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Leo Panitch says new Finance Minister has to raise massive public investments required to kick start the economy and address twenty-five percent general unemployment and fifty percent youth unemployment

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SHARMINI PERIES, EXEC. PRODUCER: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore. The newly minted prime minister of Greece, Alexis Tsipras, has appointed a new cabinet. He has also formed a coalition with the Independent Greeks, a right-wing anti-austerity populist party that has a visceral dislike for Germany, as Dimitri Lascaris reported yesterday. They have stated that Greeks are owed reparations from Germany for their occupation of Greece during World War II. Now the question is: how is all this going to play out when SYRIZA has to manage the Greek budget? Now joining me is Leo Panitch. Leo Panitch is professor of political science at York University in Toronto and the author of The Making of Global Capitalism: The Political Economy of American Empire. He is also coeditor of the Socialist Register 2015 issue of Transforming Classes. Thank you again for joining me, Leo. LEO PANITCH, PROF. POLITICAL SCIENCE, YORK UNIVERSITY: Glad to be back, Sharmini. PERIES: So, Leo, described the cabinet. What kind of appointments have been made? PANITCH: Well, everybody will talk about the defense minister, which we can talk about later. But I do want to point out that there are some very progressive people in it who I know personally, the minister for international economic policy. And he will be under the new minister of finance, but nevertheless will be responsible for international economic policy, has written a very radical book analyzing the nature of the European crisis and what’s been done to Greece in it with very progressive proposals for what is to be done in this respect, radical ones. And more important, the senior minister for education and culture is someone I interviewed for the 2013 Socialist Register on the question of strategy. People might want to go back and read that interview to see what a committed socialist you have in that very, very important position. He’s one of Greece’s most eminent philosophers. So there are progressive people there. And we can then talk about the coalition that put a right-wing nationalist in the ministry of defense and put a so-called Marxist–at least what The Wall Street Journal calls a Marxist–into the Ministry of Finance, who certainly is committed not to breaking with the European Monetary Union, but nevertheless is going to try to get the European Investment Bank to raise the kinds of funds that would allow Greece, if there’s no conditionality on those funds, to have a lot of public investment to put people back to work. PERIES: So, Leo, a well-known left economist, Yanis Varoufakis, has just been appointed finance minister. He in the past has been very critical of the Troika. How do you think he should manage this crisis? PANITCH: Well, I noticed that The Wall Street Journal today called him a Marxist economist. I must say it’s very nice for me to hear that there’s finally a Marxist finance minister in Europe. It’s about time, since we Marxists have a better understanding of how capitalism works than most others. But if you read his work, called The Global Minotaur, it’s a critical book which is very critical of European Monetary Union and the way it was structured and identifies the central problem as there isn’t a international system in place that ensures that the surplus countries–in Europe’s case, Germany, which secures this enormous surplus on the basis of its trade–there is no mechanism for recycling that surplus to the deficit countries. And as a result, they become denuded of their ability to stimulate their economies. That’s a critical book. It’s a smart book. His policy does not involve, certainly, pulling out of the European Union. It certainly does not involve pulling out of the euro or the European Monetary Union. What it does involve is getting the European bank, central bank, to do what it has does just done. So that’s a leg up. But then, secondly: to get Europe to issue its own bonds through the European Investment Bank and to allocate those bonds proportionately to the individual states of Europe, who would be able, then, to use the funds raised for massive public investment programs. And that’s obviously what Greece needs in order to be able to deal with 25 percent unemployment, put people back to work, and 50 percent youth unemployment. That’s what they’re going to be asking for. The more radical people in the party, in SYRIZA–there are not many of them, I think, or any, perhaps, in the cabinet–will be calling for pulling out of the European Monetary Union immediately. But that is certainly not what is the intention of this government. They want to remove conditionality from any loans that Greece would get from any rolling over of its debt and from any allocation of investment funds that they’d be able to get from bonds that the European Investment Bank would issue and allocate to Greece, which they would then be able to use for massive public investment. PERIES: This right-wing populist party that SYRIZA has just formed a coalition with, how do you think they’re going to play out in terms of the decisions around both the debt as well as the austerity measures? PANITCH: Well, one has to be very careful to distinguish who these people are from the right-wing, far-right, extreme-right, neofascist Golden Dawn Party, which got some six and a half, seven percent of the vote and something like 16 or 17 seats. These guys were a breakaway from the New Democracy Party, which was governing Greece before. Yes, they are nationalists and they refuse to accept the humiliation and the torture, the economic torture that was being visited on the Greek people. So, yes, they’re nationalists. They are nationalists, not left nationalists, but right nationalists, in the sense that they have been very critical of the free flow of immigration inside the E.U. and critical of the extent to which immigrants are present in Greece and, they would say, taking jobs from Greek people. In that sense, insofar as that matters much, I don’t think it’ll have a great influence, in fact, on the cabinet in that respect, because the cabinet contains more people who have taken a very good line on immigration. In fact, the person who’s responsible for immigration policy is one of the most radical social movement leaders in Greece around immigration rights. So this guy, the leader of that party, has been given the Defense Ministry. That probably means that you won’t see a reduction in the defense budget, unfortunately. But insofar as the United States would be leaning on Germany to provide more breathing space to this radical government, they wouldn’t want to see this government reducing its contribution to NATO. In the long run, this is something that needs to be addressed. But to expect it to be addressed by Greece by itself rather than the larger left in Europe, the extent to which Europe is embedded in the American empire and its strategic military apparatus, that’s something that Greece alone is not going to be able to do. What this does guarantee is that the deep state in Greece, that is, the military, will not be engaging in any quick shenanigans against this government. You know, when you look at the cabinet as a whole–and it’s almost 40 people–the Independent Greeks have four ministries, and only four people in the cabinet. Only one is a significant minister; the others are junior alternate ministers with no particular weight in the cabinet. And you need to look on the other side at who else has been appointed in order to balance out all of the various political debts, if you like, that Tsipras and SYRIZA has, not only debts, but also concerns. So you see some people there who were with PASOK–the foreign minister used to be close to the former so-called socialist government of PASOK, and especially Papandreou when he was foreign minister. He broke with him some four or five years ago and sided with SYRIZA. So he’s now the foreign minister. The guy’s also known as a Marxist and has been critical of European foreign policy when it supported imperial foreign policy. And that’s on the whole a good thing. Much more significant is that there are a number of independents, independents with a very strong reputation in the legal arena, in the judicial arena, and they’ve been given responsibility for ending corruption inside the state and for constitutionalizing the state so it’s not a clientalist patronage state. And that is very promising. So one needs to not just look at this alliance they’ve done in order to be able to form a government. They had to form a government quickly. To have engaged in protracted negotiations about whether they would have enough support to form a government would have produced enormous instability. And to have aligned with what looks like the more progressive party, The River Party, really would not have helped much, since that party is absolutely committed to modernizing in a Blair right kind of way alongside of the neoliberals in Europe. It presents itself as humanitarian and progressive and humane and so on. But by aligning with these guys, at least you get strong support in terms of facing off against the Europeans and having no more austerity, breaking with neoliberalism. In that sense, it seems to me that’s something they should not be traduced for, for having engaged in this. It’s a very complex situation. And you need to look at the whole cabinet’s makeup much more than just this guy in the Defense Ministry, who is clearly a nationalist of the right but is not by any means associated with the neofascist extreme right. PERIES: Leo, thank you so much for joining us today. PANITCH: Happy to be here again, Sharmini. Talk to you soon. PERIES: And thank you for joining us on The Real News Network.


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