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The Daily Wildcat

The Daily Wildcat


Column: Opa! Greek leaders say ‘no more’ to austerity

Syriza, otherwise known as the Coalition of the Radical Left, a left-wing party formed by defectors from the Greek Communist Party, came to power in the recent Greek elections with 10-point margins and a strong popular mandate to fight tooth and nail against the austerity regime imposed by the “troika,” or triumvirate, of the International Monetary Fund, European Central Bank and the European Commission.

The austerity “reform” conditions demanded by the troika include some good, necessary policy embraced by Syriza and the vast majority of Greeks — including a crackdown on pervasive tax evasion, effective taxation of big business and efforts to fight widespread corruption. But it also imposed more controversial austerity measures, including eviscerating the minimum wage, massive layoffs of public employees, shutting down all public broadcasting, firesale privatizations of most public property, defunding education and health care, large tax increases on the middle class and anti-union laws.

The result has been a 25 percent GDP decrease and social unrest that Syriza chairman and recent Greek Prime Minister Alexis Tsipras is calling a “humanitarian crisis.” Youth unemployment is near 60 percent. In contrast to the predictions of the troika, the country’s debt-to-GDP ratio is getting worse and worse — it has increased from about 100 percent (not far from the U.S. ratio) to 175 percent since the program was implemented.

Nobel laureate Paul Krugman writes in The New York Times that “[the troika], while pretending to be hardheaded and realistic, was peddling an economic fantasy” when it sold austerity to the Greeks with predictions that unemployment would increase only to about 15 percent and that the economy would bottom out in 2012. Instead, there was a full-blown depression in 2014 that the troika failed to predict, “[and] the Greek people have been paying the price for those elite delusions,” Krugman notes.

Krugman further explains that the IMF was aware that there were no historical examples in which “attempts to pay down debt through austerity without major debt relief or inflation had been successful.” Clearly, the austerity measures were largely a moralistic response by Greece’s creditors based on the stereotype of the lazy Southern European, not a levelheaded economic solution.

Sociology professor Kathleen Schwartzman said that “global Keynesianism” is the only solution, and the results of austerity during economic depressions have certainly proven that at least some move in this direction is warranted.

Syriza recently reached a deal with the troika — now semantically renamed the “three institutions” to heal Greek pride — to extend the bailout four months under a very vague understanding that it continue with reforms and not make “unilateral” moves — i.e. the kinds of thing a sovereign state is supposed to be able to do — to undo previous “reforms.” To fulfill campaign promises to the Greek people at all, Syriza will have to interpret the agreement rather liberally, though, and push back austerity as much as possible without being kicked out of the eurozone.

Recent bills to raise the minimum wage to 751 euros a month — hardly a luxurious sum — and to cancel privatization of a major publicly owned port represent a good first step. If the “institutions” see these modest steps toward trying to improve the humanitarian situation in Greece as reason to kick it to the curb, maybe Greece is better off refusing to be a debt colony.

The fairest scenario would be to force Germany to pay its outstanding war reparations to Greece in the form of debt write-offs and the troika to accept a write-off of as much as half of the Greek debt and tie repayment of the rest to growth, the exact deal Germany received in 1953 after trying to take over the world. 

As that clearly isn’t going to happen, center-left governments in France, Italy, Sweden and elsewhere in Europe need to work behind the scenes to allow Syriza to reverse some damaging, unnecessary “reforms” and improve the economic and humanitarian situation in Greece.

Help is on the way with Podemos, a similar left-wing party in Spain now leading in the polls for that country’s upcoming general election, and Sinn Fein, formerly the political wing of the Irish Republican Army, trailing behind first in Ireland. In the meantime, Syriza represents the beginning of a direly needed challenge to the horrific policies of austerity.


Martin Forstrom is a senior studying sociology and Latin American studies. Follow him on Twitter.

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