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Dimitri Lascaris and Leo Panitch discuss the Greek government’s negotiating strategy and whether it should be preparing to leave the Eurozone

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay. There’s been a lot of debate–in Greece, of course, but around the world–whether the deal reached between the Greek government and the Troika (the European financial community’s rulers) is a tactical victory for SYRIZA, the Greek government, or a defeat, or some kind of a temporary stalemate. Now joining us to talk about this–and, perhaps, debate: joining us, first of all, from Toronto is Leo Panitch. Leo is the Canada Research Chair in Comparative Political Economy at York University. He’s also the author of the U.K. Deutscher book prize winner The Making of Global Capitalism: The Political Economy of the American Empire, which he wrote with Sam Gindin. And joining us from London, Ontario, is Dimitri Lascaris. Dimitri is a partner with the Canadian law firm Siskinds, where he heads up the firm’s securities class actions group. And he’s also a member of the Real News board and did some reporting for us from Greece a couple of months ago. Thank you both for joining us. DIMITRI LASCARIS, SECURITIES CLASS ACTIONS LAWYER IN CANADA: Thank you, Paul. LEO PANITCH, PROF. POLITICAL SCIENCE, YORK UNIVERSITY: Hi, Paul. JAY: So, in a recent article published by The Guardian, which I guess is based on a lecture that Varoufakis, the Greek finance minister, gave few months ago, he has a couple of basic themes. And one of the things he says is that it’s the responsibility of the European left to stabilize European capitalism. And he says, as much as he would like to take advantage of this moment of crisis for a real transformation, progressive–I guess he means socialist transformation; I’m not sure the uses the word, but that seems to be what he’s getting at. But he says that the real balance of forces in Europe are if there is real crisis, unraveling of European capitalism, it’s far more likely that the far right will take advantage of the moment than the left. So the left, he says, needs to help stabilize the situation and prepare for a time where a more radical alternative is more politically realizable. He doesn’t say it outright in that article, but it seems to me that the conclusion from that then is Greece should not accept the Eurozone, as that would help destabilize, certainly, European capitalism, and certainly further destabilize capitalism in Greece. First of all, Dimitri, hopefully I have correctly paraphrased his argument. I’m not sure if you or Leo will or disagree, but what do you make of that position? ‘Cause it seems to lead to that you do not pull out of the Eurozone. LASCARIS: Well, I think he–if that is the choice confronting the left in Europe, then the course of action that he proposes, which is at all costs keep Greece within the Eurozone, and work from within the Eurozone to reform it and to prevent a collapse that the extreme right would then exploit, if that’s the choice confronting the left, then I think it’s a sensible–arguably a sensible approach. However, I don’t think that that is the choice confronting the left. The right is rising. It is rising across the Eurozone. So what you’re seeing, for example, in France–and that may be the most dramatic example of this, because in France you have a far-right party which is actually poised to win the elections, that of the Front national and Marine Le Pen, which for, I think, well over a decade has enjoyed no more than 10 percent of support of the electorate, that is really a dramatic development. And you’re seeing also an anti-euro right-wing party rising even in Germany itself, where there’s for historical reasons a very strong antipathy towards the extreme right. So the question is, remaining within the current structure, the Eurozone, and remaining wedded fundamentally, even if you’re voicing opposition to the austerity policies of the Eurozone, is that going to prevent the rise of the right? And so far I would suggest that in fact the contrary is happening. The right is thriving in the conditions of economic duress that are proliferating throughout the Eurozone as a result of these austerity policies. JAY: So, Leo, what do you make of that? You could then have Greece kind of stuck in a Eurozone controlled by even further right. PANITCH: No. If the far right comes to power, they break up the European Union. That’s what–they are far more vociferous about this than anybody on the left. If in fact this is the case, then you have to see the kind of argument that the SYRIZA leadership is making–and this is certainly not just to Varoufakis–which is to be able to bring the European centrists, and even center-rightists, the social democrats, to their senses–that is, that a Bretton Woods, Keynesian type of solution to this crisis is what is required. And that’s not beyond the bounds of historical imagination, given finally how long it took but it eventually took, when the left of virtually all stripes did join with the dominant leaders of the capitalist countries, the Democratic capitalist countries, against fascism. But I think if we are going to go back to where Varoufakis is coming from, if I may say so, I think what’s very significant about this, about what he wrote, is how he openly he declared himself to be a Marxist. And that’s unheard of in recent decades in Western capitalist countries, that there’s a finance minister who says, I’m a Marxist, I’m inspired by Marx, I take my basic analysis from Marx, and then tries to draw certain conclusions about what the balance of forces is, what the balance of class forces is, the balance of international forces. Now, one might disagree with that and one might come to the conclusion that they could do more radical things were they to be free of the Eurozone, but his assessment very clearly is that the left has been defeated. It’s been defeated for a generation. And he says very explicitly in the piece that what we need to do is buy time to be able to set a socialist alternative back on the agenda. And one has to say that, as Chris Hedges’ interview with Tariq Ali last week commemorating Chávez ended, he ended with a quote from Chávez. Despite all of Chávez’s rhetoric about 21st century socialism, that said pretty well much the same thing. So I don’t know that one should be so quick to rush to judgment on what the SYRIZA strategy is in terms of pulling in or pulling out. They made it very clear that their strategy was to try to stay in and find the balance of forces in Europe that would shift to a more Keynesian type of situation, that would transfer the surplus from Germany to the countries that have the deficit, that it would create conditions. That was always very unlikely, because the balance of forces aren’t there in Northern Europe. But to turn around, you know, within weeks of their election, and say this proves that they aren’t serious, well, then we shouldn’t have been excited about their election in the first place. JAY: Dimitri. LASCARIS: Well, I’m not stressing that they weren’t serious. I think they were quite serious. And Leo’s correct. They were very clear on their determination to remain within the Eurozone. They didn’t suggest to anybody that their ultimate objective objective was a Grexit. The leadership of the party, not necessarily the rank-and-file, certainly not the left wing of the party, are supportive of remaining within the Eurozone necessarily. But the leadership of the party was very clear about that. So I’m not suggesting that they misled anybody. I think that they were very clear about that. However, what we have seen within–and it is, admittedly, a short period of time–is an absolute resistance from the leadership of the countries, the dominant forces within the Eurozone, to any kind of humanitarian reform and to any kind of significant substantive alleviation of the austerity policies which have caused a humanitarian crisis for all the world to see. They can see that. And in the face of that resistance, how long are we going to wait before we face up to the fact this is not an economic union that can be reformed from within? What amount of human suffering are we going to have to tolerate before we face up to that reality? Costas Lapavitsas has been very clear, I think, that–and, I think, rightly so–that the writing is on the wall and that the only way that Greece is actually going to address the humanitarian needs of its country, and particularly the most vulnerable members of its society, is a Grexit. And I think he and others within the party have afforded the government some opportunity, admittedly not a very long opportunity, to try to achieve reform within the constraints of the Eurozone. And they’ve seen that there’s absolutely no appetite for compromise on the part of the German government, the Spanish government, the Portuguese government, and so forth. That’s the reality now confronting us, whatever the reality may have been before the election or have been perceived to be. And that’s what we have to deal with. JAY: Leo? PANITCH: Well, I think one has to expect that the people who have been running Europe and have established the European Union as a neoliberal European Union wouldn’t cave just because SYRIZA got elected. So the question is what kind of room for maneuver they’re going to get. And they’ve got to give that some time. And they’re engaged in bargaining. It’s pretty clear now that at a minimum, rather than a surplus of 4.5 percent being implemented, however much pressure Europe puts on the SYRIZA government, they will get away with a 1.5 percent fiscal surplus, apart from what they have to pay [crosstalk] LASCARIS: If I may, Leo, I’ve heard that said. The leadership of SYRIZA has said precisely that. But when you look at the written terms of the agreement that has been struck thus far, there’s [crosstalk] PANITCH: Yeah, but–. JAY: No, hold on. Let him finish. LASCARIS: –whatsoever, there’s no commitment whatsoever on the part of the Eurogroup. PANITCH: Sure, and they’re never going to commit. I mean, this is all going to be–of course they’re not. It’s all going to be a matter of how much room for maneuver they’re going to get with both sides saying they didn’t do anything, with one side saying, we’re getting the space to do something, and the other side not admitting, especially in Germany, given the fact that Merkel’s own party, so many members voted against what they–giving them the additional four months, of course they’ll be fudging all kinds of words. But in any case, one had to expect that this was–. LASCARIS: SYRIZA is not fudging. SYRIZA is–. PANITCH: No, but if the–. JAY: Hey, Leo, let Dimitri make his point. LASCARIS: They’re making substantive concessions in writing to the demands of the neoliberal faction within the Eurozone, which is the predominant faction. But there were no corresponding hard commitments on the part of the interlocutors in this negotiation. There’s none. All the concessions are coming from–all the written concessions, all the binding concessions, are coming from the Greek government. There’s no offsetting–. PANITCH: Well, Dimitri, I don’t know what you–I mean, this is an argument that played out in SYRIZA before the election. It’s been reinforced by what everyone knew is inevitable–and certainly the left platform always said it was, which is that there would be a run on the banks, especially by the oligarchs, and to some extent by even multinational capital. That’s happened. Sure. But all I’m saying is, you want to have this argument again, one can have it again. But one had to expect that there was going to be an attempt by this party, given its leadership’s position, given that this was the basis upon which they got elected, given that ANTARSYA, which was the only other political alternative that was laying out and needed to get out of the euro and introduce capital controls immediately, got less than 1 percent of the vote. So you weren’t going to get to this situation unless there was a government that would try to find some room for maneuver. Now, I think that to some extent they’ve always been naive about what the balance of forces would be in Northern Europe. But then again, you could say Lenin was naive in 1917 to expect a German revolution. Now, if in fact they end up being isolated because there isn’t a shift in the balance of forces of Europe and they either stay in and they give up, which is possible, or they go out, then you need to be very honest and open about the implications of that. The implications of that are not just capital controls. They’re rationing. In a country in which you have clientalism and corruption not get cleaned out of the state–and this government is way more committed to cleaning up corruption in that state than the Chávez bully-bourgeoisie was committed to clearing it out of the Venezuelan state, but it’s not yet cleared out–what are the implications of having rationing in that type of state? And from the time of the NEP on in the Soviet Union, you had corruption endemic in that system from the time of the New Economic Policy in 1921, when they had to then try to do something to deal with the massive underground economy. What I find frustrating about the left is not that I don’t think capital controls are necessary, that I don’t think that the European Union is what it is and it won’t be changed and the balance of forces won’t be changed, is that the left, and certainly the left platform, does not play this out in an honest way. They don’t say to the Greek people, you actually are likely to suffer more for a period; are you prepared to see this through? They don’t think through where would the investment and the social funds come from. Would they turn to Russia? Would they turn to China? Well, you can be dispossessed of the Port of Peraeus not only by privatizing to capitalists. You can be dispossessed of effective control of it, as we know from many cases of people who have secured support from Russia. That way as well. So these are very hard questions. I’m not saying they’re wrong, but I think one needs to play out what this alternative is apart from getting out of Europe. JAY: Okay. Dimitri, do you want to respond? LASCARIS: Well, in terms of being intellectually honest, let’s look at what the current government is doing. There’s been an almost surreal debate taking place between the Germans and the Greek government about whether or not the institutions, as the current administration in Greece wants to call them, are different from the Troika, and whether we should be calling that the Troika or the institutions. At the end of the day what you have is the same three bodies. The ECB, the EC, and the IMF are engaging in supervision of the Greek economy. The government has–it started out by saying–and it said very clearly at all times, up until very recently, that it was going to oppose supervision by the Troika. It has now accepted supervision by the Troika, but it’s furious that the Germans won’t call it something other than the Troika. So if you’re going to talk about transparency, we also have to take into account what the current government is doing in terms of cosmetics. And it is playing a game with words, and it’s not being up front, quite frankly, with the Greek people about what concessions it has made at the end of the day. At the end of the day, you’re right, Leo, there is going to be a price to be paid for withdrawal from the Eurozone. It’s going to be a painful period of adjustment, and there’s going to be rationing. The question is what is in the long-term interests of the country. And as long as you remain within the straitjacket of the Eurozone, there’s no effective writedown, and the Eurozone has made no commitment whatsoever to any type of write down it all of the debt, which Varoufakis himself openly acknowledges is unsustainable. He himself has openly acknowledged that the Eurozone for years in Greece has been engaged in a game of extend and pretend. And now he’s acceded to that very game. He’s playing that very game himself. I understand he’s in very difficult circumstances, but at the end of the day, I don’t think there’s a lot of intellectual integrity coming out of the SYRIZA government right now. JAY: Leo, I can understand buying time. I can understand even if you may at one time want to pull out of the Eurozone. You certainly can’t do it precipitously. I can understand making compromises, big compromises, and wait and see whether the Podemos wins in Spain, whether the socialists win in Portugal, whether maybe you can get the Italians on bord and build some kind of a front to fight the Germans on these issues. I can understand all of that. But I go back to Varoufakis’s article. If your kind of underlying assumption is you have to stabilize European capitalism, aren’t you telling the Germans and the financial institutions of Europe, the Eurozone, that you’re not going to pull out of–you’re never going to pull out of the Eurozone, ’cause the destabilization will bring to power the right, so we’ll negotiate with you, but we’re never leaving? PANITCH: Yeah, they may never pull out. I think they may never pull out. I think that that’s unfortunately the case. JAY: But why say so? PANITCH: Well, no, they’ve never said so. JAY: Well, that’s what I’m saying his article seems to imply. PANITCH: I mean, the point is that the SYRIZA leadership has always [incompr.] No. His article doesn’t. His article says that given the situation the left is in, the best we can hope for is a new deal in Bretton Woods. The trouble is that that shift in the balance of class forces in Greece doesn’t lead to a shift in the balance of forces in Northern Europe, even if there was a shift in the periphery of Europe. This is the problem. And it’s a severe problem. I think one needs to stand back and then do an assessment of what it means to pull out and how far that will take you. So I just think it’s very unseemly, given that this government could never have gotten elected unless it had offered to try to negotiate space to do this stuff–unseemly, within weeks–to say, well, this is all over. Well, of course the Germans are not going to say anything but we want conditionality. Of course the IMF isn’t going to say this. They exist, the IMF exists for conditionality. LASCARIS: The problem is not–Leo, the problem is not that they’re demanding conditionality. It’s that there’s no compromise whatsoever in terms of the conditionality that they want. They want 100 percent of [crosstalk] PANITCH: Well, sure, you’re right [crosstalk] LASCARIS: They want 100 percent of the conditionality that was in place before. That’s the issue [incompr.] a complete capitulation on the part of the Troika. But there’s no compromise whatsoever been forthcoming. Absolutely none. And the victories that the Greek government is claiming for itself are, frankly, nothing more than a hope and wish at this stage. There’s no commitment whatsoever to any significant, substantive compromise on the part of the Troika. JAY: Yeah, go ahead, Leo. PANITCH: Well, I don’t know who you’re saying this to, Dimitri. Are you saying this so the Germans will hear it? Or are you saying this to SYRIZA so they should pull out? Are you saying that the strategy would work better if they said we’re going to leave unless you cave in? I mean, these are hard, difficult questions. LASCARIS: I agree, and I think–. PANITCH: And I don’t know what the right answer is. I think–. LASCARIS: I think the question should be put to the Greek people at this stage. What they have seen since SYRIZA came to power is [crosstalk] PANITCH: I think that’s very premature. And what we have is a government that was–and I think it is very committed to staying in. I think it probably has to do with the identity that people in that political class have with the European project, with not being isolated from modern Europe, from not being seen as part of the Balkans, not being seen as part of–you know, this is all cultural and psychological, etc. That also relates to why they were able to win the election. I mean, I’m just trying to look at the conditions here. It’s very easy to have a slanging match about whether it’s plan A or plan B. JAY: Well, Leo, we correspond once in a while, and I’ve seen you write that if there ever is a decision to leave, you really have to prepare the Greek people for it. But even as a kind negotiating leverage, you would think you would start to make–at least prepare public opinion for the possibility. PANITCH: Paul, maybe you’re a better bargainer than they are. Maybe Dimitri is. I don’t know. I think all of their commitment–and I think this was very genuine, maybe wrongly–was to stay in. That’s the party that was elected. What is being demanded now is that the party that was elected, which had, that leadership, 60 percent for support, even if the left platform had 40 percent support, that is who is there. It’s important to see that these are not mere social democrats. This is not Blair. These are people in their majority who would define themselves as Marxists. You may then say that what they’re going through is something like the great Second International Socialist Party in the early part of the 20th century, where Marx is given the conditions, end up becoming reformists and hamstrung by all of that. You may similarly say, just as the communists ended up supporting Roosevelt and treating him as a hero, that that’s where they’re going to end up. But I do think this is who we’ve elected, this is who got elected. That is not to be–it’s just not to be expected that one would see a big turn. I think the really important thing, if you’re talking about preparing the Greek people, is that I’d like to see the left platform, if they really were doing anything. Show me any more inclination or ability to turn SYRIZA as a party into the type of party that is capable of taking the solidarity networks and developing all kinds of initiatives around workers co-ops, around social solidarity, demanding that the government not only think about plan B in economic policy terms, but be appointing people inside the state who would be animators of that type of change in this society. You know, what happens in SYRIZA meetings are slanging matches over plan A or plan B. And when you try to pay people into a series of ordinary people, they walk away in disgust, ’cause they don’t–this is abstract arguments by economists. And as I’ve often said on The Real News–and I’ll say it again–the most worrying thing about SYRIZA all along has been that it often looked like here is this tremendous social movement-based party that was using the party as a booster rocket to put in a new government but hadn’t thought through–and this was clear to me when I was in Greece last year–how to animate that party so it was a really mobilizing and educating party, building from the base, at the bottom. That’s what worried me when I was there last year, and I don’t see any evidence that those who are calling for plan B are any more oriented to having the party do this than is the government. In fact, I’d say rather less. JAY: Okay. Dimitri. LASCARIS: Well, that may be at the end of the day, but I do think there is a plan B in the offing. And whether or not it’s being formulated and presented to the Greek people in a way that’s going to garner the necessary public support is a very important question, and I’m not sure that that’s being done. But I think within the party–I’ve mentioned his name–Costas Lapavitsas and other members of the left platform are in fact envisioning the next step and they are planning for a Grexit. And I think it’s time for them to put the choice to the Greek people in a very clear and coherent manner, because that is the choice now confronting them. It is either a continuation of this game of extend and pretend, and the continuation of a humanitarian crisis, and the continuation of a complete sacrifice of sovereignty. JAY: But what do you make of Leo’s point that this is premature, that the Greek people did vote for this choice? And you need to let it play out and give some–. LASCARIS: I don’t know whether they’re going to actually survive from a fiscal perspective until beyond March, let alone a year or months down the road. They have to make a choice. It’s unfortunate that there being put to this choice, these very extraordinary and difficult circumstances, but that’s the choice confronting them. And they can either continue down this path, or they can liberate themselves from the straitjacket of the Eurozone and recover some degree of sovereignty and have some degree of latitude to address the humanitarian crisis, or they can continue to see a contraction of their GDP, they can continue to see an increase in poverty, they can continue to see a rise in the suicide rate. That’s the choice confronting them, unfortunately. They don’t have the luxury of time. JAY: Leo, quick final word. PANITCH: I don’t think it’s that simple, I must say. I agree with you, Dimitri, yeah, I agree that Europe is not going to give them a lot of breathing space. I think they’re going to have some. I think the big difference between them and the previous government is that they are going to be implementing this, rather than a set of reactionaries. And I think that does make some difference. And one has to weigh that against what the implications would be for the Greek people of pulling out. And when you speak of a humanitarian crisis, you need to speak of a country that, unlike Venezuela, did not have high oil prices to fund its social solidarity program. That’s the country you’re speaking of. And you need to then–you need to think through what a wealth tax and what some nationalization would give them in order for the humanitarian crisis not to get worse when they pull out. So I’m not necessarily disagreeing with you. I just think one needs to be [incompr.] going to be honest, one needs to not only say they haven’t got that much space in Europe; one needs to ask how much–what will be the short-term implications and be honest about it in terms of being cut off at the moment. But I’m not sure in the end that they won’t have to go. I just don’t think one can expect this to be determined within weeks of the election. JAY: Okay, gentlemen. Thanks for joining us. LASCARIS: Thank you. JAY: And thank you for joining us on The Real News Network.


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Dimitri Lascaris is a lawyer that focuses on human rights and environmental law. He is the former justice critic of the Green Party of Canada and is a former board member of the Real News Network. You can follow him @dimitrilascaris and find more of his work at