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Austerity or Grexit: A False Dichotomy

Greece has shown the world that there is an alternative to austerity: wresting power from the hands of elites and reasserting democratic control.

One day before the referendum of July 5, 2015, a rally in Madrid, Spain, in solidarity with the people of Greece urged a "no" ("oxi") vote. (Photo: Adolfo Lujan/Flickr)

The Greek people are no strangers to resistance against imperialist empires. In 1821, the Greeks said Oxi (“No”) to the Ottoman Empire after almost 400 years of tutelage. In 1940, the Greeks said Oxi to the fascist Dictator Benito Mussolini and the Axis forces that attempted to occupy Greece. Again in 1973, the Greek people, headed by students, said Oxi to the military junta when they staged a dramatic protest at the Athens Polytechnic University, which ended in tanks crashing down the gates to the university and ultimately the deaths of 24 civilians.

On June 5, 2015, the Greek people said Oxi to a new kind of imperialist dictator – that of the forces of neoliberal capital, the troika. After over five years of relentless austerity imposed by the troika and its band of creditors, the Greek people expressed their discontent through the referendum, which resulted in a landslide victory of 61 percent over 39 percent.

Despite both the international media and the local Greek media, which framed the referendum in terms of austerity vs. the eurozone, the Greek people did not uniformly say “Oxi” to Grexit. Both the media, as well as just about every other Greek political party other than those of the far left and its right-wing partner, ANEL (as well as Golden Dawn) pursued a policy of fearmongering. The Greeks were told that voting “Oxi” would lead to immediate economic collapse, an elimination of pensions, a shortage of medicine, and most importantly, ejection from the eurozone. Although bank coffers are running dry, nothing of this sort has transpired. At this point, the euro-leaders will convene in the coming weeks to discuss what to do next, as they lick their wounds because Greece called their bluff.

The breakup of the eurozone, and a Grexit (Plan B), is not as simple as the Greek people voting “Oxi” on the referendum. What the euro-leaders fear more than everything is a breakup of the euro. The depiction of austerity or Grexit has been revealed as a politics of fear. It is a false dichotomy. The Greeks merely voted “Oxi” to austerity, but as the now-former Minister of Finance Yanis Varoufakis has said, the Greek referendum is actually a “majestic, big yes to a democratic, rational Europe.” Although this Europe has not yet materialized, the hegemony of the current, neoliberal Europe has been shaken to its core. The Greeks are the first to demand change.

The eurozone never functioned to lift all euro-countries on an equal playing field that would result in prosperity for all. The exact opposite occurred – a structured power imbalance was institutionalized, and the euro operated to funnel loans into weak, peripheral countries, like Greece, while strong, export-oriented countries, like Germany, profited immensely. Greece, and others such as Spain, Italy, Ireland and Portugal, were turned into debt-colonies subject to the demands of imperialist neoliberal capital emanating from Germany.

Narratives were constructed to justify implementation of harsh austerity treatment – Greece was depicted as an immoral and entitled country that took out loans and refused to pay them back to the benevolent banks. Yet, nothing could be further from the truth. In fact, the vast majority of the bailouts have not gone to the Greek people but have been used to pay down the exorbitant interest owed to the banks. The crisis was never meant to be solved – it was meant to be managed. A managed crisis means that Greece would continue to accept loans to continue to pay back the banks. In this way, the banks could continue to profit, while Greek society bore the brunt of the costs through an acute humanitarian crisis.

Now the Greek people have stood up to the neoliberal austerity regime in Europe. Contrary to the fear-mongering, it is now the Euro leaders who are scared. The masters cannot live without their slaves. If the Grexit is to occur, it is not because of the referendum but because of angered European and German leaders. If Greece is forced out of the eurozone, then the eurozone’s true face will be revealed – that of an authoritarian system that would rather punish Greeks than concede to democratic principles that respond to the people. What the Greek people said “Oxi” to is a particular version of Europe that has become dominant in recent years and irresponsibly and destructively clings to failed austerity policies that serve to prolong the European financial crisis. A Grexit may still occur, but not because of the Greek people, but because of the euro leaders.

What has transpired within the borders of the Greek state reverberates well outside of Greece. Other countries, notably Spain, Italy, Ireland and Portugal, can heed the lesson taught by Greece – that there is a different path to economic recovery. The demands by the neoliberal Troika that there is no other alternative than austerity is an ideological lie. As even the IMF has recently admitted, austerity would never lead to economic stability, and under these terms, Greece would never be able to pay off its debt.

Yet despite its clear failures, austerity continues to creep into the economic policy of states around the world. Not only in Europe, but also in the United States, economic and social policies that have never been called austerity, but whose affinity with austerity policies cannot be denied, have become conventional wisdom for mainstream politicians (contrary to Bernie Sander’s sharp criticism of these policies). From the federal sequester of 2013 to the swath of social expenditure cuts, tax cuts for businesses and welfare control (including: controlling what welfare recipients can purchase, limiting the lifetime limit for welfare recipients to 12 months, and restricting how much cash can be withdrawn from ATMs from their benefit cards) are dominating the legislatures of states such as Arizona, Kansas, Maine, Wisconsin and Missouri.

Greece has shown the world that there is an alternative to austerity, and that is the reclaiming of democratic control that has been wrested by the hands of elites, corporations and banks. Although the capitalist class and its sympathizers have corrupted the mechanism of representative democracy, such that it functions in the interest of corporations over people, Greece is once again at the forefront of resistance to imperialism, this time of the financial kind.

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