Yesterday the Greek people voted by an unexpectedly large margin of 6l.31% against the austerity programs insisted upon by the European creditors–despite threats from the creditors that Greece would be expelled from the European Union. This was a victory for democracy and for the 99% against the 1%. The blog I wrote on the eve of the referendum explains the situation.
Here in Greece, we are in a state of suspended animation and have been for the past 5 ½ months, since the new government of Alexis Tsipras began to negotiate with the European Commission, the European Central Bank, and the International Monetary Fund, popularly known as the Troika, regarding the Greek national debt. Each week we have heard: “a few days more and the crisis will be resolved.” We hold our breath and wait. Holding your breath for that long takes a toll on your health. Right now our banks are closed, and no one knows what the future will be.
Prime Minister Alexis Tsipras and Minister of Finance Yiannis Varoufakis have been negotiating on the assumption that representatives of the Troika are rational and moral actors—or can be convinced to be.
Tsipras and Varoufakis assumed that they could make the rational case that the austerity program imposed to resolve Greece’s debt crisis has not worked. The austerity program has involved cutting pensions and salaries of public workers, instituting property taxes, laying off public employees, raising sales tax, and other programs that were supposed to raise revenue and improve the Greek economy. The country now suffers more than 25% umemployment with youth unemployment at 50% or more; small businesses are closing; pensioners are unable to make ends meet; and the country’s educated youth and professionals are re-locating permanently to other countries.
As Paul Krugman and many others have stated, the austerity program cannot work, because when people lose jobs, wages, and pensions, people have less money to spend, and the economy contracts further, rather than as austerity economics claims, becoming stronger. This makes it even less likely that the government will have the funds to repay its debt. Tsipras and Varoufakis assumed that if they explained this to the Troika, the Troika would stop insisting that the Greek people pay for bailout funds with increased austerity programs.
When an individual cannot pay off a debt, bankruptcy is declared, the banks write off the debt, and the individual is given a chance to make a fresh start. If the Greek government were being treated as an individual, most of its debt would be written off, and Greece would be given a chance to start again. Instead, Greece has been given bail-out funds in exchange for austerity measures. Most people assume the bailout funds have gone to the Greek people, but in fact 90% of them have been used to pay interest to the banks that hold the Greek notes, not even to paying down the debt.
This is why Krugman and many others–and now the IMF–have declared the Greek debt unsustainable. There simply is no way to pay it off. A large portion of it must be forgiven. Yet in refusing to consider renegotiating the debt, the Troika is failing to assign responsibility to the banks for making loans they should have known could not be repaid. In the Greek case, the Troika is standing firm: insisting that the only party at fault is Greece. Moreover, the Troika sees nothing wrong with punishing the Greek people for the sins of its now disgraced public officials.
Tsipras and Varoufakis also assumed that they could make a moral case concerning the Greek debt. They believed that they could convince their European partners that because “the system is rigged” in favor of the 1%, the rules should be changed to take account of the interests of the 99%.
If Tsipras succeeds, he will be recognized as a leader of a peaceful people’s revolution in Europe against the 1%. Some are suggesting that the real reason for the intransigence of the Troika is their desire to stave off a Europe-wide revolution against the 1%.
It is sobering, but not surprising, to recognize that the 1% have been unwilling to be persuaded by rational or moral arguments to renegotiate the Greek debt and to give up their commitment to failed austerity programs. Forced into a corner when the negotiators insisted that he accept further austerity measures days before a large debt repayment came due, Tsipras called a referendum for July 5: asking the Greek people to vote “yes” or “no” on the most recent proposals of the Troika. He hoped that a “no” vote would give him the power to convince the Troika to change its stance.
As I write on the night before the referendum, the Greek people are scared, exhausted, fed up, depressed, and angry. We had hoped that Tsipras could relieve the austerity measures that are destroying the middle class and impoverishing the most vulnerable. So far they have not been able to accomplish this.
Tsipras hopes that a strong majority will vote “no” against further imposed austerity. But the waters have been muddied with threats that Greece will be expelled from the monetary union known as Euro-zone or even from the political entity know as the European Union. Many believe that exiting the Euro-zone means exiting European Union—despite the fact that Sweden and the United Kingdom are not in the Euro-zone, but are members in good standing in the European Union.
Polls say that the country is divided in half: a little over 40% favor “yes,” an equal number poised to vote “no,” with the rest undecided.
There is a real danger that if Tsipras loses big, his SYRIZA government will collapse. Some in the Troika have already expressed the hope that this will happen, as they think they would much rather negotiate anyone other than Tsipras. But if new elections are called, there is every possibility that the right-wing, nationalist, xenophobic, fascist party Golden Dawn, whose leaders are on trial for criminal activity, could be the real winners. People who are scared, exhausted, fed, up, depressed, and angry are not always rational actors. Instead they may turn to those who feed their fear and offer them an outlet for their rage.
I will be voting “no” tomorrow because I understand that the system is rigged in favor of the 1% and in the hope that a peaceful revolution in favor of the 99% can still be achieved. It is unlikely that a peaceful revolution in favor of the 99% will be achieved today or tomorrow. We must be in this for the long haul.
Update: The people have spoken more clearly than anyone expected them to do. They have not been bullied into accepting continued austerity. Tsipras has been vindicated by the Greek people. The ball is now in the court of the European Union. Tsipras and SYRIZA are here to stay. Will the Troika wake up and negotiate a fair deal for the 99%? Or will it continue to try to destroy the Greek economy, the Greek people, and Greece’s democratically elected government?
Note: The Green Party Greece had an anti-austerity platform in the 2012 elections and supported SYRIZA in the 2015 elections. I have been following Nobel prize-winning economist Paul Krugman’s analyses of the Greek crisis since 2012. His earlier pieces on the Greek situation can be found here.
Carol P. Christ leads the life-transforming Goddess Pilgrimage to Crete (facebook and twitter). Carol’s books include She Who Changes and and Rebirth of the Goddess; with Judith Plaskow, the widely-used anthologies Womanspirit Rising and Weaving the Visions and forthcoming next year, Goddess and God in the World: Conversations in Embodied Theology. Explore Carol’s writing. Carol is a member of the Green Party Greece and ran for office in the 2012 national elections.