Greece, Grexit, Socialism: The National and International Dimensions

Karel Ludenhoff

In the run-up to the second general election in Greece this year, Karel Ludenhoff assesses the thinking and strategies of the Greek Left following the capitulation of the Syriza government under the leadership of Alexis Tsipras – Editors.


Image by Santos A.

“When one oppresses a people, it will stand up one day.”

Mikis Theodorakis


In my previous article about the two strands in Syriza after the capitulation of the Greek government under the direction of Alexis Tsipras (“Two Strands in Syriza, the Euro, and the Dictatorship of CapitalThe International Marxist-Humanist, July 19, 2015) I quoted Michael Roberts, who posed the question of a Grexit for Greece in these words:

“The issue for Syriza and the Greek labour movement in June is not whether to break with the euro as such, but to break with capitalist policies and implement social measures to reverse austerity and launch a pan-European campaign for change” (Michael Roberts, “Greece: Keynes or Marx,” Michael Roberts Blog, March 4, 2015)

The problematic of the Grexit in combination with anti- capitalist policies is one of the central elements, if not the most central of all, for the discussion about the future for the Left and the working people in Greece. This also has consequences for the Left and working people outside Greece. Similarly to Roberts, Heino Berg argues in his article, “Die Linke und der Grexit [The Left and the Grexit” (Antikapitalistische Linke, Aug. 10, 2015) (1) that the break with the euro has to be a part of a socialist strategy. His article is a polemic with a lot of leading persons in the Die Linke party in Germany. Although these leading members of Die Linke argue for a Greek exit from the eurozone and a return to the drachma or a system of free rates of exchange, they avoid the question of the necessary break with capitalist property relations. They take this position because they see an exit from the eurozone as the solution for the problems of Greece only within the currently existing framework of the European Union (2). Berg emphasizes, rightly in my opinion, that when we are talking about the European Union and its executive organs we must realize that we are dealing with institutions that are largely instruments in the hands of the banks and big corporations and that they are nothing else. It means that remaining within the framework of the EU is therefore remaining within a capitalist framework.

A solution to the Greek crisis in the interest of millions of wage workers and oppressed people must bring to the fore the question of the social system and its social property relations. This kind of solution will therefore have to mean a break with capitalist policies in Greece and a break with the present European Union. A solution for the crisis in Greece in a European framework can only be a solution in a socialist Europe.

Although Greece is a tiny country, it has a special place in crisis-ridden Europe. For Europe, and especially Germany which is the dominant country in it, is rearranging its economic and political forms of rule. This new arrangement is necessary for European capitalists to gain more profits — a process that is always the determining factor in capitalist society in the last instance.

The capitalist forces in Europe see in Greece an “area of experimentation” to pursue their purpose (profit). This “area of experimentation” has two functions. Firstly it is to bring down the living standards of the Greek people by means of reducing labour costs. We can refer here to the downgrading by 22% of the real wages in Greece in the period 2009-2014. (See Ronald Janssen, “Real Wages In The Eurozone: Not A Double But A Continuing Dip,” Social Europe, May 27, 2015). Secondly, capitalist forces are making an example out of Greece in order to deter other forces of resistance in Europe against this strategy of European capital.

In the above context, the words of former Finance Minister Yanis Varoufakis, published in the Guardian on February 18, make a strange and discordant impression: “If this means that it is we, the suitable erratic Marxists, who must try to save European capitalism from itself, so be it. Not out of love for European capitalism, for the eurozone, for Brussels, or for the European Central Bank, but just because we want to minimise the unnecessary human toll from this crisis.”

We know that the Grexit is a contested issue in Greece. Let us see why this is so. The European Central Bank (ECB) and the conservative chief of the Greek national bank, Yannis Stournaras, prohibited the recapitalization of the banks by means of the so-called Emergency Liquidity Assistance (ELA). Furthermore, the flight of capital out of Greece before and after the Referendum threatened the banks with collapse and this made the people of Greece fear for their deposits in savings banks and their pensions (Jeroen Dijsselbloem, director of the Euro group, admitted this openly). Under these circumstances, Grexit would have been a leap in the dark for many Greeks.

Throughout these developments, the Tsipras government remained passive. It kept the question of a Grexit out of the July Referendum and failed to follow up on the massive “No” vote against continuing austerity measures. The Referendum could have been the occasion for the Tsipras government to take a stand on the issue of the currency and a starting point for mobilizing the people of Greece for a radical alternative.

Having its own currency could give a Greek government more freedom to act than under the supervision of the Troika. But — and this is the crux of the matter — this freedom of action would only be relevant for the wage earners if the government used this freedom to bring about actual improvements for millions of ordinary people. And that would only be possible if the government was prepared to break with capitalist policies.

It is important, I think, to emphasize that we should not understand this breaking with capitalist policies as socialism in one country, which is the notion of the Greek Communist Party (KKE), or a kind of society in which state property prevails.

When I mention breaking with capitalist policies in Greece I am thinking of a break with capitalist property relations, which means a radical change in the labour conditions of the working people too. Further it will need, alongside the new relationships in the sphere of economics, new human relationships in all other areas of human life, such as gender and race. The Greek people can find sources for such a break in their traditions of struggle in all these areas. We can mention here for example the traditions of factory occupations, of social cooperation, of anti-fascist struggles, of helping refugees, etc. Moreover, such a process in Greece can and has to be a point of departure for other resistance movements against the strategy of European capital. These aspects of the process of breaking with capitalism need to be kept in mind for our later assessment of the vision of the Left Platform within Syriza, which has by now crystallized into the Popular Unity as an independent political party to the left of Syriza.

The Tsipras government’s failure to make this break has to be seen in relation to the functioning of the ruling class in Greece. Stathis Kouvelakis, in his article, “Turning ‘No’ Into a Political Front,” Jacobin Magazine, Aug. 3, 2015), points to an intricate connection of business interests, politicians, and the state, even reaching to Syriza:

“And here we must be absolutely specific. It would of course be a mistake to attach all blame to individual persons. But we should be quite clear about the fact that there have been enclaves providing bridges with sectors of the oligarchy inside Syriza, even before it came to power.”

Kouvelakis is writing in this context about Giannis Dragasakis, the vice prime minister in the Tsipras government, who is opposed to any change in the banking and financial sector in Greece. To get more insight and understanding concerning the connection among business interests, politicians and the state we need to look at the modus operandi of the bourgeoisie in Greek society, especially the Greek shipping magnates who own one of the biggest and most modern shipping fleets in the world. In the past fifteen years its transport capacity has doubled and due to the process of globalization its profits have been extremely high. The economic power of these shipping magnates is reflected in the greater part of the estimated 200 billion euros of Greek wealth hidden away in Switzerland. Klaus Wagener’s article, “Bourgeoisie im Bermudadreieck” [Bourgeoisie in the Bermuda triangle] (Junge Welt, Aug. 8, 2015), which is based on the work of a Swiss writer, Michael Bernegger, shows that data on the Greek maritime trade are not directly accessible for research. But in a roundabout way, Bernegger carried out a study of the structural aspects of the shipping industry on the basis of statistics in the Review of Maritime Transport, a publication of the United Nations Conference on Trade and Development (UNCTAD). One of Bernegger’s important conclusions is that of a “conceptual” bias on the reporting of maritime trade in the Greek balance of payments. From Bernegger’s analysis it becomes clear that the price determinants for the transport of commodities are calculated in dollars, their incomings and outgoings are almost completely settled in dollars, and the corresponding bookkeeping is carried out abroad. In the Greek economic statistics, however, all that appears is the small part of these transactions that the maritime interests are sending back to Greece. The essential parts of the business — costs, refinancing and investments — are settled in dollar accounts. In this way, three quarters to four-fifths of the value of the maritime industry is excluded from the Greek balance of payments in terms of national accounting.

In the tax reforms of 1957 and 1975, which were both brought in when the centrist Constantine Karamanlis was prime minister, it was determined that under the Greek Constitution shipping companies were exempted from paying taxes on profit, capital and returns on capital. Even as private citizens, they were exempted from taxes on property or revenues that had their origin in the maritime trade. All they pay, in fact, is a deadweight tonnage tax, which actually is only a song.

Through comparing Greek shipping companies’ estimated turnovers in relation to the transport capacities with the maritime trade branches of other leading countries, it can be concluded that there are discrepancies in the figures submitted to the Greek tax authorities. The International Monetary Fund (IMF) also came to this conclusion in the 1980s, but did nothing. Bernegger, on the basis of his calculations for the year 2008 estimates that the turnovers are 100 billion euros. If you subtract the turnovers of the Greek shipping traders out of foreign countries, then the result is 80 billion euros. That is a quarter of Greece’s nominal Gross Domestic Product (GDP). But 60 billion euros out of 80 billion euros are not reported to the tax authorities. That is not insignificant given a state debt of 325 billion euros. Similar operations have been carried out by the big travel agencies and hotel businesses in the tourist industry, though the tourism branch is not as great a source of wealth as the maritime trade.

The current balance of payments and prospects for surpluses depend on how transport rates and oil prices influence the shipping trade and the imports of energy. All other factors, for example the labour costs that the Troika was so concerned with, are irrelevant given the collapse of the most important import prices (especially oil) that has occurred since 2009. This resulted, says Wagener, in a negative price dynamic, which is the first-order cause of the crisis in Greece.

His research points to the role of the Greek bourgeoisie in the intensification of the crisis. It suggests that a country that for a decade has virtually achieved surpluses on the current account of balance of payments does not need to be dependent on short-term capital loans from foreign countries and therefore completely exposed to exogenous shocks like the financial crises of 2008 or 2010. Bernegger states that the ECB and the IMF did nothing to check and correct these operations of the Greek maritime trade and the tourist sector, although formally, this was what they were supposed to do.

Whatever the limitations of these statistical data – which do not take into account other factors, such as the lowering of wages and social welfare payments — one thing is clear: tax evasion by a large part of the bourgeoisie is not a consequence of poor statistics, but of conscious decisions by successive governments, which the Syriza government under Tsipras has done little to reverse.

As we look more closely into Greece as “area of experimentation” within the European context we encounter the functioning of the Troika: the European Commission, the IMF and European Central Bank (ECB). The Troika’s maxim of action, says Wagener, always refers to Germany, whose elite sees in the historical contingency of the Greek crisis her centuries-old concepts, now pursued with the help of this crisis and the financial institutions. This is the old German strategy of a European economic area under German domination, an entity competitive in all respects, which can conquer and defend its place in the sun against the North Americans and the Asians. Later on I will return to this aspect.

Against this European background we can, says Kouvelakis in his previously cited article, “Turning ‘No’ Into a Political Front,” note that what “has been crushingly defeated [in Greece] was a political strategy that the majority in Syriza, and therefore Syriza as such, has espoused for the last five years, and which could be called ‘left-Europeanism’.” He describes its content as follows:

“It was the conception that the memoranda and austerity could be overturned within the specific framework of the eurozone, and, more broadly, of the European Union (EU). That we have no need of an alternative plan because in the final analysis a positive solution will be found within the euro and that displaying credentials as ‘good European citizens’ and professions of faith in the euro could be used as bargaining chips.”

The conclusion for Kouvelakis and the Left Platform of Syriza is clear: “The left- Europeanism approach, the axis around which debate was centred, both in Syriza and the European left generally, and in which both the conflicts of the time and the limits of Syriza itself were reflected, suffered an ignominious defeat.”

These lessons of the defeat in Greece which Kouvelakis and his associates in the Left Platform in Syriza have attempted to draw have certainly not been learned by the majority of Syriza. Similarly, a lot of Die Linke members in Germany limit their positions on Greece to the framework of the conceptions of the majority in Syriza. This can be seen in Joachim Bischoff and Björn Radke’s article “Die Chance des eurokommunistischen Erbes” (The chance of the euro-communist heritage):

“A retreat to a national state which pursues its own ends is no solution of the problems….Contrary to that, the majority [in Syriza] orients itself on using the chance, through an extensive renovation of the economy, to come out of the debt dependency and, precisely in Europe, to make possible a new stage of democratic socialism” (Neues Deutschland, Aug. 22, 2015).

Kouvelakis, in pursuing his analysis of the defeat, highlights a number of factors besides the failure of the left-Europeanism approach. Referring to the downgrading of the mobilization of the masses after Syriza’s January 25thelectoral victory, he points out that actually the downgrading of mobilization was already pre-existent in the strategy of Syriza after 2012. Another factor was what he calls the “logic of appeasement” that began the moment Syriza assumed governmental responsibilities. Kouvelakis has in mind here the appeasement of persons, organizations, and the state apparatus: right wing and conservative persons holding important places in the state institutions (he also refers to the aspect of the military cooperation between Greece and Israel). Kouvelakis refers to enclaves of state power providing bridges to sectors of the oligarchy inside Syriza. He emphasizes that, especially after June 2012, Syriza became leader-centred, centralized, and detached from the actions and the will of the membership.

Kouvelakis adds that in taking power Syriza embarked on a showdown in which it not only proved itself entirely incapable of winning, but also even of organizing elementary self-defence. The Syriza government was a combination of a left government and a rich history of popular struggles with a potential for a radical social change. What Kouvelakis envisions for the KKE and the leftist group Antarsya, in his assessment of the development of the Syriza movement and government, is not so clear. At most he sees both organisations as insignificant, but offers no critique of their strategies.

Before discussing the creation of the Left Platform in response to the capitulation of the Tsipras government to the Troika, let us recall the general strikes in May 2010 in which the demonstrators tried to storm the parliament, the occupations of the squares in the summer of 2011 and the enormous demonstrations against the agreement on the second Memorandum in February 2012. The foundation for these mass strikes and demonstrations had been laid in the social protests in 2008, which became more dynamic after the police killing of the youth Alexandros Grigoropoulos December 6th of that year.

John Malamatinas pointed out back in 2011 in his “Die Krisenproteste in Griechenland [The crisis protests]” (in Detlef Hartmann & John Malamatinas, Krisenlabor Griechenland. Finanzmärkte, Kämpfe und die Neuordnung Europas, Hamburg 2011) that, when one looks into the political content of the statements of Left groups, particularly in the context of the present protests, the majority of these groups have failed to formulate a critical position on the crisis of state debt and to comprehensively criticize capitalist relations in their totality. This has resulted in a lack of any “alternative” to present to co-fighters in order to open political and social perspectives (p. 24).

This remark of Malamatinas is reminiscent of what Raya Dunayevskaya observed in the 1960s:“A new generation of revolutionaries began the 1960s as if activity, activity, activity would be sufficient to uproot the old, contending that if ever theory were needed, it could be picked up ‘en route’. They have by now learned one thing from the aborted May 1968 near- revolution in Paris: they can no more do without theory than without self- activity” (Philosophy and Revolution, New York 1973).

If we are talking about Left theory for today — and the remark of Malamatinas quoted above is an example of this — we have to say that theorizing an alternative to capitalism is the most important aspect of this. A fine description and theoretical working out of the alternative to capitalism, which has its foundation in Marx’s concepts, can be found in Peter Hudis’ “Yes. There Is An Alternative— And It Can Be Found in Marx,” Praktyka Teoretyczna, 2014.

It is not remarkable that Kouvelakis says that Syriza — as a radical potential — pointed beyond the social democratic governments of François Hollande in France today, Romano Prodi in Italy in the 2000s, or of François Mitterand in France in the 1980s. It is remarkable rather that he talks not at all about France May 1968 and “forgets” one of its most important lessons about the nature of theory for today.

Within Syriza the capitulation of the Tsipras government to the Troika resulted in the Left Platform launching a new political project to meet the challenge of the big “No” in the July Referendum. Two elements are central here. Firstly, there is the national element. The Left Platform conceives of this as a popular front in the sense of Gramsci’s notion that the labouring masses will take the lead in society, that they become “the nation” in order to re-orient that “nation” in another direction. Kouvelakis emphasizes the non-bourgeois character of this front, above all, by insisting on the class-based nature of this project. The national element covers another aspect as well, national sovereignty. Greece has virtually become a colony since the agreement of the Tsipras government with the Troika on July 12, 2015. Secondly, there is the international element of the new political project. Above I referred to the old dream of the German ruling class of a strong Europe under German domination against the other imperialist powers in the world. It is in this sense that Kouvelakis speaks also of the international dimension of the new project in Greece, “because a breach in the weak link in the eurozone and the EU opens the way for ruptures in Europe and administers a powerful blow to the reactionary and anti-popular EU edifice.”

An important aspect of Kouvelakis’s conception of internationalism is the connection of the social and political struggles against the disciplining effects of the euro and EU on living standards of living of working people with “the broader movements against imperialist and capitalist domination at a global scale, and more particularly with the movements of the Global South, which begin just at the other side of the Mediterranean.” Kouvelakis has in mind here the Arab Spring and the occupations of the squares in Greece and Spain.

If we look at the statements Kouvelakis makes in his “After Syriza” (Jacobin Magazine, Aug. 31, 2015), we can suggest that he favours a Grexit but is not so determined to leave the EU. We can find the same way of thinking about Grexit and leaving the EU in a statement Panagiotis Lafazanis, the chairman of the new Popular Unity party, made at a press conference in Athens on September 3 (Heike Schrader, “Referendum über die EU,” Junge Welt, 4- 9- 2015). He said that the program of the Popular Unity provides for the termination of all creditor arrangements, the nationalization of the banks and key industries, an immediate stop to privatizations, the deletion of at least the greatest part of public debt and the stimulation of the economy through public investments and programs of currency liquidity. A prerequisite for that, he says, is the return to a national currency. That is the Grexit. Formulated in this way, it looks, to my opinion, like a society in which state property prevails and neo-Keynesian economics predominates. When Junge Welt asked him why the Popular Unity is pleading for an exit out of the euro, but is not pleading for an exit out of the EU, Lafazanis answered that his party is fighting for a transformation (Wandel) in Europe, by way of radical changes (radikalen Veränderungen). Should the implementation of the program, however, come up against insurmountable obstacles within the EU, then the Popular Unity would organise a referendum for the Greek people in order to decide about continued membership in the EU.

Lafazanis’s international orientation stresses a shift from concentration on the EU and the NATO states, towards keeping up relations with the BRICS countries: Brazil, Russia, India, China and South Africa, and with the neighbours of Greece in the Balkans and the Middle East. But this way of thinking does not offer a perspective of breaking with capitalist policies or the moving toward an alternative to it, as mentioned above.

Only a Grexit from the Eurozone in connection with anti-capitalist policies will have a national and international dimension for the Greece people and for peoples outside Greece. Only this will open up a radical perspective.

All else is, as Rosa Luxemburg nicely formulated it, bilge!



  1. Antikapitalistische Linke(AL) is an anti-capitalist group within the German party Die Linke of which Heino Berg is a member. Non-party members can also involve themselves in this group.
  2. Costas Lapavistas and his associates also prefer a possible break with the euro, but are not willing to combine this with anti- capitalist policies. Some leading figures in Die Linkeare going so far as to give Tsipras full support after his agreement. See Neues Deutschland, 21- 8- 2015, which records this support within of the party leadership and its parliamentary group.






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