Series Understanding what happened in Greece in 2015 when hope came from Athens
Greece 2015 | From hope to capitulation | Lessons for the future
by ERIC TOUSSAINT
25 January 2015, at a time when Greece had been suffering since 2010 under the burden of a severe austerity regime forced on the country by its creditors and by the social-democrat (Pasok) and conservative (New Democracy) parties who have taken turns exercising power in the country, Syriza (an acronym whose Greek meaning is “coalition of the radical Left”) won the legislative elections in Greece, with 149 deputies out of a total 300. Lacking an absolute majority in the Hellenic Parliament, Syriza formed a coalition government with ANEL (a small “souverainist” right-wing organization which announced that like Syriza, its priority was to put an end to the austerity policies). Syriza’s leader, Alexis Tsipras, became prime minister and appointed Yanis Varoufakis, a left-leaning economist close to Syriza, his finance minister.
- Greece 2015 | From hope to capitulation | Lessons for the future
- Greece 2015: Varoufakis’ proposals were doomed to fail
- A questionable account by Varoufakis of the origins of the Greek crisis
- How Tsipras and Varoufakis’s turned their backs on Syriza’s platform
It is essential to take the time to analyze the policies put in practice by Varoufakis and the Syriza government, because it was the first government of the radical Left to be elected in Europe in the 21st century. Less than six months after it took power, the Syriza government caved in to the creditors’ demands and de facto abandoned the idea of ending austerity. Understanding that government’s weaknesses and learning from the way it handled the problems it faced are vitally important if there is to be any chance of avoiding another such fiasco. Even though the far right is on the rise almost everywhere, it is possible that voters in other European countries could elect a government of the Left which promises to lead the country out of the long night of neoliberalism and make profound changes. Sweeping social explosions could also lead to forces of the radical Left taking governmental power. But even where the chances of being elected are very limited, it is fundamental that there be a coherent set of measures to be taken by a government which is as dedicated to serving the people as the politicians currently in office are to serving big capital. It is also necessary to propose a strategy for confronting the forces arrayed against change and emancipation.
The year 2015 will have marked the history of Greece, of Europe and of the Left in this first quarter of the 21st century
The year 2015 will have marked the history of Greece, of Europe and of the Left in this first quarter of the 21st century. In this year 2025, on the 10th anniversary of the hopes raised by the arrival of the radical left in government in Greece and the capitulation that followed, the CADTM is publishing on its website chapter by chapter the book Greece 2015: There was an alternative published in 2020. [1] The book is meant as a guide for men and women of the Left who are not satisfied with the dominant narrative put forward by the mainstream media and the governments of the Troika about what has happened in Greece, and who are also not satisfied by the former Greek finance minister’s published account.
If you haven’t yet read Adults in the Room [2] by Yanis Varoufakis, order it from your bookseller. It reads like a political thriller; there’s suspense, plot twists and turns, double-crosses and more. What’s interesting about the book is that the author gives his version of events that have influenced, and are still influencing, the international situation–in particular in Europe, but also beyond, because the disappointment caused by the capitulation of Greece’s radical-Left government has left its mark on people’s minds.
In counterpoint to Varoufakis’s narrative, I point out events that he keeps silent about and I express an opinion that differs from his as to what should have been done and what he in fact did. My narrative does not substitute for his, but should be read in parallel. To understand the present book, it is not indispensable to read Varoufakis’s, since I systematically summarize the important opinions and facts found in his narrative.
My critique of the choices made by Varoufakis and the Tsipras government is precise and carefully argued.
Varoufakis took the trouble of communicating what he considers to be his side of the truth. And he took risks in doing so. Had he not written Adults in the Room, many important facts would have remained unknown. Nevertheless, he has “cherry-picked” facts that reinforce his position, and my task has been to complete the picture in the interest of better understanding what actually took place.
A distinction needs to made between Tsipras and Varoufakis: the former signed the third Memorandum of Understanding and had it adopted by the Greek Parliament, whereas the latter opposed the MoU, resigned from the government on 6 July, 2015 and as an MP voted against it on 15 July.
Why did Alexis Tsipras appoint Yanis Varoufakis finance minister in January 2015? Varoufakis was a free electron, without influence inside Syriza (of which he was not a member). Tsipras felt that if need be he could revoke Varoufakis’s appointment without causing a major disturbance within the party. Varoufakis’s profile corresponded to the role Tsipras and Nikkos Pappas had defined: an academic economist, brilliant, and a good communicator with a perfect command of English.
Alexis Tsipras decided to operate in a small group behind the backs of his own party rather than implement the policies that had been decided on collectively within Syriza and approved democratically by Greece’s people. Clearly this absence of popular participation and failure to take a democratic approach to setting policy were incompatible with the popular mobilization that must be behind a government of the Left if it is to apply a radical political agenda.
In contrast with the caricature presented by the dominant media and the governments of the creditor countries, the proposals Yanis Varoufakis made as principal negotiator with the Troika were in fact extremely moderate, and clearly fell short of–when not in outright contradiction with–the commitments Syriza and Tsipras had made during the election campaign of January 2015. Varoufakis reassured his opposite numbers that the Greek government would not request a reduction of the debt stock, and he never called into question the legitimacy or legality of the debt whose repayment was demanded of Greece. That is a serious charge, and it is levelled seriously. He never asserted the right and the determination of the Greek government to conduct an audit of Greece’s debts.
Varoufakis not only said that the government he represented would not call into question the privatizations that had been conducted since 2010, but even allowed for the possibility of further privatizations.
The Tsipras government and its finance minister Varoufakis proposed that the Troika recast a part of the then current Memorandum of Understanding by extending it and adapting certain of its measures. Yanis Varoufakis repeatedly told the European leaders that 70 per cent of the measures called for by the Memorandum of Understanding were acceptable. He added that certain measures that were still to be applied were positive, but that 30 per cent of the Memorandum needed to be replaced by other measures having a neutral effect on the budget–that is, that the new measures, and in particular those meant to deal with the humanitarian crisis, would not increase the deficit projected by the preceding government since they would be offset by additional revenues or by reductions in expenditures.
The rope around Greece’s neck would be a classic hangman’s noose: whereas Greece’s people continued to pay off several billion euros in debts between February and 30 June 2015, the creditors did not make a single euro available. The public coffers continued to be emptied, principally for the benefit of the IMF. Worse, the ECB continually limited the Greek banks’ access to cash by forcing them to have recourse to a system of emergency liquidity assistance which asphyxiated the government. That created a climate of uncertainty and caused massive bank runs: deposits were reduced by thirty billion euros during the first semester of 2015.
Yanis Varoufakis and the inner circle around Tsipras, in reaching an agreement with the Troika in late February 2015 to extend the second Memorandum of Understanding, never showed evidence of the slightest determination to take action if the creditors refused to make concessions. And the latter gave every evidence of contempt for Greece’s government. That government capitulated on two occasions–first in late February 2015 and again following the referendum of 5 July 2015.
Varoufakis and Tsipras spent a very large part of their time in interminable meetings abroad, holding negotiations during which they made concessions while the Troika methodically continued its work of demolishing the hopes of the Greek people. They did not take the time to go out and meet the Greek people, to speak at rallies where the Greek population was represented. They did not travel around the country to meet and talk with voters and explain what was going on during the negotiations or the measures the government wanted to take to fight the humanitarian crisis and re-start the country’s economy.
Tsipras and Varoufakis never left the anti-democratic citadel to involve themselves in an active process of reaching out to the social movements
Tsipras and Varoufakis never left the anti-democratic citadel to involve themselves in an active process of reaching out to the social movements that were resisting the neoliberal offensive–a process that is the essence of democracy. Their failure to appeal to the working people of Europe and elsewhere for support played a significant role in preventing the development of a powerful international movement of solidarity with Greece’s people. In order for large numbers of citizens to mobilize in support of Greece, they needed to be spoken to and informed about the massive campaign of disparagement and stigmatization then targeting not only Greece’s government but also its people.
Their practice of conducting secret diplomacy also encouraged European policymakers to persist in using the worst forms of blackmail without running the risk of that blackmail being exposed for what it was. Instead of engaging in secret negotiations they should have made full use of all the possibilities for communication provided by the social networks; but the Greek government and the inner circle of leaders around Tsipras failed to do that.
On the rare occasions when Tsipras or Varoufakis publicly asserted resistance against the creditors and European policymakers, the Greek population expressed their support in the streets, in opinion polls and in the referendum of 5 July 2015. This is a perfect illustration of the potential for mobilization if Tsipras and Varoufakis had adopted a consistent position of refusing ultimatums; if they had in fact suspended repayment pending the audit of the debt; if they had unilaterally “haircut” the securities held by the ECB, implemented a parallel payment system, exercised their voting rights in the Greek banks and insisted on oversight of capital movements.
A distinction also needs to made between Tsipras and Varoufakis. Tsipras signed the Third Memorandum of Understanding and had it adopted by the Greek Parliament, whereas Varoufakis opposed the MoU, resigned from the government on 6 July, 2015 and as an MP voted against it on 15 July.
But the main point of our critique of the policies followed by Greece’s government in 2015 is not to determine the respective responsibilities of Tsipras and Varoufakis as individuals. What is fundamental is to conduct an analysis of the political-economic approach that was taken in order to determine the causes of its failure, see what could have been attempted in its place and draw conclusions as to what a government of the radical Left can do in a country in the periphery of the Eurozone. The scope of the lessons to be learned in fact extends beyond Europe’s borders.
In this book I discuss what the winning strategy could have been at each key moment. It is a highly hazardous, but highly necessary exercise. I should point out that I myself participated in the events that took place between January and July 2015 as coordinator of the work of the Truth Committee on Greek Public Debt, created by the president of the Hellenic Parliament. I lived nearly three months in Athens between February and July 2015, and in the context of my work as scientific coordinator of the audit of Greece’s debt, I was in direct contact with a number of members of the Tsipras government. Also, living in Ambelókipi, a working-class area, I was in permanent contact with the social movements.
One major goal of this book is to show that at each crucial stage along the long and painful path that was followed between February and July 2015, an alternative was possible. That alternative path could have and needed to be taken. What happened was not unavoidable.
Experience proves that the simple fact that a movement of the Left is elected to government does not mean that it actually has power. Democracy–that is, the exercise of power by the people and for the people–requires much more. That was demonstrated in Greece in 2015 with Syriza, as in Venezuela with the election of Hugo Chávez to the presidency in December 1998, in Bolivia with Evo Morales in 2005, in Ecuador with Rafael Correa in December 2006 and, a few decades earlier, with the election of Salvador Allende in Chile in 1970.
The question in fact arises for any political movement of the Left that is elected to government in a capitalist society. When a coalition or a party of the Left takes over government, it does not take over the real power. Economic power (which comes from ownership of and control over financial and industrial groups, the mainstream private media, mass retailing, etc.) remains in the hands of the capitalist class, the richest 1 per cent of the population. That capitalist class controls the state, the courts and the police, the ministries of the economy and finance, the central bank, the major decision-making bodies, and so on. In Greece or Spain as in Ecuador, Bolivia, Venezuela or Chile, [3] a government that is determined to make real structural changes must enter into conflict with the economic power in order to weaken and then to end control by the capitalist class of the major production, service, and communication entities and over the apparatus of government.
Let’s try to make a historical comparison. After 1789, when, thanks to the Revolution, the bourgeoisie took political power in France, it already held economic power. Before conquering political power, French capitalists were creditors of the king of France and controlled the main levers of economic power (banking, trade, manufacturing and some of the land). After gaining political power, they evicted the representatives of the former ruling classes (the nobility and clergy), brought them into submission or simply merged with them. The state became a well oiled machine at the service of the accumulation of capital and profits.
Unlike the capitalist class, the people are not able to take economic power unless they come to governmental power. A repetition of the gradual ascent to power of the bourgeoisies in the context of feudal society and petty commodity production is impossible for the people. The people do not accumulate large-scale material wealth, do not run the industrial corporations, the banks, large retailing and the other services. As a result, political power (and therefore government) is an essential instrument for enabling the people to undertake transformations of the economic structure and begin building a new type of state based on self-management. At the head of a government, the Left has access to institutional, political and financial levers that can be used to initiate profound changes for the benefit of the majority of the population. But self-organization by the people and popular self-activity in the public sphere and in the workplace are the indispensable conditions for the process as a whole. Any hierarchic type of structure is doomed to failure. The emancipation of the people will be the work of the people themselves.
If real structural changes are to be made, it is fundamental that there be an interactive relationship between a government of the Left and the people
If real structural changes are to be made, it is fundamental that there be an interactive relationship between a government of the Left and the people. The latter must strengthen its level of self-organization and build structures for popular power and control from the ground up. This interactive, dialectical relationship can become conflictual if the government hesitates to take the measures demanded by the “base.” The support of the people for the promised changes and the pressure they can bring to bear are vital for convincing a government of the Left to deepen and extend structural changes tending towards radical redistribution of wealth for the benefit of the men and women who produce it. It is also vital for defending the government against creditors, those in power during the former regime, the owners of the major means of production and foreign governments. To make structural changes, capitalist property must be ended in key sectors like finance and energy by transferring them to the public sector (making them public services under citizen control) and by supporting or strengthening other forms of property having a social function: small private property (in particular in agriculture, small industry, retailing and services), cooperative property and collective ownership based on free association. [4]
If a government of the people truly wants to break with the policies of austerity and privatization now in place throughout Europe, it will immediately enter into conflict with powerful conservative forces, both at the national level and at the level of the European Union. Merely for saying that it intends to apply measures demanded by a population who massively reject austerity, a government of the Left will face fierce opposition from the European institutions, the majority of the governments in the European Union, and the directors and major shareholders of the major corporations, not to mention the IMF.
Even if it deliberately limits its program of change, a government of the Left will meet with strong opposition because the propertied classes and European institutions (who are intimately connected and in solidarity) want to further advance the ongoing concerted assault on the economic and social rights of peoples at the European level, and in addition strongly limit the exercise of democratic rights.
It is an illusion to think that the European authorities and the directors of the major corporations (in particular financial and industrial ones) can be convinced to abandon the neoliberal agenda that has strengthened since 2010.
Footnotes
[1] Éric Toussaint, Greece 2015: There was an alternative, Resistance Books, London, 2020, 260 p.
[2] Yanis Varoufakis, Adults in the Room: My Battle with Europe’s Deep Establishment, London: The Bodley Head, 2017.
[3] Cuba’s experience has been different from that of Venezuela, Ecuador, Bolivia or Chile, since the Left came to government there following an armed struggle lasting several years and sustained by a huge popular insurgency in its final phase (late 1958–early 1959). See among others: Fernando Martinez interviewed by Éric Toussaint in the book Le pas suspendu de la révolution, Mons: Editions du Cerisier, 2001. The interview is available (in French) on the Net: “Du XIXe au XXIe siècle : une mise en perspective historique de la Révolution cubaine,” europe-solidaire.org
[4] In the three Andean countries mentioned, and mainly Ecuador and Bolivia, support for the traditional forms of property of the indigenous peoples (which generally entail a high level of collective property) is also fundamental.
Author
Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of World Bank: A Critical History, London, Pluto, 2023, Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography: https://en.wikipedia.org/wiki/
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.