Greek union denounces “coup d’etat”

The besieged people of Greece awoke this morning to blacked-out television screens. They discovered that the conservative Samaras-led coalition government had shut down the ERT, the Greek equivalent of the BBC. No discussion, no warning, no consultation, not even with the two smaller parties in the coalition.

Thousands gathered outside ERT's headquarters after the announcement, and riot police blocked the entrance to a studio in central Athens where protesters had unfolded a banner reading "Down with the junta, ERT won't close!"  In Greece’s second city, Thessaloniki, some 500 gathered outside ERT’s northern headquarters. The news editors union called for solidarity from private broadcasters.

The shutdown is a further twist in the spiral of attacks against journalists in Greece. Journalists occupyed the ERT building as their union denounced the shutdown as a "coup d'etat" and called for strikes by all media workers in the country.

The abrupt announcement followed a ministerial decree authorising the government to shut down public enterprises. And it came in the wake of its failure on Monday to find a buyer for the gas utility DEPA part of a general sell-off of state assets. Greece was left unable to meet its bailout targets.

On Monday, inspectors from the so-called troika of lenders, the European Union, the European Central Bank and the International Monetary Fund, were back in Athens to conduct their latest review of Greece's progress in implementing spending cuts and reforms. They insisted on the immediate sacrifice of 2000 public sector jobs

ERT’s 2,600 staff are to be paid off immediately, whilst, the government story goes, the three domestic television channels, along with regional, national and external radio stations, costing Greece 300 million euros ($400 million) a year, will be restructured, drastically slimmed-down.

According to government spokesman Simos Kedikoglou, the 70–year-old public broadcaster had become a "typical case of ... incredible waste", comparing its costs with the private channels.

"At a time when the Greek people are enduring sacrifices, there is no room for delay, hesitation or tolerance for sacred cows," said Kedikoglou.

ERT’s workers occupied the studios, but the state forces took command. Police went onto the mountain and neutralised the people who managed the transmitter, according to Nikos Roukounakis, an engineer at ERT for 30 years.

There are fears that ERT’s orchestra and its valuable cultural archive will be lost forever.

Dimitris Papadimitriou, general director of the radio department and a well-known Greek composer, said that even the 1967-1974 military junta hadn't taken such action.

"Such a thing never happened before, not even during the dictatorship."

Papdimitriou is right to make this comparison.  No previous crisis in the short history of capitalist society bears comparison with the scale of the unfolding catastrophe, in Greece and around the world.

In the wake of the unprecedented 2007/8 crash, central banks and governments dreamed an estimated $12 trillion dollars worth of new credit into existence.  They injected these huge amounts into the global economy which was knocking at death’s door, transferring the cost of mountainous and unrepayable debts across states, individuals and corporations. 

Extending its death agony with such extreme measures as ‘quantitative easing’, guaranteed that a new more severe event would not be long in coming.

The Samaras government’s response to the troika’s demands reflects the desperation and determination of those seeking to shore up the global capitalist economy.  They will allow nothing to stand in their way.

Using the market imperative to shut down a public broadcaster is indeed a form of dictatorship. For this to happen in the birthplace of ancient democracy, and a small country which through its long history has struggled time and again against tyranny, gives this latest twist of events a greater resonance.

What is happening in Greece is a stark warning, not only for Europe but the rest of the world, about the anti-democratic repercussions of the global economic and financial crises.

Gerry Gold

Economics editor

Warnings from history in Greek crisis

What happened in Germany during the 1930s does have crucial parallels in today’s economic and political crisis. So the start of a new television series about the rise of Adolf Hitler being broadcast by the beleaguered BBC tonight is timely.

Historian Laurence Rees writes in BBC’s online magazine, that Hitler’s story holds a “stark warning for the modern day”. Particularly at a time when the openly pro-Nazi Golden Dawn party in Greece looks set to become the third largest party in any future election.

Journalist and author Paul Mason, and even the right-wing Daily Mail (which in its day actually supported Hitler for a period) have drawn attention to the shocking parallels between the blackshirts of Golden Dawn and Nazi party thugs of the 1930s.

With open support from the Greek police, Golden Dawn members march under the Nazi swastika, terrorising and beating up immigrants. They have attacked anti-right protesters. Homophobic Golden Dawn MP Ilias Panagiotaros and supporters closed down a theatre in Athens performing Terrence McNally’s play, Corpus Christi, beating up and terrorising actors.

This fascist party is tapping in to the existential insecurity suffered by Greeks as new €13.5bn a year cuts and tax rises demanded by the European Union and the International Monetary Fund are imposed on an suffering population. The young and the elderly are victims of a regime that represents the interests of global capital.

So it is definitely worth looking at the parallels between events in Greece and those in Germany some 80 years ago.  

The Germany of the 1920s saw a massive economic crisis in which the German mark lost virtually all its value. The Wall Street crash of 1929 resulted in a depression and massive unemployment, not only in the US but also in Germany.

Electoral support for the Nazi party soared from 12 seats in 1928 to 230 seats by 1932 making it the largest party in the Reichstag. Big money from German industrialists poured in to swell Nazi party coffers allowing them to print millions of election pamphlets.

Crucially, those who sought to stop Nazism were held back by their own leaders.  Before 1933, anti-Nazi deputies in the Reichstag still held over 50% of the votes. But, due to the disastrous ultra-left policies of the German Communist Party – which characterised the Social Democrats as “social fascists” – the anti-Nazi forces were split down the middle.

Naturally, Mason is right to warn of too direct comparisons between Weimar Germany and today’s Greece. He points, for example, to the melting away of support for what he terms Greece’s “centrist parties”. In poll ratings, the Pasok’s share has plummeted from 40% down to 5.5%, in comparison to Golden Dawn’s 12% with the left-coalition Syriza at 30%.

He says the real problem is political disaffection and a sense of “hopeless inertia”. He writes: “You can feel what it is like when the political system - and even the rule of law - becomes paralysed and atrophies.”   

So is the future of Greece really down to people’s psychology – the “fight or flight” instinct, as Mason suggests? Well, no. Just as German support for Nazism cannot be ascribed to a spurious “German national character”.  

One of the greatest lessons from Hitler’s rise to power was that parliamentary democracy failed to stop the Nazi’s seizing power in March 1933. In fact, the Nazis came to power legally within the terms of the constitution. This does not mean that anti-fascists should disregard parliament, or refuse to defend it against the far right.

But democratic rights in such a period as ours cannot be defended solely by relying on the very institutions that have failed, or creating alliances with bourgeois parties as disastrously happened in Spain in 1936 with the formation of the Popular Front.

Everywhere, not just in Greece, confidence in establishment institutions is in decline. Parliamentary politics fails to convince or capture people’s imagination. The solution is not to revive a political system that is tied inextricably to corporate power but to work for a new constitutional settlement that extends democracy in new ways, beyond representation. That’s what the November 17 assembly The Revolution Will Be Networked, will focus on.

Corinna Lotz

AWTW secretary

Greek parliament imposes debt diktat

As Greek finance minister Evangelos Venizelos knows only too well, the measures being imposed on all but the super rich in Greece are raising the spectre of massive social division.

Venizelos, popularly known as the “Bull of Athens,” due to his thickset features and heavy shoulders, perhaps ironically bears the name of noted revolutionary and Greek founding father Eleftherios Venizelos.

It was today's Venizelos, a former opponent of Papandreou, who did the dirty work for the former Prime Minister by persuading the left in Pasok to agree to accept the EU-IMF imposed austerity measures.

He has made repeated appeals for national unity, imploring members of parliament not to resist the massive cuts that will wreck Greek society. He warned: "We are running the risk of burning ourselves. We must steer the ship to the safe harbour of debt restructuring. It requires national unity and for us to send a message of credibility.”

In response, the Greek parliament agreed massive minimum wage and pensions cuts in a bid to secure the bail-out deal intended to stave off the first bankruptcy of a eurozone state.

They have imposed a 22-percent cut on the standard minimum monthly wage of €751. For those under the age of 25, the cut will be even more brutal, a 32-percent reduction.

In addition, in another form of collective punishment for workers still holding on to jobs, they imposed wage freezes on some staff groups until the unemployment rate, currently 21 percent, falls below 10 percent.

Monthly pension payments above €1,300 euros will be reduced by 12 percent. Supplementary’ pensions, which are paid for out of workers' own contributions, will be slashed by up to 30 percent.

The trigger for the default, as Moritz Kraemer, S&P’s Head of Sovereign Ratings for Europe, the Middle East and Asia, explained it, was the Greek government’s ‘retroactive insertion of collective action clauses’ against private holders of Greek debt.

The crux of the matter is this: the bail-out deal depends on a sufficient proportion of bondholders agreeing to accept losses of 53.5 per cent on the nominal value of their Greek holdings, with actual losses put at around 74 per cent, but, according to S&P’s classic capitalist ‘methodology’, the Greek decision to replace agreement to losses with enforcement against investors was enough to send its assessment off the credit rating scale and into default.

In times of crisis it requires the remnants of democratic forms of government to impose a brutal collective punishment on those who depend on wages and pensions for their livelihoods, shrinking the economy bloated with decades of credit and debt, whilst protecting the “rights” of investors to compete for the last remaining profits to be squeezed out of those still in work.

Central banks are pouring hundreds of billions more into the monetary clouds buying themselves time to ‘restructure’ economies in trouble. Portugal and Spain are next in the firing line.

No amount of austerity will solve the crisis in Greece. Placing the burden on the 99% in society, as the supine parliamentarians have done, only makes things worse. Even the one-day general strikes undertaken by the Greek trade unions, and fighting outside Parliament have not brought about a change of direction from the political parties. Support for Pasok, which is the governing party, has fallen to only about 20 percent according to current polls.

But Venizelos is right about his country’s “historical and existential crisis”. Greece has indeed lost its right to self-determination, which it fought for so hard centuries ago. But there is an alternative for all those who want to free themselves from diktats from Brussels, the IMF and the ratings agencies. That is to form networks of democratically controlled assemblies and to reshape its economy on a not-for-profit basis, alongside other countries inside and outside the European Union.

Gerry Gold
Economics editor

Greece edges closer to the brink

Greece is closer than ever before to social breakdown as the Pasok “socialist” government struggles to force through yet more austerity measures demanded by lenders, including the European Central Bank (ECB) and the International Monetary Fund.

The credit rating agencies which assess each country’s health have now driven their assessment of Greece to the lowest in the world, because its now crumbling government has, as yet, been unable to impose a sufficiently brutal assault on its people.

Some Pasok MPs are refusing to vote for a new round of cuts, while the right-wing parties are opposing them for their own reasons. Another 24-hour general strike today brought the country to a halt while thousands of activists and unionists converged on Athens' central Syntagma Square on the parliament's front steps to try to prevent deputies from debating the measures.

"Thieves, traitors!" many chanted. "Where did the money go?" "I feel rage and disgust," said 45-year old public sector worker Maria Georgila, a mother of two. "These are very tough measures and they won't get us out of the crisis. I can't believe they have no alternative."

Daily mass protests have drawn hundreds of thousands of people on to the streets in every town throughout the country. They have rejected pleas from prime minister George Papandreou that it is his patriotic duty to make the cuts. Demands raised include a call for Greece to default on its massive foreign loans, to leave the euro and return to the drachma and for the replacement of the current political system with direct democracy.

New cuts would increase the size of unemployment, which is already at a record 16% and deepen a recession now into its third year. The Greek economy shrank by a further 5.5% in the year to March 2011, household consumption contracted 7.8%, while investment was down 19%.

The Greek protests are directed at the government, but behind it stands something much more threatening. Yesterday the finance ministers of the eurozone under pressure from the ECB failed to agree on a proposal to force private investors to share the cost of a further bailout by extending the period of their loans to the bankrupt country.

The ECB fears the wrath of “the markets”, the private investors who lend on the expectation of a fat return for their money. Also concerned are major European banks who stand to suffer if Greece defaults on its loans. The banks have Greek debt on the asset side of their balance sheets and a write-off would be catastrophic.

Across the Middle East, North Africa and Europe, the rapidly developing global capitalist crisis has driven millions of people, young and old into action against a system of governments – both autocratic and parliamentary – which became established during the post-1945 rebuilding of capitalist production.

In Britain, public sector unions, including teachers and civil servants, are set for the largest day of strike action for a generation at the end of the month over pensions and job losses. It’s a welcome start, but as the experiene of Greece shows, strikes by themselves cannot push back the waves of the deepening crisis.

During half a century, the inexorable logic of capitalist growth demanded international agreements which enabled the emergence of increasingly powerful global manufacturing, trading, property-owning and financial corporations. Their “rights” are established in contracts backed by international treaties more powerful than the laws of any country.

Ending their power over people’s lives is the key to finding a solution. To respond to Maria Georgila, “they” actually do not have an alternative. “We”, however, can proceed to build people’s assemblies and establish a new global economy and politics based on social ownership, democratic control and not-for profit sustainable production for need.

Gerry Gold

Economics editor

When GOD spoke to Cameron and Clegg

What we learned from last night’s BBC documentary on the formation of the first peacetime coalition government for almost 80 years is that in times of crisis, the state will always step into the breach and bang heads together.

We’re not talking about any old state here but one that promoted the development of capitalism in the 19th century along with a colonial empire that made Britain the pre-eminent imperial power. A key role of the capitalist state is ensure a continuity of political power. Parliamentary government is essentially the public façade of the state, the mechanism by which it expresses itself, and seeks democratic legitimacy and authority.

Well before the May 6 general election, there was a real probability that Britain was heading for a hung parliament, with no single party able to command a majority. Public disdain for all the major parties was self-evident, especially as they were tip-toeing around the big issue of public spending cuts. The election itself was a fraud because no party was prepared to own up to what it would do if elected.

Senior civil servants under cabinet secretary Sir Gus O’Donnell (aka GOD) began planning for a hung parliament well before the election. In Five days that changed Britain, a documentary about the formation of the coalition by BBC political correspondent Nick Robinson, O’Donnell is frank about his intentions.

He wanted a coalition government with a comprehensive agreement on policy to take office as soon as possible. During the week of the inconclusive election, there were riots on the streets of Athens as Greece’s debt crisis went from bad to worse. Eurozone leaders met at the weekend to work on a bail-out for Greece and to defend the euro. The financial markets were on edge.

O’Donnell told Robinson: “What might have been a minority government wouldn’t have had the strength in parliament to pass the tough measures that were needed to get us through this problem [Britain’s public debt crisis]. So the key issue then was that the markets would really make us pay a price on a Monday morning by selling our debt [government bonds]. And that would have been a real problem for the country.”

O’Donnell thus acknowledges two related issues: global financial markets make and break governments; the role of the state is to help create the conditions through which the markets that finance state borrowing can be appeased by spending cuts. The net result is to sustain the capitalist economic and financial system at all costs. Here the state is true to itself.

Of course, O’Donnell wasn’t the only factor in the emergence of the Lib Dem-Tory coalition. David Cameron seized the opportunity to put “national interest” above party politics with decisive leadership and engineered a coup against his own right wing at the same time. Nick Clegg did the same against his left wing to get into bed with the Tories rather than New Labour. Both men deceived their parties during the negotiations facilitated by O’Donnell’s team, as the documentary shows.

All this makes the coalition government fragile and somewhat unstable at a moment when it tries to impose the largest cuts in public spending ever seen in Britain. Behind the scenes, other areas of the state are preparing for all sorts of eventualities and scenarios in the event that the coalition fails to deliver. That is why fighting the cuts also means taking on the state in a struggle for power itself which would enable us in turn to deal with financial markets. Taking part in the campaign to create People’s Assemblies thus become more important than ever.

Paul Feldman
Communications editor

It's all about power

The political crisis that has erupted in Britain following the general election provides a window of opportunity to bring the most basic of questions – who rules the country and in whose interests – right to the top of the agenda.

That is the focus of our ‘Taking the Revolutionary Road’ conference on May 22, which couldn’t be happening at a more opportune moment.

It is all too easy to be sucked into the drama around the frantic efforts being made to put together a coalition government of one variety or another. But behind the to-and-fro in Westminster, as the major capitalist parties jockey for power, is a profound political and economic crisis.

The political system is broken in a deeply significant way. A new system of weighing and distributing votes in the shape of proportional representation wouldn’t even begin to address the heart of the matter.

Many voted reluctantly last week. And a large proportion of those who dragged themselves to a polling station last week have no faith or trust in the parliamentary system. And for sound reasons that go way beyond the expenses scandal of the last parliament or the inadequacies of the first-past-the-post voting system.

As our Manifesto of Revolutionary Solutions points out: “Full-on globalisation has resulted in an unholy alliance between the state, political parties, corporate and financial power in all the major capitalist countries. From London to Washington, from Berlin to Rome, from Tokyo to Seoul, the reality is essentially the same.

“Democracy is reduced to a sham, a façade behind which real decisions are made and power exercised over ordinary people. The right to vote counts for little and the aspirations of ordinary people are denied by state systems that primarily function in the interests of big business.”

This analysis is borne out by the events since it became clear that the election had produced deadlock. The tell-tale phrase is how all parties at Westminster have pledged to rule in the “national interest”. What this means is all to clear once the patriotic rhetoric is stripped away.

The “interest” in question here is not that of ordinary working people struggling in their daily lives to make ends meet. What Brown, Cameron, Clegg and others are prattling on about is something quite different. The “interest” they will protect at all costs is vested in the financial markets and corporate boardrooms.

So irrespective of the make-up of the next government, it will come down on the interests of ordinary people like a ton of bricks, imposing savage cuts in living standards and services to satisfy the money markets who fund the British state’s massive deficit. The answer to the question about who rules Britain and in whose interests suddenly is made clearer as a result.

The financial and economic crisis can only worsen. At the weekend, the eurozone countries and the International Monetary Fund pledged €750 billion in rescue plans to try and reassure the markets that debts will be honoured. It merely serves to postpone the inevitable.

Whatever government emerges in Britain is certain to provoke large-scale resistance by trade unionists and communities as the full horror of the cuts becomes apparent. One of the immediate lessons from Greece, however, is that strikes and protests have not prevented the government from voting the cuts through the country’s parliament.

To fight to win means actually defeating and removing the government of the day, and in the process creating alternative structures to those of the capitalist state such as People’s Assemblies. In this way, ordinary people would get to rule in their own interests, replacing those of the money markets and boardrooms. By registering for the May 22 conference you would give this strategy a real boost.

Paul Feldman

Communications editor

Voters in for 'the shock of their lives'

Nothing that happened during this election has persuaded us that our call on people to hang on to their votes and instead focus on building the framework for a new political democracy in Britain was mistaken. In fact, quite the opposite.

As the campaign came to resemble a TV game show, it was clear that none of the major parties was prepared to admit that if elected to office they would have to make cuts in public spending on a scale that could easily destabilise society. Even when august bodies like the Institute for Fiscal Studies said as much, the conspiracy of silence persisted.

Little wonder then opinion pollsters found record levels of undecided voters who were unable to believe anything they had heard since the election was called. The turbulence in the polls equally reflected as the Independent’s Steve Richards put it, the fact that “a majority of voters yearn for a new way of conducting politics”.

There is no apparent enthusiasm for any party among those intending to vote today. Most people are voting against something rather than in favour of this set of policies. For example, some will vote New Labour to keep the Tories out even while admitting that Blair and Brown’s governments have pursued free market capitalist policies that even Thatcher shied away from in the 1980s.

Richards hopes that a hung parliament will enable to the Liberal Democrats to exact proportional representation as the price for supporting either the Tories or New Labour if, as seems likely, no party wins an overall majority and there is a hung parliament. But PR wouldn’t even begin to solve the political crisis – in fact, it could even intensify it. In any case, it’s a distant prospect when more immediate issues are crowding in.

The ruling classes disassociate themselves from the crisis in Greece, saying that the British economy is far stronger and there is no risk of struggling to make the repayments on the equivalent of a £163 billion mortgage, which is the current size of the budget deficit. Yet at 11% of the value of the country’s annual production, Britain’s deficit is larger than Greece’s.

And keeping it under control presupposes a growth in the economy which is simply not there. Unemployment is rising and output is stagnant. The eurozone is in crisis following the near-default by Greece with German chancellor Angela Merkel declaring that the future of the European Union itself is at stake. A slump on the continent will take Britain down with it.

For the truth about what happens next, you have to turn to the bankers’ own newspaper, the Financial Times. As its weekend editorial declared: “Whichever party wins this election will need to sack public sector staff, cut their wages, slash benefits, reduce pensions and axe services. None, however, has deigned to explain that.”

It forecast that voters “are in for the shock of their lives – and will respond with fury when they learn the truth”, warning: “Their anger, moreover, will not be directed at bankers or bureaucrats. It will be aimed at the politicians who hid their plans from the public.” The FT even went so far as to claim that no party would be able to claim a mandate to cut the state because each had hidden the truth from the electorate.

So, not only has this election been a massive fraud on the electorate, there is no way out of the emerging political and financial crisis through the existing parliamentary system. A popular revolt is on the cards. The second half of our call – to start the campaign for People’s Assemblies to challenge and ultimately replace Britain’s failed state – is right on the money.

Paul Feldman

Communications editor

Greek workers light the fuse

The general strike that got under way in Greece today, bringing the country to a standstill, is a foretaste of the struggles to come throughout the capitalist world as the global financial crisis moves from the banking system to debt-ridden sovereign states.

Stock on markets around the world from Europe to Brazil, to the US and Canada fell as the horrible truth dawned on the hedge fund managers that gamble with peoples’ lives. And the truth? It’s a two-headed monster.

Head 1: Greek workers aren’t prepared to accept the pain for a crisis not of their making, including savage wage and pension cuts and tax increases.

Head 2: Greece is just one of the many countries caught up in the consequences of the worsening global crisis and the only “solutions” available will trigger revolt throughout the world.

Spain is reported to be talking to the International Monetary Fund (IMF) about its own bail-out. Iceland remains paralysed after a referendum showed its population overwhelmingly opposed to the terms of the rescue of its banks. None of the major parties contending for votes in Britain’s fraudulent election tomorrow can admit the scale of the assault on the electorate that will follow immediately a government is cobbled together.

According to the Financial Times columnist Wolfgang Munchau, the bailout funds needed for Greece, Portugal, Spain, Ireland and possibly Italy could add up to “somewhere between €500bn ($665bn, £435bn) and €1,000bn”. The demand for new credit from all those countries will drive up interest rates “at a time when they are either in recession or just limping out of one”.

His conclusion? “The private sector in some of those countries is simply not viable at those higher rates.” It’s a prescient conclusion. In other words it means capitalist production is no longer sustainable. But that doesn’t stop them trying to fix it.

The turmoil in Greece began when the Greek government, led by the “socialist” PASOK party, found it impossible to pay the interest on loans made to cover the country’s soaring budget deficit. But even the three-year bail out package totalling nearly £100 billion, funded by the Eurozone countries and the IMF, may be inadequate for the purpose, such is the level of indebtedness.

Finance Minister George Papaconstantinou, looking both ways, said Greece had been called on to make a "basic choice between collapse or salvation". He said: "It is not going to be easy on Greek citizens, despite the efforts that have been made and will continue to be made to protect the weakest in society." But he then acknowledged the real intent – to win back the trust of the lenders: “The whole idea of the programme is … return to markets as soon as possible, so we’re hoping that next year we’ll be doing that.”

New emergency legislation authorising the cuts and tax rises is now being drafted and is due to be put before parliament for approval by the end of the week in time for the IMF’s Board meeting on Sunday to consider Greece’s application for help. It’s there and in the boardrooms of the capitalist corporations and financial markets that the key decisions are made affecting the lives of ordinary people in every country.

No one anywhere in the world voted for the bail-out of the global banking system funded by colossal sums of government debt. The “choice” in the British general election is non-existent. Only pain, pain and more pain is on the ballot form, in the form of the three major capitalist parties. Greek workers have lit the fuse of resistance which will spread like wildfire over the coming months. It’s time for a new kind of democracy. Join us on the revolutionary road. Sign up for our conference on May 22^nd.

Gerry Gold

Economics editor

PR is not the road to happiness

As the likelihood grows of the Lib Dems holding the balance of power in terms of seats after May 6, so does the debate about what price Nick Clegg’s party might exact for joining a New Labour or Tory-led coalition government. Centre stage is the idea of replacing the present voting system with PR or proportional representation.

The Lib Dems have always been in favour of PR, which is not surprising. Under the present system, they could, for example, gain a larger share of the total votes cast than New Labour and yet end up with fewer than half the number of seats. Even the Tories could poll far higher than Gordon Brown’s party and still have fewer seats than New Labour. Democracy in action this isn’t!

Some people who are fed up with the present political system see PR as a way forward. It would, they argue, allow smaller parties to be represented in Parliament. PR could even open up the floodgates to “revolution or fundamental reform”, according to one response to our election policy of “hang on to your vote – build People’s Assemblies”.

But would it? PR assumes that a) Parliamentary representation is the only possible form of democracy b) Parliament in the shape of the House of Commons has real power c) reforming the voting system will benefit ordinary people d) the Lib Dems are alright really e) the present capitalist state system can become the tribune of the people.

None of these presuppositions holds water, however. As we have demonstrated many times, Parliament has had no real power for over 140 years, when the executive first established a permanent stranglehold over MPs. Representation is an extremely limited form of democracy. It was first elaborated by Alexander Hamilton, one of the key thinkers behind the American Revolution. He saw it as a way of filtering popular sentiment while keeping it at arms length.

So what developed much later in Britain following the 1867 Reform Act was representation – but without power, which lay firmly in the hands of the state. The founding of the Labour Party did not fundamentally alter this relationship, even when it took office for the first time as a minority government in 1923.

This is because the government is only a part of the state system as a whole. And this state is indisputably capitalist by nature in the sense that its primary role is to uphold the status quo of private property and the wage contract system for workers, with force when necessary. Globalisation has brought the character of the state out into the open for all to see, with banks and corporations ruling through parties like New Labour and the state reorganised to facilitate global finance and the free movement of capital.

In this context, PR would not make a jot of difference. Sure, smaller parties would be represented in Parliament – the Greens, the neo-fascist BNP and the ultra-right UKIP to name but three. But the levers of power would remain in the hands of the ruling classes.
The experience of Italy, which elects its MPs through a system of PR, is a clear example that a more balanced voting system does not result in progressive change.

Advocates of PR are in danger of missing the wood for the trees, the form for the content. A fairer voting system is obviously required because the first-past-the-post method used in general elections is clearly weighted against change. But something like PR only makes sense within a truly democratic political system built around ideas like People’s Assemblies. Otherwise PR could actually be used to reinforce the status quo.

This is, we repeat, a crisis election. Britain’s debts are enormous and the crisis convulsing Greece is a warning of what’s to come here. Whatever the manoeuvres around a post-election arrangement, whatever regime emerges will be down on our necks like a ton of bricks because that’s what the money markets are demanding. Voting for any of the parties planning these cuts would be like turkeys voting for Christmas, whatever the merits or otherwise of PR.

Paul Feldman
Communications editor

Uncertainty grips the markets

The value of the pound fell in response to the official launch of the election campaign as foreign exchange markets reacted to the distinct possibility that it could produce weeks of wrangling over which leader or leaders and which party or parties are left in charge of the British economy.

It’s not that dealers are consciously “sending a message” to the electorate or even the candidates, though that is how their actions are translated into news reports for public consumption and interpreted by the contending parties. Market traders are directing their attention to the single-minded pursuit of profit.

It is their perception of the actual and likely trajectory of political change that affects and responds to actual and predicted movements in the relative price of currencies on international markets. The same logic determines the price at which government bonds change hands, and the interest rates attached to them.

As the period of profit derived from the growth of globalising corporations waned in the 1990s, world economic expansion became increasingly dependent on credit to fund both the production and consumption sides of the equation.

This coincided with the coming to power In Britain of New Labour. Gordon Brown was its Chancellor for most of the period, single-mindedly working to build relationships with the heads of the global financial institutions by turning the City of London into the world’s most attractive place for them to do business.

And the business was credit. Britain became a central hub for financial transactions. As time passed, the balloons of fantasy finance needed to keep the global capitalist economy from shrinking were inflated to unsustainable pressure.

When all that collapsed, Brown was to the fore, leading the world in shoring it up again through the invention and deployment of new, ever more fantastic sources of credit. Britain’s personal, corporate and government combined debt in relation to its annual output exploded, surpassing every other country.

But now it is payback time. Investors who bought government bonds with credit given to them by those very same governments want to see some return on “their” capital. The concern is that the debts have grown so high that they can’t be serviced, let alone repaid. Just like the default on sub-prime mortgages that triggered the collapse in 2007. Only on a much grander scale.

Payback will require governments to inflict unprecedented pain on their electorates. Investors, speculators and market traders will only put their money into places where governments show the greatest determination to extract the value needed to service their debts. An indeterminate election on May 6 is not what the markets want and it shows itself in currency gyrations.

Even where there seems to be agreement to slash state budgets, popular resistance is throwing governments off balance. The Greek government is already wavering in its determination to impose the recently-agreed austerity programme on its restive population. Iceland is in a political limbo following the overwhelming rejection of the terms of the repayment of its debts to the British and Dutch governments.

The conflict between the masters of the global economy and their political pawns on the one side and the mass of the population on the other is certain to mount. Strikes are growing in frequency and intensity throughout Europe, whatever legal obstacles are put in their way by the state.

Britain’s general election will not settle any of these questions because they reflect the deep divisions and insoluble contradictions at the heart of capitalism itself . New systems of democracy that put people in ownership and control of society’s resources are posed as the only practical way out of this impasse.

Gerry Gold
Economics editor

The great deception

The reasons for hanging on to your vote at the general election next month are mounting. But surely the most significant is the fact that the electorate is being kept in the dark by a conspiracy of silence by all the major parties capable of forming a government.

How can people vote for parties that are refusing to say what their immediate post-election plans are in relation to cutting the budget deficit? Despite all the squabbles between New Labour, the Tories and Liberal Democrats over national insurance contributions, no one has admitted the truth: that savage reductions in public spending are on the cards.

Leaving aside for the moment whether the deficit ought to be cut as opposed to repudiated, from a capitalist point of view there is no choice. The deficit is close to 12% of the value of annual output (GDP) and similar in size to that of Greece, which is teetering on the edge of bankruptcy.

The government is forced to borrow on the bond markets to finance the gap between state spending and income – and the cost of this is rising. Currently, the Treasury is charged about 4% on borrowing and this is expected to rise to 5% this year. Interest payments alone are running at over £40 billion a year – adding to the total debt every day.

Jonathan Loynes, chief European economist at Capital Economics, is typical of City observers in noting after last month’s budget that “the current plans to halve the deficit over the next four years rely both on spending cuts which have not yet been properly detailed, and on almost certainly over-optimistic projections for the economy”.

His view that “the momentous task of tackling the UK's fiscal crisis will get under way after the election – and it's going to hurt" (my emphasis) is self-evidently true. But as that is the case, how can people actually take part in the election? Why should they vote when the major parties are effectively lying about what’s to come?

After all, you wouldn’t buy a car or a fridge or even a pint of milk without making some sort of check, would you? If you knew the milk was off, you wouldn’t buy it. So how can voters be expected to “buy in” to what’s on offer when the information on the label is pure fiction?

The great deception is what this election will be known for, therefore. And it is all part and parcel of the great wipe-out of democracy, where corruption and the big lie have undermined not just the significance of the right to vote but eaten into the very heart of the capitalist political system. Which is another good reason – perhaps the most important of them all – to hang on to your vote.

To those who say we have to use our vote because people died fighting for it, we say that their sacrifice was not made so that we could participate in a charade. The plot of the major parties is actually to steal our votes. Let’s not give them that opportunity.

We have to open a campaign that challenges the right of the political elites to impose the burden of a crisis created by their complicity with financial and economic powers on to the backs of ordinary people. That means withholding our vote, denying them a mandate to make draconian cuts. At the same time we favour building support for People’s Assemblies that would find ways to reorganise the economy and state finances along lines that benefit the majority instead of the privileged few.

Paul Feldman
Communications editor

Something's got to give

Economic storms continue to batter countries throughout Europe as their governments struggle vainly to keep their heads above the tsunami of debt.

After weeks of wrangling among the eurozone countries an agreement was reached on a support package staving off state bankruptcy for Greece and the collapse of the euro. Backing from the International Monetary Fund and the European Central Bank was judged sufficient for the country’s government to return to selling its debt on the international bond markets to raise the cash needed to fund its monumental deficit.

But international investors are yet to be convinced by the Greek government’s ability to impose its programme of further austerity measures on its unwilling population. The 5.9 per cent interest payments needed to attract buyers for its latest €5 billion issue turned out to be much higher than was hoped for.

Now the additional costs will have to be passed on in the form of deeper “structural reforms” which are certain to further destabilise the already volatile political crisis and intensify the conflict with the Greek trade unions.

Meanwhile, on Europe’s western extremity, Ireland’s National Asset Management Agency began operations yesterday as the country’s “bad bank”, buying up the “impaired assets” that litter the country in the wake of the global financial meltdown and continuing recession.

NAMA is just one part of the Irish government’s attempt to steady its economy, which has suffered the most severe contraction of any industrialised country: the value of annual national output shrank by a cumulative 12 per cent in the three years to 2009.

The basic idea is that NAMA will buy up the banks’ bad debts and valueless property, in the process cleaning up the economy so that those left standing can return to the old game of turning a profit.

But there were shocks in store when NAMA announced the scale of the operation. It has counted up the face value of the toxic debts in the economy and arrived at a figure of €81 billion, which is equivalent to almost half the total value of all goods and services produced in the country in 2009.

The new agency is highly experimental. Nobody knows if what it is supposed to do will work. The terms of its first round of purchases stunned the markets. It is buying property-based loans with a book value of €16 billion. But NAMA has the power to set its own price, and it has awarded itself a discount of 47% based on the current market value. The agency is set to become the owner of hundreds of pubs, empty office blocks, abandoned shopping centres and acres of unused farmland, as well half-finished housing projects abandoned by bankrupt speculative builders.

As part of the deal, the newly state-owned Irish banks are required to restock their capital balances after years of floating on thin air. They are €32 billion short, so they’ll have to sell off their valuable assets in the US, the UK and Poland. This action will reverberate throughout the world.

In the meantime just like Greece, Portugal, Spain, the UK the US, and a growing list of countries facing up to state bankruptcy, Ireland has to set about reducing its budget deficit which is the second largest in the eurozone after Greece’s. Something’s got to give - and it is already. The British state is apparently preparing for emergency political measures in the event of a hung Parliament after the upcoming general election to prevent a run on the pound. We'd be well advised to prepare for all eventualities ourselves.

Gerry Gold
Economics editor

Darling's budget deception

You have to hand it to Alistair Darling. Britain is in the midst of a major financial and economic crisis and all the major parties are planning unprecedented cuts in public spending after the upcoming general election. Except you wouldn’t know that from listening to the chancellor of the exchequer drone on yesterday.

The gigantic budget deficit that results from bailing out the banks and the global recession combined was left out of the equation in a bid to fool the electorate that all will be fine so long as you re-elect New Labour. And when he actually got round to talking about the economy, Darling’s forecasts for growth were soon dismissed by experts as fantasy figures. So much for truth and transparency!

Darling’s difficult task was to give the managers of global financial markets enough to hold off their attack on the government over borrowing levels whilst announcing attractive headlines to persuade people to cast their vote for New Labour in a few weeks time.

So, in an hour long speech full of detail, on the vote-getting side we heard an attempt to restart the housing market with stamp duty changes, an extension to the winter fuel payment for pensioners … and not much else. Only later, after the media had mostly lost interest, came the negative news, marked for the attention of the bond traders and currency speculators.

The yield on government bonds – the rate the government has to pay to borrow from the credit markets to fund the deficit – had begun to creep up, not by much, perhaps, but just enough to remind New Labour’s ministers who or rather what forces are in charge of the economy.

Swelling deficits worldwide are forcing governments including the US to increase their borrowing by issuing bonds, and the market is flooded. When that happens they have to pay more to get lenders to invest. The same happens when credit rating agencies mark a country down – as they did with Portugal yesterday, as its sovereign debt crisis deepened.

The unavoidable fact is that whoever lead the next British government will be required to launch an assault on almost every section of the population in an attempt to reduce the monumental - and increasingly expensive – public debt.

Every international gambler, every credit rating agency and every supranational agency like the OECD, the IMF and the European Central Bank is insisting that the assault must begin sooner rather than later.

And indeed it has already. Just like in Greece, Ireland, Iceland, Spain, Portugal and the once mighty US, millions of ordinary people are being forced to bear the cost of a crisis over which they have no control. In Britain, universities and hospitals are already feeling the heat as “efficiency savings” – aka cuts – take their toll.

Resistance is growing. As Darling prepared to deliver his holding operation 250,000 civil servants throughout the UK were on strike against cuts in redundancy pay and many were picketing government buildings. Brown shrugged them off in England, but in Wales, Labour and Plaid Cymru seats were empty in the National Assembly with some Assembly Members refusing to cross the picket line (but cynically working elsewhere). British Airways cabin crew are due to resume their strike action this weekend and rail workers are fighting job cuts and have voted to walk out.

Yesterday’s phoney budget reinforces our call to “Hang on to your vote” at the election rather than giving any of the parties a mandate to destroy services, alongside the building of People’s Assemblies which would begin to wrest control of our future out of the hands of the hedge funds and corporations.

Gerry Gold
Economics editor

Bankers plan to bankrupt Greece

European governments have joined forces with the likes of Goldman Sachs and a large collection of globalised banks. They are ganging up to bully the Greek government into upping the assault on the country’s working people.

Finance ministers have given the Greeks a month to make up their mind. What they’ll do if the PASOK government doesn’t have the stomach for the brutal measures needed to extract an estimated 12% reduction in living standards hasn’t been spelt out.

You couldn’t ask for a better illustration of the coming out of the transnational capitalist class in all its glory. You might even see it as a second coming.

The first was when governments and central banks banded together in an historically unprecedented mutual burst of co-ordinated action to pour trillions of their respective currencies into the open hands of the banks.

Most of it promptly disappeared into the vaults. The remainder is now being divvied up as profits to shareholders and the infamous bonuses supposedly needed to keep high performing staff loyal.

Some of the cash escaped from captivity and is now appearing in “surprising” price hikes, like the rise in the annual inflation rate to 3.5% January in UK, way beyond targets and forecasts, and despite the worst recession for generations.

At least part of the story of how so many of the world’s governments – not just Greece – got into this mess is fairly well-known: the outpouring of generosity to the highly-respected organisations comprising the global financial system was necessary to prevent financial meltdown and a complete collapse of the economic system.

Some people say it worked, at least to some extent. Just imagine what would have happened if they hadn’t done it. And maybe there’s some truth in it. But now we’re beginning to see the real consequences.

The managers of the hedge funds and the pimps who arrange the credit default swaps like the one that seduced the Greek government are threatening to declare any and every country bankrupt that fails to implement a programme of public sector wage, service and job cuts, matched with savage tax rises.

Iceland and Ireland have already been forced down that route. The former’s government is trying to negotiate its way out of the referendum it called to head off huge opposition from its population to the cost of paying its bankrupt banks’ debts to the UK and the Netherlands.

Ireland’s austerity programme has failed to solve its problems. Its government leapt in early to guarantee the debts held by its financial institutions which have now leapt to a staggering eleven times the country’s annual output. The guarantee must now be worthless, just like the similar promises offered by so many others.

If the transnational financial class has its way, public sector jobs, wages, homes, pensions, health and social care, as well as emergency services like fire and ambulance will have to go. Only those jobs that contribute directly to profit will remain, and only those where wages and condition can be reduced to match the lowest anywhere in the world.

Under these objective conditions defensive trade union action and protest must merge with revolutionary solutions and actions such as those we propose in our draft Manifesto. Workers and those without jobs should join with farmers, people with small businesses and the self-employed in every country to set up new democratic organisations as the basis for revolutionary governments. These will take the power to cancel the debts outstanding to the speculative investors, close down the markets they operate in and redeploy their traders to useful work.

Gerry Gold
Economics editor

Greek debt crisis: a warning from history

Greece has moved centre stage as the global debt contagion engulfs Europe. But Italy, Portugal and Spain are not far behind, whilst France and even Germany, whose banks have many billions invested in the other countries, are waiting in the wings. No wonder EU leaders are holding a crisis meeting tomorrow.

Greek public sector workers are taking to the streets today in protest against the government’s austerity programme. This is designed to appease the hedge fund managers who are raising the cost of borrowing, and the foreign exchange dealers who have launched an unprecedented assault on the euro.

The Panhellenic Socialist Movement (PASOK) was elected in October and pledged to rescue Greek capitalism after the break-up of the previous right-wing government. But PASOK has struggled to get to grips with the worsening economic and social crisis.

Today’s strike by unions PASOK could once count on against pay and pension cuts is accompanied by a continuing blockade of main roads by farmers, including the border with Bulgaria. They are demanding financial support the government can’t afford to give.

The immediate threats to the country’s political stability arise from the payments due on its mountainous debts, now proving impossible to service as its economy – largely dependent on tourism and shipping – has taken a big hit from the global recession.

But the Greek government is not alone. It just happens to be the weakest of the pack of highly indebted countries which includes Portugal, Italy, Ireland, Spain, France, the UK and the US, not forgetting Dubai.

Greece’s public spending deficit exceeds 13% of the value of annual output of goods and services, Spain’s 11.4% and Portugal’s 9.3%. All these are far in excess of the 3% safe limit determined by rules set by the EU for countries using the euro currency.

These deficits are funded by borrowing – selling bonds to investors, speculators on the private markets whose only interest is “interest” or “yield”, the amount they can charge. As the problems of repayment mount, so does the cost of borrowing. The principle is the same whether we’re talking about global investors or doorstep, pay-day lenders. Fail to make a payment and the interest due is added to the principal - and then the rate rises. Defaulters are treated very severely. Brutally.

Some consider the UK safer from the effects of debt contagion, because it is outside the euro zone. But its deficit is way up there at more than 12%, and the pound is also under pressure from the foreign exchange traders.

Bankers and hedge fund managers now call the shots, demanding public sector wage and benefit cuts, tax rises, pension reductions and the ending of vital services. Respected figures like George Magnus, senior economic advisor to UBS Investment Bank, talk in hushed tones about the need for governments to balance the risks of a breakdown in “social cohesion” arising from the prescribed “structural reforms” needed to attract investors like him.

The system of elected government that Europeans have got used to during the thirty years of corporate-led globalisation cannot survive the scale of the devastation needed to sustain the capitalist system. Greece was ruled by a military Junta between 1967 and 1974; Spain’s fascist dictatorship lasted from 1939 until Franco died in 1975. The Salazar government in Portugal lasted from 1933 until his death in 1970. The Nazis came to power in 1933 as the effects of the Great Depression were felt throughout the world.

That Depression only came to an end when fascism and the Second World War eliminated the surplus productive capacity produced by the speculative growth of the 1920s. Today’s globalised financial, economic and political crisis exceeds by far the conditions of the 1930s. The costs of resolving it within the capitalist framework cannot be countenanced.

We invite you to join the discussion of alternative, revolutionary solutions put forward in our draft Manifesto.

Gerry Gold
Economics editor

Debt contagion spreads

In the aftermath of Davos, the annual skiing trip for the bankers, businessmen and tame governments of the global economy, one key theme runs through the post-mortems in the wake of the economic and financial crash: the free market requirements of corporations are in open conflict with the political constraints of a world of capitalist nation-states.

The Financial Times’ Martin Wolf, who moderated the “economic outlook” session sums it up like this: “We have a globalised economy, but politics remains local. In times of crisis, the pressure to look after the former dominates the latter.” What Wolf is indicating is that local “politics” either gets in the way and/or is not up to the job. He is right but Wolf fails to grasp that the contradiction between globalising corporations and nation-state politics is insoluble.

So struggling to take much if any comfort from the less-than-impressive signs of a return to growth after renewed and unprecedented overdoses of “stimulus”, the talk in darkened corners is now turning to “rebalancing the global economy” with all the unspecified pain for millions that brings in its wake.

The crash exposed massive over-capacity in production around the world, after decades of the increasingly credit-led investment needed to maintain the expansion on which capital feeds. In the last 12 months, many countries have relied on individual attempts at rescuing domestic economies, creating export-led growth as a result.

But it isn’t happening.

Whilst the stimulus enabled banks to refill their capital balances, and, particularly in China allowed production to continue and even grow, it has failed to get people buying. Consumers aren’t consuming.

In countries like Spain, the United States and the United Kingdom and its nearest neighbour Ireland, as well as some of the countries of the former Soviet Union consumption was funded by borrowing against absurd inflation in property prices. Property prices have collapsed, so consumption collapsed. It can’t be restored to previous levels. The patient has suffered a near fatal illness.

Growth certainly hasn’t returned to countries like the Ukraine where GDP fell 14% last year. All across the world unemployment is high and soaring, hours and wages are being cut. Pensions wiped out. In the US, where some of the production numbers look positive, Lawrence Summers, Barack Obama’s principal economic adviser, admits “what we are seeing in the US and perhaps in other places, is a statistical recovery and a human recession”.

The obscure language of the financial commentators can be difficult to untangle at times, but the threatening messages are getting clearer day by day. They speak on behalf of the global investors, speculators who move vast funds to the source of highest return. And the message to governments is this – those with an excess of debt had better give up on stimulus pretty soon to avoid the growing threat of state bankruptcy that is spreading like a global contagion.

Italy, Portugal, Spain, the UK, Iceland are joining Greece - which has its hand out for help to the International Monetary Fund and the European Union – in the emergency ward. Those with excess savings like China had better get their people increasing their consumption pronto, or face the consequences.

No wonder the political crisis is growing in all the major economies. Cut spending and the economy will dive (or die); don’t cut spending and the state faces bankruptcy. In short, there are no answers within the present framework. That doesn’t mean the forces of extreme reaction will give up and go home. If conventional nation-state politics won’t work, there is always the danger of unconventional “solutions”.

In our draft Manifesto of Revolutionary Solutions we set out our proposals to bring this obscene and increasingly dangerous system to its end. Join the discussion.

Gerry Gold
Economics editor

Warnings come thick and fast

First the financial crisis, followed by economic disintegration. Then the political and social crisis, which will probably lead to a military-style crackdown by the state. This is not my gloomy assessment but the view increasingly taken by right-wing commentators and aired in a recent report produced by the US Army War College’s Strategic Institute.

Civil unrest has already broken out in Greece, China and Russia as a consequence of the impact of the global economic recession. In Athens, young people hit hardest by unemployment have battled the police on the streets for more than two weeks. With the police patently unable to cope, only the hated army stands between the government and a political collapse.

Demonstrations have broken out – and been broken up – across Russia, whose fragile state finances are being devastated by plummeting oil prices. The rouble has lost 11% of its value in four months and unemployment is growing. Attempted protests have taken place in Moscow, Vladivostok, St. Petersburg and Kaliningrad. The Chinese authorities fear something similar as its export-led economy goes into free-fall. An estimated 40 million Chinese workers are expected to lose their jobs in the new few months and party officials have warned of "mass-scale social turmoil".

In less than a month, president-elect Obama will take office in the midst of the gravest crisis to hit the United States since the 1920s. The survival of major industries hangs by a thread. Loans given to the big carmakers are conditional on savage job cuts by the spring which the unions are opposing. Repossessions are running at record rates and some in the Pentagon are turning their minds to potential consequences for the military.

A recent report produced by the US Army War College’s Strategic Institute warns that the United States may experience massive civil unrest in the wake of a series of crises which it has termed "strategic shock”. The report, titled Known Unknowns: Unconventional Strategic Shocks in Defence Strategy Development, also suggests that the military may have to be used to quell domestic disorder. "Widespread civil violence inside the United States would force the defence establishment to reorient priorities in extremis to defend basic domestic order and human security," the report, authored by [Ret.] Lt. Col. Nathan Freir, reads.

Freir also warns that the incoming Obama administration should prepare for a "first term crisis" that could act as a catalyst for such unrest. "The current administration confronted a game-changing ’strategic shock’ [9/11] inside its first eight months in office," the report reads. "The next administration would be well-advised to expect the same during the course of its first term. Indeed, the odds are very high against any of the challenges routinely at the top of the traditional defence agenda triggering the next watershed inside DoD [Department of Defence]."

The Washington Post last month reported that the US military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe. In a September 8 Army Times article, it was announced that the first wave of the troop deployment in Colorado Springs, would be aimed at tackling "civil unrest and crowd control".

Ambrose Evans-Pritchard is an astute commentator for the right-wing Daily Telegraph who insists the financial and economic crisis has a long way to run. He has noted that Dominique Strauss-Kahn, the head of the International Monetary Fund, has warned that if economic growth is not restored promptly, then “social unrest may happen in many countries, including advanced economies … . the people have reacted with feelings going from surprise to anger, and from anger to fear”.

Evans-Pritchard, who acknowledges that the Marxist phrase “a crisis of capitalism” has made a comeback, says the crisis may overturn the "New World Order" adding: “The last great era of globalisation peaked just before 1914. You know the rest of the story.”

You can’t say we haven’t been warned. One of the things you could consider between now and 2009 is getting hold of a copy of Unmasking the State and having a read about some democratic alternatives to capitalist war and dictatorship.

Paul Feldman
AWTW communications editor

Please note that the next A World to Win blog will appear on December 31.

Greece in revolt

The sustained revolt by Greek students and young workers in major cities throughout the country may have been triggered by the shooting of a 15-year-old by police but is actually a confrontation that was waiting to happen. And it reveals that in the country that first conceived of democracy, there is no future for the ideal within the confines of the existing Greek state.

Greece has suffered a long period of corrupt rule, both by the existing New Democracy, right-wing government and before them the social democrats of Pasok. As a result, many Greeks have long lost any semblance of respect for the state in terms of abiding by laws and regulations. Tax evasion, for example, is widespread, an indication that the country has become ungovernable. A World Bank study on Greece found that one in every nine euros of company revenues is not recorded and therefore not taxed. The 11% level of tax evasion is exceeded by an underground economy which is reckoned to amount to nearly 30% of gross domestic product.

As the state has floundered, the divisions between rich and poor have grown sharply. In a country of 11 million, one in five lives below the poverty line and there is mounting anger at the government’s attempt to cut budgets in line with the requirements set down by the European Union in order stay part of the eurozone. A series of corruption scandals have hit the inner circle of Costas Karamanlis, the prime minster. Unemployment is already at 8% on average and much higher among 20 to 25 year olds. All the signs point to a sharp rise in joblessness over the next few months as the global crisis takes its toll on the country.

Today, schools are shut and thousands will attend the funeral of 15-year-old Alexandros Grigoropoulos, killed by police at the weekend. Tomorrow, the trade unions which have been battling the government’s privatisation policies, have called for strike action in protest against his death. "A lot of teenagers identify with Grigoropoulos," said Christos Mazanitis, an Athenian journalist. "There's a whole generation out there who see their parents in debt and feel they have nothing to look forward to in the future. Fear and despair are what these riots are about."

The impotence of the state is even recognised by the right-wing, whose commentators are suggesting that Greece "will now be out of control" after the protests. Nikos Konstandaras, writing in the centre-right newspaper Kathimerini, said: "It is tragic that the loss of one life should highlight so many impasses in our society and our politics. Instead of seeing that our refusal to resolve problems makes them intractable, I fear the way that we will use this death will simply make our problems worse."

There is no certainly no answer to the despair of young people through another Pasok government. The party’s leaders are angling to return to power – to carry on where Karamanlis leaves off. "It is as if the state [machinery], the government, has collapsed," said Ioannis Rougissis, a spokesman for the opposition Pasok party. Clearly, Pasok sees its role as one of restoring the authority of the corrupt and ineffectual Greek capitalist state just at the moment when its grip on power is self-evidently draining away.

A reconstruction of the Greek state from top to bottom is the only practical way forward. This process, which will require organisation and a revolutionary strategy, would aim at a transfer of economic and political power to the majority as a basis for the equitable development of Greek society. Then, and only then, would the term democracy have any substantial meaning in modern Greece.


Paul Feldman
AWTW communications editor