Book Review: Greece 2015 – There was an Alternative by Ėric Toussaint

In January 2015, the first eurozone-government dominated by a party that positioned itself left of social democracy was formed. After 168 days, however, the Syriza government did what it had blamed Pasok for: it accepted the third ‘bailout’, consisting of privatizations, welfare cuts and de facto suspension of parliament. Beneficiary of the ‘aid’, financed by the European Stability Mechanism (ESM) though controlled by the troika (ECB, IMF, EC) was the troika itself. The ‘aid’ was earmarked to repay the IMF and the ECB, which shifted their debt claims to European taxpayers, the underwriters of ESM debt.

There was thus no difference between Syriza and Pasok, which went along with the first ‘bailout’ in 2010, in which private banks had shifted their debt claims to the ECB and IMF. And yet there was. Syriza had at least put up a fight. Tsipras’ main negotiator was Economics Professor Yanis Varoufakis. Varoufakis wrote Adults in the Room (AitR) about what went wrong in the spring of 2015. This detailed, informed and lucid account cannot be ignored in any reconstruction the Syriza debacle. Toussaint indeed organizes There was an alternative as a rebuttal of AitR, premised on the conviction that any government serious about ‘real structural changes must enter into conflict with the economic power’. Syriza didn’t and, according to Toussaint, neither did Varoufakis. Toussaint clearly displays Varoufakis’ flaws. It is, however, less clear whether there really was an alternative, if that is to mean objective improvement. The impossibility of just that is the last line of defence of social democrats and Syriza members. That argument should be taken more seriously. It should not only be made clear whether there was an alternative but what that alternative looks like. No is not enough – but first the discussion of AitR.

Toussaint carefully disassembles the strategy of Tspiras cum suis. The first and fatal flaw was that Syriza respected the public debt, breaking an electoral promise. In 2014, Tsipras, for example, presented the Thessaloniki programme, asking for a mandate to ‘write-off the greater part of the public debt’ and calling for a moratorium on debt servicing. Varoufakis disagreed with this programme and was reassured by Pappas, Tsipras’ chief of staff, that it was only a ‘rallying call for our troops’.

And so it seems to have been. Syriza attempted to negotiate and continued doing so even after its ‘negotiating partners’ turned out to act in bad faith. The ECB did not keep its promise to return the profits made in its Securities Market Programme, in which it bought Greek debt on the cheap, while insisting on being paid in full by the Greek government. And as Varoufakis documented himself, on February 4, 2015 the ECB revoked Greece’s waiver and refused its debt as collateral in its main refinancing operation. This was, in Varoufakis’ words ‘a calculated act of aggression’, putting pressure on Greek banks.

Varoufakis and Syriza nonetheless kept on ‘negotiating’. This not only broke electoral promises, but was also increasingly inconsistent. Varoufakis insisted that debt restructuring had to come first, but opposed a ‘unilateral haircut’. He denounced the abortion of democracy, but signed the February 20-interim agreement, committing the Greek government ‘to refrain from any rollback of measures and unilateral changes’. And while Varoufakis claims to have insisted with Tsipras on using the deterrent (write-off of the debt held by the ECB) if the troika wouldn’t budge, he publicly supported Tsipras until the referendum. Varoufakis did resign after the referendum on 5 July in which 61.3% of voters voted Oxi (No), and which was immediately overturned by Tsipras who signed a Memorandum of Understanding with the troika. Tsipras needed Pasok to cover for Syriza’s Left Platform that wouldn’t vote for the third ‘bailout’. By then the outsider Varoufakis, as he acknowledges himself, had outlived his usefulness for Tsipras, who, according to Toussaint, used ‘him as radical cover during the crucial initial period of SYRIZA in power’.

Toussaint’s convincing point is that the debt, force-fed in the first two bail-outs, had to be annulled immediately. Greece should have declared a state of emergency and Syriza should have mobilized the people to withstand the predictable attacks of capital. By negotiating behind closed doors Syriza demobilized and demoralized citizens. Toussaint explains Syriza’s election victory in September 2015 then as voters responding with ‘resignation and adaptation to the “normality” created by the neoliberal purge’. And this was the plan all along of the right wing of Syriza. The Minister of Economy Dragasakis assured in January 2015 that the government would not harm the interests of the private shareholders.

Varoufakis did not belong to the right, social-democratic wing. Philosopher Žižek considers his position as such:

Syriza was a unique experience. Why? Precisely because it overcame this simplistic opposition: either you are inside and play just some social-democratic [. . .] game, we play the game, but a little bit better maybe – or simply step outside, like the Greek so called Left platform. He stood for this magic third way – of course not in the sense of New labour. The whole subversive potential of Syriza – that’s why it was such a trauma – was that they wanted radical change of European Union but staying inside. Staying outside is not a problem, this is not an act of resistance, I mean like, North-Korea is definitely outside and so on. That’s why I think his destiny [Varoufakis’] embodies the tragedy. The moment Syriza fell apart into those who capitulated and those who opted for the outside, it was over. ¹

As long as Varoufakis did not agree to a third ‘bailout’, it was up to the troika to expel Greece, setting in motion uncharted political dynamics. Although I find Toussaint’s position more agreeable, this line of reasoning should have been pursued. Varoufakis has to be clearly distinguished from the social-democratic position, consisting of empty electoral gestures, followed by succumbing to creditors.

Toussaint also hardly discusses what an alternative would entail. After annulment of the debt, Greece would have been ejected from the E(M)U. Boycotts would have followed. The IMF and the United States, banks and hedge funds, and the Greek capitalist class would have waged legal, political and economic war. Varoufakis states that Tsipras himself feared a “a Goudi’ fate”, that is, to be murdered. The best scenario for Greece was probably to become another Venezuela – isolated and besieged.

Be that as it may, the alternative for surrendering could have been objectively worse. This at least was Syriza’s claim. Of course, the party should have informed citizens about the different scenarios and should have prepared accordingly. Toussaint’s analysis then resembles Syriza’s position in 2012. He denounces the party in power for objective betrayal. This he does in an informed, detailed, concise and convincing way. However, like Syriza, the book does not offer an extensive class analysis of the power structure and the aims and strategy that follow from it.

The deadlock in any case remains. The social-democratic position, so much became clear again, is untenable. Either one contests (central) banks to the bitter end or one doesn’t bother. The words of Rosa Luxemburg apply unabridged: entweder Übergang zum Sozialismus oder Rückfall in die Barbarei.