June 7, 2012 · 0 Comments
By Costas Panayotakis:
On June 6 The New York Times featured a front page article on the finances of the Greek government.[i] On the one hand, the reporter Liz Alderman was right to point out that austerity policies across Europe have made it “harder, not easier for governments like Greece to become self-reliant again.” The reason for this is that such policies have drastically cut incomes, reduced demand, led to the mass closing of small businesses, fueled unemployment and understandably led, through all these different pathways, to a collapse of tax revenues. On the other hand, however, the article also contained a number of claims and omissions that produced a misleading picture regarding various dimensions of the Greek crisis.
After describing the problem of tax evasion and the difficulty that Greek tax authorities have enforcing tax laws both because of the lack of computerization and of the cutbacks that tax authorities themselves have suffered, the article leaves the reader with the impression that the culprit for this sad state of affairs is political instability. Indeed, the article ends with the claim by the head of the Greek tax collectors’ union that “things will only improve in Greece when we get a stable government that will impose its political will.”
The reality of course is that Greece had been politically very stable for decades before it landed into the troubles it is currently facing. With the exception of the two-year period between 1989 and 1991, Greece was, between 1974 and 2011, ruled by either the socialist PASOK party or the conservative New Democracy party. Thanks to electoral laws that they tailored to their needs, these two parties were able to enjoy parliamentary majorities and alternate into power on the basis of as little as 40% of the popular vote. In other words, the problems described in the article, along with all the other problems that have brought the country to its knees, were not the product of “political instability” but of the choices made by the politically very stable rule of the conservative and socialist political elites that for decades dominated the Greek political system.
The recent political instability in Greece is not the source of the country’s problems but their product. In particular, last month’s inconclusive elections reflect the growing disenchantment of Greek citizens with the political forces, which, through their corruption and mismanagement, amassed unsustainably high debts and which, through their complete capitulation to the demands of European capitalist elites, have presided over a brutal austerity program that has generated a social and humanitarian catastrophe in Greece. Because of the bitter fruits that decades of socialist and conservative “stability” produced, the support for these two parties in last month’s election collapsed from its – up to that point – usual 80% level to about 32%. Meanwhile, a number of other parties, notably the anti-austerity Coalition of the Radical Left (SYRIZA) saw their support growing.
Blaming political instability for Greece’s present problems is therefore completely disingenuous, since it simultaneously absolves and supports those most responsible for Greece’s current problems. If instability was the result of Greek citizens abandoning en masse the traditional political forces and instability is the way out of the crisis, the absurd conclusion that follows is that the only way for Greece to get out of the crisis is to reelect those most responsible for bringing about the crisis in the first place! Absurd as this conclusion undoubtedly is, this is the message that both capitalist elites and the mainstream media in Greece – and around the world that they control – are trying to drum into the heads of Greek citizens. And they do so not just through outright distortions but through the most shameless fear-mongering imaginable.
The article also points out that “[t]he budget gap is widening as the so-called troika of lenders – the International Monetary Fund, the European Central Bank and the European Commission – withholds 1 billion Euros in bailout money earmarked for government financing while it waits to see whether new leaders elected June 17 will honor Greece’s commitments.” There are a number of highly problematic claims and assumptions contained in this statement.
First of all, the simple reference to “Greece’s commitments” hides the fact that these commitments were made by a government which did not truly represent Greek citizens and which was installed by Greek and European capitalist elites precisely for that reason. The original end of political stability in Greece arrived in the fall of 2011 when growing popular resistance against austerity made it clear to the socialist government at that time that it had become too weak to push through parliament a new wave of harsh austerity measures accompanying the second rescue package that had become necessary for Greece because the first one had proven a failure. At that point then-prime minister George Papandreou announced his intention to hold a popular referendum on that question, but the idea was dropped when German chancellor Merkel and then French president Sarkozy in effect threatened to oust Greece from the Eurozone. Having lost the trust of Greek and European capitalist elites, Papandreou stepped down. While the logical thing to do in such a situation was to hold an election, Greek and European capitalist elites rejected this idea because they knew that Greek citizens could not be trusted to give the “right” answer to the austerity question. Thus, a coalition government between socialists, conservatives and a smaller far-right party was formed with the task of signing a rescue package that Greek citizens would probably have rejected. To say, therefore, that the commitments made by a government formed in this way are “Greece’s commitments” gives a reader not familiar with recent Greek political history a very misleading understanding of the situation at hand.
Indeed, the contrast in that sentence between the leaders who will be elected June 17 and Greece’s commitments is a choice piece of Orwellian language. In that contrast the government headed by an unelected former banker and set up with the express purpose of making commitments that Greek citizens opposed stands for Greece. On the other hand, the people who will be elected June 17 and who, for that reason, will likely go against the commitments made against the wishes of Greek people are seen as potential deviants who, in doing what Greek citizens want them to do, will be viewed as going against “Greece’s commitments.”
Thus, while seemingly a statement of a bland, unproblematic fact, the sentence in question constitutes a shameless and deceitful adoption of the ideological standpoint of Greece’s borrowers. This is especially true given an additional piece of information that the New York Times reporter forgets to mention. The decision of the Europeans to withhold part of the bailout installment until after the election was not an understandable precautionary measure that Europeans had to take in view of unreliable Greeks who refuse to make good on their commitments. On the contrary, when the decision was made to withhold part of the bailout installment, Greece had fulfilled all the requirements for that installment, so in effect it was the Europeans who violated the loan agreement with Greece in a transparent effort to put pressure on Greek citizens to correct the “mistake” they had made in May when they abandoned the pro-austerity parties. In other words, the article perpetuates the racist stereotypes against Greeks and Southern Europeans that have been used to justify brutal and ineffective austerity measures, while hiding the fact that the European response to the current crisis represents an assault not just on people’s basic rights and living conditions but on democracy itself.
All in all, this article is also in line with what I have elsewhere described as the Keynesian neoliberalism of the New York Times.[ii] Its general thrust is to provide support for the political and economic actors in Greece and Europe who want to use the crisis as an opportunity to advance the restructuring of European societies in a neoliberal direction. At the same time, however, the article recognizes that excessive austerity can prove counterproductive as it can generate a popular backlash and the rise of parties, like Syriza, that dare to threaten the kind of “political stability” that has brought destitution and despair to millions of people not just in Greece but across the European continent.
Costas Panayotakis is Associate Professor of Sociology at the New York City College of Technology of the City University of New York and author of Remaking Scarcity: From capitalist inefficiency to economic democracy.
[i] Liz Alderman, ‘With Tax Proceeds Drying Up, Greece Could Be Broke by July,’ The New York Times, June 6, 2012, http://www.nytimes.com/2012/06/06/business/global/greece-warns-of-going-broke-as-taxes-dry-up.html?_r=1v .
[ii] See Costas Panayotakis, ‘On the Keynesian Neoliberalism of the New York Times,’ NYTimes Examiner, April 1, 2012, http://www.nytexaminer.com/2012/04/on-the-keynesian-neoliberalism-of-the-new-york-times .