Alexis Tsipras in London (updated with video)

Alexis Tsipras and CND’s Kate Hudson at the TUC

The leader of the left party in Greece, Syriza, has been in London this week speaking to academics, political supporters and leading British politicians and trades unionists. Here Michael Burke reports on the economics seminar he attended that Tsipras spoke at last Thurdsay

There are 700,000 households in Greece that currently have no incomes at all, according to Alexis Tsipras the leader of the anti-austerity SYRIZA party, who has highlighted the disastrous economic and social consequences of austerity.

Speaking to a group of economists he said that there had been three different Memorandums of Understanding with the Troika of the EU, the IMF and European Central Bank and each one had failed. Once again, government revenues are well behind target in the first two months of 2013 and now the Troika are threatening to withhold funds as a result.  In fact there will be an automatic process, where payment of bailout funds is only triggered if targets are met, yet which are set at unrealistic levels given the continued Depression.

But the Greek leader, whose party is currently running neck-and-neck in the polls with the main party of the right New Democracy, argued that austerity measures will be maintained and even deepened even though the impact on both the economy and government finances is evidently extremely negative.  This is because, as Tsipras argues, ‘austerity represents interests. It is the means to an end, lowering living standards and wages’.

He highlighted the effect of the imminent planned privatisation of the postal savings and agricultural savings banks. Both banks are stable and profitable public sector banks yet the Troika demands they are privatised at knock-down prices. This will clearly widen the deficit as the profits from those banks are lost to the public sector. The purpose of these privatisations is not deficit-reduction, but to transfer their profits to the private sector.

For SYRIZA the wider European context is crucial. The Greek Depression is only the most extreme example of a Europe-wide crisis, which is deepening and drawing in a growing number of countries and reaching into the ‘core’, like France.  He argues that a Grexit, Greece exiting the Euro, is neither in the interests of the Greek population or the Euro. Non-membership of the Euro and large devaluation has brought no recovery only inflation to Britain.

But the interest of the core countries, especially Germany, in maintaining the Euro is also the basis for negotiation. Forcing an unsupportable burden on the Greek economy will only reinforce the centrifugal tendencies in the Euro, and threaten the single currency which benefits German businesses so much. Instead, it is the entire system of the EU and the operations of the single currency which need to be transformed, with investment leading to a Greek economic recovery and resolution of its banking crisis.

Europe is crucial in resolving the immediate effects of the debt crisis. In 2012 the Greek economy contracted by €14bn. Despite all the promises of debt restructuring and ‘haircuts’ for bondholders the level of debt interest payments increased to €15bn, more than the entire fall in GDP. It is therefore imperative that a full level of debt cancellation takes place and that the interest bill does not swallow up the economy. Internationally, this direct call on European governments to forgive debt would improve the position for workers and the poor in Greece, at the expense of bondholders, none of which are now ordinary pension or insurance funds outside Greece.

Tsipras also had an important warning on the political situation in Greece, particularly with the rise of the fascist Golden Dawn. He argued that they were a symptom of the economic crisis and that that their policies would continue it, while scapegoating immigrants and others. Confronting and defeating them was, he said, the biggest task facing his own party and all socialists and democrats.