Pro-euro protesters hold European Union flags during a demonstration in front of the parliament in Athens on June 30, 2015. Photo: Aris Messinis/AFP
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Owen Jones: The elites are determined to end the revolt against austerity in Greece

Europe's great powers won't be satisfied until they break Syriza, and stop an anti-austerity movement spreading across the continent.

Contagion: this word sums up how the Greek disaster has been allowed to descend into catastrophe. Not economic contagion, or any real fear that Greece is a Hellenic Lehman Brothers-in-the-making, whose implosion will send dominoes toppling from Berlin to Lisbon, but political contagion. An attempt is being made to suppress the contagion of its anti-austerity movement. In a eurozone where more than 11 per cent of the citizens are without work, including half of all young Spaniards, the social devastation endured by the poor has been sustained by a simple doctrine: “There is no alternative.” If Greece threatens that narrative, it has to be punished.

After France’s François Hollande abandoned his left-wing mandate almost as soon as he marched into the Élysée Palace, Syriza’s dramatic triumph in January represented the first time Europe’s anti-austerity movement had seized power in a national election. Since then, Europe’s great powers – the European Union, the eurozone’s unaccountable Central Bank, the IMF, the German government – have all conspired to make an example out of the party. Greece is a rebellious eurozone province, and if its democratically elected insurgents are allowed to succeed, the doctrine of “There is no alternative” will be shattered and a growing populist left will be emboldened. Why wouldn’t Spain’s austerity-weary voters give a decisive mandate to the radical left Podemos in a general election due by December? And why not then Ireland, Portugal, Italy, the Netherlands and so on?

Syriza has to be broken, or so the EU great powers decided long before it was even elected. But how? First: compel it to impose another dose of disastrous austerity, in violation of the party’s clear electoral mandate. This would inflict on it the same fate as the Greek social-democratic party Pasok, which so alienated its support base that its vote plummeted from 44 per cent in 2009 to 4.7 per cent by 2015. A second possible strategy: strangle Greece’s economy until the people decide that the lesser catastrophe would be to resign themselves to endless austerity within the eurozone. This is the current course of action.

The third strategy: force a default and drive Greece out. However, this might expose the eurozone’s Achilles heel. A precedent would be set: the eurozone would no longer be an indivisible currency union, but a club that weaker members can leave or from which they can be de facto ejected. Italy, say, could find itself the subject of extreme market speculation.

And there is another danger for the elite: although defaults are invariably followed by the ejection of the ruling government – so, goodbye, Syriza – what if a temporarily hobbled post-euro Greece enjoyed a recovery comparable with Argentina’s after the default of 2002? Other countries locked in economic misery would have an example to emulate. For these reasons, a Greek default will have to be as painful as possible, pour encourager les autres.

Syriza’s fate will also be used to hammer opponents of austerity. Resisting the prevailing economic common sense of our time (it will be claimed) is demonstrably futile and self-defeating. Greece’s woes are the product of overspending, and so on. That the likes of Goldman Sachs helped to massage Greece’s books to allow it to enter the eurozone in the first place will be forgotten. The irresponsible lending of German and French banks will be forgotten, too.

The global financial crisis is generally not blamed on low-paid Americans for accepting sub-prime mortgages, but on those who lent to them irresponsibly. The same should apply to Greece: greedy banks, acting in the short-term interest, which lent money, setting aside risk for the sake of profit. As the Jubilee Debt Campaign has pointed out, it was German and French banks that were bailed out, not the Greek people.

Since then, successive bailouts with ruinous austerity measures attached to them have shored up private-sector institutions while slicing a quarter off the Greek economy. Poverty rates have more than doubled to over 40 per cent, unemployment is now a quarter and debt consumes 177 per cent of the country’s GDP. Greece has been instructed to extend policies that have so far achieved only ruin. Yet such is the pressure being exerted on the Greek people that acceptance of (or rather, resignation to) the creditors’ demands is surely likely.

Whatever happens, opponents of Europe’s disastrous policy must keep calling for an international debt conference; not only for Greece, but other countries, too. This debt is an unpayable accountancy fiction that is strangling growth, and inflicting a terrible human cost. A new strategy – informed by the likes of Nobel Prize-winning economists such as Joseph Stiglitz and Paul Krugman – based on public investment, growth, and quantitative easing aimed at infrastructure and new renewable industries must be championed.

But Syriza is cornered, and so are the embattled Greek people. Any concession to the troika will be used to clobber anti-austerity forces. “The Greek people don’t want to let down the EU,” the Commission president, Jean-Claude Juncker, has pleaded. Austerity, Greece, the manifest lack of democracy and accountability . . . all are spreading disillusionment about the EU among the left. A pro-EU centre may continue to shrink, chipped away by left and right. Today, we witness hubris: but tomorrow, the EU may meet its nemesis.

Owen Jones discusses the politics of hope with Suzanne Moore and Georgia Gould in an NS event at the Latitude Festival on 16 July.

Owen Jones is a left-wing columnist, author and commentator. He is a contributing writer to the New Statesman and writes a weekly column for the Guardian. He has published two books, Chavs: the Demonisation of the Working Class and The Establishment and How They Get Away With It.

This article first appeared in the 01 July 2015 issue of the New Statesman, Crisis Europe

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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.