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Greece Seeks to Reanimate European Social Democracy

The Prime Minister of Greece and leader of the radical left party, SYRIZA, Alexis Tsipras, delivered a major speech that addressed the near totality of domestic and foreign policy issues facing Greece. Important questions about the separation of Church and State and LGBT rights—both in the party platform—were not covered, in order to placate the conservative coalition partner, the Independent Greeks. In certain respects this was business as usual, as a newly elected government commonly presents its program in a ‘state of the union-to-be’ sense to the Parliament and then seeks a vote of confidence. The affirmation of the Government and its program symbolically (since it is largely aspirational in character at this early point) signals the beginning of the legislative season.

PM Tsipras’ speech is historic for Greece and the EU (potentially even more broadly) in both symbolic and practical terms: For the first time in Greece’s political history the Left is in power—and not in the guise of the self-described social democrats of the formerly ruling and now nearly defunct Panhellenic Socialist Movement (PASOK) of the elder Andreas Papandreou. It has replaced the coalition of the largely discredited Center-Right New Democracy party and its diminished PASOK partner, which was fully invested in the neoliberal fiscal and macroeconomic strategies of the European Commission, the European Central Bank, and the International Monetary Fund (the so-called ‘troika,’ which designed and supervised the implementation of the loathed 2010-15 austerity program).

The speech constitutes the first articulation from a position of power, instead of opposition, of principles dearly held by the European Left and social democrats since the end of the Second World War – principals that have been under sustained assault in Europe since the European Communities’ (now the EU) neoliberal turn in the second half of the 1980s.

Tsipras’ speech reclaims, at least in word, lost ground to deregulation, privatism, the hollowing out of the social state, and the erosion of democracy, which are broadly associated with the onset of globalization.

Cast as ‘Freedoms’ the four powers of the Single European Act of 1987, liberalized the regional organization’s labor, capital, goods, and service markets, producing an, albeit, imperfect ‘Single Market.’ The ‘Freedom of Capital’ principle was an artfully articulated expression of banking and capital markets deregulation at the EU level, paralleling the opening of the world economic system in the same period. ‘Freedom of Labor’ was celebrated as a critical step to creating ‘real Europeans’ by allowing them to cross national borders and maximize their professional potential across the EU. At the same time this transnational mobility of labor had the potential to unsettle and erode the Member States’ labor cultures by establishing a new set of labor market facts on the ground. The Freedoms of Goods and of Services were designed to reduce transactional costs for firms, produce economies of scale, and facilitate inter-firm collaboration—all prima facie desirable.

Greece's Prime Minister Alexis Tsipras pictured here with Pablo Iglesias of Podemos. (Alexis Tsipras/Facebook)
Greece’s Prime Minister Alexis Tsipras pictured here with Pablo Iglesias of Podemos. (Alexis Tsipras/Facebook)

While large firms with an established international footprint vastly benefited from the greater openness, small- and medium-sized firms (SMEs), especially in less competitive economies like Greece’s, were nearly annihilated. In Greece ‘flee, restructure, or be destroyed’ became the de facto state of business affairs: While some of the large Greek firms survived the deregulation wave, the majority of manufacturing capital representing SMEs fled across borders to non-EU states in the Balkans (now most of them Member States), or demobilized entirely adding to the ranks of the unemployed in the private sector. State-owned service monopolies, such as Olympic Airways and OTE (the national telephone company), were broken up and privatized, often not on advantageous terms for the electorate, but certainly advantageous to Greek oligarchs and international firms.

Clearly, the Greek economy was becoming ‘Europeanized’ in a profoundly neoliberal manner. What made neoliberalism especially toxic was the clientelistic character of Greece’s political system. I describe it extensively in two articles I wrote in 2012, in the context of the Greece’s Parliamentary elections, click here and here.

Briefly, establishment parties of the Center-Right (New Democracy) and Center-Left (PASOK) built and maintained a political culture of ‘votes for jobs, pensions, and perks.’ Expanded liquidity and reckless borrowing (and lending by international banks) alimented the system until the global economic crisis of 2008. By the end of 2009, the cheap money that was the lifeblood of Greece’s political system ran out. Any borrowing was done under the supervision of the ‘troika,’ in the service of objectives expressly consistent with a neoliberal strategy of rolling back the (social) state, deregulation, and privatization of state property.

Greece's new Finance Minister Yanis Varoufakis has been instructed to quit blogging. (Yanis Varoufakis)
Greece’s new Finance Minister Yanis Varoufakis has been instructed to quit blogging. (Yanis Varoufakis)

The coalition government of New Democracy and PASOK proceeded to disembowel worker rights and protections, social services and compensation, even environment protections that could have discouraged investors, while protecting, to the extent that it could, the bloated ranks of the civil service (its political base). There is no question that structural reforms were very much overdue. The operative question, however, is ‘cui bono’: who benefits? The resulting pauperization of Greece’s population, and the loss of social and economic rights earned since the fall of the junta in 1974, brought the Left to power in Greece in January 2015.

PM Tsipras’ first speech to Parliament can be viewed as historic because it represents a new radical political power of the Left that breaks with traditions of Greek politics established 40 years ago. Early critics will point out that key beneficiaries of Greek clientelism were labor unions and their bosses, who are foundational blocks of both PASOK’s and SYRIZA’s power base. Further it questions established relationships among state, the European Union, firms, and the international regulatory system in a manner that is consistent with principles of European historic social democratic thought ante neoliberalism. For that, look to the past alone Tsipras and the SYRIZA project may be deemed as improbable, impractical, even foolhardy. Or one can argue that Tsipras is voicing what has been in the minds of silent leftist (and centrist) majorities across the EU. If that is the case, Greece’s questioning of neoliberalism as a political-economic paradigm may prove to be catalytic beyond its borders, especially in Member States like Spain where public discontent with austerity is a major political force.

PM Tsipras was emphatic and explicit in naming, in his mostly domestic-scope speech, neoliberalism and Greek oligarchs as the cause of the national malaise. He clearly soft-pedaled his polemic discourse on Germany and the IMF, as the speech was cast officially as a Greek family affair. He spoke little of foreign policy, essentially affirming much of established Greek foreign and security policies regarding the EU role in these areas, and regarding Cyprus, the Former Yugoslav Republic of Macedonia, and Greece’s desire to serve as a pole of stability in an otherwise turbulent region.

Instead, the heart of the speech was the Government’s program of applying a version of the European social democratic paradigm to Greece through ‘roll-backs’ of the type of minimum wage-containing, union-gutting labor policies that Europeans and Americans have come to see as standard features of their economies since the premierships of Reagan, Thatcher, and Kohl in the 1980s, and expansion of the footprint of, and protections for the social state. PM Tsipras spoke of welcoming FDI but not predatory FDI. He spoke of evaluating the merit of civil servants (a massively controversial process) but in a manner that respects constitutional limits. He underlined the need for international economic competitiveness through supports for R&D; and called for educational reform at all levels (another third rail of Greek politics).

There is no doubt that the PM’s speech was meant to strum the heartstrings of every social democrat and centrist in Greece and the EU. While conservative forces will resist SYRIZA’s program, I hazard to say that the game will be decided not only in Berlin, Frankfurt, and Brussels, but perhaps equally in Lisbon, Madrid, and Rome.