Monday, 20 May 2013

Plan B to Take Greece to the Drachma

This article was published by EnetEnglish. Watch the Al Jazeera report

Leftwing activists and politicians have launched a new political party espousing a return to the drachma and ditching of the euro.

Plan B, as the party is called, is the brainchild of Alekos Alavanos, the former leader of Syriza. "Greece is a now a country with no achievement. It’s a society that has lost its self-confidence and its perspective for the future," Alavanos told EnetEnglish. "We cannot wait one day," he said, "because Greece is dying. There is a generation of people who have never known work. Young people are starting to forget what they studied." Unemployment for the 18-24 age group now stands at 64 percent. 

Alavanos believes that Greece can only rebound under a devalued currency, because the euro is making Greek products and services expensive to overseas buyers and to other Greeks. "There is not even one example in the last century of a developed country like Greece that has been in a recession, in a depression, to find its way out with a hard currency. Now we have as our own currency the currency of the Germans," he says.

Greece's economy is forecast to shrink by 4.2% this year, losing a quarter of its value since the beginning of the recession in 2008. Unemployment stands at 27% and is to grow. Even forecasts by the country's creditors do not see a return to robust growth for several years, while the European Commission believes that unemployment will remain above 20% for at least three years. Unemployment in the 18-24 age group currently stands at 64 percent. 

That is a problem, because Prime Minister Antonis Samaras came to power promising to focus on growth rather than recession. He had told voters that each point of GDP growth creates about 50,000 jobs, helping to drive tax revenues upward.

Plan B presents its own problems, however. Most economists believe that a drachma would be devalued by 60% in relation to the euro (even Plan B admits to a likely 50% devaluation). That would make Greece's €300bn debt, which is denominated in euros and dollars, even more difficult to pay off. But Alavanos says this will just make painful truths clearer. "Everyone knows, everyone, even the Germans … that Greece cannot pay its debts …  This is a reality and everyone will accept it finally even if he does not like it," he said. Plan B's manifesto says that "the debt writeoff must be overwhelming".

Greece forced its private sector lenders to accept losses of up to 75 percent last year, in the biggest restructuring on record. It would now be asking European taxpayers to do the same, since European sovereigns have now bought most Greek debt in echange for two bailout loans. That is a more difficult proposition. 

Falling out

Alavanos led Synaspismos, the main party in Syriza, and helped pave the way for Syriza's current leader, Alexis Tsipras, to rise to the top. But the two had a falling out in 2010 over whose protege would carry the nomination for Athens prefect in the local elections, and Alavanos lost out. He now believes that Syriza has left voters without any real alternative to austerity by compromising too far with the troika, and many voters agree.

Syriza entered the 2012 election campaign promising to rip up Greece's loan agreements and the memoranda of austerity measures that accompanied them. A few days before the May 6 election Syriza nuanced its position, saying that it would not jeopardise the flow of loan instalments that was keeping the government payroll afloat, and insuring millions of pensions; it would instead revise the terms of the loan. It further reassured voters that it would never advocate a departure from the eurozone.

This chimed with the wishes of about three quarters of Greeks, which through the crisis have polled in favour of staying within the eurozone despite the hardships that involves. But Alavanos believes that majority has eroded through the crisis. "I think it's now about 50-50," he told EnetEnglish, adding that "sometimes you have to go against the flow".

He is adamant, however: "We need a currency that can help Greek exports and help us reconquer a part of our internal market. So there is not any other solution."

Alavanos has demonstrated a particular talent at riding the popular mood by focusing on single issues. In 1999 he rose to fame by criticising the then-socialist Pasok government for handing Kurdish rebel leader Abdullah Ocalan over to Turkey. Ocalan was an international fugitive, and sought refugee status while hiding out at Greece's Nairobi embassy. Three ministers were sacked over the debacle, and Alavanos led protest marches in central Athens.

He assumed the leadership of Synaspismos shortly thereafter, and in 2006 took the party to the unprecedented height of 17% in opinion polls by becoming the leading voice opposing the conservative New Democracy government's education reforms, saying that they amounted to privatisation of the university system. The rise was ephemeral, however. Synaspismos deflated to its core voter base of just over four percent within a year. Tsipras, has arguably done better by taking the party to 27% of the popular vote in the June 2012 election.

Plan B may now damage Syriza if it manages to paint it as a compromised opposition; but it could end up helping the government, which this year asked its eurozone partners to forgive much of the country's debt. Strong support for the drachma party might bring back fears of Greek contagion to the eurozone. Anaemic support, however, might suggest to the eurozone that the Greeks' vaunted spirit has fizzled out. 

Wednesday, 15 May 2013

A new street fight for Greece’s public teachers

This article was published by EnetEnglish.

The conservative-led government has spent the year escalating its undeclared war with the public sector. In January it succeeded in forcibly mobilising striking workers at the Athens Metro. The following month it did the same with mariners in passenger shipping. It now faces its biggest battle against the secondary school teachers’ union, OLME, the largest and most powerful of the three unions to have been presented with civil mobilisation slips ordering them back to work.

Although an official announcement is not due until the end of Wednesday, OLME is expected to vote in favour of defying government orders after local chapters overwhelmingly did so on Tuesday. The strike was sparked by a government request to increase classroom hours by two per week, to 20.5. The aim is to save 300 million euros a year by avoiding the hiring of substitutes.

OLME has suffered two blows in the opening stages of this battle. It will not enjoy full support from its parent body, the powerful civil servants’ union, ADEDY, which instead held a symbolic 24-hour strike on Tuesday. GSEE, the private sector confederation of labour unions, also invited to the fight, is to hold a five-hour work stoppage on Thursday. OLME is also in legal limbo. It failed to secure a court injunction against the mobilisation; instead, the Council of State will return a decision on June 7, so OLME has to risk action on its own.

Nonetheless, the vote will be binding on all of OLME’s 88,000 members, offering them the security of a swirling bait ball. Should they strike, they would face arrest or dismissal, testing the government’s resolve. It is technically impossible to arrest so many, and dismissing them Reagan-style would probably backfire by spurring ADEDY into solidarity. In this fight, there are no easy victories for predator or prey.

Who is right is a question of perspective. Teachers argue that both their numbers and their salaries are falling. Staff levels are already down by 12 percent since 2009, OLME says. It expects 64 schools to close and at least another 800 jobs to go in an upcoming consolidation. It also points to surveys showing that European Union average teaching salaries are between 50 percent and 70 percent higher than those in Greece, although Greek teachers work the same number of weekly classroom hours.

OLME also argues that the mobilisation is unconstitutional and autocratic. It may well be right. Article 22 of the constitution unequivocally states that labour may never be coerced. The government is standing on a presidential decree passed in September 1974, three months before the current constitution was adopted. The decree was drafted to “mobilise the civil forces and resources” of the country so as to “secure the national defence in a time of war and to face emergencies.” As a constitutional lawyer, the government’s socialist coalition partner, Evangelos Venizelos, once opined that labour strikes are clearly outside its purview. The fact that the government applied the decree pre-emptively to quash an incipient strike, thus precipitating it, might also be used against it in court.

The decree is very much a product of its time. In was passed shortly after a seven-year colonels’ dictatorship had collapsed, leaving many sympathetic appointees in the armed forces and the civil service. Konstantine Karamanlis’ fledgling civilian government could not necessarily count on loyalty. The Turkish invasion of Cyprus two months earlier had brought Greece to the brink of war and prompted Karamanlis to withdraw military forces from NATO. Greece stood alone and had to be able to rally its resources.

Yet the government has in its favour the historical context of a different kind of national emergency. The country is fighting for financial survival and struggling to reassert financial sovereignty. At stake are decades of work claiming and securing a place in the European Union and the Eurozone, but also the nature and extent of economic recovery in the decade ahead. Even the security of Greece can be argued to hang in the balance as cuts have deeply affected the armed forces.

The second factor that may give the government tacit approval is Greece’s inward division. The public sector may have sacrificed up to half its income, but the private sector has borne the brunt of unemployment. It is clear that the survival of one is at the expense of the other, so the two are not braced in solidarity. Patience has worn thin with entitlements that turned the state sector into a labour aristocracy since the 1980s.

OLME is a case in point. Its May 10 proclamation insists on no school closures, no layoffs, no transfers, no teacher evaluations, no extra hours and preferably a pay increase. This attitude sits ill with a nation in which 3.6 million people work to support another 7.2 million, many of whom have lost their livelihoods. The fact that a third of people still in work are public sector employees paid through diminishing tax revenues is now strongly felt by the other two thirds.

On top of this, OLME has its own peculiar sins to bear. Greek middle and high school students have been so ill-served by the system, that parents have spent the last thirty years building Europe’s most extensive shadow education economy, or parapaideia as the phenomenon has been baptised. A Europe Commission report (“The Challenge of Shadow Education”) showed that as late as 2008, the first year of the current recession, Greeks spent 952.6 million euros out of pocket on private tutoring in phrontisteria or at home, representing a fifth of the state’s primary and secondary education expenditure over again. That made Greeks the highest per capita spenders on private schooling in Europe, and Greece one of the top spenders in nominal terms. Nor is this done ethically. Although it is illegal for state teachers to work for a phrontisterio, the law is routinely ignored. The conflict of interest means that teachers can actively enrol their after-hours customers during their day job.

Perhaps OLME’s greatest sin is not in its refusal to regulate its profession (most Greek unions have failed at this), but in its insistence on playing national politics. It was instrumental in sinking far-reaching education reforms tabled by the New Democracy government in 2006-7 with street demonstrations even middle school students were encouraged to attend. Had the reforms succeeded, Greece would have amended article 16 of the constitution, allowing it to recognise non-state colleges and branches of overseas universities on Greek soil, as well as tens of thousands of degrees earned by Greeks in EU universities. University evaluation and reform would have proceeded years earlier. 

Such bold reforms would have benefited students and helped Greece become an education exporter, which its highly educated population supremely equips it to do. The man who drafted them as chairman of the National Council on Education, Professor Thanos Veremis, was so dismayed by union resistance, that in 2009 he declared that no consensual reform was possible. In his words, a reformist government would have to “break some eggs” to get anything done. 

The government has announced 15,000 layoffs this year and next, as part of a broader effort to slim the public wage bill by 150,000 over four years – a commitment to Greece’s creditors. The majority of dismissals have not been decided upon. OLME may well feel the Damoclean sword dangling over it, and this may have triggered its streetfighter reflexes. But Prime Minister Antonis Samaras is also an able streetfighter with few options and little to lose. By going on strike during the exam period, OLME aimed to maximise its leverage. It may instead have handed the government a switchblade.