Social Democracy and the Greek Disaster

February 13, 2012

On Sunday night, February 12, the Greek Parliament passed the new austerity measures demanded by the Troika of the International Monetary Fund, the European Commission and the European Central Bank. It is widely agreed that the draconian program will drive the Greek economy even deeper into recession. Very few believe that Greece will avoid defaulting on their debt.

The new “restraint” package includes a 22% reduction in the minimum wage, cuts to pensions and the national pharmaceutical drug program, wage cuts, the elimination of 150,000 government jobs, and the privatization of more government businesses and programs. Companies will now be able to unilaterally reduce wages and break contracts with trade unions.

Public opinion polls show an overwhelming majority of Greeks are opposed to the economic measures being imposed on them. The present government is an alliance between the social democratic party,  PASOK, and the conservative New Democracy, presided over by Lucas Papademos, an unelected prime minister and former banker. The latest poll shows 79% opposed to the bailout package, which is designed to try to protect the international banks and their investments in Greek government bonds.

The two major trade union confederations have been holding general strikes across Greece for over a year now. They are formally linked to PASOK, Greece’s version of Canada’s New Democratic Party (NDP). In the 2009 election for the Greek parliament PASOK received 44% of the vote and formed a minority government. In the most recent public opinion poll, their support among potential voters has fallen to 9%. New Democracy is holding at 31%, just slightly less than they received in 2009.

Greeks support general strike

The Greek crisis has shifted public opinion away from the neoliberal social democrats and towards the parties of the left. Support for he Communist Party (PKK), which has played an important role in the general strikes, stands at 13%. The Coalition of the Radical Left, a left green party, is at 12%. The Democratic Left, a socialist party created in 2010, stands at 18%.

When voters were asked who would be the best leader for Greece at this time, the results show the general shift to the left:

Fotis Kouvelis of the Democratic Left – 56%
Alexis Tsipras of the Coalition of the Radical left – 41%
Antonis Samaras of New Democracy - 31%.

Despite what all the business leaders, mainstream politicians and the mass media proclaim, there is a clear alternative to accepting the Troika’s austerity program. It has been advanced by respected Greek economists. Greece would leave the European Union and reintroduce their own currency. A devaluation would be required to give their economy a chance to regain a competitive edge. There would be the inevitable default on the debt and debt restructuring. Argentina and Iceland serve as precedents for such a strategy. But this alternative is a major threat to the many insolvent European banks.

PASOK followed all the social democratic parties in Europe by supporting the neoliberal package of the free market, free trade, deregulation and privatization. When this model failed in 2009, the social democratic parties all supported the imposition of austerity programs which fall heaviest on the weakest members of society. Where the social democrats were in office, they were all turfed out. Canadians might want to ask: is the New Democratic Party any different?