Greece and Ireland: A Tale of Two Crises

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Across Europe austerity is being imposed - but it is often met with resistance. Nikos Loudos draws lessons from the explosive struggles of Greek workers, while Marnie Holborow exposes the desperation of Ireland's ruling class, whose neoliberal economy has become Europe's weak link.


GREECE: CRUCIBLE OF RESISTANCE


Greek workers show the way

Greece is heading for elections for mayors and prefects on 7 and 14 November. Never before have we had a pre-electoral period so strongly marked by strikes. Civil servants, teachers, hospital and local government workers staged a 24 hour strike in October. The railway, transport, telecommunication and power workers had a series of walkouts, even if the Greek TUC didn't officially call a general strike. At the same time, journalists and other media workers are in the middle of a bitter fight against the big media bosses who are axing hundreds of jobs.

In August, the political question that was haunting the government was whether the strike wave that produced seven general strikes in the previous months would resume after the holiday. But any hopes they might have had were proved wrong.

The cabinet was reshuffled in early September to symbolise the government's hope to turn the page after the hot first months of the year, but their plan is already burnt. The new minister of public order, who as an MP criticised the austerity measures, ordered the riot police to attack contract employees of the Ministry of Culture who had occupied the Acropolis to protest having not been paid for several months.

It's now a year since this government took power with a landslide in the general elections. Some conclusions drawn through the course of this year's events may be helpful for struggles in other European countries, including the fight against the Con-Dem coalition in Britain.

Process

The first thing that has to be stressed is that the struggle against austerity measures is a process and not just an event. The announcement of the cutbacks did not bring up a "big night" of barricades. And why should it? The capitalist crisis itself is a protracted procedure and the fightback has to be seen on a long-term scale.

For the majority of people the crisis was a big shock. The official capitalist ideology presented the crisis like a meteorological phenomenon: a hurricane that was hitting the country, meaning that we should stay calm and wait for it to pass. The ideas of conformism could have won back in December 2009. The important thing is to see why they didn't win.

Nothing has been automatic or just spontaneous. Social movements never proceed as a whole - the same applies for the workers' movement. The past year has seen a constant effort by the most advanced sections of the movement to help all the others to come along, to overcome the impediments put up by the bureaucracy and to provide examples of struggle.

The trade union leadership in Greece is not more militant or left wing than in other European countries. Most of the unions are controlled by cadre from Pasok, the social democratic party. When Pasok was elected in October 2009 they were preparing the union membership for a long period of strike suspension. The first strike that opened up the struggle was not officially called by the Greek TUC leadership but by local teachers' unions. Their pressure forced the teachers' union leadership to call a limited three-hour strike. There was a domino effect with other small unions. Local hospital unions joined in followed by unions controlled by the Communist Party.

The unions that organised the 17 December strikes are not the strongest or the biggest in Greece, but they are not the weakest either. They are unions with experience of action and a strong presence of the left, especially the anti-capitalist left. In retrospect, the importance of 17 December was not that it was able by itself to move the biggest unions into action, but that it made clear to lots of activists in other unions that the fight against austerity had to be organised from below and that just waiting for the leadership to call action was futile.

The results were obvious in the following general strikes called by the TUC leadership. The leadership could no longer simply stand aside, but hoped that calling one or two new strikes, with limited participation, would mean they could blame the most militant unions and the left for having lost their head. What actually happened was that the strikes and demonstrations had larger participation than expected.

Again, spontaneity is just part of the answer. The real difference is that in several workplaces groups of workers for the first time felt the necessity to organise pickets and bring as many of their colleagues as possible to the demonstrations. There was an imbalance of participation between different workplaces depending largely on whether there were two or three workers willing to take the responsibility to organise into their own hands.

At the 5 May general strike the chair of the TUC tried to address the strike rally from the podium, but he received a massive boo and could not finish his speech. The workers who booed him were in the stronger unions: those for railways, power, telecoms and local government, and the unions controlled by Pasok. These were the workers who had organised people to participate in the massive demo and now felt the confidence to keep a distance from their leaderships.

Complex

So the peak of the movement until now, in terms of numbers and combativity, has been the 5 May general strike which saw millions of people on strike and hundreds of thousands on the streets - many of whom almost stormed parliament. But before getting to 5 May we had to pass through smaller and more fragmented strikes. That's something the government wants us to forget. Now it compares every mobilisation with 5 May, trying to say, "You didn't storm parliament that day, so nothing bigger can happen." It is playing with fire, because 5 May created an even more complex process inside the working class.

First, there were political effects even at the highest level. Three Pasok MPs voted against austerity and were expelled from the party. Even the Tories were forced to vote against the austerity, which guaranteed that the political instability in Greece is not going to end soon.

Second, the strike showed even more workers that in order to win militancy had to increase further. The bus drivers on 1 July kept the buses in garages without even calling a strike because there was a day's delay in their wage payments. Striking journalists let some World Cup programmes transmit without a commentator.

The strike of the lorry owners is a crucial example. They are not workers - most of them are middle class - but they continued striking not only after the courts ordered them to go back to work, but even when the government used martial law to force them back and threatened to confiscate their lorries. The lorry owners have raised the stakes for the union leaderships of the railway and power. Court orders cannot be used as an excuse for calling off a strike any more.

Third, after 5 May thousands of new people were brought into politics. The tragic death of three people in a bank during the demonstration was used by the government to terrorise and prevent the escalation of action. No one succumbed - the unions issued statements blaming the police, the government and the bank bosses. This proves that in these few months the consciousness of millions of people has made leaps forward.

This process of radicalisation is far from finished. The finance minister himself, in an interview with the Financial Times in July, said, "I wish we'd had six months more to prepare the pensions reform, but in six months time I don't know whether we would get it through."

From abroad, the Greek struggles sometimes seem like a series of consecutive and militant strikes. But, from the inside, it's very far from that. It hasn't been just a linear building of forces; it has been a shift in the consciousness of thousands of workers, a political process and an organisational challenge for trade unionists. The intervention of socialists in this process has been indispensable at all levels.

Ideological

At an ideological level, the discussion about the origins and character of the capitalist crisis remains at the basis of the unravelling struggles. Workplace activists need Marxist arguments in order to predict the course of events and challenge official propaganda.

The participation of immigrant communities in the general strikes could not have happened without socialist intervention - and it has been crucial in preventing racism from sneaking into the fight against austerity.

The most important challenge is to help the most advanced workers to create a real network of rank and file trade unionists to keep the pressure on the bureaucracy.

The French working class is now at the forefront of struggle against austerity in Europe. It is a big help for us in Greece because for a year now workers have been pressed to apologise for being the "exception" in Europe. The French workers are going to bring even more experience to the fight against austerity as it becomes increasingly international.

If, as we all hope, the working class in Britain is going to be the new and important player to join the fight in the coming period, some of these Greek lessons may be useful.


IRELAND: CUTS AND CAPITALIST MADNESS

During the summer, to the surprise of most people living in Ireland, Taoiseach (Prime Minister) Brian Cowen won fifth place in Newsweek's top ten world leaders of the year for being the best "fiscal taskmaster" in the banking crisis.



Taoiseach Brian Cowen

He was praised for pushing through a drastic austerity package, raising taxes and slashing public salaries. Former International Monetary Fund (IMF) economics adviser Kenneth Rogoff, along with other international commentators, agreed: "If you want to escape default, the Irish path is the only way to go."

Only a month later Ireland was teetering on the brink of collapse. The black hole of the Irish banks was proving to be the deepest in the world and austerity measures had made things worse. Ireland and Greece, also reeling under severe cuts, were the only two countries to experience sharp recession this year. In other words, the advice stridently advocated by most governments - reducing the public deficit - is patently not working.

Weak link

Ireland has become the weak link of the crisis because it was at the extreme end of the boom. It had seen the most inflated property bubble and the most deregulated banking practices. It was the neoliberal model. The Dublin-based International Financial Services Centre, the "Liechtenstein on the Liffey", was the super tax-minimiser for US corporations, the enabler of corporate tax relief, through a phoney transfer pricing system. In the economic crash the fantasy economics of Ireland's tax scams have become exposed and the tight web of government, developers and bankers uncovered for everyone to see.

The strategy of the Irish government was to guarantee the deposits of the banks and ensure that no bank, however toxic, went the way of Lehman Brothers. It guaranteed a huge €440 billion worth of bank debt and also embarked on the now notorious bailout of the zombiest of banks, Anglo Irish. Saving the banks, the argument went, was the priority, no matter how big the bill. Only then, finance minister Brian Lenihan argued, would credit begin to flow in a recovering economy. In April 2009 a government "bad bank" - the National Asset Management Agency (NAMA) - was also set up which would take on property developers' debts. The state would "over time" recover the cost of this operation "very cheaply", we were told.

Both strands of their strategy have imploded, and the black hole of bank debts has got deeper and deeper. From telling us at the beginning that the cost of the Anglo bailout would be €1.5 billion it turned out to be €30 billion - the most costly bailout in the world. Last month Lenihan committed another €16 billion to saving the banks, bringing the total of the bank bailout to an incredible €50 billion (€16 billion is equivalent to the whole of the expenditure for the Irish health service for a year and €50 billion equivalent to the total Irish public sector wage bill for four years). This year's current deficit will be 32 percent of GDP, the highest ever recorded in a developed economy in peacetime. By comparison, Argentina's debt in 2002, when it defaulted, was 11.9 percent.

Despite this meltdown, the Irish government has continued to repeat the policy from the IMF, the Organisation for Economic Co-operation and Development (OECD) and the European Central Bank, that the priority was to save the banks and reduce public debt. Little did it matter that the main source of the rise of government debt was the bank bailouts. The government's ideological imperative was to single out the public sector as public enemy number one.

In this, the Fianna Fail government were amply helped by their coalition partners, the Greens, who take every opportunity to jump into the limelight to defend the latest austerity measures. Agreement to cut back (by a further €4 billion this year) was also given by opposition parties Fine Gael and Labour. This is despite the fact that overall Ireland has relatively under-resourced public services - even during the boom it had the lowest public expenditure among OECD countries, on a par with Mexico at 16 percent of GDP. It is now being suggested that a national consensus should be forged around how best to reduce the cost of public services, social welfare and public sector workers. The logic of this robbery and the mainstream consensus backing it up explains the huge anger rumbling under the surface of Irish society.

There is no end to the bailout/austerity merry go round. The Irish government is set to introduce its fourth hair-shirt budget in December. It is proposing further welfare cuts and increased taxation to include the low paid, and a cut in child benefit. Already, in 2009, pay cuts for public sector workers - something that no one believed they would live to see - together with income and pensions levies resulted in net pay reductions of up to 20 percent. In concrete terms a porter in a hospital will have seen €100 a month disappear out of their pay packet and a teacher may be down by as much as €902 a month.

Contraction

Taking all this money out of the economy, not surprisingly, has contracted it further. The Irish economy has now seen a drop in GDP of over 15 percent from its peak. Figures published on 23 September showed that Ireland's GDP fell by 1.2 percent in the second quarter and tax revenues are still shrinking.

Behind these bald figures lie real social hardship and despair. Hospital wards are being closed and waiting lists are growing. There are 450,000 out of work who are seeing their single parent benefits and training funds slashed. Emigration has also reappeared, with 6,000 a month leaving Ireland, a rate second only to Lithuania. Over 350,000 people are in mortgage arrears and struggling with repayments on houses that are now worth half of what of they were. Meanwhile, housing estates around Dublin stand empty with leaves blowing round half-finished frames.

It is important to say that Irish workers have not taken this lying down. Old age pensioners took to the streets in September 2008 and forced the government to back down on taking away their medical card entitlements. Symbolically, their mass meeting spilled over into a Catholic church, with Fianna Fail speakers being booed off the altar. In February 2009, 100,000 marched against the proposed pension levy and on 24 November a quarter of a million public sector workers went on strike against the budget cuts with thousands of young workers joining picket lines.

Amid the fear of the recession, however, workers were dependent on the union leaders to call them out. From the beginning Jack O'Connor, general secretary of Ireland's biggest union, SIPTU, used these fantastic mobilisations as a bargaining chip for talks with the government. The trade union leaders twice called off planned strikes. This left the traditionally strong and unionised public sector exposed. Just when the government could have been toppled by working class mobilisation the union leaders held a life-line out to Fianna Fail and helped get their cuts through.

The trade union bureaucracy always vacillate between the interests of their members and the employers. In Ireland decades of social partnership agreements with the employers have seen them veer closer to the establishment, forever rubbing shoulders with government ministers while becoming increasingly removed from the members. The recent revelation that senior trade union officials in the health services had shared with the employers a huge slush fund for junkets abroad is more shocking proof of this cosiness with the bosses.

As the crisis continues, and further attacks happen, doubtless some sections of the trade union leaderships will be forced to mobilise against the savagery of the cuts. In the meantime, the lesson must be that individual activists and workplace committees must learn new ways of organising so that they can begin to put pressure on the leaders, rather than the other way round.

The slow drip feed of information around the banks has shown starkly how tight the clique running Irish capitalism is. At every turn they give each other a dig out. Huge fees are awarded to their buddies in law firms - €9 million in one case for legal advice given to deal with the banking crisis! The head of Anglo - property developer Sean Fitzpatrick - transferred huge sums of money to his wife as he was declared officially bankrupt. Property developers who owe NAMA on the one hand are contracted by the same NAMA on the other, with handouts of millions of euros, to complete public-private partnership schemes like a useless National Convention Centre in Dublin.

The whole system, with armies of accountants and lawyers, is seen to conspire to keep capitalist swindlers from jail. The hatred felt for this capitalist elite is palpable. We have been subjected to the mushroom theory - "left in the dark and fed manure" is how one journalist put it.

The Labour Party have been the main beneficiary of this anger. In the polls at 34 percent, they have overtaken the other parties and may well be in a position to lead the government if and when an election is called. However, their leader, Eamon Gilmore, has accepted that the cuts have to happen and the public service has to be "reformed" (meaning job reductions and greater productivity).

Not so Keynes

Union officials with links to Labour were the architects of the Croke Park deal in June this year which accepted pay cuts and ushered in revision of public sector contracts, redeployment and longer working hours. While a surge for Labour may ignite confidence to fight back, as happened in Greece, it is clear that the Labour Party are already keen to reassure business interests by calling for public sector cutbacks and condemning strikes. Even in opposition, Labour Party Keynesianism does not amount to very much: recently they backed the Fianna Fail minister in her trawl for Irish jobs from corporate America.

Grassroots mobilisation has become the only way for people to express their anger. Local campaigns in Sligo, Wexford and Dun Laoghaire have seen determined opposition against hospital closures and public service cuts, with the radical left alliance People Before Profit being key to these mobilisations. On the EU Day of Action against Austerity on 29 September, despite all the efforts of the trade union leaders to ignore it, an angry protest took place outside Dail Eireann. Many stayed behind, after the Irish Congress of Trade Unions speakers departed, to listen to speeches from socialists and the radical left.

One thing to emerge from these struggles is the need for unity on the left and for socialists from different traditions to work closely together in elections and in organising opposition to the cuts. The Right to Work campaign has called a further mobilisation this month, which, in the absence of any union mobilisation, could become a real focus for opposition to the budget.

Nobody in the mainstream is questioning the logic of saving the banks. Some right wing commentators are arguing that only the robust banks should survive but their logic is that banks work well most of the time. Yet challenging the speculative profit-making of the banks is the key to stopping cutbacks in the public sector.

Protecting the bondholders, presented as international players driven by market pressures, has been the mantra of the government. But they do not reveal that these bondholders include Irish banks. Allied Irish Bank and Bank of Ireland were second and third of the top ten banks that held Irish government bonds in July 2010, with investments amounting to €6.3 billion!

This is why socialists argue that bondholders should not be given a safety net for their speculation. They should be forced to deal with their losses themselves. A state bank should be created - not to prop up the toxic debts, but to allow the socialisation of credit. The government should harness the wealth that it has used on bank bailouts to fund a public works programme to support and strengthen our enfeebled public services.

This alternative is dependent on the struggles taking these demands forward. In Ireland we saw militant struggles at the beginning of the crisis. We need now to learn how to build from below to force things once again in that direction.