The tired country’s parliament continues to enact austerity measures to ensure Eurozone financial help keeps flowing, to the anger of many affected parties.Last Wednesday night, I sat in the press stalls inside the main hall of Greece’s parliament watching a critical bill being debated. While Americans were still distracted by the results of their own election, Greece’s ruling coalition, made up of three parties that straddle the center, was struggling to pass new cuts and reforms necessary for continued financial help for the debt-ridden country. As the measure was attacked by deputies from SYRIZA, the hard left official opposition, and the populist-right Independent Greeks, I heard yelling and commotion from inside the parliament building. My first thought was that the tens of thousands of protesters who had gathered outside in the pouring rain had broken through the lines of police and made it into the building.
The reality was even worse. The screaming came from the employees of parliament themselves, a notoriously well-connected and privileged enclave of the public sector, who had learned they were going to be included in stricter pay and benefits rules instituted for government workers. They streamed down from the offices to the side entrance of the main hall of parliament, poised to barge in.
In the end, they opted for a more effective approach: They held an impromptu strike, vowing that the session—perhaps the most crucial one in Greece’s post-junta history (since 1974)—would not continue until the proposed amendment was withdrawn. It took only a few minutes for their wish to be granted, though Finance Minister Yannis Stournaras vowed to reintroduce it at a later time.
How did we get here? The last two weeks have been the most testing for the three-party coalition that has governed the country for the past five months. Its future looks more uncertain than ever. Whether the ruling-coalition will crack is the question that still lingers over Greek politics, and the answer will likely determine the fate of Greece’s membership in the Eurozone.
The first tremors were felt on October 31, in two parliamentary votes on the withdrawal of the state as a shareholder in ports and other large, publicly owned enterprises—a concession government property to private developers. This vote was essential for the privatization program that is part of Greece’s second bailout agreement. Both articles passed, despite the fact that the Democratic Left, a moderate party and the most junior of the three coalition partners, came out against them.
It was a harbinger of things to come. Last Wednesday, parliament voted on an omnibus bill incorporating brutal new austerity measures for the 2013-2016 period and two-and-a-half years worth of promised-but-delayed structural reforms. Its approval was a necessary condition for the release of the next tranche of financing from the Eurozone and the International Monetary Fund, worth 31.5 billion euros. Since May 2010, Eurozone member-states and the IMF have released 147 billion euros to Greece, but each installment requires reforms and cuts the Greek government has been increasingly reluctant to make. This latest payment has been held back for more than four months, during which time the Greek public and private sectors have been floundering in a desert of relentless illiquidity. The recession, currently in its fifth-straight year, has deepened further and unemployment has soared above 25 percent.
The total austerity package for the next three years, including 4.7 billion euros worth of cuts chillingly described as “not specified,” comes to 18.9 billion euros. For 2013 alone, the fiscal crunch is 9.3 billion euros, equivalent to around 5 percent of GDP. But the troika (the European Commission, the European Central Bank, and the IMF), beset by their own internal disagreements about the sustainability of Greece’s debt, pushed further, demanding greater liberalization of the labor market, including less severance pay for laid-off workers and a stricter restriction on wage growth.
This was something the Democratic Left could not stomach. Pulled in different directions by its desire not to destabilize the government on the one hand and its inability to accept what it considered destructively neoliberal labor reforms, it decided it would vote “present” on Wednesday’s omnibus bill. As Wednesday’s make-or-break vote approached, the government’s position was looking increasingly precarious. Without the 16 members of the Democratic Left, it could in theory rely on the 127 members of Nea Demokratia, plus—it hoped— enough members of PASOK for the bill go through.
In the end, the bill did pass, but with only 153 “yes” votes, seven more MPs expelled from the parties of the majority for not supporting the bill, and after a session of parliament that will be remembered, thanks to the mutiny of the parliamentary employees, as a distinctly low point in the country’s modern political history.
Despite this shameful incident, and the crowds in the street, and the populist cries and threats of communists, nationalists, and fascists inside parliament, the measures were passed. A few days later, a little after midnight Sunday to Monday, a considerably larger majority of 167 approved the draconian 2013 budget. The additional support came from members of the Democratic Left, who wanted to cement their position in the ruling coalition—a position that seemed to be slipping fast.
So the center is holding, but just barely. Recent polls put the hard-leftists of SYRIZA in first place in voters’ preferences, and the fascist thugs of Golden Dawn in third place with double-digit support. SYRIZA leader Alexis Tsipras routinely cautions potential investors that any privatized assets they buy will be taken back by the state when his party wins power. He is calling for early elections even though Greece has already held two in 2012, at great cost, and even though one of his party’s top officials recently admitted the party is not ready to govern. A SYRIZA deputy went as far, during the budget debate, as to warn ministers who have put their signatures to the Memoranda of Understanding between Greece and the troika that they may suffer the fate of the American ambassador in Libya.
Europe’s governments know this is what is coming if the current government falls. They know the only hope for political stability and economic recovery in Greece begins, as the barest minimum, with the speedy release of the next tranche of money, accompanied by a two-year extension of the timeframe for meeting agreed-upon budget targets, which would allow the Greek economy some room to breathe.
Since the omnibus bill passed last week, what we have gotten instead is more prevarication, mixed messages, and contradictory anonymous leaks regarding the date and the size of the next disbursement. As for the rather vital issue of the sustainability of Greece’s debt, which is slated to hit 189 percent of GDP at the end of 2013, the governments of the Eurozone keep their heads firmly planted in the sand. They know that otherwise they will have to tell their voters that the only way to keep Greece in the euro is to forgive some of its debt to them.
So the sorry saga continues, Greeks sinking ever deeper into despair, and the likelihood of what is so euphemistically referred to by analysts as an “accident”—its leaving the Eurozone—grows greater by the day.