Greek voters have struck a fantastic blow on behalf of all those fighting against austerity in Europe. A brilliant campaign waged by Alexis Tsipras and the leadership of Syriza united all those who want an end to austerity and to the national humiliation of living under the diktat of Brussels/Frankfurt and Washington.
The Oxi or No vote was strongest in the workers’ districts and the Nai or Yes vote was only strong in the wealthiest neighbourhoods. The campaign united all the popular classes in the face of threats, bullying, and the enforced closure of the banks. Almost the entire Western European mainstream press was united in a vile campaign of lies and propaganda. Yet the 61.3% vote rejecting ECB/EU/IMF terms was greater than Syriza’s vote of 36.3% in the general election or even the combined vote for the government parties of 41.1%. It won in every age category except the over 65s. Syriza has become the overwhelmingly dominant force in domestic politics and the parties who supported the Yes campaign are in disarray.
The political representatives of the creditors are unlikely to accept democratic mandates, but Syriza is now in a far stronger position. A clear aim of the creditors had been to engineer a split inside Syriza. Instead, it was Samaras who was forced to resign from the leadership from the leadership of New Democracy, the main rightist opposition. A host of former right wing Prime Ministers confirmed their status as political has-beens in calling for a Yes.
There are important divisions among the creditors. The IMF, representing the US, clearly favours debt restructuring and released a report on the eve of polling on the unsustainability of Greek government debt, which the European governments unsuccessfully tried to block and Tsipras capitalised on in a televised address. US banks are not lenders to the Greek government, unlike either European banks or governments. But the US is also firmly committed to austerity and to privatisation, which it believes it can profit from.
This division could only work to Syriza’s advantage if there was a degree of debt restructuring and reduced interest payments that was large, and significantly greater than any token spending cuts or tax increases that might be agreed. On that basis, the net result could allow increased government spending and investment, which are decisive in reversing austerity and restoring growth. But, on this matter the main European leaders have been willing to stand up to the US. Clearly, they consider that shifting the burden of the crisis onto workers and the poor and crushing the anti-austerity forces in Europe are in the vital interests of big business in Europe.
There has been much commentary on the replacement of Yannis Varoufakis by Euclid Tsakolotos as Greek finance minister, much of it ill-informed or contradictory. The change signifies no important concession to the creditors and may be the adoption of a more hard-headed approach to negotiations.
The immediate requirement is to lift the ban on new liquidity provision from the ECB to Greek banks. By itself, this would restore confidence in the banking system and reverse the bank run. This is crucial to allow proper economic functioning including the purchase of vital goods. If this is not done it will signal that the creditors are moving to destroy the government leading the whole anti-austerity movement in Europe.
In any event, this is only one battle. €3.5bn in debt repayment is due to the ECB on July 20. The negotiations on releasing both the last tranche of the prior bailout and money owed to Greece lies ahead, along with the terms of a longer agreement, which the IMF puts its infamous red lines through before the vote. Debt restructuring is still needed and is unavoidable.
The Greek government has registered a famous victory over the pro-austerity forces. It will need increased solidarity from all anti-austerity forces in Europe in the further battles ahead.
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