On the drizzly evening of 7 November, I joined a demonstration in front of the Parliament in Athens. Like the estimated 100,000 other people in the vast square and surrounding streets to protest against the imposition of yet another – the fifth – round of austerity measures being debated inside the building, I wasn’t in a good mood. My pension had already been cut by 40 per cent, the tax rate on the remainder nearly doubled, and a further cut was planned. We were kept away from the building by multiple rows of police, a terrifying sight with their bulky black uniforms, white helmets and visors, assorted weapons and communications gear, tear-gas canisters and water cannons. The scene that wet evening made for a peculiar image of democracy in practice; the people’s elected representatives cowering inside the temple of democracy, protected from the people’s wrath by a praetorian guard. That was bad enough. Inside the building, parliamentary democracy was getting short shrift.
The government had distributed the proposed austerity measures – a 250-page document – to legislators only that morning. It had taken five months to craft the package, a process billed as ‘negotiations’ between the government and the creditors’ representatives, the so-called troika of the International Monetary Fund, European Central Bank and European Commission, who weren’t in a mood to compromise. Their only concession was to the sweltering weather: the suits went tieless. They presented a long list of measures – 150 according to some sources – and kept the government’s hand in the fire until it signed.
The troika asked for overall savings of €11.5 billion in 2013. A government proposal to raise €8.5 billion through taxes was rejected as unrealistic and cut in half. The remaining €7 billion is to come from further cuts in wages, pensions, social services, mass dismissals of civil servants, the auction of state assets and a hundred other ‘economies’. Even the lowest pension, a derisory €330 a month received by traditional farmers, is to be cut by 10 per cent. The package makes neither provision nor promise for economic recovery at any point.
The carrot dangled before the government was a ‘dose’ of €31.5 billion agreed months earlier, but held back until ‘Greece commits itself to fulfil its obligations.’ With its back to the wall, the government turned the carrot into a stick to whip the package through Parliament. Legislators had no time to read it, let alone discuss it. The time for talking was over, the government said: a vote was required immediately so that the €31.5 billion could be released before ‘the money runs out in two weeks.’ The 12-hour debate that followed shed no light on the issues at hand, but highlighted the disintegration of the political establishment. The government didn’t deign to discuss the merits of the package but repeated ad nauseam that it was the country’s last chance to avoid bankruptcy and expulsion from the European Union. Syriza, the radical left opposition party that has now overtaken New Democracy (which leads the governing coalition) in opinion polls, also ignored the package, instead heaping insults on a government it calls the agent of the creditors.
Insults gave way to threats when the deputies of the far-right Golden Dawn promised to have the government tried for high treason. The Independent Greeks, a splinter of New Democracy on the right, called the package a gross violation of the constitution. At the same time, a high level committee that provides legal guidance to the government ruled unanimously that many of the austerity measures already passed are potentially unconstitutional. The next day, the Supreme Court ruled unanimously that the measures are indeed unconstitutional. This does not hinder the government at present, but presages a storm of litigation in the future, when the judiciary is bound to follow the lead of the highest court. Since the judges are refusing to work more than one hour a day in protest at cuts to their salaries and pensions, litigation is unlikely to favour the government.
At one point, the proceedings in the legislative chamber come to an unannounced halt: the parliamentary clerks were threatening to go on strike. Pampered by politicians for decades, this clique has accumulated the sort of salaries and benefits that enrage the troika, but a government founded on patronage has not dared touch them. A last-minute troika ultimatum compelled the government to sneak an amendment into the package trimming their sails, hoping it would go unnoticed. It did not. The amendment was withdrawn – the only change made to the package that day – and the show went on.
Outside in the rain, the demonstrators’ main contribution to proceedings was non-verbal. Showing a palm with splayed fingers close to someone’s face is a gross insult, doing it with both hands doubly so. A forest of raised arms and palms with splayed fingers were thrust in Parliament’s direction that night, signalling the people’s utter contempt for the institution. The labour unions were out in force, waving flags and shouting slogans in support of the sixth general strike called in recent months, and condemned to futility like the rest. The spectre of la grève générale no longer strikes terror in the era of global capitalism. Youth political organisations were there too, blaring songs through their loudspeakers. But the songs were dated – from the political battles of the 1960s and 1970s – and the slogans tired. I had thought three years’ accumulated frustration and hardship would end in a political explosion. That night I saw a demoralised people resigned to their fate; a fate far worse than bankruptcy. Around 9 p.m. the rain fell heavily and the people dispersed. A group of enterprising Asian refugees appeared out of nowhere to sell cheap umbrellas.
The package passed that evening by only seven votes: a disintegrating PASOK suffered several defections, and the coalition’s third party, the Democratic Left, unable to stomach the obliteration of workers’ rights, withheld support. But two days later the 2013 budget implementing the package passed with a comfortable majority. The Democratic Left reversed its position and backed the budget. There were no demonstrators outside Parliament. ‘What’s the point?’ a friend said. ‘I can’t raise enough spit for their faces.’ My first reaction to learning that my pension will be cut by 10 per cent was relief that it wasn’t worse.
The government expected a swift pat on the back from Europe in the form of the long delayed €31.5 billion. ‘Greece has done all that was asked of it,’ the prime minister said, and its need for assistance was urgent: ‘the money runs out in a few days.’ Athens pinned its hopes on the Eurogroup meeting of finance ministers on 12 November. They did not share the sense of urgency, though they threw Greece a bone by giving it a two year extension to balance its books internally. On 27 November Greece was promised €43.7 billion if it jumped through another hoop imposed by the IMF. Greece has until 13 December to buy back bonds worth some €30 billion from private investors at a discount of 60 to 70 per cent; a windfall for Hedge Funds that had bought the bonds at an even heavier discount. Greece has been lent €10 billion by the European Stability Mechanism for this purpose – borrowing from Peter to pay Paul. If and when the €34.4 billion promised this month is released it will do nothing to lighten the burden on the population, because some €25 billion of it is earmarked for the recapitalisation of the Greek banks. In fact, more cuts are anticipated as the government introduces a revised tax system in 2013 (on which the remaining €9.3 billion promised by the troika depends).
The recession is now in its fifth year. GDP has dropped by 25 per cent, the unemployment rate is around 25 per cent, and a moribund market has seen 68,000 shops close since 2010: all ample proof of the failures of austerity. Yet the EU insists on pressing on with a programme that will bleed the economy dry. Never mind that there is little blood left in this stone. The sum owed to the state treasury in unpaid taxes this year has reached €11 billion. The state electricity company is cutting off supplies to householders who can’t pay at a rate of 30,000 a month. A hike in the cost of heating oil to match the price of vehicle fuel is the latest government brainwave, with the loopy justification that it will eliminate rampant tax evasion by importers and distributors.
The potential political consequences are the most worrying prospect. The ongoing destruction of the working class and the impoverishing of the middle class are clearing political space to be filled by the radicals of the right and left. Syriza has made the most gains, thanks to its outspoken rejection of the austerity programme, and could well lead the next government. The party has toned down its rhetoric, committed itself to the EU and the Eurozone, and may conceivably reach a new deal with the creditors. Its critics accuse it of opportunism and a lack of clear policy. Weirdly, they also accuse it of seeking to protect the institutions and traditions of the old regime that they themselves represent. If Syriza comes to power it will have to deal not only with the creditors, but also with the neo-Nazis of Golden Dawn, now rising rapidly in opinion polls, something the present government lacks the political will to confront. When this comes to pass, serious political strife cannot be avoided.