Europe's left looks at Greece with grave concern

Europe’s left is torn between outrage and anxiety over drastic cuts in living standards and working conditions being imposed on Greeks by the European Union and the International Monetary Fund.

Indignation at sweeping pay and pension reductions and public sector job cuts dictated by official creditors in return for a second bailout of the debt-ridden eurozone state is strongest in south European countries that fear a similar rod.

Yet there is scant sympathy from centre-left politicians and labor leaders in northern Europe, where voters are more worried at the potential cost to themselves of repeated bailouts, nor in former communist central Europe, where people are more inured to hardship.

”What if we all became Greeks?” left-wing French daily Liberation asked on Monday. ”Is what is being imposed today on this pressured and humiliated country a foretaste of what will one day be prescribed for Italy, Portugal, and why not France?”

A planned 22 percent cut in the Greek minimum wage, with a 32 percent cut for workers under age 25, is among the most radical steps backwards inflicted in peacetime in modern Europe.

Only Latvia has endured a similar EU/IMF-mandated ”internal devaluation” cutting living standards.

Public sector pay in Ireland has fallen on average by 15.9 percent since 2009 due to wage cuts and a pension levy, but an agreed 12 percent cut in the minimum wage was reversed with lenders’ permission after the government found savings elsewhere.

The leader of Portugal’s largest trade union, Armenio Carlos of the CGTP, praised Greek workers’ ”heroic resistance” against austerity measures and warned that his own country could face a similar social explosion.

”If the results in Greece were disastrous, without a doubt they will be no different here,” Carlos said last week.

French Socialist politician Segolene Royal, the defeated presidential candidate in 2007, voiced outrage at the way austerity was targeting the poorest Greeks while the rich were still able to evade taxes with impunity.

Accusing European leaders of ”cowardice,” she singled out European Commission President Jose Manuel Barroso for criticism.

”Athens is burning ... Where is Mr Barroso? -- the ultra-liberal politician chosen to head the Commission -- that was a very grave error. Where is the Council of Ministers? What is the European parliament doing?” Royal asked in a radio interview.

Yet the reaction of the mainstream European left has been mostly muted, partly due to exasperation among ordinary citizens in wealthier countries at having to rescue Greece twice, but also because many center-left parties have been associated with the austerity measures.

In Greece and Portugal, Socialist governments requested the original EU/IMF bailouts and supported the public spending cuts and painful pension reforms required as part of their fiscal adjustment programmes.

Ireland’s center-left Labour party is a junior partner in the coalition government that is enforcing the country’s austerity plan, which is showing first signs of success.

In Italy and Spain, left-wing parties backed budget cuts, raising the retirement age and freezes or reductions in public sector pay as part of austerity programs enacted to save those countries from being shut out of capital markets.

Italy’s Democratic Party, the largest center-right political movement, has supported technocrat Prime Minister Mario Monti’s sweeping pension and structural reforms and austerity measures despite misgivings about the impact on growth and employment.

That makes the left somewhat schizophrenic about what is happening in Greece.

”The Greek riots are just the tip of the iceberg of a failed policy that focuses totally on public accounts and ignores the real economic issues of growth and jobs,” said Stefano Fassina, the party’s top economic adviser.

”The conservative government in Berlin is primarily responsible for imposing this cure. All of Europe is in recession because of it,” Fassina said.

Germany’s opposition Social Democrats (SPD) advocate a different policy mix to revive growth and jobs but they are cautious about challenging Chancellor Angela Merkel’s tough line on Greece, which polls show is widely popular.

”A country that is weakened again and again ultimately won’t have the power to service its debt,” said Andrea Nahles, the SPD’s general secretary. ”This is exactly what is happening now in Greece. It is a vicious circle that must be broken.”

Finland’s center-left Social Democrats and the Left Alliance are part of a coalition government that has insisted on strict conditionality and collateral in return for loans to Greece.

Given popular frustration over bailouts it would be political suicide to sound too sympathetic towards Greek workers. Instead, they are criticizing job cuts by Nokia and others in Finland.

The European Trade Union Confederation, the umbrella group for organized labor around the continent, has had little success in trying to mobilize workers Europe-wide against austerity. Apart from one big demonstration in Brussels, protests have largely been confined to national issues.

ETUC Secretary General Bernadette Segol criticized the so-called troika of European Commission, European Central Bank and IMF for imposing ever deeper cuts on Greece and said she feared ”a big clash and contagion” if Athens eventually defaulted.

”It’s not the right course, it’s not going to lead to a solution for Greece and the Greek people,” Segol said.

There is little solidarity with Greece in central European countries that lived through a harsh transition from communism to the market economy in the 1990s and are still poorer per capita than the Greeks today.

Slovakia refused to contribute to the first Greek bailout for that reason. A Slovak official noted that even after the planned minimum wage cut, Greece’s would still be higher than Spain’s, which has not had to request assistance, and far higher than Portugal’s.

In Lithuania, where a center-right government cut wages and benefits during a 2009-2010 financial crisis, the leader of the main center-left party said Greeks had spent themselves into this mess and had to take their medicine now.

”Greece has no escape but to implement strict austerity measures or to face bankruptcy. It can’t save itself without outside assistance,” Algirdas Butkevicius, leader of the Lithuanian Social Democrat Party, said.

”Maybe it’s not good to cut the minimum wage, but Greece’s spending on pensions has been very generous compared with the rest of Europe,” he said. [Reuters]

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