[Marxism] The Greek Cauldron

Louis Proyect lnp3 at panix.com
Wed May 9 07:11:17 MDT 2012

New Left Review 72, November-December 2011
Stathis Kouvelakis


The escalation of the Eurozone crisis in the closing months of 
2011 has produced spectacular upheavals in the political 
landscape. Within less than a fortnight, the Greek Prime Minister 
George Papandreou had announced a referendum on the punitive terms 
of a loan agreed at the Eurozone summit on October 27, only to 
abandon the plan after public humiliation by Sarkozy and Merkel at 
the G20 summit in Cannes on November 4, and resign two days later. 
On November 10, Lucas Papademos, ex-chief of the Bank of Greece 
and a former vice-president of the European Central Bank, was 
installed at the head of a government of so-called national 
accord. Alongside ministers from the preceding pasok government, 
with several key figures—notably the Finance Minister Evangelos 
Venizelos—keeping their posts, the centre-right opposition New 
Democracy party has been awarded six cabinet positions, including 
Defence and Foreign Affairs. Papademos’s government also includes 
a minister and two deputy ministers from the extreme-right laos 
party, which returns to office for the first time since the fall 
of the military dictatorship in 1974. By contrast, the parties of 
the Italian centre right, the Lega Nord and Popolo della Libertà, 
announced their opposition to the so-called technocratic 
government of the eu Commissioner Mario Monti, formed in Rome on 
November 12 after the forced departure of Silvio Berlusconi; thus 
scotching the plans of the centre-left pd, which had hoped to 
enter office on Monti’s coattails.

The outcome in both Athens and Rome was above all determined by 
outside pressure from the German and French governments, 
accompanied by relentless assault from the bond markets, which 
have priced up both countries’ debts to unsustainable levels. The 
installation of first Papademos and then Monti can thus be 
considered as bloodless coups, conceived and administered by the 
Eurozone leaders and the bankers, whose authorized representatives 
they are. Marx’s characterization of the 1830–48 July Monarchy in 
France—‘a joint stock company for the exploitation of the national 
wealth’, run by and for ‘the financial aristocracy’—has gained 
renewed relevance. [1] Yet the social and political situations 
within the two countries are in marked contrast. For the past two 
years Greece has been on the receiving end of the most punishing 
austerity programme ever implemented in post-war Europe, which has 
produced a cycle of increasingly radicalized mass mobilizations 
since May 2010, with huge demonstrations, general strikes and the 
occupation of Syntagma Square.

The 48-hour general strike of 19–20 October 2011 confirmed that 
this cycle was entering a new phase. According to the most 
reliable estimates, around 300,000 turned out for the 
demonstrations in Athens and at least 200,000 in the rest of the 
country, out of a total population of 10.5 million. The marches 
were particularly imposing in provincial towns. The strike 
paralysed the entire public sector and the majority of big 
enterprises; almost all small businesses and a fair proportion of 
small-to-medium concerns joined in, often at the bosses’ urging. 
Participants included workers from the public and private sectors, 
the unemployed, young people, small business owners and 
entrepreneurs, retired people. The scale, spread and diverse 
social composition of the demonstrations indicated the support of 
the majority of society. The two days of protest also included a 
range of spontaneous actions: occupations of public buildings, 
including government ministries; refusal to pay the new taxes; 
prolonged strikes by groups such as dustmen and hospital staff. 
The largest organization of the Greek radical left, the Communist 
Party (kke), and its trade union, the All Workers Militant Front 
(pame), organized a blockade of Parliament on October 20.

A dynamic of street action had been established, which escalated 
in the demonstrations that broke out on the national holiday of 
October 28. Known as the ‘Anniversary of the No’, it commemorates 
the Greek government’s rejection of Mussolini’s ultimatum in 1940 
with parades in streets and squares across the country—the 
equivalent of Bastille Day. This year the demonstrations were 
turned into a national ‘No’ to the eu–imf–ecb Troika and its 
punishing austerity programme: officials were chased from the 
dignitaries’ stands. The President of the Republic, Karolos 
Papoulias, a symbolic figure from the old guard of pasok, had to 
flee from the ceremonies in Thessaloniki, where he had come to 
watch the national military parade. The army march past was 
cancelled; school delegations, civilians and reservists marched in 
its place, many with fists raised, to the acclaim of the crowd. 
Slogans taken up by demonstrators across the country linked the 
‘No’ of 1940 with the current situation, likening today’s leaders 
with the wartime collaborationists; chants and songs from the 
Resistance mingled with those from the struggle against the 
military dictatorship, while German and eu flags were burned 
before jubilant crowds. A symbolic threshold had been crossed: for 
large swathes of society, it seemed that a connection was emerging 
between the social and national elements of the protests, linking 
the present with popular memory. It was in response to this 
situation that a shaken Papandreou suggested his high-risk 
referendum initiative, which turned out to be fatal.
Hellenic exception?

Why has Greece—rather than, say, one of the newly integrated 
ex-Communist countries, Slovakia or Slovenia—turned out to be the 
Eurozone’s weakest link? The answers lie in its longer-term path 
of historical development, as much as in its euro-era credit boom. 
The fall of the Greek Junta in 1974 brought the end of a 
repressive cycle which had begun with the start of the Civil War 
in 1946, and arguably dated back even further to the Metaxas 
regime of the late 30s. The ‘Rule of the Colonels’, who had seized 
power in 1967, was in that sense merely the final episode of the 
authoritarian system, marking the agony of this historical 
sequence. The Junta’s downfall therefore produced a sense of 
liberation far out of proportion to their seven-year tenure; the 
period known as metapolitefsi was one of particular effervescence 
and radicalization in Greek society, a cathartic moment quite 
different to the post-Franco ‘transition’ in Spain—or, indeed, the 
Carnation Revolution in Portugal.

Yet the social foundations of the ancien régime remained largely 
in place, not only under the conservative New Democracy party in 
the second half of the 70s, but also during the long rule of pasok 
after 1981. Historically, big Greek capital had always had a 
diasporic-mercantile character. Concentrated in international 
shipping and banking, it displayed little interest in productive 
investment at home. At the same time, the devastating defeat of 
the left in the Civil War meant that post-war Greece possessed 
nothing comparable to the social compromise forged elsewhere in 
Europe in the 1950s and 60s: there was no welfare state, no 
social-democratic party; wage-levels continued to be miserably low 
and workplace regimes were very repressive. Unionization was all 
but impossible in the private sector, and the official 
public-sector unions were kept on a tight rein: the last leaders 
to be legitimately elected by the rank and file were arrested and 
shot in 1946. Greece had also experienced a particularly brutal 
capitalist modernization: the countryside was dramatically emptied 
out, in part as an effect of the Civil War; counter-insurgency 
tactics, applied under close us supervision, brought the wholesale 
expulsion of villagers. Millions emigrated overseas, while 
millions more moved to the cities, above all to Athens, which 
experienced headlong expansion in the post-war period. This 
largely explains the phenomenal concentration of the population, 
with nearly half of the national total living in the capital.

The social compact on which Greek governments had rested in the 
immediate post-war decades excluded the working class and 
peasantry, instead relying on the support of the petty 
bourgeoisie—family-run businesses, independent professionals and, 
as of the 1960s, small proprietors in the nascent tourist sector. 
This layer was the privileged client base of the conservative 
parties that ruled the country in the 1950s and 60s, and was 
offered advantages unavailable to the mass of the population; 
these included exemption from taxes, access to public-sector 
jobs—doled out by the main right-wing parties—and a certain level 
of social mobility through education. Thanks to this compact, the 
Greek class structure for a long time preserved a distinctive 
peculiarity compared to other European states: the relatively 
large petty bourgeoisie meant that wage earners came to constitute 
a majority of the population only in the 1970s. The narrow tax 
base and lack of social welfare systems also reinforced another 
peculiarity: the reduced size of the Greek state, especially small 
if we leave aside its hypertrophied repressive apparatus.

By the time the Junta left the scene, unemployment had reached 
chronic proportions, and the defects of the existing model had 
become evident. While the tensions and conflict it produced could 
be contained by the previous regime, under the new democratic 
dispensation it was no longer sustainable. Elements of a social 
compromise were therefore introduced, first by the conservative 
government that was installed in 1974; pasok then enlarged upon 
these when it came to power in 1981. They included an expansion of 
the very meagre welfare state; the creation of a national health 
system; substantial increases in salaries and pensions; an 
extension of public services, noticeable above all in the 
countryside; and significant expansion of the education system. 
pasok also implemented progressive trade-union legislation and 
university reforms. Greece was therefore moving in a 
social-democratic direction in the 1980s, at a time when most 
other European states were making a neoliberal turn. However, the 
pasok governments of the 1980s did not touch the fundamental 
pillars of the preceding social compromise. Not only large 
capital, but even the moderately wealthy and middle layers 
remained unburdened by taxes. What pasok did was in effect to add 
social-democratic accretions to the existing social formation, 
funded in part by European adjustment funds. Periodic attempts 
were made to rein in budget deficits; but an unavoidable legacy of 
public debt remained from this relatively generous 
social-democratic phase, which helped the country recover from 
decades of authoritarianism and underdevelopment.
Euro bubble

The neoliberal turn therefore came later in Greece than elsewhere 
in Europe. It was Costas Simitis, pasok prime minister from 1996 
to 2004, aided by Papademos at the central bank, who set the 
country on a course of sell-offs and deregulation, while also 
claiming to cut the deficit, lower labour costs and crush 
inflation, bringing the country into line with emu convergence 
criteria and joining the euro in 2001. Financial deregulation had 
produced a frenzy of speculative activity, boosting the Athens 
stock market to unprecedented heights and transferring large 
quantities of wealth upwards to a newly financialized elite; 
euphoria rose higher still in the run-up to the 2004 Athens 
Olympics. In reality, as the world now knows, the deficit figures 
were rigged: Simitis and Papademos oversaw a fee of $300 million 
to Goldman Sachs to shift billions of euros of debt off the public 
accounts. Yet even when this was revealed by Eurostat in 2004, the 
ratings agencies continued to give Greek bonds a triple-A 
investment grade. Like Spain and Ireland, Greece was seen as a 
Eurozone success story, by contrast to the ‘rigidities’ of France 
and Germany. Its traditional sectors of shipping and banking were 
riding high during the globalization boom; Greek banks expanded 
their operations into Romania and Bulgaria. Growth rates soared, 
buoyed up by credit provided, not least, by French and German 
banks, which fuelled a lending boom to Greek consumers. The 
government debt, too, soared—stabilizing at around 100 per cent of 
gdp as of 1993—drawing on both domestic and above all foreign 
loans, the latter comprising two-thirds of the total. French loans 
funded an extraordinary arms-buying spree: in 2005–09, for 
example, Greece bought 25 French Mirage-2000 jets and 26 F-16 
fighters from the us, purchases which accounted for 40 per cent of 
the country’s total imports. [2]

The music stopped with the Crash of 2008 and ensuing worldwide 
recession. The public debt started rising dramatically, when 
Karamanlis’s centre-right New Democracy government decided to bail 
out the banks and the Greek economy began to feel the impact of 
the global downturn. Revenues from shipping and tourism slumped, 
the flow of cheap credit stopped abruptly, gdp shrank by 2.7 per 
cent in 2009 and unemployment rose to nearly 9 per cent. Revised 
figures for the national accounts, as published by Eurostat in the 
autumn of 2010, would show a 2009 deficit of 15.4 per cent of gdp 
and public debt of 127 per cent of gdp. Already facing strikes and 
a national wave of school-student protests after Athens police had 
killed a 14-year-old boy, Karamanlis baulked at imposing the 
austerity programme Eurozone leaders were now demanding and called 
an early election. pasok returned to office under George 
Papandreou, the Amherst-educated son of Andreas, taking 44 per 
cent of the vote to New Democracy’s 33 per cent.

With the economy plunged into deepening recession, the level of 
public debt was clearly unaffordable. A structured write-down of 
Greek debts at this stage would have been an entirely manageable 
procedure. It was adamantly opposed, however, not just by France, 
the uk and the ecb—where Trichet shrilled that it would bring a 
global meltdown—but by the Papandreou government itself. In 
February 2010 when Yanis Varoufakis, a respected pasok economist, 
called publicly for a default he was attacked by the Greek Finance 
Ministry for spreading ‘treasonous notions’. [3] Whether out of 
weakness or vanity, Papandreou refused to countenance a structured 
default, even on the loans-for-arms of the previous 
government—‘odious debt’, by any measure—preferring to put the 
country through the rack of successive austerity measures in order 
to continue the drip-feed of eu–imf loans (‘bailouts’) needed to 
roll over the ever-growing interest burden. Two rounds of 
swingeing budget cuts in February and March 2010 did nothing to 
slow the rise in Greek bond yields. With deadlines for refinancing 
looming—and with debt restructuring still firmly off the agenda—in 
early May 2010, Papandreou signed a Memorandum of Agreement with 
the Troika: salaries and pensions were to be slashed by a quarter, 
and the public sector starved of funds still further, bringing 
hospitals, universities and basic services to a standstill, as 
conditions for a €110bn loan that would be dispensed, month by 
month, to the creditor banks. The parliamentary debate on the 
Memorandum prompted a massive wave of strikes and popular 
mobilizations, starting on 5 May 2010. As a telling measure of the 
party’s hollowing out after decades in office, only two pasok 
deputies voted against.

The year that followed brought one of the most drastic drops in 
living standards that post-war Europe has seen. Workers and the 
retired alike have lost around a third of their incomes. Wage 
arrears in the private sector have now reached three months on 
average, while public-sector pensions—around €500 to €700 a 
month—are in many cases not being paid at all. Public services are 
in a state of collapse: schools are without textbooks, bringing 
teaching to a virtual halt, while hospital patients are being told 
to buy their own medication from pharmacies. The suicide rate, 
traditionally one of the lowest in Europe, has increased by 40 per 
cent in just one year, and the health of the population is 
deteriorating dramatically. [4] The actual unemployment rate is 
said to be around 25 per cent (the official rate is 18.5 per 
cent), with the figure twice as high among 15-to-24-year-olds, 
while gdp has declined by at least 12 per cent since the start of 
the crisis, a proportional drop comparable to the effect of the 
1930s Depression.

Successive strikes and protests were given fresh impetus in May 
2011, when thousands of people occupied Syntagma Square, taking up 
the tactic of the Egyptian masses in Tahrir Square and the 
indignados of Madrid. The ‘people of the squares’ were a 
heterogeneous group, consisting for the most part of voters 
alienated from the two major parties, joined by sectors of the 
population excluded from the traditional representative system 
(precarious workers, unemployed people holding higher education 
degrees). But over the late spring and early summer they converged 
with a re-energized trade-union movement. Though many of them had 
become bureaucratized under pasok or nd tutelage, the trade unions 
remain a considerable force in Greece, with one in four 
wage-earners a union member. The June 15 demonstration brought 
300,000 people onto the streets of Athens, as the Parliament 
prepared to vote through yet another round of austerity measures. 
The popular assemblies and unions together encircled the Vouli and 
other public buildings, the police responding with fierce 
repression. With the streets of the capital in turmoil, a shaken 
Papandreou offered to make way for a government of ‘national 
accord’. The idea was rejected out of hand by New Democracy leader 
Antonis Samaras who had consistently held out against the 
conditions of the Troika’s Memorandum. Papandreou undertook a 
cabinet reshuffle instead, bringing in his old opponent Evangelos 
Venizelos as Finance Minister. But the episode revealed the logic 
of a deepening political crisis.
Soft coup

The magnitude of the May–June 2011 ‘movement of the squares’, and 
even more so that of the October general strike and ‘Day of No’, 
suggests the conditions of what Gramsci called an ‘organic 
crisis’, when ‘social classes become detached from their 
traditional political parties’. Such a crisis comes about when the 
masses ‘have passed suddenly from a state of political passivity 
to a certain activity’—‘the immediate situation becomes delicate 
and dangerous, because the field is open for violent solutions, 
for the activities of unknown forces’. It now becomes a ‘crisis of 
authority’—‘the crisis of hegemony, or general crisis of the 
State.’ [5] Confronted with this situation, the political system 
seeks to free itself from representative structures and the rules 
of parliamentary alternation of power. Gramsci spoke of 
‘Bonapartism’ or ‘Caesarism’, which can be imposed ‘even without a 
Caesar, without any great, “heroic” and representative personality’.

In a parliamentary regime, such solutions take the form of ‘grand 
coalitions’, which directly link the economic and sectoral 
interests of the ruling classes with fractions of the political 
elite that have loosened their previous party ties. By comparison 
to the Bonapartist phenomenon, which was personalized and confined 
to the 19th century, these solutions offer greater flexibility in 
constructing a power bloc that bypasses, or significantly alters, 
representative arbitration and electoral legitimacy, without 
breaking explicitly with the existing parliamentary framework. It 
is within this context that the formation of the ‘national unity’ 
government headed by Papademos should be situated. The idea had 
been circulating for some time, and was briefly tested, as we have 
seen, in June 2011. But the issue only became truly urgent with 
the explosive turn taken by popular movements in October. There 
were numerous indications at this time that the state machinery 
had been shaken—from the almost complete paralysis of public 
administration, exacerbated by a wave of occupations of government 
buildings, to the sudden removal of the entire military high 
command, who had made no secret of their opposition to severe cuts 
in the army’s budget. [6]

In such circumstances, faltering leaders often take initiatives 
which end up spreading the fire that they were supposed to douse. 
Papandreou’s announcement of a referendum is a prime example of 
this kind of gesture. The pasok leader’s démarche sowed panic in 
the stock markets and brought down the fury of the eu’s 
Franco-German directorate, understandably alarmed at the mere 
mention of the word ‘referendum’: the eu had scarcely escaped 
unscathed from popular consultations of this kind, held in 
immeasurably better conditions than those of Greece. Papandreou’s 
humiliation at the Cannes G20 summit of November 3—unprecedented 
for a European leader—was the logical consequence of this false, 
although undeniably overdue, democratic naivety.

Domestically, Papandreou’s gesture—followed swiftly by direct 
pressure from European leaders—indirectly strengthened the hand of 
the ‘Internal Troika’ faction of the pasok, who immediately 
rejected the idea of a referendum and instead called for a 
government of ‘national unity’. [7] While Papandreou may have 
undermined the cohesion of his own party, he scored some points 
against the right-wing opposition. Faced with the strong 
possibility of a victory for the ‘No’ to the October 27 agreement, 
which would amount to a vote for a default, if not for leaving the 
euro, New Democracy fought vigorously against the referendum 
proposal. But in the wake of this, it was forced to yield to the 
demands for ‘consensus’ made by the business world and European 
leaders since the start of the debt crisis, even though Samaras 
dug in his heels when instructed by Merkel and Sarkozy to write a 
letter signalling his agreement with the October 27 conditions. 
For its part, the far right—which since spring 2010 has championed 
the idea of ‘national unity’, as a muscular means of imposing 
‘shock therapy’—experienced the moment as a triumph, allowing the 
laos leader, Georgios Karatzaferis, to gain the institutional 
respectability he so craved. Formations on the fringes of the 
centre-right and centre-left—the small, ultra-liberal and 
europhile Democratic Alliance; the Democratic Left, which emerged 
from a rightist split from Synaspismos; the Greens—also offered 
support, despite rejecting the confidence vote due to the 
participation of laos. Thus the way was paved for the formation of 
a government headed by the banker Papademos—the natural 
incarnation of a ruling bloc that is entirely dominated by the 
interests of European finance.

Educated in Athens and at mit, Papademos—also a member of the 
Trilateral Commission—was governor of the Bank of Greece between 
1994 and 2002. He was thus one of the architects of Greece’s entry 
into the euro, alongside his political mentor Costas Simitis, who 
is thought to have very close ties to the German business world. 
Papademos was also integrally involved in the financial 
manipulations that enabled Greece to meet the Maastricht 
‘convergence criteria’, and which the eu’s own statistical body 
criticized so furiously in 2010. This was no obstacle, however, to 
his becoming vice-president of the ecb from 2002 to 2010. Until 
his elevation to the premiership, Papademos had served as an 
unelected advisor to Papandreou.

Indications of the radical neoliberalism that inspires Papademos 
and his entourage can be gleaned, firstly, from an article he 
published in the Greek daily To Vima and the Financial Times on 
October 23, in which he challenged the proposal to cancel 50 per 
cent of the Greek debt held by banks and other private 
institutions that was eventually adopted by the eu summit of 
October 27. [8] Instead, he advocated sticking with the 21 per 
cent cancellation suggested at the summit of July 21, a proposal 
almost unanimously judged scandalously favourable to the banks and 
utterly unsustainable for Greece. When it comes to paying the 
country’s debt, it would be better to bet on Angela Merkel’s 
‘generosity’—or realism—than on the new prime minister. Second, 
one of the primary demands of Papademos and his European 
supporters, in the midst of their obstinate rejection of the 
proposed referendum, was to sideline the idea of fresh elections. 
This had been one of the conditions on which the nd supported the 
government of ‘national unity’, and Samaras had mentioned February 
19 as a possible date in the statement he made immediately after 
its formation. Confusion continues to reign on this point; but it 
is clear that, in line with the Bonapartist logic noted earlier, 
Papademos and the eu are not looking for a merely transitional 
team with a limited mission. They wish to install a fighting 
government, as one of the prime minister’s former colleagues at 
the ecb stressed in remarks made anonymously: ‘Leading the Greek 
government, he will have to learn to make hard choices, to make 
people unhappy.’ [9] Flanked by his laos ministers and the zealots 
of the ‘internal Troika’, he will no doubt learn very quickly.

The eu’s role in all this deserves specific comment. Even the 
remnants of national sovereignty and democracy that had still 
existed in Greece, already largely formal, are now a thing of the 
past. The manner in which Papandreou was forced to retract the 
promise of a referendum—having had the terms of the question to be 
asked and even the date of the ballot imposed upon him in the most 
humiliating fashion—the conditions of his departure and the 
shadowy manoeuvres leading to the formation of the ‘national 
unity’ government: all this constitutes a bloodless coup, the 
first whose planning and execution have been guided by the eu. It 
scarcely seems necessary to point out the current government’s 
utter lack of democratic legitimacy. Yet the task it has been 
assigned—applying the October 27 agreements and carrying out 
austerity measures even more severe than any to date, under 
permanent Troika supervision, amid a sell-off of nearly all the 
country’s remaining assets—will mortgage Greece for decades to come.
Political outcomes

How has the unfolding crisis affected the political landscape? 
Opinion polls currently indicate an enormous distrust of almost 
all political parties, around a third of respondents refusing to 
state a preference. There is an overall tendency towards 
fragmentation, continuing the pattern seen in the November 2010 
regional and municipal elections. In these, there was a pronounced 
swing away from pasok, whose share of the vote dropped by 9 per 
cent compared to the 2009 parliamentary vote. The radical left 
made notable gains—the kke moved from 10 per cent to 14 in the 
capital region, and polled 11 per cent nationally—but so did the 
neo-Nazi group Golden Dawn, which scored 5 per cent in Athens. 
Based on projections from those who did indicate a preference in 
recent polls, in a national election pasok would obtain around 20 
per cent of the vote, nd about 30 per cent and laos 6–8 per cent; 
while the parties to the left of pasok, if we include the 
Democratic Left, would between them garner more than 30 per cent 
of the vote. If these estimates were to prove accurate, no single 
party would win a parliamentary majority.

Such an outcome would represent a total collapse for pasok, which 
has generally secured around 40 per cent of the national vote 
since the 1980s. Founded after the fall of the junta in 1974, 
pasok became a mass party in the 1980s; it had hundreds of 
thousands of members, building a party machine that until quite 
recently was imbricated into Greek society. The party had a strong 
working-class base, for instance in the industrial belt of Piraeus 
and the western suburbs of Athens. Most of the trade-union 
leaderships, especially in the public sector, were affiliated with 
pasok, allowing it to bring a sizeable portion of the labour 
movement under its sway. The bureaucratization of these unions, 
and the corruption involved, certainly contributed to the ebbing 
of its support; but by the 1990s, the party had ceased to function 
as a mass political organization. The principal cause has been 
pasok’s gradual autonomization from its social base, which gained 
momentum under Simitis, with the effects of the model he promoted. 
This process in turn explains the lack of splits within the 
party—one small parliamentary faction aside—over the Papandreou 
government’s repeated rounds of austerity. The electoral machine 
to which the party has been effectively reduced, however, is 
itself now losing substance in spectacular fashion.

New Democracy has thus far held up rather better. Like pasok, it 
too became a mass party in the 1980s, with its support base 
strongest in the more traditionally right-wing parts of the 
countryside and among the petty bourgeoisie. During the long reign 
of pasok, it also managed to maintain a clientelist base; it has 
its own trade-union wing, which even today is comparable in scale 
to that of the kke. It was the party’s rank and file that was 
responsible for the election of Antonis Samaras as leader after 
nd’s defeat in the 2009 elections—a complete surprise for the 
country’s political and media establishments, who had seen a 
victory for the hyper-Atlanticist Dora Bakoyanni as a foregone 
conclusion. The product of an upper-class Athenian family, Samaras 
was educated in the us, rooming with Papandreou at Amherst. He 
adopted a tough nationalist line on the Macedonian question in the 
early 1990s, and throughout the debt crisis has consistently 
emphasized the issue of national sovereignty. Despite an overall 
neoliberal outlook, and his explicit support for some of the 
Memorandum’s key measures—privatizations, ‘structural reform’ of 
the labour market—Samaras did not vote for the austerity programme 
and continued to oppose the terms of the eu bailouts, to the 
astonishment of the European political class. In that sense, he is 
possibly the only remaining figure within the Greek political 
elite who defends the traditions of representative parliamentary 
democracy. Only intense pressure from Merkel and Sarkozy seems to 
have convinced him to back the government of national unity, and 
even then he pushed very strongly for the Papademos government to 
give a date for elections, something Papademos—backed by pasok and 
the Troika—has so far refused to do.
Fragmented left

The Greek radical left, for its part, has found itself in a 
paradoxical position since the beginning of the debt crisis. On 
the one hand, its position in the electoral landscape has been 
strengthened, from levels that were already high in a European 
context. Its activists have a prominent presence in popular 
mobilizations, even if the ‘movement of the squares’ highlighted 
its difficulties in widening its influence to social layers beyond 
its traditional base. However, it has struggled to intervene 
strategically in the political situation, or to propose any 
credible alternatives to the barbaric policies being enacted in 
the face of such widespread opposition.

Two factors weigh particularly heavily in this context. Firstly, 
the deep division—or rather state of virtual civil war—between the 
radical left’s two main components. The kke is doggedly committed 
to a sectarian and nostalgic Stalinist line, which still dominates 
its electoral activity and grass roots. Syriza, the Coalition of 
the Radical Left—a grouping of ten parties and organizations, of 
which the main one is Synaspismos—advocates a united approach; but 
it has been unable to make its various factions cohere, and tends 
to fall back on minimal declarations of unity founded on a simple 
rejection of austerity. [10] Necessary for united action, this has 
proven insufficient when it comes to posing an alternative to the 
ruling powers. Within Syriza—and especially for Synaspismos—the 
majority line is that the debt should be renegotiated at eu level, 
without halting repayments. The questions of the euro and of the 
anti-democratic, indeed quasi-colonial, structure of the eu are 
minimized or put off until some indefinite point in the future, 
when a ‘European social movement’ will supposedly have changed the 
entire eu system.

Faced with this impasse, elements of Synaspismos—notably the ‘left 
current’ led by Syriza’s current parliamentary spokesman, 
Panagiotis Lafazanis—and members of Syriza who have reformed as 
the Front for Solidarity and Rupture, led by one-time Synaspismos 
leader Alekos Alavanos, are breaking with the Europhile consensus. 
They advocate a ‘Kirchner-style’ renegotiation of the national 
debt, involving cessation of payments, accompanied by exit from 
the euro and nationalization of the banking sector; this would 
allow for devaluation of the currency, offering a way out of the 
logic of ‘internal devaluation’—essentially a dramatic reduction 
in labour costs—that has been imposed by the high priests of 
austerity. Such a break with European institutions, without an 
immediate exit from the eu, is necessary on political as well as 
economic grounds, in order to release the country from Troika 
supervision and restore its basic democratic functions. This 
agenda, strongly argued for by the London-based economist Costas 
Lapavitsas and colleagues, is already promoted by the 
extra-parliamentary far-left group Antarsya, as the basis of a 
programme for an anti-capitalist rupture. [11] However, despite 
some important convergences and its growing audience, the ‘anti-eu 
pole’ of the radical left is finding it difficult to coordinate 
and gain greater visibility.

Within the kke, the situation is more sterile still. Traditionally 
hostile to the eu, the party has long favoured a Greek exit from 
the Union. But it has nonetheless been cautious on this subject 
since the start of the debt crisis, stressing that none of the 
problems the country confronts can be resolved until the ‘power of 
the capitalist monopolies’ has been overturned and ‘popular power’ 
established (under the party’s direction, naturally). This 
‘leftist’ rhetoric in fact serves to justify a quietist practice 
when it comes to mobilizations, concerned above all to avoid 
joining any unified actions of the left, and to portray Syriza and 
Antarsya alike as ‘opportunist forces’ that are ‘playing the game 
of the bourgeoisie and of the eu’.

In truth, the kke leadership, like that of Syriza, make use of a 
radical but disembodied discourse, one eye always on the polls. 
They seem content with the role of passive repositories for 
popular rage, a shared position which has created a strange 
complicity, beyond the virulent polemics. In both cases, albeit 
for opposing reasons, what is excluded is the idea of an 
alternative built on transitional objectives, responding 
concretely to the crucial problems raised by the crisis: the debt, 
eurozone membership, the economic model, the need for democratic 
reconstruction, the questions of national independence and the 
relationship with the eu. This perverse complicity explains why 
Papandreou’s referendum proposal placed both Syriza and the kke in 
a difficult position, above all when it seemed that the question 
of the euro, and the idea of an escape from the eu’s iron cage, 
would both be raised. Though they ended up calling for a ‘No’ 
vote, both Syriza and the kke have now chosen to make the call for 
early elections their watchword, hoping to convert their high 
opinion-poll scores into seats.

This routinized handling of a situation that is extraordinary in 
all senses of the word is fraught with risks. The formation of the 
Papademos government, which sets the seal on the common front of 
the Greek and European ruling classes, presents a formidable test 
for the Greek left. Far from being a marginal force, consigned to 
the role of witness, it is now invested with a historic 
responsibility: the construction of a social and political front 
capable of taking up the challenge presented by an adversary that 
is unstable, and thus even more dangerous. If the left shrinks 
from the task, revealing itself unable to alter the status quo, it 
could well be swept from the scene, as have all oppositional 
forces in countries that have already suffered ‘shock therapy’.

What are the likely outcomes to the Greek crisis? By far the most 
probable scenario is a default. This now seems unavoidable, and 
will perhaps occur after the sixth austerity package has been 
implemented. The austerity measures themselves will trigger 
further waves of social unrest; here it is hard to predict what 
forms any upsurge will take, and what their political content will 
be. But the likelihood that the Greek response to social 
catastrophe will mirror that of, say, Yeltsin’s Russia seems slim: 
Greece is a far less atomized society than the late Soviet Union, 
with far higher levels of popular mobilization. This therefore 
implies a much more confrontational outcome than that of 1990s 
Russia, as the regime struggles to maintain control over a 
desperate population in revolt. The possibility of an 
authoritarian fuite-en-avant then arises; already the far right 
has discussed altering the electoral law to block the left from 
increasing its presence in parliament, speaking ominously of 
Greece becoming ‘the Cuba of Europe’.

The example of Argentina is much discussed in Greece at present, 
with Fernando Solanas’s 2004 documentary Memoria del saqueo 
enjoying enormous popularity. There is certainly a political void 
in Greece into which a Kirchner figure could step, perhaps from 
the margins of the political system—especially if the left 
continues to be paralysed. And while it lacks the commodity-export 
base that fuelled Argentina’s economic revival, Greece possesses 
other advantages: a highly educated population, relatively good 
infrastructure, a strong tourist sector, its overall level of 
wealth. There are crucial differences, however, that make it very 
difficult to see this scenario being realized. Firstly, the extent 
to which the Greek ruling class is integrated, both politically 
and economically, into the European project. Secondly, the Greek 
debt crisis is an organic part of a wider crisis of the eurozone: 
events in Athens trigger immediate reactions from governments and 
stock markets elsewhere, to a far greater extent than did those in 
Buenos Aires.

Greece’s current situation is unlike any we have seen before in 
postwar Western Europe. In this respect, Greeks may find 
themselves once more at the forefront of historical developments. 
In 1821, they were the first continental country to win national 
independence; by saying ‘No’ in 1940, they were the precursors of 
the battle against fascism. Their uprising against the military 
dictatorship in the early 1970s inspired other peoples in Southern 
Europe and Latin America suffering similar oppressions. Is it 
conceivable that Greece will once again sound the tocsin? The 
country’s economic situation, already dire, is steadily worsening. 
Under these conditions, it seems unthinkable that a government 
gearing up to administrate a new dose of austerity to an already 
debilitated population will have an easy run.

[1] Marx, ‘The Class Struggles in France, 1848 to 1850’, in 
Surveys from Exile, vol. 2 of Political Writings, London and New 
York 2010, pp. 36–8.

[2] According to the Stockholm International Peace Research 
Institute, in 2006–10, Greece was the world’s fifth largest 
importer of weapons.

[3] Landon Thomas, ‘The denials that trapped Greece’, nyt, 7 
November 2011.

[4] See Alexander Kentelenis et al., ‘Health Effects of Financial 
Crisis: Omens of a Greek Tragedy’, Lancet, 22 October 2011, pp. 

[5] Antonio Gramsci, Selection from the Prison Notebooks, London 
1973, pp. 210–1.

[6] The cuts have so far left the multi-billion-euro arms 
purchases untouched.

[7] Its leaders include Anna Diamantopoulou, Andreas Loverdos and 
Giannis Ragousis.

[8] Lucas Papademos, ‘Forcing Greek restructuring is not the 
answer’, Financial Times, 23 October 2011.

[9] Cited in Clément Lacombe and Allain Salles, ‘M. Papadémos 
désigné premier ministre en plein chaos politique et économique’, 
Le Monde, 12 November 2011.

[10] Synaspismos, the Coalition of the Left—not to be confused 
with Syriza, the broader coalition launched in 2004—is the outcome 
of two splits from the kke, in 1968 and 1991. It scored 5 per cent 
in the 2007 elections, compared to the kke’s 8 per cent. Most of 
the other components of Syriza, which include Maoist, Trotskyist 
and ‘movementist’ organizations, are to the left of Synaspismos.

[11] See Costas Lapavitsas, Annina Kaltenbrunner et al., ‘Breaking 
Up? A Route Out of the Eurozone Crisis’, Research on Money and 
Finance report, November 2011.

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