Tuesday 8 May 2012

SYRIZA: Next Steps in the Formation of a Greek Government

Antonis Samaras of New Democracy was given a mandate to form a government yesterday, and after inconclusive consultations with several parties, handed it back to the President of Greece. The responsibility today goes to Alexis Tsipras of SYRIZA, raising the spectre of yet another failure to form a government, and the instability that this brings.

In this case, my opinion is that Samaras acted correctly. It is eminently clear that neither SYRIZA nor the smaller parties have an actionable programme capable of working within the constraints of Greece’s economic situation or the Troika’s conditionality. The costs of trying to keep them in a governing coalition would have created such tension that coalition failure would have been inevitable.

The responsibility now goes to SYRIZA to translate its pre-election platform into a workable governing coalition. To this end, both New Democracy and PASOK have indicated that they will given conditional support, and PASOK has apparently volunteered to enter a governing coalition. Smaller parties, such as Democratic Left and Independent Greeks, have been preening themselves to join. In the meantime, the message has also passed that “SYRIZA won the elections”, although in terms of popular vote they remain the second party.

With this in mind, I checked the SYRIZA website to see if anything had changed in its economic policy platform. It’s worth looking at some of these points to see how they stand up to reality.

A free translation follows of some points. This is necessarily selective, and no doubt I will be condemned for making a partial translation. There are several policy points which are positive: necessarily, I will focus on those which I find necessary to comment on given the limited time I have available for this post.


We commit, with the daily support and activation of the people, to cancel the Memorandums, the loan agreements, the monitoring mission from the European Union and the International Monetary Fund, and to interrupt the catastrophic course which destroys society and has pillaged the country.

They tell us that there aren’t enough resources for a political change like the one we need. This is not true. In Greece, everyone who works produces over EUR 200 billion. This is enjoyed by the few. Resources can be found with a fundamental change of the tax system, and the taxation, as needed, of large incomes and accumulated wealth, and with the reduction of expenditure which does not serve the people’s interests.

·       Change the tax system with an important increase of rates on large incomes, to 75% on incomes over EUR 500,000 per year
·       The tax rate of large companies should be increase to at least the average in the Eurozone
·       To implement a rate on financial transactions, and a special tax on long-term and offensive consumption
·       To end the special tax asylums on powerful interests, such as the shipping sector and the Church
·       To inventory the accumulated wealth, either in Greece or outside, and adequate taxation of large fortunes above EUR 1 million
·       To end banking and commercial confidentiality, so that there is transparency in transactions and to battle against tax evasion and income evasion
·       To ban all transactions by off shore companies
·       To transform and modernise the tax and auditing services of state

Additional resources can be found by the effective utilisation of every European euro, not based only on absorption, but on the multiplication effect of utility. With demanding the return of the German occupation loan and reparations for the victims of the Occupation (referring to World War II). With a review of all military expenditure and ending all expenditure which is no necessary for the defence of the country, starting with NATO expenditure.

Even today, in the heart of the crisis, at the same time as they are cutting power to poor families, they contribute to hiding income, exempting VAT income and the income of insurance funds, and they do not collect taxes of past years, while they don’t hesitate to reduce taxes (from 24% to 20%) on enterprise profits.

All health services should grant medical, dental and ophthalmological care to unemployed, homeless and low income retirees, without any cost or participation by the patient.

To increase and expand the unemployment benefit to all insured, and grant this throughout the lifetime of the unemployment. To grant a special benefit to all who have not been registered in the unemployment system.

To take immediate measures for the reduction of prices of basic goods, with a commensurate reduction or, where needed, elimination of VAT. To implement special price rates for services of common benefits and vulnerable citizen groups. To immediately eliminate the tax on small property. 

The financial system can and must become public and transform itself fundamentally into a new banking system, with a democratic and transparent administration and management with the participation and strong control of the working class. This is what we mean with the slogan “Nationalisation – Socialisation of the Banks.”

A productive restructuring without public investment and large public companies cannot be done.  Large public enterprises and organisations which have partially or totally been privatised (Public Power Company, National Telecoms Organisation, National Railway Organisation, Post Office, National Water Company, Transport means) must return to public control. Basic production units which are critical for the development of the economy, such as ports, airports, highways, shipyards, mines and energy wealth, must return to the control and responsibility of the State.

The departure of Greek military forces from missions with constitute interventions of imperialism in foreign territory, especially Afghanistan and the Balkans. For the Greek Armed Forces, the following principle must apply: No soldier outside the borders of Greece.

The condemnation of the military cooperation with Israel and the end of all planning for military attacks on Iran and Syria. The support for the creation of an independent Palestinian state on the 1967 borders.

The closure of all foreign bases in Greece. Immediate closure of the bases of Suda and Actio. We don’t want Greece in NATO, nor NATO in Greece, and we strive for its dissolution.

These are some of the main policy points of SYRIZA: there are many more which I could not repeat here due to shortage of time. SYRIZA has received 1,061,158 votes in the national election, coming in second, and gaining 52 seats of the 300 in Parliament. This is also the party now charged with forming a government of national unity.

It should be clear that:

1.     This policy platform is on the far left (not moderate left, as some have interpreted it) and, given that it received approximately 10% of the votes of the population, and 17% of the electoral votes cast (taking into account a 35% abstention rate), remains a minority. It is a mistake to assume that “SYRIZA won the elections”, and that therefore the population is ready to accept this platform. It is equally a mistake to assume that SYRIZA represents Greece or all the Greek people.

2.     Some of these goals (unlimited unemployment, unlimited healthcare) sound extraordinarily attractive to a population which is being transformed into wage slavery by Troika policy and the domestic banking system.

3.    There appears to be no historical memory of the past failures of nationalisation in Greece. While SYRIZA blames this on “dikommatismo”, or the bipartisan rule of ND/PASOK, the fact is that corruption and incompetence in the public (and private) sectors is indivisible of political ideology, as seen from numerous examples in Greece and in world history.

4.     Very few of these promises address the issue of moral hazard of state dependency or state actors. Unlimited unemployment benefits leads to legions of permanently unemployed. Nationalisation of state assets in the Greek environment leads to poor public services and permanent state employment. Unlimited educational benefits leads to legions of badly-educated university graduates with no hope of employment in the real economy.

5.     Very few of these promises can be paid for in a normal economy, let alone an economy in a depression which cannot afford to pay for a public sector which takes over 50% of GDP.

6.    This platform wilfully ignores the key question of Greece’s responsibility to its Eurozone partners. It is impossible to state that Greece should remain a European country while abrogating its fundamental, state responsibilities to other European countries, and to other European taxpayers.

I must also question the preparedness of some of the SYRIZA party leaders to manage. Many party leaders have spent the majority of their “careers” either as public university union activists or in politics. I question to what extent they have actually worked in the real world, and to what extent their ivory tower approach to social justice applies. 

It is relatively easy to promise social justice using “Other People’s Money”, yet the experience of equivalent organisations and cases the world over shows that corruption, mismanagement, misspent funds and wishful thinking are not the sole preserve of the “evil right”. I note that SYRIZA is definitely not alone in having leaders unprepared for public office by real economy experience, or by taking extraordinary liberties with OPM. 

In Greece, Andreas Papandreou came to power in 1981 promising much the same combination of policies: withdrawal from NATO, kick the US bases out of Greece, nationalise what little private industry existed, “Tsovolas, give everything”. The results were disastrous for Greece. SYRIZA will no doubt claim this is due to corruption, and that corruption in SYRIZA does not exist because SYRIZA is a “purer” expression of the people’s will. This remains to be seen, but proving a negative of this sort in Greece does not inspire me with trust.

I agree with some of these points, such as the fact that there is no reason at the present time for corporate income tax to fall from 24% to 20% while taxes on individuals are rising. There is a definite need to reign in corrupt offshore company practises. I agree with the identification of bipartisan corruption as a driver of failure in the Greek public service. I agree with the fact that many of the measures adopted by the Troika are unfair and will not lead to any results (and have blogged extensively on all of these).

On the whole, however, I do not feel that SYRIZA’s platform is well-suited to the world we live in. It relies on a romantic, naive notion of the noble worker, and of an economy which can be regulated without reference to ecommerce or globalisation. It assumes that granted unlimited state power, state workers and functionaries will remain honest, efficient and idealistic. 

It assumes that all state workers are angelic, while all private sector managers are evil. It equates everything European or trans-Atlantic with imperialism or financial subjugation. It ignores the stifling effect of government monopolies on entrepreneurship and innovation. It ignores the invisible handmaiden of a totalitarian economic policy, which is a totalitarian political culture and the secret police apparatus which accompanies it. 

It assumes that sovereign obligations made by Greece only months ago, which have been financed by the sovereign guarantees of other European countries, can simply be eliminated without consequences, and disregarding the moral or ethical foundations for doing so.

Should SYRIZA cobble together a government and actually try to implement this platform, both it and the residents of Greece will receive an important lesson in the boundaries of reality. Unfortunately, this lesson will be accompanied by a total economic collapse, by massive investor flight from Greece, and ultimately, by failure.

One would have hoped that left wing totalitarian solutions had been discredited as much as uncontrolled, corrupt crony capitalism had been. Unfortunately, it seems that on both sides of the ideological divide, both voters and politicians are bound to make the same mistakes year after year, generation after generation.  

© Philip Ammerman, 2012

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