/ 27 August 2015

The left’s hopes for Greece fade

Alexis Tsipras had to step down as prime minister because he agreed to the new bailout package. He will contest the elections next month and could win.
Alexis Tsipras had to step down as prime minister because he agreed to the new bailout package. He will contest the elections next month and could win.


The political left in Europe had high hopes when the left-wing party Syriza came into power in Greece at the beginning of the year with promises to stop austerity policies in that country. Even in South Africa, far from the Greek shores, Syriza’s election success sparked hope.

Many on the South African left, including unionists, primarily in the National Union of Metalworkers (Numsa) and the United Front, saw in Syriza’s Oxi (No) to austerity an example of how to regain lost political ground to mobilise popular support.

After the recently agreed measures between Greek Prime Minister Alexis Tsipras and Europe, including further privatisation and social security reforms, hope on the left in and outside Europe to stop austerity policies has faded.

Tsipras had to step down as prime minister after losing substantial support in his party. The angry left has accused Tsipras, by agreeing to the new bailout package with Europe, of betraying 62% of the Greeks, who said Oxi to the European austerity programme in the July referendum. A new far-left party has been formed by Syriza dissidents and new elections will take place probably around September 20, the third election in eight months in this crisis-ridden southeastern European country with 11-million people and more than 25% unemployed.

Most commentators agree that Tsipras will win the elections, despite the new party to the left of Syriza. That is because many Greeks seem to believe Tsipras brokered the best deal possible, bearing in mind that Germany’s finance minister, Wolfgang Schäuble, threatened Tsipras with a “Grexit” if Greece did not agree to the new proposal from Europe.

So what lessons do these recent developments tell us here in South Africa where many on the left supported Greece in its struggle against austerity?

One lesson is to base promises on a thorough analysis that includes the economic situation and the balance of power.

Promise only what you can keep might be another lesson. Tsipras and his followers underestimated the extent to which not only the German government but also many other governments in Europe were hostile towards a fundamental policy change concerning Greece.

Syriza also overestimated its own power, based principally on an angry population fed up with corrupt national politicians and a remedy prescribed by Europe and the International Monetary Fund (IMF) that obviously did not work. Syriza mobilised the anger, but anger or popular support is not enough if you are financially dependent on other countries.

What happened in Greece since the beginning of the 2008 crisis resembles the case of Africa in the 1980s, when many countries were trapped partly because of overspending and mismanagement, and partly as a result of a world economic slowdown. Caught in a debt trap, they were compelled to accept the IMF/World Bank cure, called structural adjustment programmes.

This bitter pill has been as much a failure as the austerity programme in Greece, but African countries were as helpless then as the Greeks are today to avoid the cure.

In fact, Africa had to wait until the end of the 1990s to accept the IMF and World Bank’s new medicine called HIPC (heavily indebted poor countries); a situation resulting in the cancellation of debt because of an inability to pay.

South Africa’s left must ensure its drive for a just society is based on a sound and sustainable financial footing, which is difficult to achieve in a fragile economy with high spending on more state employees, teetering parastatals, a weak mining sector and an education system that produces far too many underperformers.

Another Greek lesson for the left in South Africa is to come to terms with regional interdependency and thus become internationalists and regionalists. In Southern Africa, where people easily cross borders and where economic activities are highly concentrated in Gauteng, the heart of the region’s economy, building a common economic and political Southern African region is a necessity.

Europe’s economic integration with its common currency, the euro, is not the reason for the current crisis in Greece and other European countries, as some on the left in South Africa think. The euro is misunderstood to be the tool used by “core” countries such as Germany to under-develop the periphery in the south of the continent.

Greece, Spain, Portugal and others benefitted greatly with the introduction of the euro in 1999 because of lower interest rates that made borrowing by the different states, companies and private consumers much cheaper and resulted in growth and employment until the crisis hit. Combined with millions of euro in aid from other European countries that helped build infrastructure programmes and so forth, parts of southeastern Europe overcame dictatorship and developed rapidly.

The flaw in a European common currency is the lack of common economic and financial policy and institutions, such as an economic government and a Eurozone Parliament, as proposed by the French economist, Thomas Piketty.

The unwillingness to co-ordinate policies is partly based on a beggar-my-neighbour policy, Germany’s unwillingness to share the debt in the eurozone, and a consequence of a fundamental disinterest in fellow European economic thinking. Building a common economic area depends, whether in Europe or Africa, on real mutual interest in economic and political problems and thinking.

The left in South Africa should take a much broader view than the narrow borders of their own country to build a functional, regionally integrated economy for all, the poor and the richer areas, including the Zimbabweans here and the people in Johannesburg or Cape Town, local or foreign. A new left programme for South Africa alone will not be enough.

Armin Osmanovic is regional representative of the Rosa Luxemburg Stiftung in Southern Africa. This article reflects his personal views.