Greece Needs a ‘Clear Exit’ from ‘Constant Monitoring’
The constant dependence on international financial institutions has created a loss of financial sovereignty for Greece. Syriza is working hard to no longer need these institutions so the country might regain its independence, says Ioannis Bournous of Syriza’s political secretariat
SHARMINI PERIES: It’s the Real News Network. I’m Sharmini Peries coming to you from Baltimore. The Congressional Progressive Caucus of the Democratic Party here in the U.S. annually hosts a strategy retreat in Baltimore. This year they have invited several EU progressive Left parties to join them. And in our studio today we’re joined by one of them, Ioannis Bournous. He is a member of a political secretariat of the governing party Syriza in Greece and his responsibilities lie in the area of European and international affairs. I thank you for joining us today.
IOANNIS BOURNOUS: Nice to meet you.
SHARMINI PERIES: Syriza and the struggle of the Greek people are near and dear to us at the Real News because we’ve been covering the rise of Syriza, and the struggles that Syriza and the people of Greece have gone through in terms of the debt crisis, in terms of the forced austerity on the people of Greece. What is it that you’re hoping to achieve in terms of this conversation, dialogue you’re having with the Democratic Party and their progressive caucus?
IOANNIS BOURNOUS: First of all, to raise awareness about the Greek case. Everybody discussed about the Greek tragedy of the previous eight years. But now it’s time to talk about the rebirth of Greece. Now it’s time to talk about the clear exit of Greece from the memorandum of austerity. Because the current three-year program that we have been fully agreed and compromised with the European Union and the IMF, comes to an end in August 2018. And this government is fighting and it will against until the end to have a clear exit from this program, which means that we will do our best not to need another institutional credit line. Another institutional loan coming from the EU, the European Central Bank, and the IMF. We want to to make our country solvent so that it will be able to go back for credit to the financial markets and thus not be dependent by this constant monitoring by the institutions that are our lenders. In this way we will manage to expand our fiscal space of maneuver, and this means expanding our maneuvers concerning social policies because this is our main focus.
Even in times of austerity, in the last three years we managed to achieve many important things in the sectors we consider as the most valuable for the social majority and this is healthcare education and the welfare state. Despite the very strict rules of the current program we have managed to overachieve in our fiscal targets and redistribute these achievements to the people as much as we can. And this is a good sign that we are moving towards, as I told you already, towards a clear exit from the program, which will allow us to restore part of our lost sovereignty. And also as Portugal did after their exit from their memorandum, start restoring, first of all, collective contracts, collective bargaining, which have been forbidden for Greece for the last five years, and also start raising the minimum wage, which is one of the landmark targets for our government. So I’m here to raise awareness about all these things.
SHARMINI PERIES: All right. Raise those awarenesses, in terms of what are the indicators in the economy that allows you to speak in these terms that you will be able to renegotiate in more favorable terms, or eliminate the type of memorandum that was issued to Greece in invented last time around. What are the economic indicators that gives you this favorability in terms of trying to convince those that you’re on a different track?
IOANNIS BOURNOUS: First of all, in the last two years we have been overachieving in terms of primary surpluses, which has given us the opportunity to redistribute a part of the surpluses in Christmas 2016 and Christmas 2017 to hundreds of thousands of low pensioners and unemployed youth through extra allowances, one-off allowances.
Secondly, we are waiting for the final calculations, which will be issued this month. But our estimation is that we finish 2017 with growth that will approach 2 percent. And this is the first time that Greece not only avoids a recession but sees actual growth happening. Of course, this is what we call the wellbeing of numbers. The question is how to translate these official numbers, positive outcome, to positive changes for the daily life for the social majority, the people that have suffered the most from the crisis. And as I told you our utmost priorities are health care, education, welfare state. We have been trying a lot and we have achieved things that might have been unimaginable for the old political regime, which was fighting people from the public sector. Closing down hospitals, closing down schools.
At this time, after three years of Syriza in government, we have totally reversed the image. We have a program of 12500 hirings in the public healthcare system since 2016, and it will expand. We have been doing the same in public schools. We have been doing the same in the research and development. It’s the first time that public spending for research and development is actually visible in the years of the crisis. And of course we have established many measures concerning the welfare state that have created the protective net for the people. One of them is the guaranteed minimum income, which influences about 600000 people right now in Greece. We have been advancing in such ways that will allow us to lead the victims of the crisis out of it. Sure we have good official numbers who have been step by step, despite the existing great difficulties, improving the daily lives of the poor.
These are two indicators that go hand in hand. Third indicator will be the labour market. And as I told you before, for us this is one of the main aims on our way to finishing and exiting this program in August. How to restore collective contracts, how to restore the minimum wage and start increasing it. Because in my opinion this is not only, these are not only reforms that will improve people’s lives. This is also a political clash with the neoliberal elites in Europe. After so many years of degradation of labour relations it is time for a government, just like Portugal did in the last two years, to show that there’s a different way, that there is a way of restoring social rights and not diminishing them. And we are positive that we are going to achieve this.
SHARMINI PERIES: The kind of privatization that Syriza has been engaged in is counterproductive to what you’re talking about. Let’s take the example of the Port Piraeas and the privatization of a port that has demonstrated that it can function on its own merits and its own finances in terms of what it cost to run the port. It also could demonstrate that it is the kind of revenue generation that the state and the government needs. And yet it was sold off to Cosco, which is which is a Chinese company, at a fire sale price. Why did Syriza engage in this kind of activity, and what made it necessary to sell that?
IOANNIS BOURNOUS: First of all, I already talked about the very painful compromise which we were forced to agree upon after a very clear blackmailing by the EU, the European Central Bank, and the IMF in July 2015 after the historic event in Greece. This painful compromise also included a program of privatizations.
What we achieved on that area in this memorandum is that in contrast to the model privatizations were made during the old establishment government in the previous years of the crisis, instead of selling off our public assets we are creating a state fund for the valuation and the development of state assets. This does not mean necessarily that we are going to privatize all the public services or public assets that are transferred to the ownership of this fund. But we will take advantage of them. For example, in the case of hundreds of empty state-owned buildings that we’re going to rent in order to have more revenues.
But let me come to the specific question about the port of Piraeus. First of all, the partial privatization of the port of Piraeus was not finalized by our government. It was finalized by the previous government of Greece. So when we undertook government responsibility the port was partially privatized already. What we did in dialogue and in negotiations with Cosco, which is a state Chinese company, is that we renegotiated the contract. The results, the concrete result of this renegotiation, are in favor of the workers of the port. First of all, we should say, and this is not-.
SHARMINI PERIES: Why is it in favor of the, okay.
IOANNIS BOURNOUS: I will explain. But let me give you another detail. We should not underestimate the fact that the Chinese side, which is a state company of China, did what they promised. They have increased the investment in the port. In terms of public investment for the development of the infrastructure, even of railway connection from the port would have been actually impossible concerning if we judge from the financial state of the state and the priorities we have.
Second thing is that they’ve fulfilled the terms that we put for workers’ rights. And let me come to the specific results. We have the first collective contract signed a few weeks ago at the port, collective agreement achieved between the employers, which includes the Chinese side, the trade unions, with the mediation of the government. It is the first post-bailout collective contract even before the end of the bailout. It increased the starting net wage for the employees to 1800 euro, which is an unthinkable number, if we think with the terms of the previous old political regime of the neoliberals. It restored all family and holiday allowances. All the holiday schemes that existed in the past or the special allowances having to do with the difficult conditions of work in some sectors of the port. It is, I repeat, for us it is important that we have the agreement, the conclusion of the first post-bailout type of collective contract even before the end of the bailout program. And in these terms, the cooperation with the Chinese side has not been proved to be disastrous for public interest and the workers’ interest.
Of course, this is not the case with all the privatisations that have been made under the violent compromise of the current program. But what our government is trying to do is at least ameliorate the consequences by giving extra incentives, for example, to citizens of islands whose airports have been privatized to give them extra incentives, for example. Now we are talking about special measures that will lower the cost of transportation through water or air in areas that the airports have been privatized and where transport had already been very expensive, very costly for citizens but also for merchants and commerce.
And it’s not always easy to cope with this program, and it’s not always easy to cope with the European Union. And even more with an IMF ruled by those who are ruling them.
SHARMINI PERIES: Are you suggesting that part of the plan on the part, on the part of Syriza is to begin to deprivatized the airports, as you say, or the transportation to lower the cost for ordinary citizens?
IOANNIS BOURNOUS: Part of the plan is to ameliorate the consequences of a part of the privatizations that have been, has been harmful for public interest and citizens’ interest. A ctually, recently we renationalized service. And this is not widely discussed. We nationalized the transport system of Thessaloniki, the biggest city of Greece, which was owned by a private company which was fed with state money for decades, and they produced enormous scandals of misuse of public funds. But previous governments never put their hands on this company. A few months ago Syriza government was the one to nationalize the transport system, the transport company of Thessaloniki. And despite the argument and the fight on behalf of the right-wing opposition the transport system is greatly improved in the last months. The buses are being very quickly renewed and the new board of the company appointed by the government has already managed not only to reveal the scandals of the previous decades, which means that the private donors will have to answer to the justice system about what they did with public money, but it has also managed to rearrange the budget in such a way that the company currently is finishing 2017 with an enormous surplus.
What is our strategy in total when we’re facing all these very difficult challenges? I think that Chomsky described it very well when he was trying to describe the first term of Lula’s government in Brazil. He said that the strategy was to expand the room of the cage. Syriza, when we reached the critical point in July 2015, Syriza acknowledged that the dead end. We had to choose between two solutions which were bad, really bad, for the Greek people. So we had to choose this path that would be less destructive. We decided to choose this path, the current path, to sign the painful compromise which would at least give us the opportunity through the very hard negotiations that will continue until today. Give us the opportunity to open the door for an exit of this downward spiral of the last years of the crisis. We understood that the other choice was dreadful, because the other choice would be to exit very violently the eurozone, and this would mean a very weak economy of the European south. Only 2 percent of the Europeans it would be, would be exposed to very violent consecutive devaluations of the new national currency, because we didn’t have the productive basis as Argentina had, for example, or we didn’t have any foreign currency reserves in order to support the exchange rate of the national currency. In a devastated economy consecutive devaluation of a new national currency would mean devastation of the workers and pensioners, would have been the immediate devastation of the social majority, the people we want to protect.
Of course, they are suffering with the memorandum of austerity. But we restored stability of the country, we managed to stop the degradation of the economy, and the economy is growing. This is the opening of a window. I’m not saying that all things are well. There are very big structural problems with the Greek economy that have to do both with the neoliberal recipe that has been applied in the last decades, but also with particular characteristics of the Greek productive mechanism, productive system, and also the economy, the clientèle system, the extensive corruption that was fed with enormous public funds all the previous four decades. This is a long way. This is not a 100 metre run.
SHARMINI PERIES: This is a marathon.
IOANNIS BOURNOUS: It is really a marathon. And I think that we made the right choice because it starts to become visible day by day, slowly, gradually, but it starts becoming visible that we can actually make it. And if you judge by the course of things in Portugal we’re becoming even more optimistic. In Portugal we have a social democratic government, a center-left government, minority government, which is supported by the Communist Party and the Left Bloc and the Green Party. According to governmental contract with these smaller parties of the left, as long as the socialist government followed and honored the terms of this governmental contract, the economy is growing faster after the exit from the memorandum. They have managed to start increasing gradually the minimum wage, and restoring social rights. We’re following the same regime.
SHARMINI PERIES: All right. It is important that you mention the word corruption, because as you know very well, Syriza and the government has been hit by a huge corruption scandal. Let’s take that up in our next segment.
I’ve been speaking with Ioannis Bournous, who is joining me here in our Baltimore studios. He’s a political secretariat, leader of the governing party of Syriza. I thank you for joining us for now.
And thank you for joining us here on the Real News Network. And please join us for part two.