Notes from the front – of the week 11/3/2015

EU is using ‘salami slicing’ tactics against Syriza

The EU rejection of the latest Greek government proposals confirms that the struggle is both intensifying and is likely to be prolonged.

The EU’s very public dismissal of Syriza’s proposals on reforming the tax collection system – and the widespread ridiculing of them by the European media – shows that the Eurogroup of finance ministers is not looking for any compromise and just aims to crush Syriza’s opposition to austerity. This stance is reinforced by the European Central Bank which is refusing to provide short-term funds (‘liquidity’) to Greek banks in case these are used to fund government operations.

The reform of tax collection is imperative. It is widely agreed that in Greece the rich and many businesses only pay tax on a purely voluntary basis. There is no effective enforcement.

In the OECD countries the average is that taxes amount to about one in every four Euros of profit. In Greece it is less than one in seven Euros. Tax collection should be one of the easiest areas for the EU to settle with Greece as there is agreement on all sides about the aim of necessary reform.

Rather than ridiculing Syriza’s proposals, the international bodies could have made constructive suggestions of their own on how to widen tax revenues. But they are only interested in inflicting a defeat on anti-austerity forces in Greece and beyond.

The agreement in principle over tax collection does not apply to the many other issues on the table – tax is just one of seven areas. These include the role of wages, collective bargaining and privatisations.

In addition Syriza continues to demand a comprehensive deal on debt restructuring when the current agreement with creditors runs out in June. Euclid Tsokolotos, Syriza’s minister for international economic affairs says the EU is using ‘salami slicing’ tactics on Greece, using every area of negotiation to push back against the anti-austerity agenda.

There is widespread criticism of the new government’s stance from sections of the left, including within Syriza. The criticism that Syriza has not rapidly concluded an exit from the Euro is entirely misplaced. It did not stand on and has no mandate for an anti-Euro platform. An overwhelming majority of the population continues to support Euro membership. Along with the other crisis countries and their anti-austerity parties, there is a continued commitment to Euro membership based on the history of investment from EU bodies. The populations of these countries want a return to that system of transfers. By contrast, the anti-Euro forces in Europe are currently led by the far right, the Front National, UKIP, AfD, True Finns, and so on.

Exit from the Euro may eventually be forced upon Greece, but there is an entire political struggle to be gone through before that point is reached. In particular ensuring that the Greek population is travelling that road with the government, as an immediate effect would be a massive devaluation of the Greek currency and a consequent squeeze on living standards.

The more nuanced criticism is that more could have been achieved in negotiations. But the Syriza leadership argues that there have been a series of small victories. The fifth evaluation of the Memorandum was not agreed as this would have imposed more austerity. The Troika demanded that Greece run a primary surplus (before debt interest payments are included) of 3.5% of GDP. That has not been agreed and all future surplus targets remain an open question. It is clear that the leadership continues to fight. All informed discussion on tactics and achievements needs to take this into account.

A key factor is the overall balance of forces. Mobilisations and discussion continue in Greece and Syriza’s support has risen significantly since the election. In Europe, Syriza continues to argue that the rise of Sinn Féin and Podemos is their greatest support. In Britain and elsewhere the campaign to drop the debt remains key, along with explaining that it is the austerity policy and its proponents who are responsible for the continuing crisis. Supporting the activities of the Greek Solidarity Campaign remains crucial.

US not helping Ukraine – just stoking a new cold war

Last week the National Bank of Ukraine sharply raised its benchmark interest rate by 10.5 percentage points to 30 per cent to try and deal with a financial crisis of spiralling inflation and a sinking currency.

Since the February 2014 parliamentary coup imperialism’s policies have imposed a severe economic contraction on Ukraine, resulting in its GDP shrinking 7.5 per cent in 2014, with a similar reduction expected this year.

This has led to the financial crisis, with large-scale capital flight, the hryvnia (local currency) down 70 per cent since the start of 2014 and official annual inflation currently standing at over 25 per cent. The population is being increasing impoverished.

The terms imposed by the US, through the IMF, are responsible for this devastation, as Ukraine’s economy is subordinated to Western interests.

A large part of the IMF’s so called ‘loan’ went directly to international banks that were holding Ukrainian government debt – so Ukraine now owes the IMF instead of these banks. In return for this ‘bailout’ Ukraine has lost sovereignty over its economic policy. Public assets and private industries have to be sold off to Western purchasers and the government must implement the severe austerity programme that is slashing, already low, living standards.

Public services are being cut, alongside wages and pensions, whilst subsidies for necessities such as domestic fuel are now being sharply reduced. The number of state employees is due to be cut by 20 per cent in 2015 and the retirement age will rise by five years.

The key area of government spending the IMF does not require Ukraine to cut is military spending. The US wants Kiev to maintain military pressure on Russia and be prepared to resume missile attacks on the self-declared people’s republics in the east when the US next requires.

On the other hand, most West European states clearly would prefer the current ceasefire to work and a political solution be negotiated in Ukraine. And Obama, for the present, is not scuppering the recent German/French brokered ceasefire initiative. But significant US interests are pushing for the fighting to resume. US General Breedlove, the top NATO commander in Europe, makes frequent wild claims about Russian military activity that the German government calls ‘dangerous propaganda’. Plus Victoria Nuland, head of European affairs at the US State Department, is still urging Washington to deliver arms to Ukraine.

Meanwhile NATO’s encirclement of Russia continues to tighten, with Western militaries increasing their presence in central and eastern Europe. More aircraft are being deployed in the Baltic states, more warships sent to patrol the Black Sea and Baltic Sea and more troops are on the ground undertaking training and exercises. The West has embarked on a new cold war.

Keep the CWU on the left – support Billy Hayes

The campaign for the re-election of Billy Hayes as the General Secretary of the Communication Workers Union is underway with the outcome crucial for the future left orientation of the union. Hayes is challenged by Dave Ward, senior negotiator in the postal constituency of the union.

Hayes is standing on a platform of opposing austerity; promoting the Living Wage for all communication workers; prioritising the unionisation of unorganised workers; advancing a strong agenda on equalities; and integrating social media alongside traditional union communications.

Under Hayes’s leadership the union has moved from supporting the Blairites to being a reliable ally of the trade union and Labour left. Alongside this, he has ensured the union has made an important contribution to the anti-war movement, the anti-fascist and anti-racist movement, and taken an active part of the international solidarity movement with Palestine and Latin America. Inside the TUC, he has ensured the union has supported the most progressive developments in the last 14 years.

A victory for Hayes would maintain the left orientation of the CWU. A defeat would see the union move rightwards, with left policies and alliances being overturned, or allowed to wither. The result will be known by 16 April.