The victory in the Greek elections Sunday of the anti-capitalist Syriza (coalition of the radical left) led by Alexis Tsipras is being celebrated by Europeans rejecting policies that have produced over 11 per cent unemployment across the Eurozone.

The new direction for economic policy that Syriza is calling for will be opposed by the powers-that-be that imposed austerity across Europe: the so-called Troika: the European Central Bank (ECB) in Frankfurt; the European Commission in Brussels; and the International Monetary Fund in Washington, D.C.  

Interviewed in 2010, the ECB President Jean-Claude Trichet said, “the idea that austerity measures could trigger stagnation is incorrect.” Greece has proven that statement to be as wrong as it can be.

The Greeks succeeded in creating the largest government primary surplus (tax revenues less program spending) in the EU. In other words, through reductions in spending and increases in taxation they have implemented austerity, and outdone every other EU country in doing so.

As a result of successful austerity, the Greek economy has lost one million jobs, the unemployment rate rose from eight per cent in 2008 to 25 per cent, one in two young Greeks are unemployed, the Greek economy has shrunk by 22 per cent, and 400,000 people in Athens rely on free food to exist. And, yes, the debt that was being paid down went up as a share of GDP.

As a policy designed to facilitate debt repayment, austerity is insane, unless a government can count on huge foreign trade surpluses, which is the case with Germany, but not Greece.

Cutting back government makes the economy smaller, lessening its ability to generate the income needed to repay loans. Enough Greeks rejected the austerity efforts of two previous governments, one social democratic (PASOK) and one conservative (New Democracy) to elect Syriza, the anti-austerity alternative.

With 40 per cent of the electorate staying home, the Syriza party won 37 per cent support at the ballot box.

It owes its near majority (149 seats out of 300 in the Hellenic Parliament) to Greek election law designed to promote stability: the party with the most votes gets a bonus of 50 seats.

Syriza has decided to form a curious legislative alliance with the 13 elected members of the Independent Greeks group, a right-wing protest party that agrees with Syriza on the need to oppose Troika policies, but little else. This relationship is unlikely to be stable.

Alexis Tsipras can expect domestic opposition to his government policies to be strong. The powerful oligarchy of wealthy families which dominate the economy and public life represent serious adversaries for the new government. 

The new prime minister has described Greece as a kleptocracy. Favours and sweetheart deals created political relationships dependent on bribes and corruption. Syriza has pledged to root out corrupt practices and bring in policies of transparency and public consultation.

In the months leading up to the election, Syriza has multiplied its contacts with official European agencies and authorities. Alexis Tsipras and his economic adviser Yanis Varoufakis have been explaining the policies Syriza will be bringing in to turn the Greek economic and social situation around.

Known as the Thessaloniki program, it has four pillars: confronting the humanitarian crisis; restarting the economy and promoting tax justice; regaining employment; and transforming the political system to deepen democracy.

The Syriza government lays down a series of challenges to Europeans, beginning with the failure of austerity policies imposed on Greece as a condition of debt re-structuring.

Austerity led to a butchering of public budgets, drove professionals out of the country, and destroyed public health.

Having a healthy population is a basic goal in any democratic society. Cutbacks to Greek health services have had appalling consequences. Withdrawal of mosquito-spraying has seen the re-introduction of malaria in a country that relies on tourism. The long-term reduction in infant mortality has been replaced by an increase of over 40 per cent in the two years following cutbacks. The suicide rate has gone up by 45 per cent. Scientific evidence on health conditions has been denied by governments and international agencies. 

It is time to acknowledge the wisdom of debt forgiveness as a strategy for Europe. After all, it was the 50 per cent debt write-off fashioned by the U.S. and implemented 61 years ago in West Germany that got that country back on its feet.

As a result of debt re-structuring arrangements undertaken under the auspices of the Troika, governments or EU institutions now hold 80 per cent of the Greek debt. A new round of debt negotiations focusing on linking debt repayment to Greek ability to pay has the potential to succeed. Syriza has pledged to pay privately held debt; European governments have the means of re-scheduling the balance.

A deterioration of public life promotes flourishing conditions for extreme-right quasi-fascist parties such as the Greek Golden Dawn or the French National Front.

The future of Europe lies in the direction laid out by Alexis Tsipras in his victory speech in Athens. Knowledge, science and artistic creation are what need to be fostered in Greece and Europe.

Duncan Cameron is the president of and writes a weekly column on politics and current affairs.

Photo: Asteris Masouras/flickr

Duncan Cameron

Duncan Cameron

Born in Victoria B.C. in 1944, Duncan now lives in Vancouver. Following graduation from the University of Alberta he joined the Department of Finance (Ottawa) in 1966 and was financial advisor to the...

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