Dmitri Lascaris says these compromises have created dissent within the SYRIZA coalition
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SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore. The finance ministers of the Eurozone have approved reform proposals submitted by Greece. The Eurogroup have signaled that they will begin national procedures, which are parliamentary votes in euro states, to give the deal the final approval. The approval would mean that Greece will receive a four-month extension on its bailout and receive the next part of the loan, which would otherwise expire on Saturday. Joining us now to talk about all of this is Dimitri Lascaris. Dimitri is a partner with the Canadian law firm Siskinds, where he heads the firm’s securities class-actions practice. As you know, Dimitri reported for The Real News from Greece during the election. Thank you so much for joining us, Dimitri. DIMITRI LASCARIS, SECURITIES CLASS ACTIONS LAWYER, CANADA: Thank you, Sharmini. PERIES: So, Dimitri, while all these tussles and rustles are taking place in Europe with the finance ministers and the Greek government, what’s going on on the ground? How is it being received by the very diverse coalition of the SYRIZA Party, and of course among the SYRIZA supporters, who actually voted them into power? LASCARIS: I think we’re just beginning to flesh out how people are responding to this. The proposals, the precise terms of them, were published, I think, earlier today. So it’s taking some time to digest. But the reaction overall is not favorable thus far. Two things stood out for me in observing how supporters of the party and people within the party in particular are reacting. One is that one of the elements of the proposals is that the government, one of the more negative aspects of the proposals is that the government is now not only not going to unwind privatizations, even those that may have been done at fire-sale prices. It is not going to suspend privatizations that are in progress but have not been completed either. And, in fact, it’s not even committing to abandon privatizations that have not yet begun. And one of the privatizations that is in progress–not completed, but in progress, and therefore caught up with in the commitment of the government to go forward with privatizations, is that of a subsidiary of the power company, a power grid operator. And the minister of energy, who is one of the leaders of the strong left-wing faction within SYRIZA, publicly stated quite clearly several weeks ago that that privatization was not going to go forward. So, effectively he’s been hung out to dry. His name is Panagiotis Lafazanis. And, apparently, there was a cabinet meeting today where not only Mr. Lafazanis but others were expressing their heated objections to the proposals. And he in particular led the charge and is reported to have left the meeting livid. Quite apart from his reaction to what appears to have been his being hung out to dry, there are reports of 40 members of the SYRIZA parliamentary group circulating a petition demanding an emergency meeting of the central committee of SYRIZA to discuss what I think many within the party view as unacceptable compromises. PERIES: Now, Dimitri, I found the Greek government’s proposals to the finance minister, this particular component on privatization, somewhat carefully worded, in the sense that they will not undo ones that are already in progress, but they will also not go forth with more privatization. Is that not leaving the door open to not move forward? LASCARIS: With their language, to the extent they’ve given themselves any wiggle room in this six-page letter, it’s extremely narrow space. So what they said–again, they’re committing not to unwind privatizations already completed, even if the terms were quite unfavorable and fairly unfavorable to the state. They are committing not to terminate privatizations that have begun. The only wiggle room is with respect to privatizations that have not yet begun. And what they’re saying there is that they will review the terms of those privatizations, not with the possible outcome of terminating them, but simply to ensure that they’re getting the best possible deal that they can get for the state. So, you know, as far as I can tell, this six-page letter essentially commits the government to the privatization commitments that the prior regime had made. PERIES: Now, in being fair to the government, now, this is only a four-month extension. And did they in fact agree to this because they need the funds? Because the terms of the previous agreement expires on Saturday, and without it it’s going to be high and dry, what could it possibly have done otherwise? LASCARIS: Well, I think that’s almost certainly true that it–I mean, it’s–and, by the way, it’s not just the privatizations where there has been an apparent capitulation. We can come back to that later. But sure, it’s undoubtedly true that they’re making these concessions in order to secure funding. The problem is that they’re going to be in precisely the same position in four months’ time. They’re always going to need funding unless there’s a dramatic debt restructuring and/or an exit from the Eurozone. So this exigency is not going away. And if you prefer to capitulate now, then you would probably be prepared to capitulate four months down the road or one year down the road. Where does it all end? PERIES: Now, is it a capitulation? Or is it just buying of time? LASCARIS: Well, again, I think they’re buying time, but to what end? Because if they’re going to–you know, in four months’ time, they’re going to need additional financing. The only way they’re going to avoid this perpetual need for financing from the troika and other members of the Eurozone is to restructure the debt and to do so a dramatic fashion. There’s nothing in this proposal, nothing at all about the restructuring of the debt. And, in fact, even the–there have been reports that at least in private conversations the Greek government has been assured that the 2012 memorandum requirement, that its primary budget surplus be increased beyond 1.5 percent. There have been reports that that has been–there’s been a concession made to Greece in that regard and that it won’t have to increase its primary budget surplus beyond 1.5 percent, which would, of course, constrict further its ability to engage in social spending. This six-page proposal says nothing about the primary budget surplus. In fact, it says something to the contrary. It talks about the measures to–unspecified measures to relieve the humanitarian crisis. But it says quite clearly that they will not be taking those measures to the extent that they have a negative impact on the country’s fiscal position, which effectively means that the kinds of measures that one needs to see to dramatically ameliorate against the humanitarian crisis in the country cannot and will not happen. PERIES: Dimitri, speaking of the humanitarian crisis, now things that the government committed to right after the election, mainly a minimum wage, rehiring of government workers that have been laid off, now this plan that they have tabled would mean unraveling some of those commitments. How is that faring on the ground? LASCARIS: You know, this is–I think not at all well. I mean, this is one of the–the minimum wage commitment was one of the red lines which varies members of the government said the party would not cross. Now, it hasn’t clearly crossed that red line. What it said is that the goal of raising the minimum wage is now an ambition–that’s the word it uses–not a commitment; it’s an ambition–and it must be done in a way that safeguards competitiveness. And the language that’s in this proposal is that, quote, “The scope and timing of changes to the minimum wage will be made in consultation with (…) the European and international institutions,” i.e. the Eurozone and the Troika. And, of course, they have all, almost to a person, articulated their ironclad opposition to any kind of alleviation of the humanitarian crisis, including the raising of the minimum wage. So with that kind of qualification built into the proposal to raise the minimum wage, it’s far from clear that you’re going to see any increase in the minimum wage, let alone to the level that had been discussed previously, any time soon within Greece. PERIES: Dimitri, getting back to the emergency meeting that’s been called and the divisions within SYRIZA about this proposal, what do you think will be the next discussions there? LASCARIS: Well, I think the government is–those who have authored this proposal–and again, I’ve said this before, and I’ll repeat: I understand they’re in a very difficult situation. And to their credit, their proposal, their six-page proposal, places great emphasis upon tackling corruption, tax evasion by the wealthy, and control of the economy by the oligarchy. For example, they’re now talking about having an auction process. They’ve committed to having an open, transparent auction process for the use of frequencies by media outlets at market rates, and these media outlets are owned by the oligarchy. They’re talking about beefing up the staffing for the units that are rooting out tax fraud and tax evasion by the wealthier members of society. They’re talking about augmenting inspections and risk-based audits. And you may recall, when I was in Greece, I said early on in our examination, our discussion of this topic of SYRIZA’s rise to power, that if all it ever accomplished was to emasculate the oligarchy, it will have dramatically changed Greece for the better. And the good part about this proposal is that it does commit the government down that path. It does give reasonably detailed insight into how it’s going to go about doing that. And I think what you’re going to be hearing from SYRIZA in the days ahead is an emphasis on that aspect of its proposals. PERIES: Now, Dimitri, we know that that aspect of the proposal will require a great deal of civil servants in order to administer, and ministries and agencies to actually implement. And one of the commitments it made in the proposal is that it would reduce the number of ministries from 16 to ten, and also not be able to expand the civil service. Doesn’t that put SYRIZA and the government in a strange predicament? LASCARIS: It does indeed. In order to really dramatically improve the level of tax collection and dramatically reduce the level of tax evasion, you’re going to need additional resources–informational resources, human resources. How the government is going to accomplish substantially increased collection and reduction of tax evasion with this further so-called rationalization of the civil service is a really good question, and the answer to that question is not remotely clear at this stage. PERIES: Dimitri, as always, thank you so much for joining us and giving us this update. And we expect you back later this week. LASCARIS: Thanks very much, Sharmini. PERIES: And thank you for joining us on The Real News Network.
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