Last week, on a warm evening in Athens, Alexis Tsipras stepped on stage to announce his party’s victory, declaring through a wide smile that: “the new Greek government will be ready to cooperate and negotiate with our partners for a fair, mutually beneficial, and sustainable solution for Greece.” While his words could be easily mistaken for any political victory speech—a supportive spouse on the sidelines, party flags waving in the breeze, abstract hopes for the future—they mark a critical moment in the ascension of Greece’s Coalition of the Radical Left, or Syriza. This election will have far-reaching implications for the debt-strangled nation as well as the European Union at large, and the young party’s success may well be a referendum on the failed Eurozone policy of austerity.
The revolt’s origin
In 2008, when most of Europe was rocked by the economic downturn, Greece’s problematic status—like that of other debt-ridden countries—was not immediately clear. The downgrading of the nation’s debt to junk bond status in 2010, however, signaled a major change. After almost a decade of rapid GDP and debt growth, the country was unprepared for a recession. Without the ability to sell bonds, Greece had no reliable source of income to manage its debt and was thus poised to default on its loans. This disaster birthed the Troika—a chimeric assemblage of the European Central Bank (ECB), the International Monetary Fund (IMF), and the Eurozone—which staged two bailouts of the Greek economy totaling around €240 billion. These bailouts were secured in exchange for legally-bound austerity, or moves by the government to reduce spending and increase revenue. A total of seven austerity packages were passed between February 2010 and July 2013. The packages cut salaries and pensions, altered laws regarding firings and overtime pay, raised the retirement age from 61 to 65, raised taxes on all classes, called for huge layoffs in the public sector, and made plans for privatizations worth €50 billion. Following the second of these packages, Cephas Lumina, a Zambian UN expert on foreign debt and human rights, warned that further austerity could threaten “the enjoyment of human rights by the Greek people, particularly the most vulnerable sectors of the population such as the poor, elderly, unemployed, and persons with disabilities.”
Many Greeks agreed, and each package was met with clashes—most notably on May 5, 2010, when upwards of 100,000 protesters marched through Athens, and major unions organized a nationwide general strike which shut down most public services for the day. In the almost five years since the first bailout, the deficit has shrunk and Greece’s debt is now rated well enough to be traded on the bond market. During the last quarter of 2014, the Greek economy was the fastest growing in Europe. While these numbers seem to show that austerity has succeeded, this perspective fails to account for the fact that the people have not fared quite as well as the economy. While general unemployment stubbornly hovers above 25 percent, it is around 50 percent among those under 25. For those still employed in 2013, wages descended to levels not seen since the late 1990s. According to the Foundation for Economic and Industrial Research more than a third of the population was living below the poverty line in 2013. The disconnect between a growing GDP and a continually suffering population is reflective of the inequity of the situation. The people of Greece have been told to foot the bill for a crisis born of a broken system and a corrupt government.
A turning point
Founded in 2012, Syriza has gained popular support by framing itself as a populist reaction to the perceived injustice of the austerity. Many feel that the country’s economic struggles should be blamed on the credit rating agencies’ missteps, or on the government, which Transparency International has consistently ranked as the most corrupt in Europe. Tsipras and his supporters agree, further arguing that Greece’s dominant parties—the center-right New Democrats and the center-left Panhellenic Socialist Movement (PASOK)—sank the country’s prospects by conceding to the EU and the debt-collectors. The Syriza platform is founded on a plan to renegotiate the terms of the bailout. Their goal is to reverse the austerity measures so that the new government can start rebuilding the economy, rather than punishing the people for errors made by previous governments.
Syriza cites the London Debts Agreement of 1953 under which German war debt was forgiven by the allies as a historical example of leniency among the Eurozone countries. Furthermore, they claim that Germany still owes hundreds of billions of Euros in reparations to Greece for the damage done to the nation and the lives taken during the war. This argument is particularly politicized as institutions of the powerful German economy are the most important voices among the troika’s many heads. While Germany’s Chancellor, Angela Merkel, has been steadfast in insisting that the troika will not forgive any more debt, the possibility of a Greek default could force the group’s hand. While a default would be economically painful for the Eurozone, the effect on public sentiments is particularly worrying. The David and Goliath narrative of Greece taking down the austere Troika has generated popular support throughout Europe, and there is also fear that the destruction of a member state would be fuel to the flame of those doubting the EU’s legitimacy, and could provoke further electoral backlashes.
In the US, every election is hyperbolically referred to as a “referendum,” as though the biennial transfers of power reflect more than deep pockets and successful advertising campaigns. In contrast to our stalled political system, the Greek election is in fact a referendum on the country’s willingness to accept brutal austerity at the cost of remaining in the EU. While Syriza only received 37 percent of the vote, considered alongside other anti-austerity and euro-skeptical parties—including those on the right—the percentage of voters in opposition to austerity is well above 50 percent. Since the founding of the EU in 1993, this is the first example of a radical leftist, anti-EU party stealing national control away from an entrenched political establishment. The Greeks have voted for centrist governments for decades and recent polls show they are now ready for something new. This referendum has given the new leaders a clear mission: end austerity, build a new Greece.
Since taking office Syriza has softened its tone, already backing away from demands that half of Greece’s debts be forgiven. They are, however, proposing changes including the rehiring of all public employees laid off during austerity, a doubling of the minimum wage, and a massive overhaul of the tax system (the country’s tax filings are notoriously corrupt, as evidenced by the fact only 200 Greeks declared incomes over €500,000 last year). Noticeably, the party has been conspicuously quiet when explaining what changes will be made to avoid another crisis down the road. If Syriza takes the people’s referendum seriously as a call for change, they might do well to look for inspiration in the history of leftitst solidarity in Greece.
The cooperative model
In a 2013 article published in the Journal of Regional Socio-Economic Issues, Christy Petropoulou explores the history of “Solidarity-Cooperative Economies” in Greece. Following the Metaxas Regime of the 1950s, the Greek economy began “a gradual shift … to more consumer models, [while] the political importance of the cooperative organization flagged.” Greek cooperatives were fundamental, playing major roles in healthcare, education, agriculture, industrial production, and the feeding of the poor. Since the 1990s, cooperatives have once again been on the rise, with an uptick in efforts since the beginning of austerity. Having realized that the structural adjustment is weighted against them, poor and ostracized Greeks are now looking for success in solidarity. Recent squatters cooperatives have reclaimed urban spaces in a number of major cities, others focus on uniting women so as to increase family income and raise social status, and agricultural cooperatives support many of the more than 800,000 farms in Greece, the majority of which farm fewer than 25 acres. Cooperatives build community, support local business development, and keep capital circulating locally: exactly what the recent electoral shift has suggested Greece wants more of.
The most notable recent cooperative happenings in Greece have formed around the anti-middlemen movement. Covered recently by The New York Times, and examined in detail by Theodoros Rakopoulos in a 2013 article in Anthropology Southern Africa, this grass-roots movement has grown up across Greece as a means of fighting corruption, raising profits for producers, and lowering costs for consumers. One organization of which Tsipras was once a member, Anihti Poli (“Open City”), claims that its markets lower prices by 60 percent by cutting bribes and middlemen out of the equation. Rakopoulos’ article focuses on the field work he did with RAME, a squatters cooperative which organizes a farmers market in Athens, and boasts prices far lower than those of the nearby supermarkets. RAME’s members are highly skeptical of the government, which they see as bloated with corruption and inefficiencies. This movement has blossomed under austerity by blotting out both bureaucracy and corruption, and the Syriza government might do well by trying to expand this system rather than simply trying to regrow the oversized Greek public sector.
What could Syriza do if it was to take inspiration from the cooperative movement? The first change needs to be the eradication of corruption. Obviously easier said than done: corruption is rumored to result in the exchange of €3.5 billion per year in Greece. That the cooperatives have managed to do business without bribery is radical, and is therefore the movement’s proudest claim. Secondly, the government could pay attention to the success of grassroots, decentralized networks of solidarity. The anti-middleman movement matured with no government support, and did so through a collection of localized groups tailored according to the particular needs of each region. If Syriza were to encourage an expansion of the program, the savings visited upon Greek consumers could be impressive. However, the expansion would need to cling to the decentralized model if it were to avoid the activists’ assertions that the new government will be unable to eradicate the state’s inefficiencies. Similarly, rather than luring job creators and housing developers into the country with tax breaks—a failed policy which, like austerity, relies on decisions made from above—government spending could go towards the formation of new workers and housing cooperatives. By using public funds to develop from the bottom-up, these programs could focus on the actual needs of the Greek people, thereby appropriately and directly responding to the crisis of jobs and housing.
The solidarity movement is growing outside of Greece as well, and has developed a number of methods of resistance that could fit well in a restructured Greek economy. For example, the new government could begin to shift its trust away from the banks (which have consistently failed both the country and the people), and instead encourage the formation of local credit unions so that capital stays in the communities that create and need it. As another grassroots system, credit unions might avoid the bureaucracy and corruption of the national banking system by forming according to the needs of the communities that they serve. Similarly, Syriza could organize a system of participatory budgeting whereby citizens vote directly on budgets, such as has shown great potential for communities in Brazil, France, Italy, Germany, and Spain. This could help to alleviate fears that the government is disconnected from the citizemnry, and would reinforce the message that Syriza understands the significance of this election’s referendum.
If Syriza manages to convince the EU to restructure the bailout—no small feat—they will likely have only one chance to rebuild Greece. By taking plays from the cooperative movement, the new government could find a model for small-scale, sustainable, solidarity-oriented economic growth, which is fitting with the struggling nation’s needs. That these organizations flourished under austerity shows the financial viability of a well-run, solidarity-oriented system of cooperatives. The New York Times article on the movement quotes a farmer as saying, “The goal is not to destroy the old market system but just to slow it down and get it to change.” By slowing down, Syriza could find the time to enact the change needed in the economy as well as the government, while offering immediate help to the Greeks struggling most under austerity. These systematic approaches may not deliver the immediate GDP growth of a huge stimulus package, but they might improve quality of life for the Greek people with less debt in the future. In sticking to its radical foundations, Syriza could demand that the new economy be judged by its statistics of literacy, nutrition, housing, and quality of life, rather than according to the abstract GDP.
Opposition to established financial systems is growing in Europe, and Syriza is in a position to lead the resistance. Following the Greek electoral success, more than 100,000 people marched in Madrid in support of Podemos, a radical anti-eviction, anti-austerity, and anti-establishment party that formed only a year ago. On the other side of the spectrum, far-right parties win more elections each year, most notably the National Front in France and UKIP in the UK. The localist solidarity movement is in a unique position to unite forces on the right and the left against the dominant economic politics of the EU. Hatred is often inseparably linked to economic fears, and there is a possibility that far-right opinions on immigration and social issues might be mitigated through successful economic change. These Euro-skeptical forces have been waiting for a prominent radical group to lead the charge, and the people of Greece have given Syriza the chance—nay the referendum—to be that group.
MALCOLM DRENTTEL B’18 has abstract hopes for the future.