Greece's Syriza Soon to Deliver a Mighty Blow to Empire

The announcement this morning (Niki Kitsantonis, "Greece Heading to Early Elections After Presidential Vote Fails") that Greek Prime Minister Antonis Samaras failed to force through the election of his candidate, Stavros Dimas, for president means that there will be early general elections by the end of next month. Syriza, the leftist party that for years has been seeking to renegotiate the bloodthirsty debt agreement with the troika -- the European Central Bank, the European Commission and the International Monetary Fund -- is favored to win:

Opinion polls show the leftists firmly ahead of Mr. Samaras’s conservative New Democracy party, although Syriza’s lead has narrowed in recent weeks as the prospect of protracted political and financial uncertainty has grown. The Athens Stock Exchange fell by 10 percent during the vote, trimming losses to 7.4 percent later in the day.

The yield on 10-year government bonds, which moves in the opposite direction to the price, spiked nearly a full point to 9.3 percent. The outcome of the parliamentary vote also weighed on markets in the overall eurozone, with the Euro Stoxx 50 blue-chip index losing about 1 percent. The euro was little changed at $1.2199. 

In an interview with state television over the weekend, Mr. Samaras pushed opposition legislators to align with the government in Monday’s vote, saying that failing to elect a president would be “political blackmail” and would result in “pointless upheaval” for the country. 

Despite furious lobbying by the government, Mr. Dimas received only 168 votes, the same number as in the second ballot last week and eight more than in the first vote on Dec. 17. [Votes needed: 180]

Mr. Samaras accused Syriza of “foolish bravado,” adding that the leftists’ economic program was “full of unilateral moves” that would upset Greece’s creditors and jeopardize the country’s fragile return to growth.

Mr. Samaras’s coalition government is working with the so-called troika of lenders, which has granted Greece two bailouts worth 240 billion euros, or about $292 billion, since 2010 to keep the country liquid. In return, the troika has demanded an array of austerity measures that has slashed household incomes by a third and pushed unemployment above 25 percent. 

Negotiations with the members of the troika — the European Commission, the European Central Bank and the International Monetary Fund — on a tough economic program have been dragging amid rising opposition in Greece to austerity. But eurozone officials have expressed their readiness to extend Greece a precautionary credit line next year.

The possibility of Syriza coming to power is threatening to upend the economic negotiations. Wolfgang Schäuble, the German finance minister and a champion of austerity in Greece and other countries, said in an interview with the German daily Bild on Saturday that any Greek government would have to honor existing agreements. 

“New elections won’t change anything about Greece’s debt,” he said, referring to a debt burden equal to 174 percent of gross domestic product, the highest rate in the eurozone. 

Mujtaba Rahman, an analyst at the London-based Eurasia Group, said the domestic troubles in Greece had the potential to once again bring broader consequences for Europe. 

“France and Italy will be vulnerable economically, as both have done little to reform since the days of the debt crisis,” he said, adding that the southern periphery would be more immune in economic terms. “They will be at risk politically, given their own troubles with populist parties.” [In other words, "Watch out, neoliberal elites. The people are pissed and aren't going to take it anymore."]

The key to investor confidence, he said, will be the E.C.B. and whether it undertakes bond buying at the turn of the year. “If the E.C.B. does not deliver, this could be the trigger for a major reversal in Europe wide market sentiment,” Mr. Rahman said. 

Mr. Tsipras insisted over the weekend that his party’s program for tackling the “humanitarian crisis” in Greece was “not negotiable,” though Syriza has not explained how the Greek state would pay for the promised benefits.

Here the reporter, Niki Kitsantonis, is either being lazy or disingenuous because Tsipras does explain how Syriza will pay for a return of benefits that have been slashed to feed the austerity beast. ZNet recently published the Syriza program, "What the SYRIZA Government Will Do." Tsipras plans to negotiate a growth clause. Meaning that debt payments will come only after growth has returned to the Greek economy. Funds from the troika will be used to promote growth first:

THE CONTEXT OF NEGOTIATION 

We demand immediate parliamentary elections and a strong negotiation mandate with the goal to: 

• Write-off the greater part of public debt’s nominal value so that it becomes sustainable in the context of a «European Debt Conference». It happened for Germany in 1953. It can also happen for the South of Europe and Greece.

• Include a «growth clause» in the repayment of the remaining part so that it is growth-financed and not budget-financed.

• Include a significant grace period («moratorium») in debt servicing to save funds for growth.

• Exclude public investment from the restrictions of the Stability and Growth Pact.

• A «European New Deal» of public investment financed by the European Investment Bank.

• Quantitative easing by the European Central Bank with direct purchases of sovereign bonds.

• Finally, we declare once again that the issue of the Nazi Occupation forced loan from the Bank of Greece is open for us. Our partners know it. It will become the country’s official position from our first days in power.

On the basis of this plan, we will fight and secure a socially viable solution to Greece’s debt problem so that our country is able to pay off the remaining debt from the creation of new wealth and not from primary surpluses, which deprive society of income.

This is all Econ 101, nothing radical or something to be dismissed as frothing-at-the-mouth lunacy of an atavistic Marxist; it is the kind of reasoning often found in Paul Krugman's column. That's why it is troubling that the Gray Lady's reporter dismisses Syriza's program without comment.

One key predictor of how the Obama administration is going to react to Greece's early election -- and, therefore, how Empire is going to react -- is to see what Krugman says about Syriza. Krugman has been nothing if not consistent in debunking the "austerian" credo. He has written countless columns from the outset of the Great Recession pointing out the devastating consequences of slashing government budgets while the economy is contracting. For Krugman not to endorse Syriza's program for Greece means the fix is in.

But Krugman opposed Scottish independence. And recently he has engaged in pathetic Putin bashing. So it might well be that 1) he either avoids commenting altogether, or 2) he carries water for Obama yet again and bashes Tsipras.

While it is true that the Scots were made to buckle at the polls in September because of threats and scaremongering, it seems to me that Greeks who have lost a third of their household wealth will be more immune to such tactics.

What is certainly true, based on last May's European Parliament elections and the recent U.S. midterm poll, is that there is massive erosion in support of, belief in, allegiance to the large, established, mainstream political parties of the West.  These political formations have been completely captured by a corrupt, disconnected, neoliberal power elite and a majority of people have woken up to this fact.

A clue to the direction of where it will all end will be provided by Syriza in January. The people have reached a level of disgust with the status quo that is going to start manifesting itself positively. The real question is going to be, "How destructive will the Empire be in maintaining the status quo?"

I have to say, "Plenty."