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Greece Has Been a Laboratory on a Way Out of a Capitalist Crisis

The crisis in Greece has no end in sight.

Facts and myths: the left plot shows the average number of hours of work in Greece, Portugal, France and Germany (from 2000-2016), and the right plot shows the fall of Greek GDP since 2008.

Ricardo Vaz: The crisis in Greece has no end in sight. While the media cheered a recent agreement between the Syriza government and creditors, there is no escaping the reality of an unsustainable debt, a completely destroyed economy in which successive austerity programs have brought immense suffering to the Greek people. To better understand the current situation in Greece, and how it may develop from here, we have interviewed Mariana Tsichli, a lawyer and a member of the political council of left-wing party Laïkí Enótita (Popular Unity), or LAE. This party was founded after the 2015 referendum “betrayal” by people who left Syriza, notably former Minister Panagiotis Lafazanis, and other left-wing forces. We talk about the most recent memorandum, the measures it entails, the way out of the crisis and the task of building a united front in Greece.

On June 15th there was an enthusiastic announcement that an agreement had been reached in the Eurogroup. Why was this so important both for the creditors and for the Greek government?

Mariana Tsichli: For the Greek government it was important because it is a way to ensure that it will remain in office and avoid any uncontrollable political evolution in Greece. For the creditors, I think it is important because they are trying to make an example out of Greece. Not only the creditors, but also the upper classes in Europe and in Greece itself, they are trying to make an example out of us to show that there is no alternative way out of the financial crisis, that there is no other way but to destroy the interests of the working class and of all the people that have been seriously harmed by this situation of the past seven years.

It is not just about the Greek bankruptcy, or the Greek debt. Because in absolute terms the Greek debt is not very large in terms of the eurozone economy. But if we could show people in other European countries that there is another way, then this could lead to radical evolutions in other countries, like Spain or even France. And this would be a very big problem politically and financially for the bourgeoisie and the upper classes in the EU and around the world. So this was an important agreement for them in that regard.

Before this agreement the Greek government had already agreed to several measures that had already been passed in parliament. There was also slight change of discourse from “austerity” to “structural reforms.” What were these latest implemented measures?

There are austerity measures in this memorandum, which is the fourth one. There are measures regarding the decrease in the tax-free threshold in Greece. The tax-free threshold has been lowered to 5600€ per year (less than 500€ a month), after that you start paying taxes. There are also measures about reduction of pensions, from 2019 or 2020 onwards. And the funny thing is that Syriza, during the reform of the pension system last year, their basic argument was that they were reforming the pension system in order to protect the lower pensions and not reduce them! But with these measures they are reduced.

There are also measures regarding privatizations of public sector enterprises. The main one is the public power company, PPC. And there is also a plan to privatize water, and also to sell very big portions of land, which were until now under public ownership, to certain investment funds, mostly foreign. These are the main changes, as well as some changes regarding labor law. Also on this matter Syriza had promised to change labor laws in a less conservative way and restore some protective measures that existed in Greece before 2011, but this has not happened. And this agreement ensures that current labor legislation will remain in place until at least 2020.

You were saying these are reforms beyond 2020. Is this not also beyond Syriza’s term in office?

Yes! And this is very original. I believe it has never happened before. Even in 2011, or before the elections of 2015, the right-wing governments then in power would not agree to measures that exceeded their term. But Syriza has done that, despite the fact that the other parties have not voted in favor of these measures in parliament.

There is this idea that is sold to by the mainstream press, especially in northern countries, that the bailouts have been a generous help to Greece, and that they have not worked either of because of some inherent genetic Greek characteristics… What have the bailouts really been about? Do you get the sense that Greece has been a laboratory to test how much suffering can be imposed on a people?

Yes, the belief that the Greek people are lazy, or the Greek state had too many expenditures, and that is what brought the financial crisis in Greece, is a myth, and there are numbers that prove that this is a myth. For example government spending in healthcare, education, pensions, public sector wages, etc., was lower than the average of the eurozone countries. In my opinion it is clear that this is about an experiment. Greece has indeed been a laboratory on a way out of a capitalist crisis, and the experiment so far has not worked very well.

It has definitely not worked for the majority of the people. But it has not worked very well for the upper classes either, at least until now. On the one hand, they have succeeded in imposing a great decrease in salaries in both private and public sectors and also in imposing reforms in labor law and other aspects of the social relations which work in favor of the upper classes’ interests. But, on the other hand, there has been a destruction in Greece. The GDP has fallen by 27% in seven years, the biggest decrease since WW2 in any capitalist country. The unemployment is about 30% now, it is higher amongst younger and the most educated people. Every year about 1-2% of the country’s labor force is lost to immigration. And there has also been also a very big decrease in wages, about 27% if you add up after all these years, 30% in pensions, and there has been a decrease of around 35% in domestic consumption of the private sector.

Facts and myths: the left plot shows the average number of hours of work in Greece, Portugal, France and Germany (from 2000-2016), and the right plot shows the fall of Greek GDP since 2008.Facts and myths: the left plot shows the average number of hours of work in Greece, Portugal, France and Germany (from 2000-2016), and the right plot shows the fall of Greek GDP since 2008.

On the whole, there are huge problems regarding the Greek economy, its productivity has declined in a dramatic way. Industrial production has declined by 30% and in what has been a complete destruction of the interests of the working class but also of the economy as a whole. I believe that the rate of decline of all economic indicators was not foreseen even by those who designed the memoranda. So it is definitely an experiment on how much austerity can be imposed on the people of a country, but until now, even with all the cuts and reforms that have been imposed, this strategy has not yet worked. We are in the 7th straight year of recession and there are very big problems in the Greek economy. That of course does not mean that the strategy will not work for the upper classes in the future, but if it works it will mean a permanent reduction in income, healthcare, pensions and so on for the vast majority of the people in Greece. This is why we need another political solution.

And there is also the matter that the bailout money has not stayed in Greece…

Most of it has been to repay the public debt. And despite this the public debt has only increased and it continues to increase, even after the PSI [1] and the measures that have been taken in 2011, 2012. The Greek debt has not stopped increasing and it is clearly not sustainable.

You said that this agreement allows the Syriza(-ANEL) government to survive until the end of their term. But do you feel that they have a strategy beyond this? Finance minister Tsakalotos for instance said there was “light at the end of the tunnel.”

I believe that at the end of the tunnel there will be a fifth memorandum probably! I think that the political situation in Greece has been slightly stabilized by this agreement, in the sense that the government and Tsipras have proven that they are able to sign literally anything that is proposed to them, in order to stay in office. And in truth there were no protests from inside Syriza either, despite the measures involved.

The truth is also that the Greek upper classes support Syriza at the present time, and so do the major EU states. Because it is a government that will impose any measure without any protest, and the political cost will be on Syriza and not on (major opposition party) New Democracy, which is the preferable solution in the end for the Greek bourgeoisie and the major EU states. So the strategy is to keep Syriza, if that is possible, in office until the end of its term, to let Syriza impose all the measures, and then have another more preferable solution centered around New Democracy which will not have suffered the political cost.

And I believe that Syriza wants to comply with this strategy in order to ensure it will have a major political role in the future. It will not only stay in office now, but it will also try to be the second biggest party in the Greek parliament after the next elections. So I think that in a way they are all kind of satisfied. But of course it is also true that there cannot be any light at the end of the tunnel and there cannot be any solution as there are no means of relieving the Greek debt and debt service. This is why the only solution to this situation is the people’s movement and a wholly different strategy to exit the financial crisis in favor of the interests of the working class and the vast majority of the people.

PM Tsipras always argued that implementing austerity measures was a necessary sacrifice in order to get debt relief. But with this agreement and debt relief is postponed for the future…

And of course they did not get anything. I think the creditors are waiting to see that the measures will be implemented, the ones that are described in the fourth memorandum and any other measures which will be needed after that. They are also waiting to see if the Greek economy can sustain at least part of the payment of its debt and I believe that they are also waiting for a change in the political situation. I believe it is more possible to give debt relief to the next government, around New Democracy, than to Syriza. And until now, this proves to be true, in the sense that the debt relief has been promised by Syriza to the Greek people for more than a year now, but still nothing happens.

Your party, LAE, was formed in 2015 after the referendum, in the run-up to the elections. It was formed in part by people who left Syriza, like former minister Lafazanis, and other left-wing factions such as yours, which came from Antarsya. Can you briefly describe the party’s strategy at the moment and how you are mobilizing against this new wave of austerity?

I believe that there are two basic milestones in regard to the strategy of LAE for this period. The first of them is establishing a program for an alternative way out of the crisis, which will be a program that protects the interests of the working class and of the social groups that have been destroyed by the crisis. And it is a program that has some basic points [2]:

  • The first, and perhaps one of the most important, is the exit from the eurozone.
  • Also, the immediate refusal to pay the Greek debt and our goal is for this debt to be cancelled.
  • And another basic point is the nationalization of the banking sector and the basic sectors of the Greek economy, which have been or are now in the process of being privatized.

These are the main points of LAE’s program for this period, to provide an alternative way out of the financial crisis. The second milestone is our belief that in order to implement such a program, all the left-wing forces in Greece have to agree on the basic points of the program and form a united front. There are currently many forces in the Greek left that could agree on these points, but there is a problem in the Greek left-wing forces, which is a historical problem, the fact that they have always been and still are very many fronts, organizations, fractions and so on. We believe that it is necessary to solve this problem in order to be able to mobilize the people against the measures.

The truth is that the Greek people are very disappointed and they do not just need to be mobilized against this measure or the other, they need to see an alternative solution to the whole problem. This is the main issue. At the moment we are supporting the strikes that are about to happen in the coming days in some areas of the Greek public sector and we are also continuing a political campaign regarding the program and the front of left forces in Greece, with many political events all around Greece.

It seems like there is no way around the issue of exiting the eurozone. Costas Lapavitsas (also a member of LAE) has been stressing this for years, even in 2015 after Syriza took office, and studying this issue in detail…

Yes, we share the same views regarding the matter of the eurozone. I think that exiting the eurozone is the only way to solve the Greek problem. In fact the Greek problem has its roots in the eurozone and the effect that it had on the economy and the social relations in Greece. By entering the eurozone the Greek economy changed in a lot of ways. There was a big decrease in industrial and agricultural production, and there were advantages only for the banking sector, tourism, also shipping, all these sectors in which the capitalists and the big enterprises were interested in and in which they had an advantage. And there were also many changes in the social relations in Greece after entering the eurozone. Without exiting there is no way out.

Also after the crisis started we had no ability to devalue our currency, so the whole strategy of the bourgeoisie was to do an internal devaluation by cutting wages, pensions, income in general.

Wages become the only factor of adjustment…

Yes, they are the only factor. So without having a national currency in order to have the ability to use the devaluation to change some factors in the Greek economy, without the ability to protect Greek production, industrial or agricultural, and basically without the ability to impose measures that will change the relations in the Greek economy and production in favour of the majority of the people, there is no way of exiting the crisis in favour of the working class. So I believe that exiting the eurozone is completely imperative.

What are your thoughts on the idea of creating a convergence of countries which are in a similar situation, for example southern European countries?

This is a thing that might happen, but in my opinion there is a pre-requisite that the people in each of these countries have their own movements and change the situation in their respective countries. This would of course involve exiting the eurozone and the EU, and this convergence I believe would be a next step in such a plan.

You talked about upcoming strikes, and there is also a garbage crisis developing. Do you think this could be a kind of “hot summer” of protests coming?

It is possible, but of course in a smaller scale than the previous “hot summers” of Greece, especially the summer of 2011. There are many difficulties, and the main one is that most of the people are very disappointed because they had hoped that through Syriza’s government there might be some change in the political and economical situation. They supported this change by voting “No” in the referendum but then they felt betrayed on a very large scale. When the referendum happened there was indeed a part of the Greek people that was ready to fight for another solution, even to leave the eurozone or maybe even leave the EU, even if they did not describe it perfectly. After that, there was a big disappointment. But this year there have been (relatively) small things, in comparison to things that happened in Greece from 2010 to 2012, which show that this might be the beginning of some new movements in Greece. But it is still very early to say.

There have been certain events concerning the public sector. Last year there was a very big strike to protest the reform of the pension system, mostly by lawyers, technicians, doctors and so on. This year we have had larger strikes than a year ago. All of this shows that Greek people are very disappointed and that if they are presented with an alternative way out they may be able to mobilize again and to fight for an alternative solution.

Is there also a risk of fascist party Golden Dawn growing in this crisis?

At the moment I would say that this threat is relatively smaller than it was some years ago. That is because the traditional political parties which historically have defended the bourgeoisie interests in Greece are reforming in a way. New Democracy is reforming. Also the small parties that in recent years have been formed around fractions of New Democracy or PASOK are shrinking, the political situation is more stabilized, so the bourgeoisie has no need to resort to the fascists.

But the fascists also have begun again to stage attacks. There had not been any major attacks for more than a year, after the trial for the murder of Pavlos Fyssas began [3]. But last month there have been new attacks, against people that the fascists thought were anarchists or leftists. In one recent incident a student was very badly injured. So this is a problem which is again severe but overall their power and influence seems to be decreasing.

One final question: Yanis Varoufakis has been saying that the EU has its problems, but it is reformable, it can be democratized. Of course, other people disagree. What are your thoughts on the “reformability” of the European Union?

I believe in a sense the reality disagrees with Yanis Varoufakis, and it was shown through the outcome of his strategy regarding the Greek problem and the economy. Anyway, I think there is no question of “reform” of the EU in a more democratic or in a less conservative way. The only reform that can be possible is an even more conservative reform, and historically all EU reforms have gone in the same direction.

The EU was designed and structured to impose the neoliberal social relations to its members, because in some of the member-states, when this process started, these relations and neoliberalism were not as stable and not as deep as in countries such as the US and the UK. So I think the EU is a process that has been designed in order to impose such a model on the people, and thus it cannot change. The only solution for the people is to exit the EU.


[1] Private Sector Involvement (PSI) was a component of the second Greek bailout, in 2012. Part of the agreement hinged on private investors accepting losses in the Greek bonds they held.

[2] In a recent interview with João Ferreira of the Portuguese Communist Party (part 1 and part 2), he also discussed three very similar measures to take Portugal out of the current situation: exiting the eurozone, renegotiating the debt and taking control of the banking sector (before moving to other sectors of the economy).

[3] Anti-fascist rapper Pavlos Fyssas was murdered on September 17, 2013, in Athens. After a huge outpouring of antifascist protests a massive case trial was brought against 70 members of Golden Dawn, making the case that the party was directly responsible for scores of beatings and killings of migrants and political opponents, with indifference or even collusion from state authorities.

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