Daily Times

Christine Lagarde, boss of the International Money Fund (IMF), has warned Greece that there is “no period of grace” after a debt repayment deadline. Greece will be in default on its loans from the IMF if it fails to make a € 1.5 billion payment on June 30, and risks being forced out of the Eurozone and possibly also the European Union (EU). The troika of the EU, IMF and the European Central Bank (ECB) is leading last-ditch negotiations that have become a European speciality. European finance ministers are assembling in Luxembourg and leaders are on standby, just in case they may have to meet over the weekend. A deal is still possible, but both sides have come to loathe each other.

The left wing of Greece’s Syriza party, the Left Platform, put forward a plan to default on government debt and replace the Euro with the previous national currency, the Drachma. It proposes controlling capital movements and the establishment of a sovereign central bank to serve as a basis for a new financial system. As one Syriza parliamentarian involved in the drafting told The Telegraph: “This goes well beyond the Left Platform. We are talking serious numbers. We are all horrified by the idea of surrender, and we will not allow ourselves to be throttled to death by European monetary union.”

Syriza, which catapulted into power on a radical programme, is reluctant to pay debts ahead of funding pensions for 2.6 million Greeks and salaries for over 600,000 civil servants. It has already moved to re-employ 4,000 civil servants, whom the previous right-wing government had fired. Giving in to the troika would mean signing up for an austerity programme that would entail further cuts in pensions and increased tax, leading to outrage amongst Greek citizens. Even then, Greece is likely to need a third bailout worth tens of billions. The EU has worked hard to cordon off the banking difficulties of one member state from the other 27. The IMF has warned that “risks and vulnerabilities remain”. Default would also mean a steep loss for the ECB, with its € 110 billion exposure to Greek banks and around € 20 billion in Greek government bonds. As a central bank, the ECB would have to print money to recapitalise itself, but that is considered an anathema by Germany. There is also the potential of political repercussions. Several governments facing anti-Euro movements will be watching developments in Greece nervously.

The dominant leadership of Syriza is left reformist and not revolutionary. However, The Communist Tendency of Syriza has put forward a clear programme of socialist transformation as the only solution to the miseries of the Greek masses. Its latest statement reads: “In order to enable a break with the creditors and for a decisive and consistent improvement in the living standards of the working people, a break with the economic and political power of capital itself is inevitable and crucial. It should be combined with the application of an anti-capitalist, socialist programme. It is an absolute necessity if we wish to protect ordinary working people from the inevitable war that would be unleashed against Syriza immediately after a default when the international creditors and their capitalist allies in Greece would attempt to strangle the country by refusing any further credit. The 500 largest companies that have increased their assets in the five years of the crisis, in manufacturing, construction, services and trade, along with all transport and mineral wealth, should also be nationalised. Large land ownership, Church and monastic property expropriated and be placed under a central and democratically controlled economic plan by the working class. A radical re-structuring of the army and the security forces would have to be carried out along with the nationalisation and freeing up of the media from the control of the capitalist oligarchy. Exit from the EU, which is founded on prohibitive and anti-socialist mechanisms, treaties and agreements, and withdrawal from NATO, a military alliance that is there to defend the interests of western imperialism, which the Labour movement is opposed to.”

This situation in Greece has now become a direct clash of the contending classes in society. If the Syriza leadership does not go the whole hog, then ultimately the sharks of capitalism, the imperialist monetary institutions, will defeat them. This shows the limits and failure of reformism in an epoch of the terminal decay of capitalism. On the other hand, the intrinsic weakness of European capitalism is so intense that the bosses fear similar radical movements in Portugal, Cyprus, Spain and other EU countries. We have already seen the meteoric rise of Podemos in Spain. Yet the crisis is such that if Syriza capitulates to the troika it will split. Consequently, instability and political polarisation would worsen. But at the same time, the financial and economic crisis of European capitalism is such that it cannot afford to make any more concessions, give any relief or sustain social benefits to the masses.

However, this crisis is not just limited to Greece or Europe. Capitalism is declining on a global scale and even the so-called recovery in the US and other advanced capitalist countries has been joyless and jobless. The Financial Times printed on June 14: “Developing economies are sputtering. Investors are shying away from countries such as China, Brazil, and Russia where growth prospects, once bright, are increasingly lacklustre. They are happy to pay to park their money in US concrete. From anecdotes at the high-end of the housing market to sober evaluation of the fundamentals, it is clear that monetary policy in the US and abroad is stoking another house price bubble. And the bigger the housing bubble gets, the greater the risk of a crash once rates are normalised.”

The Economist’s outlook was no different. In its latest issue: “Europe is deep in debt and dependent on exports. Japan cannot get inflation to take hold. Wage growth could quickly dent corporate earnings and valuations in America. Emerging economies, which accounted for the bulk of growth in the post-crisis years, have seen better days. The economies of both Brazil and Russia are expected to shrink this year. Poor trade data suggest that Chinese growth may be slowing faster…If any of these worries causes a downturn the world will be in a rotten position to do much about it. Rarely have so many large economies been so ill equipped to manage a recession.”

Capitalism is doomed on a global scale. However, it will have to be overthrown, otherwise, as Lenin once said, “It always has a way out.” These merchants of doom can fabricate the most vicious and disastrous schemes. This historically obsolete and economically redundant system has to be obliterated. Nothing less than a workers revolutionary insurrection can accomplish this task. Europe has, yet again, become the epicentre of a world socialist revolution. A socialist revolutionary victory in Marx’s classical proletarian heartland can lay the foundations of salvaging the destiny of humankind.

The writer is the editor of Asian Marxist Review and international secretary of Pakistan Trade Union Defence Campaign. He can be reached at lalkhan1956@gmail.com