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Five questions from Costas Lapavitsas to Syriza’s leadership on their Euroland deal

Syriza logoThis is a translation of a blog by Costas Lapavitsas who was Professor of Economics at London’s SOAS until he was elected as a Syriza MP this year. He is known as a Eurosceptic critic of the more Europhile stance of the Syriza leadership, though his criticisms are more reserved than those of Syriza’s 92-old resistance veteran Manolis Glezos, and we reproduce it here to help understanding of the debates now taking place within Syriza.

The agreement of the Eurogroup is not completed, partly because (at the time of writing) we do not know yet what ‘reforms’ will be proposed by the Greek government today (Monday, February 23) and which of them will be accepted. But those of us who have been elected on the basis of SYRIZA program and regard the Thessaloniki programme as our commitment to the Greek people have deep concerns and we must express them.

The general outline of the agreement is as follows:

  • Greece asks for extension of the current credit support agreement, which is based on a series of commitments.
  • The aim is to enable the completion of the evaluation of the current agreement and buy time for a possible new agreement.
  • Greece will immediately submit a list of ‘reforms’ which will be assessed by ‘institutions’ and be finally agreed in April.If the evaluation is positive, the money
    will be released not given under the current agreement plus reimbursements from the ECB profits.
  • The existing funds of the Financial Stability Fund will be used exclusively for the needs of banks and will be out of Greek control.
  • Greece is committed to fully and promptly meet all its financial obligations to its partners.
  • Greece is committed to ensuring ‘appropriate’ primary surpluses to guarantee the sustainability of the debt on the basis of the Eurogroup decision of November 2012. The surplus for 2015 will take into account the economic conditions of 2015.
  • The Greece will not revoke measures, or make unilateral changes that can have a negative impact on the budgetary targets, the economic recovery, or financial stability, as will be appreciated by those institutions.

On this basis, the Eurogroup will provide a four-month extension of the current agreement and urges the Greek authorities to immediately start the process for the successful completion of its evaluation.

It is difficult to see how, through this agreement, we can implement the Thessaloniki programme including the cancellation of most of the debt and start work on the National Reconstruction Plan. Those who were elected under Syriza banner pledged to implement the National Plan regardless of the negotiations on the debt, because we need to restart the economy and relieve society. It is necessary therefore to now explain how these commitments will be implemented and how will the new government to change the tragic situation he inherited.

To be more specific, the National Plan included four pillars at a cost for the first year as follows:

  • Addressing the humanitarian crisis (€1.9 billion);
  • Restarting the economy with tax cuts, setting “red loans” establishment Development Bank, resetting the minimum wage to €751 (total €6.5 billion);
  • Public Employment Programme for 300,000 jobs (€3 billion in the first year and another €2 billion in the second);
  • Transformation of the political system with interventions in local government and in parliament.
The sources of funding again for the first time planned as follows:
  • Settlement of debts to the tax office (€3 billion)
  • Combating fraud and smuggling (€3 billion)
  • Financial Stability Fund (€3 billion)
  • NSRF and other European programs (€3 billion)
Given therefore the release of Eurogroup, I ask 5 questions:
  1. National Reconstruction Plan: How will we fund the National Reconstruction Plan, where €3 billion of the Financial Stability Fund is now outside Greek control? The removal of these funds makes even more pressing the collection of large amounts of tax avoidance and settlement of debts in a very short time. How feasible is this prospect?
  2. Remission: How will the debt be cancelled, when Greece is committed to fully and timely fulfill all financial obligations to their partners?
  3. Austerity Waiver: How will austerity be abolished, when Greece is bound to produce ‘appropriate’ primary surpluses to make the existing huge debt ‘sustainable’? The ‘sustainability’ of debt – as conceived by the Troika – was precisely the reason for eliminating the irrational primary surpluses. If the debt is not reduced significantly, how do we get rid of the primary surpluses that are catastrophic for the Greek economy, and are the essence of austerity?
  4. Supervision and financial cost: How can we make any progressive change in the country when the ‘institutions’ will exert strict supervision and prohibit unilateral actions? Will the ‘institutions’ allow the direct or indirect financial costs of implementing the Thessaloniki programme?
  5. The future negotiation: What exactly will change in the next four months of ‘extension’, so that the new negotiations with our partners go better than this? What will prevent the deterioration of the political, economic and social situation of the country?
We are at an absolutely critical moment for society, the nation and of course the Left. The democratic legitimacy of the government rests on Syriza program. The minimum requirement is to have an open discussion amongst party members and the Parliamentary Group. Key responses should immediately give to these questions to keep the great support and momentum which the Greek people give us. The answers that are forthcoming will determine the future of country and society.

2 Comments

  1. David Pavett says:

    Interesting. The hopes raised by the rise to government (I hesitate to say “power”) have almost certainly raced ahead of the reality.

    It is disturbing to see substantial differences on the key issue at such an early stage. We perhaps need to remind ourselves that Syriza is something of a ragbag of different groups. Some of its leaders have distinctly whacky ideas. I read the recent reprint in the Guardian of an article be Syriza finance minister Yanis Varoufakis on why he is an “erratic marxist”. It left me wondering if he had ever taken the time to read Marx. I feel the need to know much more about Syriza’s leader, its programme and its internal democracy.

  2. James Martin says:

    The real problem with Syriza (and I think Podemos in Spain) is that they are not working class socialist organisations with deep routes in the working class and the unions, but radical protest groups. KKE (who do have deep routes in the Greek unions) were criticised for not going into government with Syriza, but they knew full well that the pro-EU, pro-Euro and NATO -ambivalent leadership (who were former right-wing Euro-communists after all – in the UK their equivilents mainly became Blairites) would do next.

    It’s been a huge source of amusement to look at how the far (and not so far) left in this country has been wetting themselves about Syriza without once stopping to ask what about the Greek working class, about the balance of forces in the workplaces and the unions and what about the power of Greek bosses that Syriza is incapable of challenging because of their shallow social routes.

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