Harry Konstantinidis — What’s Next for Greece?

The deal passed the Greek parliament without the support of almost one-fourth of Syriza MPs, rendering Syriza effectively a minority government and prompting a cabinet reshuffle. How could Syriza have agreed to such a deal? Wouldn’t Greece be better off introducing its own currency, rather than conceding both fiscal and monetary policy?

In order to answer this question, one has to understand the political identity of Syriza. Syriza has historically been a Europeanist party, differing from the Communist Party of Greece in its adherence to the notion that it is possible to change existing European institutions. It is worth noting that Synaspismos, the predecessor of Syriza, had even voted in favor of the Maastricht Treaty that laid the foundations of the European Monetary Union in 1992, viewing the treaty as a first—albeit incomplete—step towards a more solidaristic and unified Europe. Most of the Syriza MPs, even to this date, believe that Europe, rather the nation-state, is the locus on which to improve workers’ conditions and achieve positive social change. Thus, Syriza’s goal was not to exit the European (Monetary) Union, but to change it in favor of working people. Furthermore, Syriza never suggested that its goal was to abandon the euro: the closest the Syriza leadership ever came to proposing Eurozone exit was Tsipras’ saying in 2012 that “the euro is not a fetish.” In 2015, such ambivalences were abandoned.…

What does Syriza need to do in the very short-run? The Greek government, first of all, needs to (finally) attack the Greek oligarchy and tackle the web of intertwining relations between media, banks, and big business in Greece. Over the last five years, the Greek public has been taking loans to recapitalize the Greek banks in exchange for preferred stock: thus the management of Greek banks has stayed in private hands. While lending had come to a standstill, banks continued to make loans to insolvent private media, owned by a small number of Greek families with strong political ties. At the same time, the Bank of Greece (the national central bank) has refused to provide information about these loans, invoking bank secrecy. These relationships need to stop.

Furthermore, Syriza needs to start the productive reconstruction of the Greek economy. The negotiations with the creditors have dragged on for a long time, and have taken time from attention to domestic issues. If the Greek economy has any chance of recovering (either inside or outside the eurozone), Syriza needs to build and foster the productive structures that provide employment and allow the people of Greece to cover their basic needs. Even in the absence of fiscal space, a productive reconstruction based on self-management, new food systems striving towards food sovereignty, and increased public participation (through local assemblies and participatory budgeting) are imperative. So is, in addition, an open and frank discussion about how productive reconstruction can (or cannot) take place within the coordinates of existing European economic and political institutions. 

Triple Crisis
What’s Next for Greece?

Harry Konstantinidis | assistant professor of economics at the University of Massachusetts-Boston