika and the Greek government. Several analysts say, however, that this missed payment is not as crucial as the upcoming one with the European Central Bank (ECB), due on July 20. Even the IMF avoided the use of the term “default,” in favor of gentler “in arrears.”

Although EU and IMF officials have downplayed repercussions to the global economy, stock markets have responded negatively across the globe. London, New York, Shanghai, Frankfurt and many other cities saw their values sink roughly 2-3 per cent, on average. The uncertainty of the global economy –recovering at a jolting rhythm since the 2008 crisis – is indeed worrisome.
On the other hand, banks in Greece have remained closed all week and deposits are being held to prevent a catastrophic capital outflow and increasing lack of liquidity. Pro- and anti- EU demonstrations have completed the politically unstable scenario.

In this setting, Greek PM Alexis Tsipras announced on Sunday that there would be a referendum on July 5 to decide whether to accept Troika´s last proposal. Despite the crossfire, the two sides are willing to continue negotiations, with Tsipras explicitly stating that the government seeks a NO ballot majority in order to bargain with the Troika on better terms. The ECB top officials, as well as the IMF and the main European leaders are doubling down. They refuse to strike a deal before Sunday’s referendum, while they are calling the Greek people to vote YES and putting an equal sign between the “NO” vote in the referendum and a “NO” to the EU in general.

Both Troika leadership and SYRIZA government know that a simple referendum on whether to quit the European Union would almost surely result in a “no” vote. Previous polls have shown that the Greek majority is afraid of the immediate, distressing consequences of exiting the Eurozone. What is becoming more and more evident is that there is no EU without austerity.

What is staggering, then, is Greek authorities’ stubborn insistence on continued negotiations – but let’s be clear; far from a principled position, what brings Alexis Tsipras and his crew back to the table is pure pragmatism. No matter the degree of humiliation and submission demanded by the “institutions,” SYRIZA yields time after time with hopes of a bailout. At the time of the first agreement, reached on February 24, the Greek government entered the game of trading miserable cutbacks, bearing a primary budget surplus, to pay back the debt. Shaeuble’s words after the first agreement are telling: “The Greeks will certainly have a difficult time explaining the deal to their voters.”

This path has only been reaffirmed and intensified ever since. More concessions have been made, more “red lines” crossed, and the situation in Greece has gradually gotten worse. In blatant capitulation, Tsipras has not only abandoned the Thessaloniki Program, but has retreated entirely, leaving no trace of his “red lines.” Tuesday night, he displayed a new level of disregard for the people’s will: while calling for the referendum, he sent a letter to the Troika saying he would accept the last proposal –backpedaling from a plain rejection on Sunday– with a few minor changes.

At the same time, the imperialist impositions by Germany and the EU have gone so far as to instruct the Greek people on the upcoming referendum. This is unacceptable. After forcing the Greek government to get on their knees and beg for a bailout at any cost, the uncompromising refusal of the Troika can only be understood as an attempt to destabilize the government through economic shock and the ensuing political turmoil.

The meaning of the referendum now

A ‘NO’ victory will be useful as a blow against the EU institutions and an encouragement to the people, the workers and the youth in Greece to oppose the dictums of the imperialist EU. It certainly should not be taken — and many international left tendencies make this mistake when framing support for the “no” vote — as a vote of support for the SYRIZA government, and in extension, its willingness to grovel for bailouts in return for more unemployment, poverty and hunger. The last proposal SYRIZA offered (and the Troika rejected) already included concessions that the Greek people could not afford, such as pension cuts, privatizations and strict budget constraints. Leaked documents from EU Institutions show that not even with this stringent measures, and assuming an annual steady growth of 4% (huge assumption), will Greece be able to have a ‘sustainable’ debt by 2020.

Instead of showing moderation and accommodating the Troika, how powerful would it be if the Greek actually broke ties and begin a path of sovereignty and liberation from foreign and national exploiters?

What kinds of repercussions would be seen in the chastised Spain if the Greek people decides to expropriate all banks? How would the people in Puerto Rico respond to the news of an outright rejection of the Greek debt, on the grounds of its illegitimacy? Greece today is the scenario of a live play that is being watched worldwide. There is immense potential to ignite popular unrest around the world. But a government led by lukewarm social democrats, inherently unable to break with capitalism, is unlikely to play this role. The masses in Greece, whose mobilization power has been repeatedly demonstrated, are the ones able to take this program into their hands. It is paramount that left political parties do not raise hopes in SYRIZA and instead advocate for a transitional program to socialism now.

Facebook Twitter Share

Europe

Berlin’s Mayor Loves Antisemites

Kai Wegner denounces the “antisemitism” of left-wing Jews — while he embraces the most high-profile antisemitic conspiracy theorist in the world.

Nathaniel Flakin

March 22, 2024

A Left-Wing Bar Needs to Be Open to Everyone, Including Palestinians

Syndikat, an anarchist bar in Berlin's Neukölln district, has said that Palestinian groups aren't welcome. As leftists who meet up at Syndikat, we think the bar should work like any other left-wing space internationally.

Nathaniel Flakin

March 20, 2024

At a Meeting in Paris, 1,200 People Put Revolution Back on the Agenda

Last Wednesday, 1,200 people attended a meeting of Révolution Permanente, the sister site of Left Voice in France. The group has been playing an important role in the fight against neoliberal reforms and the Far Right, while showing that a world beyond capitalism is more possible than ever.

Feargal McGovern

March 12, 2024

Berlinale: Filmmakers Say What the Rest of the World is Saying

At the Berlinale film festival, Israeli and Palestinian filmmakers called for equality and peace. German politicians want to ban such hateful talk.

Nathaniel Flakin

February 28, 2024

MOST RECENT

A square in Argentina is full of protesters holding red banners

48 Years After the Military Coup, Tens of Thousands in Argentina Take to the Streets Against Denialism and the Far Right

Tens of thousands of people took to the streets across Argentina on March 24 to demand justice for the victims of the state and the military dictatorship of 1976. This year, the annual march had renewed significance, defying the far-right government’s denialism and attacks against the working class and poor.

Madeleine Freeman

March 25, 2024

The Convulsive Interregnum of the International Situation

The capitalist world is in a "permacrisis" — a prolonged period of instability which may lead to catastrophic events. The ongoing struggles for hegemony could lead to open military conflicts.

Claudia Cinatti

March 22, 2024

What “The Daily” Gets Right and Wrong about Oregon’s Move to Recriminalize Drugs

A doctor at an overdose-prevention center responds to The Daily, a podcast produced by the New York Times, on the recriminalization of drugs in Oregon. What are the true causes of the addiction crisis, and how can we solve it?

Mike Pappas

March 22, 2024

Lord Balfour Was an Imperialist Warmonger 

We should give our full solidarity to the Palestine Action comrade who defaced a portrait of Arthur Balfour at Cambridge University. But the problem for everyone who opposes the genocide against Gaza is how to massify and politically equip the movement.

Daniel Nath

March 21, 2024