In Greece, the New Left has had to modify its agenda somewhat, but it is still poised to do plenty of damage.
The leftist government’s ‘reforms’ guarantee that Greece will remain in the headlines. The left-wing SYRIZA came to power in Greece last year promising to end the austerity programs of the Troika (the European Union, International Monetary Fund, and European Central Bank) and to return to the pre-crisis normalcy of hefty government spending, early and plentiful public retirement plans, and a slew of new openings for public-sector employment. SYRIZA had promised the voters that it would be a return to the good old days: Have the courage to vote for us, SYRIZA told the voters, and we will have the nerve to confront the European reactionaries.
Now, after nearly a year in power, SYRIZA is passing through parliament a new set of austerity measures that mostly aim to balance, on a budgetary level, the economic consequences of SYRIZA’s “negotiations” with Greece’s European creditors during its first seven months in power. The end result of those seven months was capital controls for the banks and an economy that went from growth back to recession. There has been a complete collapse of government revenues, which has resulted in the government’s paying salaries, pensions, and not much else. It must be said that the new austerity measures, which are often amusingly termed reforms, are for the most part tax increases — which may not be popular, but which conform to SYRIZA’s ideological creed. The new package agreed to by SYRIZA and Greece’s creditors is about 90 percent new taxes or tax increases and 10 percent reforms. The tax increases have the benefit of protecting SYRIZA’s core constituency, which is the public-sector employees. Despite the collapse of public revenue and the overall dismal economic outlook, the SYRIZA government plans to increase the salaries of public-sector employees (by as much as 8 percent) and carry on with 45,000 new hires in 2016.
Meanwhile, in the private sector, SYRIZA has increased taxes on all sorts of things and is planning to double the taxation of farmers. It has increased business taxes and also demanded the pre-payment of business taxes. It has increased the VAT on almost all goods, and it is defining affluence down so as to increase income taxes for a greater number of taxpayers. And although Greece has probably the highest social-security contributions in Europe, SYRIZA is planning to increase these contributions even more, despite the fact that pensioners now outnumber those who are still employed in the private sector. Behind this policy madness is a very cynical ploy by SYRIZA, which aims to preserve a large voting block of public-sector employees and pensioners on its side. In the fragmented political landscape of post-crisis Greece, that ploy almost guarantees SYRIZA first place in the polls. That wouldn’t amount to much, though, if it were not for the fact of the Troika’s tacit acquiescence to all of this. If something has been clear in this six-year bailout period, it is that Greece’s European creditors don’t care a lot about the quality and the economic viability of whatever measures the Greek governments propose, as long as they can show in an accounting sort of way that these measures can balance the books. That strategy guarantees that Greece will remain in the headlines for years to come.
Continue reading below…
Leave a Reply