The Disaster of Greek Austerity – What Next?

By Evita Nolka, a Greek political scientist. This is the concluding part of a two-part series. Part 1 is available here. Originally published at Triple Crisis

U-Turn by SYRIZA and Popular Disillusionment

Originally elected in January 2015 on a vehement anti-austerity platform, the Greek Prime Minister Alexis Tsipras has made an unprecedented U-turn. He has ignored the popular outcry against austerity – loudly expressed in a referendum on July 5 – and has given in to the creditors’ demands. In August a new bailout was signed and approved, including fresh austerity but also neo-colonial restrictions on national sovereignty giving the right to creditors to monitor the Greek government.

And yet, Tsipras won a new election on September 20, again forming a government. The result seemed to vindicate his capitulation. It appears that Greek voters, confronted with a narrative presenting the new agreement as inescapable, opted to give the governing party a second chance.

“This wasn’t a vote of hope but a vote for the “lesser evil” within the limits of a “nothing can really change” mentality,” says Costas from Patra.

Costas is even convinced that if there was another general election soon, the governing party would still emerge victorious. Greek voters appear to think that there is no credible alternative to austerity. “Ever since the PM marginalized any voices in SYRIZA that tried to show a different way and declared there was no alternative, the Greek society, having lost its morale, has come to accept its fate,” he says.

Truly to understand the popular mood, however, one should take a look at the abstention rates in the recent election. Turnout plummeted, with a record-high abstention rate of 45%. If we take into account the blank ballots that reached an extraordinary 2.5%, the message is quite clear: the Greek people’s disappointment has led to a massive rejection of the political process altogether.

18-year-old Victoria tells me that most of her friends either cast a blank ballot or didn’t bother to vote at all since “they didn’t believe any of the existing political parties could actually make a difference”.

Defeat Threatens Apathy

The low turnout of the elections was not an isolated incident. During the past few years, social unrest and frustration over the austerity measures gave rise to widespread discontent and large-scale demonstrations. But the decline of struggle as unemployment began to bite and especially the betrayal of hopes by SYRIZA have led to a wholesale rejection of politics by broad layers of the population. The sense of defeat and indifference is pronounced among workers, and especially the youth.

“Wishful thinking,” says Costas about SYRIZA’s hopes to overturn austerity by creating a domino effect in the countries of the European south. The balance of power has proven not that easy to change and now people feel that Greece is being penalized for questioning Europe’s neoliberal policies.

European Union officials have categorically ruled out any possibility of a debt write-down. Restructuring in the form of a lengthening of maturity or perhaps a lowering of interest rates is still on the table, but it would have very debatable long-term results.

As for the SYRIZA government’s current promise to implement a “parallel program” that would counteract the impact of the harsh new austerity policies, the country is still awaiting the announcement of concrete measures. It looks as if it is going to wait for long – “parallel” programs running alongside austerity measures are not what the EU has in mind, and nor would they be possible to implement.

The Prospect of Change

The only real question for Greece at the moment is: could there be an alternative path?

Not everyone is despondent. In a school building in central Athens I meet Georgia, a young teacher and mother of three, who offers extra classes to underprivileged students free of charge. She tells me that the economic crisis has made her more politically aware and that she now chooses to spend much of her time and energy in political and social movements and social solidarity structures, where she can actually feel useful.

“People would take to the streets because they hoped they could make an actual difference,” she says. “Now it is clear that our hopes were false.”

That said, so far the only coherent argument about how Greece could adopt an anti-bailout strategy has been presented by Popular Unity, a new political front that includes SYRIZA’s left wing that split from the party by refusing to accept the new bailout. However, Popular Unity has failed to convince Greek voters and did not gain parliamentary representation.

“People feel exhausted, defeated and betrayed”, continues Georgia, “but many refuse to give up”. This is just a period of reflection and finding alternative ways of resistance that could potentially be the basis for something new to emerge in the future. The hope is not lost that Greece would be able regain some economic stability and find a development policy in the interest of its people.

The ever-optimistic Victoria, is certain that Greek people are ready to believe in something new. They just need to be inspired. “Hopefully, after some time new political entities will emerge, new ideas will take form and people won’t hesitate to support them.”

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  1. JTMcPhee

    the Greek people’s disappointment has led to a massive rejection of the political process altogether.

    18-year-old Victoria tells me that most of her friends either cast a blank ballot or didn’t bother to vote at all since “they didn’t believe any of the existing political parties could actually make a difference”.

    So other than some kind of anomic collapse, what possible other outcomes are there now — not only for Greeks, but for the rest of us?

    We mopes have put all our “legitimacy” eggs in the basket labeled “ruleoflaw electoralism.” We apparently are so good at ducking our heads and accommodating and adapting and distracting that the organized MORE-ists that bleed and rule us can pen us up and send us up the chutes to the abbattoir as it pleases them.

    I wonder if the Rulers do all the stuff they do consciously, as part of some kind of Grand Plan, or just do what they do out of the kind of momentum that sometimes people shot through the heart have — they run, run, as if they can run away from the darkness…

    1. James Levy

      I understand your frustration, but the 19th and 20th centuries (and the so-called Arab Spring and Color Revolutions) are so littered with the debris left over when you throw away rule of law electoralism that I am simply frighten by the alternatives, the vast majority of which turned out worse than rule of law electoralism. Ukraine and Egypt are most likely what you get when you throw rule of law electoralism out the window, not a better world than the one we are stuck with today.

      Is there an answer? I sure as hell hope so. Am I sanguine that it resides outside rule of law electoralism? Not really. And I believe the coercive apparatus of the State is still too strong to contemplate anything else.

      1. bdy

        To be fair to adventures in extra-electoral resistance, rule of law electoralism gave the universe Hitler, slavery, the Indian Wars, Florida, NPR in its current state . . . wait . . . strike Florida for failing “rule of law.”

        1. Deloss Brown

          Um–those smarter than me can correct me, but I believe that Hitler never won a national election to president. He won so many votes (35%) in the last presidential elections, but not a majority (nor did his party ever win a majority), that Hindenburg was persuaded to appoint him chancellor and give the Nazis three cabinet posts, one of which made Goering Prussian Minister of the Interior, with control over the police. The rest is horrible history. I am myself a horrible snob, and believe that if Satan were to run for President, he would get a minimum of 30% of the vote, but I object to the implication that the Germans were greater boobs than our own electorate.

      2. alex morfesis

        although somebody has to drive the bus in the morning after draculas castle has been burnt to the ground, so yes, violent overthrow by the citizenry is not advocated(although violent military takeovers no one seems to often to overly complain about)…if we actually had “rule of law” today…there would be less problems…what we have are “rules by law”…with two sets of rules…one for corporate sovereigns and another for the rest of the crowd…

        why is it ok for fannie and freddie to bake new cookies for corporations that have crashed and burned multiple “non-recourse” mortgages…but the average shmoe is told since “they” filed bk, they do not qualify for a new home mortgage anytime soon…

        the problem is not the rule of law…is that we are now at chinese “rule by law”…

        if a citizen leaves the country and renounces their citizenship(stupid idea but…) they have to pay the treasury for 10 years or so…last I checked the supreme court said corporations are people too…yet when these “corporate citizens” renounce american citizenship…all we get is jake “no” law saying there is not much he can do about it and congresskritterz need to pass some laws…

        we do not have rule of law any longer (maybe we never did)…
        we have rule by law…

        so most unfortunate danielsan

      3. Carlos

        Neoliberalism ensuring it is the least worst option around.

        They are so devoid of ambition now, the only option left is to sabotage any potential challenge.

  2. washunate

    Great read.

    wholesale rejection of politics by broad layers of the population

    This is such an important insight into the unpredictable nature of change that lies ahead of us.

  3. Jim Haygood

    Greece may be stuck with its externally-imposed austerity, which is all about staying in the euro. But Argentina’s self-imposed austerity of a 60% overvalued currency looks set to end on Sunday.

    A recent presidential candidate debate put Peronist economic illiteracy front and center:

    Ruling party candidate Daniel Scioli … argued that a devaluation of the Argentine peso was inevitable under Mauricio Macri, as were cuts to popular social welfare programs for the poor and subsidies for everything from gas bills to bus fares.

    “Who is going to pay for the huge devaluation?” said Scioli.

    “Pay for” a devaluation? Devaluation is universally considered to be a stimulative measure that makes a country’s exports more competitive — precisely what Argentina needs to build its shrunken reserves.

    Scioli is quite right that devaluation is inevitable under Macri: Macri has pledged to scrap capital controls on “day one” of his presidency.

    When Argentina stops trying to run an Olympic marathon with a 10-kilo frozen turkey tied round its neck, poor Venezuela will remain as the last benighted dunce cap, trying to maintain a wildly overvalued Bolivar while the rest of world plays competitive devaluation.

    1. ambrit

      Didn’t a “competitive devaluation” lead into the Great Depression last century?
      A possible econo-political scheme would be “internal development” coupled with a Counter Globalism policy. What’s the use of a thriving Global “Economy” if your country is going to H—?

      1. Jim Haygood

        Dozens of books have been written about the Great Depression, but they don’t agree on what caused it.

        Early devaluers such as Britain (which let the pound float on 20 Sep 1931) were less harshly hit than late devaluers such as the US, which finally devalued against gold in stages between April 1933 and Feb. 1934.

        As the Independent recalls,

        Several European countries had devalued their currencies, leading the markets to conclude that the pound must be next – particularly because it was seen as being pegged at too high a rate. Faced with these pressures, the Government bowed to the inevitable, reversed its strong pound policy, and let sterling float.

    2. bdy

      Its funny to call a sovereign spending money on things people need “self-imposed austerity” – kissing cousins to that “welfare causes poverty” logic the Clintons sold us when we were young.

      It seems like you’re saying that it’s smart for Argentina to devalue it’s currency (with necessary cuts to spending implied) because then it will be easier for them to sell their stuff abroad. Is part of your argument that lower payouts won’t hurt so much, because selling more stuff overseas will mean more money for everyone at home, so that people will now have money to buy food, heating oil, and a bus ride without government interference? Are we talking Etsy here? Profits = high employment? Trickle Down or Rising Tide? Has that shit sandwich ever panned out, anywhere?

      Or is it just that the balance sheet matters more, and if the State patching holes on a meaningless ledger in some Manhattan database doesn’t really translate into living with dignity for the people of Rosario, well they can suck it?

      I was trying to figure out how your comment applied to Emma Goldman democracy in Greece, and bingo I got there: the people can suck it.

      1. Jim Haygood

        ‘lower payouts won’t hurt so much’

        Devaluing means higher payouts for farmers, when their overseas sales are converted back into pesos.

        1. bdy

          . . . and the farmers will take that extra coin and INVEST it, hiring those out of work city dwellers to grow MORE food to sell for GREATER profits and hire MORE folks to yada yada because Global Capital, until pretty soon everything’s great for everyone who’s not too lazy to work and great for everyone who can engage the international commodities markets. As for the people . . . and by “people” I mean just the ones who stubbornly refuse to move to the farm for that job or just the ones whose paycheck suddenly can’t compete with dollars for those soybeans, oilseeds and nice leather handbags . . . well they can suck it.

          1. JTMcPhee

            Didn’t Pol Pot have a plan like that? No such thing as stubbornly refusing to go to the farm, if you wanted to continue breathing, and no guarantee you would keep breathing even if…

            Humans, the Pre-Failed Species…

        2. Carlos


          Don’t most Argentinians and businesses take out their loans in $US, devaluation would be a disaster for them.

          Kirtchner never reined in the banks and never got the parallel USD currency out the economy. That ultimately dooms this branch of Peronistas to failure.

            1. Carlos

              Thanks Jim,

              I’m trying to figure why they are losing ground, is it ceding too much economic control to reactionary forces hell bent on economic sabotage?

              Is it the weight of the privately owned media pushing the inflation meme, hence they think they have less policy space than they really do?

              Economic incompetence…..or all three?

        3. Luciano Moffatt

          Absolute nonsense.
          Farmers keep the rent for themselves and 90% of people that lives in cities get higher prices for food.
          Argentina development needs a big internal market. If you devalue the currency you will shrink the “mercado interno” (the inside market?) and therefore the economy will collapse. Our exporting goods needs few hands to operate and the owners will get all the hard currency to spend it on luxury items.
          In Argentina we pay high salaries and we are proud of that, because we have good education and a skilled (and legendary fighting) working class.

          1. Jim Haygood

            Argentines used to feel a kinship with the French. Even urban dwellers in Paris prize their countryside connections, and tolerate periodic protests when farmers block the Périphérique with their combines and tractors. It’s all in the name of solidarité.

            By contrast, Kircherismo adopts an attitude of contempt toward farmers, who represent the only internationally competitive sector in Argentina. I saw the graffiti that La Cámpora sprayed on La Rural — the Belle Epoque stadium in Buenos Aires where Argentina’s annual livestock show takes place — likely with a wink and nod from the Widow K.

            It’s pretty sad. ‘Paris of South America’ no more. More like the ‘Caracas of South America’ under the tender ministrations of the Widow K and her radical youth. She’s got great hasbara, though, I’ll grant you.

            1. Luciano Moffatt

              I take the hasbara thing as a compliment, so thanks.
              I never been in Caracas so, I can not tell you if we are that or no.
              I do not care if we are Paris of South America or not. We are Buenos Aires and that is a lot to say. There are plenty of europeans here enjoying a vibrant life and finding interesting things to do. There are also several europenas working on my school doing the science that they cannot do in Spain because there is no job for them there.
              I would be a shame if we shoot ourselves in the foot by electing Macri, it would be a big step back in so many aspects.
              For instance there was today a graffiti in one of the memorial places where the Dictadura Militar hold their desaparecidos (La Mansion Sere) saying: “el 22 se acaba el curro”, so the dark forces of the past are waiting for their opportunity to get back. And we all know, the right is unmerciful.

              1. different clue

                Interesting how the word “hasbara” is beginning to enter the language for general use in different contexts. Perhaps it is time for the good people at Urban Dictionary to give “hasbara” a new definition beyond the official definition it now has. Something along the lines of “tricknological explainification”.

                Nothing wrong with that. Inventing new definitions and/or whole new words as-called-for is a perfectly cromulent way to embiggen the language . . . as Lisa Simpson once said.

        4. Will

          Only in nominal terms, the farmer could still face a loss in purchasing power. In addition, all savings would be worth less, and purchase power of income of non-exporting sectors goes down.

    3. Luciano Moffatt

      Which kind of self imposed austerity are you talking about? Just complete nonsense. There is no austerity in Argentina, just the absolute opposite.
      The devaluation that Macri would impose would be a tremendous transfer of wealth to the rich. And it would lead to widespread unemployment and a degradation of our living standards. Besides, Macri is known to be a close ally to the US embassy and it tries to impose on us their agenda on Venezuela.
      I am hoping that Daniel Scioli becomes the new president. Fortunately for me, it is not here where I have to get voters. Argentina is clearly the only hope left for what it would be a Western Civilization. If we fail, China will certainly rule us in a few decades, since Neoliberlalism is a self fullfilling fallacy.

  4. alex morfesis

    Greece has a chicago mentality…woe is me…some kid is going to reach his glove out and steal the world series from us…despite having jordan win and ditka win…it has been an interesting year…greece shall live again…but those who want to leave should leave…but they will find life in the rest of the west not so inviting…most greek college degrees are useless outside of greece…most who will argue otherwise did not use their PhD from greece but rather from some non greek university, to go forward in life…greece shall live again…but she needs to create financial competition internally…Italy, Germany, Spain, Switzerland and UK have robust financial enterprises…you can count on your fingers and toes the number of insurance AND banking enterprises in greece…that is why it always felt like Zimbabwe on the Mediterranean…a hand full of capital providers, mostly tied to the then two political parties…greece shall live again…

  5. TheCatSaid

    Interesting things are taking place in Venezuela to produce more internally instead of importing.

    For example, Another Beer is Possible: Venezuela’s Grassroots Take On the Polar Brewing Monopoly
    Venezuelan Government and Communities See Urban Agriculture Increasing, dealing with the crucial areas of food and drink.

    TINA is never true. When someone or some entity promotes this kind of thinking I take note. People are far more creative than we are led to expect or believe by experts / media / common consensus / “inside the box” thinking.

  6. different clue

    At least Greece is following one of ian Welsh’s pieces of advice . . . to send as many migrants and refugees into Europe as possible. Though Ian Welsh suggested it as an example of the kind of pain Greece could cause if Greece’s debt was not forgiven. Greece hasn’t tried for that, but at least Greece is getting some revenge on Europe for what Europe has done to Greece. The more refugees, the more revenge. Maybe millions and millions of refugees passed through Greece into Europe, as fast as possible.

    Meanwhile, what might Greek Greeks do within Greece in the meantime? I don’t know. I wonder if Albania under the Milosevich Yoke but before the outright war might offer some answers? Didn’t the Kosovoan Albanians develop a whole parallel society and economy under Milosevich occupation? How did they do that? If Greeks were to view Europe as One Big Milosevich and themselves as One Little Kosovoa, might they begin developing survival subsistence economic resistance within Greece?

      1. different clue

        I wasn’t referring to the Hashim Thaci organized-crime side of Kosovo economic life. I was referring to the whole network of parallel medicine, parallel etc. that non-violent leader Ibrahim Rugova was spiritually involved in helping to kick off. And I was suggesting that Greece look at the Rugova model of parallel survival, not the Thaci model of crime and violence. Drug running Thaci-ism is pretty mainstream, when you get down to it.

        Though Ian Welsh suggested Greece work with all the mafias of
        Balkan Europe as well to destabilize EUrope as fast and hard as possible, to torture EUrope into forgiving the debt. It was one of several measures Ian Welsh suggested for torturing EUrope into reversing its policy of kinder-and-gentler stealth-holodomor against Greece. But Greece never adopted any of them, and now it is too late.

        But perhaps Greece can still learn from Rugovian parallel survivalism as developed in Kosovo under Milosevich.

    1. TheCatSaid

      “might they begin developing survival subsistence economic resistance within Greece?”

      That’s the implication of the 2 recent links posted above re: Venezuela. People will find a way.

  7. Keith

    It took Hitler to default on Germany’s impossible debts in 1933.

    After 5 more year’s of austerity the people of Greece may be ready for Golden Dawn.

    The people just have to find someone who has the balls to say no to the creditors.

    Probably why countries turn Right after financial crises (another of today’s articles).

    A nationalist Right will take on and fight global creditors.

    It seems to be the way it works.

    1. JTMcPhee

      Really? You think in the world of triumphant monetization that any politician, Right, Left or Other, will be able or be allowed to repudiate that neoliberal fraudulently generated debt stuff? I don’t know, is Mossadegh a case in point? There have to be bunches, Huey Long maybe on the home front, that moved in that direction until bought or otherwise stopped…

    1. Tsigantes

      More than half of original SYRIZA abandoned the party after the 13 July capitulation of Tsipras. Then 65% of the SYRIZA central committee left, followed by 100% of SYRIZA Youth Wing. So who is left in this ghost SYRIZA? A lot of ex-PASOK people and a few “SYRIZANs” who apparently prize power at any price. At least we now know who they are.

  8. RBHoughton

    When a left-wing government was elected in Portugal recently, after a fraudulent attempt by the national President to set them aside, they assumed power and now face the carrot and stick of the ECB, IMF and private bankers, just as Tsipras and his group have done and failed.

    Schauble told them “Elections are irrelevant, there are rules” revealing that the EU’s position is that once you’re a member you are a member for ever – like the mafia – regardless of the will of the people.

    So here we have a pristine example of the diminishing status of democracy. Its a return to Napoleon’s Europe (which certainly worked) – “a dictatorship over a vast democracy” as the great man described it. Europe will have a pilot to steer the ship of state whilst members will have the government of their countries domestically and no more.

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