Key
parts from the speech at the Democracy Rising
conference recently held in Athens
The Syriza
government has just signed up to a new bailout agreement. This
bailout agreement is a very bad deal. It's a very bad deal for clear
reasons which I will enumerate.
First of
all, the agreement is recessionary. It's going to make the Greek
economy go into recession. Because tax increments alone annually come
to 2 percent of GDP. This tax imposition is mostly on VAT, indirect
tax, imposed on goods consumed by mostly the laboring layers of the
population. Taxes have also been increased on enterprises, and
they're going to hit small and medium businesses primarily, which are
the backbone, still, of the Greek economy. Taxes have also been
imposed on agriculture, and they're probably the most severe increase
in taxes, doubling the income tax for farmers and imposing a raft of
other obligations on them.
So there's
no question these measures are recessionary, and they're taken
exactly the moment when the Greek economy is teetering over the edge
of recession. So it's going to be tipped into recession, for sure.
Second, the
deal imposes measures which are clearly unequal. They're going to
intensify inequality in this country. Don't let anyone tell you that
these measures will not exacerbate inequality in this country.
Because of course the bulk of tax revenue will come from indirect
taxes which are by definition inequality-inducing. Inequality will
increase because the measures will take away 800 million Euros
annually from pensions. So they will impose a significant burden on
pensioners, who are typically among the poorest layers of the
population. Inequality will also increase because, of course,
unemployment will again rise this year and next.
The measures
and the agreement is also bad because it will do nothing for the
national debt. There is no restructuring of the debt. It is a
replacement of some of the debt denominated under some category into
another. There might be some marginal benefit in terms of interest
rates and duration of the debt, but that is marginal. And debt will
definitely increase by 20-25 billion to recapitalize the banks. The
IMF expects debt to GDP ratio to go up to 200 percent next year, and
that is, so that is most likely what is going to happen.
Fourth, the
measures will do nothing for development. There is nothing
developmental in these measures. The so-called package of 35 billion
Euros doesn't exist. These are moneys that already have been alloted
to Greece in the various funds of the--there's no new money in this.
We don't know when it will accrue and how to Greece. There is no
developmental angle to this.
Finally, the
deal is quite clearly neocolonial. The government of the left has
signed up Greece to a neocolonial agreement.
And it
is--it is neocolonial for many reasons. I will mention three. First,
the deal proposes the establishment of a privatization fund of 50
billion Euros which will basically sell public property under foreign
management. 25 billion of that, the first 25 billion, will go to the
banks by the agreement. If there's anything left, and there won't be
anything left because they'll never make 50 billion, it might go to
repaying the debt and possibly to investment. Essentially, then, this
fund will sell what it can of public property to recapitalize the
banks. We've just agreed the deal that sells the family silver to
recapitalize the failed Greek banks.
We've also
agreed to reforms of civil administration managed by the EU. We've
also agreed to monitoring, and this monitoring will be very severe
and it will last a lot longer than the three years that this deal
will last.
To me this
deal as it stands represents a disastrous capitulation. This is not
Brest-Litovsk. Those of you who think that this is Brest-Litovsk are
making a mistake. This is not gaining time to establish Bolshevik
power in Moscow and Leningrad. This is not--this is not gaining time.
There is no time to be gained. Time works in favor of the enemy in
this context, and this is not a tactical maneuver. This is putting
the country down a path which has only one exit. And that exit is not
in the interest of people's rights.
The real
winner of this deal is obvious. It's staring you in the face. The
real winner is the Greek oligarchy expressed in the mass media.
That's why the mass media are thriving and celebrating [a win].
Sometimes
reality is what it appears to be. You don't have to look beyond the
surface. If you read the big Greek press and if you listen to the
media you know who has won.
Why, then?
Why this capitulation? Why have we come to this after all the
enthusiasm of six months ago? After all the, the surge of grassroots
support in this country and in Europe? Why, why this? The answer is
clear to me. And it has to do with the wrong strategy, that was good
enough to win elections, to triumph over elections, but it proved
disastrous in government. Wrong strategy that has collapsed. That's
the reason for it. What is this wrong strategy? It's very simple,
expressed openly time and time again. We will achieve radical change
in Greece, radical change in Europe, and we will do it within the
Eurozone. That was the strategy. Well, that's not possible, period.
That's not possible. That's the lesson of the last few months. This
is simply not possible.
... the
monetary union in which, to which Greece belongs, is not ideological.
I mean, it is, but it isn't just ideology. And it isn't just a
balance of forces. It is an institutional mechanism. The sooner the
Greeks understand this, the better for all of us. It is an
institutional mechanism, it is a monetary union that's, it's a
hierarchical body that works in the interests of big business and in
the interests of a few countries within it. That's what the EMU is.
It's a failed monetary union, historically. And the failure is
manifest in the case of Greece. Greece has been ruined by the
monetary union. And the more it clings on to its membership in the
union, the more it destroys its own people and its own society. This
is a very long, established thing in the history of monetary unions.
It's just that every time people refuse to see it.
That's what
the left has failed to recognize in Europe and in Greece. The
mechanisms of the European monetary union are a reified class
practice. That's what they are. You can't change them because you've
got, you've won a vote in Greece. It's impossible to do. You can't
change them because you'll get Podemos in Spain. It's not possible to
do. Either you break the whole thing or you accept it as it is. And
that has been shown to be.
What we need
to do is to withdraw our consent to this agreement. To withdraw our
consent to this agreement. And to redesign a radical program that is
consistent with our values, our aims, and what we've told to the
Greek people all this time, all these years. And that radical program
is impossible without Euro exit. The only thing that we really need
to do is focus on developing a plan for Euro exit that will allow us
to implement our program. It is so obvious I'm amazed that people
still don't see it after five months of failed negotiations.
Now, do we
have the forces for this? We do. We do because the referendum, which
said no so powerfully, showed two things. The first thing that it
showed is that the Euro is a class issue. It isn't some impersonal
form of money. As I said to you, it crystallizes and encapsulates
class relations. And people have instinctively understood it. The
rich voted yes, the poor voted no in the referendum, period.
The second
thing that the referendum showed, and that's a massive change, the
first time we've seen this during the last five years is that the
youth of Greece have at last spoken. Most of us have been waiting for
the youth to say something. Something. And it--that youth that is so
European in outlook, so educated, presumably so far away from all
these dinosaurs of the extreme left that believe in Marx and all
these other people, that youth of Greece that travels on Erasmus
programs and goes here and there and everywhere, 80 percent of it
said no. And that is the basis for a radical line, for a different
line for Syriza today. And if we say yes, and if we maintain the yes,
we will lose the youth. I'm sure of it.
You mustn't
think that there's been no plan of how to exit this disastrous
monetary union and implement a radical strategy. A plan exists. It's
just never been used. And never been developed, never been further
studied. The plan needs developing and the plan needs political will.
Above all what it needs is political will to be implemented.
A plan, in
the form of a road map, will contain a few very clear things. First,
default on the national debt. The weapon of the poor is default.
Greece must default on its debt. There is no other way out. The debt
is crushing it. So default on the debt is the first step to achieving
a deep write-off of the debt.
Second,
nationalization of the banks. Effective nationalization of the banks.
Let me say
that I've seen some simulations and some econometrics of what is
likely to happen to GDP, to prices, and so on. They're very useful
these things, and very interesting to read at times. But on this
occasion by definition and cross-section of the case, they're
valueless. Why? Because simulation or econometrics essentially
assumes--typically simulation more than econometrics essentially
assumes that the structural features of the model, whatever it is,
are maintained. Otherwise you can't do the simulation. Here by
construction we're changing the structure. You understand? By
construction we're doing that. It's a regime break. Or to put it
differently to you, how can I possibly foresee the effects of someone
who will start cultivating again his vineyard? Because that's what's
going to happen. So it's going to be a structural change. So any kind
of assessment of--numerical assessment of what's likely to happen
ahead is not worth very much. So don't believe the people who tell
you there is going to be a recession of 25 percent. There's going to
be a contraction of GDP of 50 percent. They don't know anything.
That's just the number they take out of the hat.
I hope that
Syriza will see the point, they will say no. They will not sign up to
this agreement. They will go back to its radical principles and
radical values. They will make a new offer to Greek society and take
it down the road of wisdom.
Full
speech and questions by the audience (+video):
One important point not yet mentioned;
ReplyDeleteReal democracy does not borrow money. Once the birth pangs of a new ecodrachma, democracy and freedom have subsided, there will be no reason to borrow except to accelerate the successes of real democracy. The dream of accelerating hard won success with debt is wrong headed, the pain of past debts proves pay as you go is the number one rule of freedom.
The main reason real democracy does not borrow money, ever, is that debt funded projects destroy democracy by avoiding the distributed intelligence of voting taxpayers.