Austerity’s stubborn hold Proves contentious as Syriza jockeys for deal

The Syriza-led government of Greece formally submitted a list of proposed economic reforms overnight that would accompany a four-month loan package from its foreign creditors.

On Tuesday morning, Greek ministers held a cabinet meeting in Athens while later in the day the Eurogroup is scheduled to meet via teleconference to review the proposal and vote for or against its approval. After reaching a preliminary agreement at the end of last week to issue a loan extension, the implementation of that deal now rests on accepting the slate of programmatic reforms put forth by Syriza.

Though the set of conditions offered walks back on some pre-election promises to immediately expunge some of the worst austerity policies imposed by the so-called Troika—which is comprised of the European Central Bank, the European Commission, and the International Monetary Fund—what has been put forth by Syriza, explained Greek Finance Minister Yanis Vourafakis, is designed to lay the groundwork for larger reforms in the months ahead.

Summarized by the BBC, the key proposals of the deal include:

• Creating a fairer tax system
• Combating tax evasion
• Tackling corruption
• Targeting fuel and tobacco smugglers
• Implementing labour reforms on collective contracts and bargaining agreements.
• Tackling Greece’s “humanitarian crisis” with housing guarantees and free medical care for the uninsured unemployed.

The Guardian has posted the complete text of the proposal (pdf) on its live-coverage blog.

Notably compromised out of the deal is a measure that would have rolled back certain privatization efforts already in process, a promise to immediately increase the nation’s minimum wage, and other policies set forth in Syriza’s vision statements. According to Reuters:

On the issue of minimum wages, for example, Prime Minister Alexis Tsipras’s government climbed down from election pledges to raise the level immediately. Instead it said it would phase in collective bargaining with a view to raising minimum wages over time and that any changes would be agreed with partners.

Greece also said it would reform the public sector wage system in a way that would not reduce pay further but would ensure that the overall public wage bill does not rise.

Athens also committed to consolidating pension funds to achieve savings, and eliminate loopholes and incentives for early retirement – in an apparent effort to find a compromise between the government’s objective of avoiding any further pension cuts as previously demanded by EU and IMF inspectors.

With some members of its own ruling coalition expressing concern that Syriza has capitulated to the Troika powers, it remains uncertain how the newly-elected government will withstand both the internal and external pressures that have built up amid the tense negotiations.

In order to acknowledge the concerns of those from within the Syriza bloc who have urged its leadership to hold firm on all of its anti-austerity commitments, Tsipras on Tuesday, ahead of the scheduled cabinet meeting, took time to meet with Mikis Theodorakis, a celebrated composer and respected voice of the left. On Monday, Theodorakis delivered a sharply-worded public statement telling ministers to respond to Germany’s ‘Nien’ with a resolute ‘No’ on continuation of any of the harshest conditions.

As the Guardian‘s Helena Smith reported, the meeting between Tsipras and Theodorakis was “aimed at nixing the mounting dissent within Syriza’s ranks over what is perceived to be the government’s climbdown in Brussels last week.”

On the issue of future negotiations, the ones that will take place over the next four months, Syriza MP Costas Lapavitsas—noted economist and de facto spokesperson for the leftist bloc of Syriza members who have submitted their reservations about the leadership’s pending deal with the Eurogroup—said, in a letter (trans.) published on Monday, that key questions remain:

What exactly will change in the next four months of this ‘extension,’ such that the new negotiation with our partners will happen under a better position? What will put a stop in the worsening of the political, economic, and social situation in our country?

These moments are absolutely crucial for the society, the nation, and of course the Left. The democratic legitimization of the government is based on Syriza’s program. The least that is needed is for us to have an open discussion within the party and in the Parliamentary Group. It is necessary to give substantial answers immediately to these questions, in order to retain the large support and the dynamism given to us by the Greek people. The answers that will be given in the upcoming time period will decide the future of the country and of the society.

As criticisms of what Syriza will be able to achieve within the current framework exist, several outside observers have pointed out that the task put before Varoufakis and Tsipras was quite literally an impossible task.

As author Mike Whitney wrote at CounterPunch on Monday:

the Eurogroup made it perfectly clear from the beginning that they weren’t going to restructure Greece’s debts or end the austerity program. The issues weren’t even on the table. So, those who think that Varoufakis should have given the Eurogroup an ultimatum (“Reduce our debts or we’ll leave.”) simply don’t understand the nature of the negotiations.  Varoufakis was forced to operate within very strict parameters. Given those limitations, he nabbed a very respectable deal. Even so, it’s only natural for people to feel let-down, especially since Syriza had promised much more than they could deliver.  But that doesn’t mean Varoufakis is a traitor or a sellout. Not at all. It merely means that Syriza’s belief that it could end austerity but keep Greece in the Eurozone proved to be unfounded. In fact, German opposition has made it nearly impossible. The larger point is this: Syriza had no mandate to spearhead a Grexit.  That is not what the people voted for or what they want.  Varoufakis’s was asked to do the impossible, square the circle. In that regard, he failed. But still, the deal he hammered out should mitigate Greece’s slump to some extent, although one should not expect a full-blown economic recovery, not without a healthy dose of fiscal stimulus which is nowhere in sight.

According to University of Texas economist James K. Galbraith, Greece had nearly no leverage in these negotiations—given that the Euro exit was never on the table for them—and in that context, what Syriza has been able to achieve is significant.

“From a psychological standpoint,” Galbraith wrote on Monday, “Greece has already changed; there is a spirit and dignity in Athens that was not there six months ago. Soon enough, new fronts will open in Spain, then perhaps Ireland, and later Portugal, all of which have elections coming. It is not likely that the government in Greece will collapse, or yield, in the talks ahead, and over time the scope of maneuver gained in this first skirmish will become more clear. In a year the political landscape of Europe may be quite different from what it appears to be today.”

And Tom Walker, a political activist and journalist based in the UK, was among those who argued why it is important for supporters of Syriza to remember is that their struggle against imposed austerity is one that should be a shared across Europe.

“This battle is a very long way from over,” Walker wrote on Monday, “and no doubt there are many weeks and months of crunch points still to come. The last thing we should be doing is abandoning Syriza because it hasn’t fulfilled all our hopes in the first few weeks after its election. And it’s also no use flipping backwards and forwards between enthusiasm and dejection based on each day’s round of negotiations.”

“The future of austerity across Europe now rests on what happens in Greece,” he continued, “If we give up on them, we are giving up on our own struggle too.”

This article originally appeared on Common Dreams.