Scholar, analyst and author James Petras discusses his relationship with former Greek prime minister, Andreas Papandreou, the impact of Papandreou’s politics on Greece, the reasons why he believes that Greece’s new Syriza-led government is a continuation of the corrupt old guard of Pasok, and the continuation of austerity and debt repayments by the new Greek government.
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Michael Nevradakis: You’ve written about the three generations of the Papandreou family and their role in what you described as the “destruction” of Greece. Discuss the impact of the Papandreou family on Greece.
James Petras: I’m most familiar with Andreas Papandreou. I was a personal adviser to him, particularly in 1982-83, when we would meet weekly and discuss Greek politics. He was very flattering and congenial and he would take a notebook out, and one had the impression that he was taking serious policy recommendations, but in fact what he did was use a lot of leftist ideas to justify right-wing policies. In the first six months or year, it was very clear he wasn’t going for any kind of socialist transition, but I stayed because I thought we could at least create a political space for the trade unions and the agricultural movements to build up a grassroots movement which could push further. However, I saw very quickly that this was a clientelist regime, that Papandreou would always find excuses for not doing what he promised, beginning with the US military bases. He always claimed there was an “envelope” which he was about to reveal as the basis for his expulsion of the bases, which was all bluff. He was very cynical, with his balcony speeches and his capacity to mesmerize the masses while secretly or less conspicuously engaging with big business, the US Embassy and NATO. What precipitated my resignation though was the expulsion of socialist trade union leaders when they protested his stabilization program, and it was all done with his index finger.
This corruption and deception and conformity with NATO, with the EU, with big business, combined with the demagoguery and the fooling of the people, was endemic.
There was no democracy; it was a totally personalistic dictatorship, and I saw cabinet members involved in all sorts of chicanery, bribe-taking and corruption. After I left, it became much worse, not because I left, but because Pasok was using a lot of the EU money to build up its clientele, to enrich its leaders and bankers. Frequently they gave loans to business people who had no intention to repay it, but it was understood as a kind of bribe with kickbacks to leading Pasok members and to the Pasok treasury. This corruption and deception and conformity with NATO, with the EU, with big business, combined with the demagoguery and the fooling of the people, was endemic, and it was one of the factors that has ignited my criticism of Syriza, this idea of saying one thing to the people and doing the opposite in practice, putting on theater with radical gestures for the domestic consumption while agreeing to insidious and reactionary policies with their overseas associates in the EU and NATO. I might say this is common practice among social democracy and particularly in the US, as we saw with Obama promising peace and engaging in more wars than any other president, but you expect something different from a party that’s called itself socialist, a party that repudiates austerity and then puts it into practice.
So I think this legacy of Pasok has found expression in Syriza, and it’s not accidental. Many of the corrupt people from Pasok joined Syriza when the ship was sinking, and Tsipras welcomed them. In fact, he appointed one of the most corrupt advisers to George Papandreou to be his finance minister, Yanis Varoufakis. That should have rang some bells as to the real course that the government was going to undertake, and I think that it’s indicative that we can’t expect anything close to what Syriza represented itself as. It’s doing exactly the opposite, and it reminds me a great deal of Papandreou’s regime. Tsipras seems to be a reincarnation of Andreas Papandreou.
How was the Greek economy transformed through membership in the European Economic Community and the EU?
I was privy to the inner circles of Andreas Papandreou at that time. There was a report prepared on the consequences of Greek entry into the EU. It was very negative: it pointed out that the grants and the financial transfers would be more than nullified by Greece’s inability to compete with the open market, and that Greece would be a subordinate partner in the EU and it would strategically have a very negative effect on the way in which the Greek economy transformed, given the fact that the European partners were much more powerful and much more competitive and much more likely to dominate Greek markets and reduce Greece to a tourist haven. Papandreou saw that report and rejected it.
In the short run, Greece received a lot of loans and “competitive funds” which were supposed to create Greek industry and agriculture and allow it to eventually become competitive with the European associates. Most of this funding went in to building up Pasok’s electoral base, particularly in the countryside. I have relatives who took the money and didn’t increase their efficiency: they built apartments for their children; they sent them to college – but nothing to increase the competitiveness of agriculture. The loans went to businessmen who laid the foundations of factories and never completed them. Greece remained a backward economy, and Pasok was able to build a machine in the same pattern that the right-wing had done.
The Europeans constructed a political structure in which Brussels would dictate Greek policy.
The end result was that Greece was a very uncompetitive economy. The Europeans didn’t care because, though they did complain that there was corruption in Greece and about misallocation of funds, they really understood that they had the levers of power, that the same people that lent money could impose conditions, and more importantly, they constructed a political structure in which Brussels would dictate Greek policy. The long-term impact was that Greece lost sovereignty; Greece’s economy became utterly dependent on the Europeans; they had no fiscal flexibility or policy to adjust, to stimulate the economy and to reorient its trade. They were totally colonized, and during the expansion, particularly when they joined the European Monetary Union with Costas Simitis, who was completely submissive to the Brussels elite, Greece had an artificial boom. The political oligarchs in both New Democracy and Pasok organized the Olympics, which was a huge boondoggle. Contractors and bankers benefitted, including Goldman Sachs, which cooked the books so that the EU actually believed – at least I think they believed – that Greece was balancing its books and that it had no great debts and liabilities. This was totally falsified, and when the crash came, everything became null.
Greece had not [had] a competitive economy, but had enormous accumulation of unproductive debts. The money that Greece had borrowed was stolen. And so, the Greek people were saddled with debts which benefitted individuals and corporations that didn’t invest in Greece. Huge tax evasion: all the leading Pasok leaders that I knew, none of them paid anything near their taxes, nor did the ship owners, nor did the bankers, nor did the small businessmen. No sense of civic responsibility and no enforcement, from either the right-wing or the center-left governments. As this was amassed; the EU overlooked this, because ultimately they held the levers of support. They allowed their funds to be misallocated because the trade-off was that they totally controlled Greek economic and social policy. Greece is a colony. It’s a vassal state; it has no control over economic policy. It’s lost and is in the process of losing all of its major lucrative public enterprises through forced privatizations.
What is your view on Syriza and how they have performed in their first two months in office, including the actions of new Greek finance minister Yanis Varoufakis?
I think he’s a clown. I don’t think he’s a serious political figure, above and beyond the reactionary policies. Any serious analysis of Syriza has to look at the various layers in Syriza and when they became part of Syriza. Originally you had Marxist and radical groups that came together, then Euro-communists, moderate leftists and other radical leftists. Some of them with some insertion in the mass struggles, but mostly small groups that had a marginal influence on the mass movements. Subsequently, they began to attract the popular vote, lower-middle-class salaried people, and as they grew, they began to attract support from two directions. One, from the unemployed youth, and growth of some trade union support, especially from the communist party. Also, as Pasok sank from 40-something percent to 10-12 percent, they began to attract Pasok leaders and people who are involved in the political apparatus, including Varoufakis, who had a very negative background. If you look back to 2004-2006, he was really a bootlicker, running interference for George Papandreou.
I would say that 90 percent of Greece’s debt was originally contracted by kleptocrats, and they should have never paid that debt.
Nobody studied that different layers that came in, the opportunists that joined Syriza. They just looked at the program, which the left formulated, but the leadership was in the hands of these opportunists, totally disassociated from the general strikes and mass struggles. One other factor was that Tsipras, like Papandreou, developed a style of leadership which was very much a caudillo. Personalistic leadership, increasingly authoritarian, dictating policy and then explaining it afterwards. Tsipras and his inner circle, people like Varoufakis from the right wing of the party, have nothing to do with socialism. It’s a joke hearing Varoufakis talk about himself as some kind of dissident Marxist. There’s absolutely zero Marxism, in terms of any commitment or engagement in the mass struggles.
When Syriza gathered the votes, the first thing they did was recognize the debt. There was absolutely no questioning of the illegality. I would say that 90 percent of Greece’s debt was originally contracted by kleptocrats, and they should have never paid that debt. In the case of Ecuador, they had a commission before they paid a cent, and showed that about 75 percent of the money went to the Ecuadorian elite and out of the country. So Syriza didn’t question the debt; they put on theater and there was laughter outside of Greece, in the European and financial press, about the theatrics of Varoufakis making these radical noises and then capitulating on every count, running from Paris to London on bended knee asking for support.
Why should the Europeans renounce the debt when Syriza was accepting it?
Of course, the lenders saw these very submissive and demagogic people who made no preparations for capital flight or for confronting the intransigence of the Europeans. Why should the Europeans renounce the debt when Syriza was accepting it? It was absolutely clear within two weeks who was in control in Syriza. The lenders saw people who were absolutely committed to staying in the EU despite the fact that the EU is run as an elite club dictated by Germany, and expecting somehow these power elites to sacrifice their interests when they were dealing with a submissive leadership that didn’t organize a single general strike or protest or mass mobilization. Syriza thought that their cleverness, their occasional banging of the table, would result in something.
When I was in Hungary in the 1990s, they had a similar problem of negotiating with the IMF, and I was with the minister of economy at the time, and outside his office was a huge demonstration. He winked at me and said “While I’m negotiating with the IMF, I tell them, if you don’t deal with me, you’re going to have to deal with them, there’s 100,000 people outside.” He clearly engineered the mass protest as a lever on negotiations, to secure some concessions, postponement of payments, etc. Syriza didn’t do that, wasn’t even clever enough to put their strength in front of their negotiation. They were amateurs; they were people who didn’t understand that when you announce you’re going to attack capitalism, you don’t lower your gun, you begin to take measures expecting them to retaliate. Syriza made no attempt at any point, apart from opportunist and conciliatory gestures; they didn’t even mobilize their strong side, didn’t even take any precautions against the flight of capital, did nothing to maintain their fiscal financing. It was a political movement without any kind of political will, political mobilization, political capacity to understand the nature of power when you’re dealing with adversaries.
You were an adviser to other left-wing leaders, including Salvador Allende in Chile and to Hugo Chavez. What was your experience in working with these leaders; what was their vision for their countries in the face of the hegemony of the United States, and how do they compare to what we’ve seen in Greece?
Allende was a consequential democratic socialist. When I was in Chile, we were very involved in agrarian reform, expropriating the giant copper companies, the banks, and pushing for deepening that process, turning it from nationalized public enterprises into worker-controlled enterprises. That government in Chile was an arena from which one could fight from inside, because you’re fighting within a process of transformation. My biggest criticism was the fact that they made no effort to support the progressive military generals, and that’s when I left Chile, when I saw the carelessness of the government in dealing with a strategic issue like military power and the fact that the military in Chile was divided and that the pro-US, pro-coup faction was gaining ascendency without any effort to arm the workers. Tactically, we were very successful, but strategically, it was a failure.
With Chavez, the issue was not compatibility ideologically and in terms of interest. He read my books; we discussed them and I emphasized that his welfare policies were very important in arousing electoral support and mass mobilization, but he had to move on diversifying the economy, that an oil-based economy is not a sustainable basis for long-term growth. Also, the security question: that they were allowing these NGOs which were conduits for US intervention in Venezuela, and which should be closed down. Again, there was agreement – and then nothing happened.
The difference with Syriza is, you’re talking in Venezuela and Chile about governments that were in the process of transformation. That’s not the case in Greece. There isn’t a common basis; there isn’t a sense in which power is changing from Brussels to Athens, that the privatizations are not going to be continued and the previous privatizations are going to be reversed. There’s nothing that you can say that Syriza has done, not even this minimal thing, with the cleaning women and the finance ministry that Syrizademagogically suppressed, that what they were going to do when they came to power is to rehire these women. Well, they’re still living in the tents outside the finance ministry. Even the few hundred thousand euros that would put these women back to work, they have said “we will do it.” Everything is “We will.” It’s the faux socialism of the later Papandreou. And might I add: the first year of the Papandreou government, we passed a lot of progressive, redistributive, income-increasing policies, raised the minimum wage, extended trade union bargaining, legalized divorce, built universities, extended the national health plan. So at least, I felt, there was still a basis to say “Well, this is not socialism, but they are positive steps that strengthen the mass movement, so I’m staying.” But Syriza is not even anywhere near these moderate reforms that Pasok passed in its first year.
What policy actions do you believe Greece should undertake in order to break free of the crisis and the ongoing cycle of austerity?
It’s difficult at this point to see. I think the opportunity was, when they first came in, to put in capital controls, to stop the run of money, to begin to collect the taxes and cutting off debt payments. I think still that is the agenda that needs to be pursued. It’s going to be harder; it’s going to have more serious internal repercussions, but I think Greece cannot continue paying the debt. There’s no money for the debt, and any minimal kind of immediate payments, salaries and pensions; and I think secondly, I think they cannot continue making these regressive concessions that the EU calls “reforms.” They have to build an emergency economy. They have to renounce the debt payments immediately. They have to impose capital controls. They have to look to finding alternative forms of raising revenue, using social security funds, etc. It’s an emergency situation: I think they have to put the country on a war economy; they have to convoke mass meetings and explain to people, make self-criticism; explain the mistakes they’ve made and how they’re going to proceed in rectifying them. They cannot operate with Varoufakis taking photos with champagne in his penthouse overlooking the Acropolis, and then talking to the masses how he feels about poverty. This kind of theatrical lying and deception has to stop.