We are all actors in Greece’s debt drama

International solidarity has a vital role to play, as Syriza chooses between capitulation or default, argues Jonathan Stevenson of Jubilee Debt.

IT SEEMS A LONG TIME SINCE SYRIZA’S ELECTION VICTORY. With the fledgling government locked in seemingly permanent negotiations with its European paymasters, €1.2 billion of debt payments are due in June, and a further €4.3 billion due in July. Greece cannot afford to pay without a deal to unlock the final €7 billion of promised bailout funds, and the price being demanded is capitulation to austerity. Can anything break the deadlock?

Syriza’s post-election strategy was to unilaterally cancel the austerity programme, but try to negotiate over the debt. To reassure the markets, they pledged to continue making debt payments during negotiations, and declared that their aim was to keep Greece in the euro. The hope was that other Eurozone members would accept an ‘honourable compromise’ rather than risk precipitating Grexit.

But the strategy was hamstrung by Syriza’s unwillingness to follow through and leave the euro if their demands were refused. Germany called their bluff and refused to give an inch. The European Central Bank cut off emergency funding to Greek banks, provoking a liquidity crisis. The four month ‘extension’ agreed in February was achieved only because all substantive decisions were postponed.

Yet if Syriza largely lost the first round of negotiations, the second looks more promising. Thanks partly to agitation within the party, the threat of default has been cranked up. Red lines on pensions and wages have been set out, and ministers have declared they would rather pay their people than pay the debts. Meanwhile the ‘breathing space’ has been used to begin implementing the anti-austerity programme in Greece. The Finance Ministry cleaners sacked under the Samaras government have been reinstated. A crackdown on corruption and tax evasion has begun, with tax collection far exceeding predictions.

But even if a short-term deal is reached, the wider question of Greece’s €317 billion debt, and the austerity programme attached, will return when the bailout programme expires on 30 June. Syriza will need to hold its nerve if Germany is to be forced to concede, but international solidarity can contribute in two crucial respects.

Firstly, despite Syriza’s emphasising its desire for an agreement “in the interests of the average European, not just the average Greek”, there has not yet been a decisive shift in European public opinion in favour of Greece. That’s why it’s so important to emphasise the true beneficiaries of Greece’s bailout.

As Jubilee Debt Campaign research has shown, while Greece has been lent €252 billion by the IMF, European Commission and European Central Bank since 2010, it has spent 92% of it on paying off financial institutions for their original reckless loans – in particular, German, French and British banks. Just 8% of the bailout has gone to the people of Greece. The IMF, meanwhile, has made an estimated €2.5 billion of ‘profit’ on its programme with Greece, which its own directors warned would mainly be benefiting the banks. The Greek Debt Truth Commission, a formal committee of the Greek Parliament established to audit the public debt along the lines of Ecuador’s successful debt audit and default of 2007, looks set to add to this evidence base. Secondly, while anti-austerity movements including Podemos in Spain continue to build, there has not yet been the level of mobilisation in support of Greece and against austerity that could help shift the balance of power. As the 30 June deadline approaches, now is the time to step this up again.

The Greek situation was a major focus of the recent World Social Forum in Tunisia, where a week of solidarity action was called for 20-26 June, as well as a gathering of social movements in Athens in the summer, and a European debt conference in the autumn. In the UK, the Greece Solidarity Campaign and the Labour Assembly Against Austerity were active in organising parliamentary support for Greece before the UK election. This needs to be broadened in the months ahead.

If a further breathing space can be won, it is the third round of negotiations that offers the best prospects for a serious advance. It may take the rejection of a bad deal in a referendum to force Europe’s hand. But anything short of a capitulation, whether Greece defaults or not, will create hope for anti-austerity movements across Europe. We can all play our part.

» Jubilee Debt Campaign’s work on Greece’s debt is available at  jubileedebt.org.uk/greece

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