Greece’s Syriza government signals pension cuts
25 April 2015
At Friday’s meeting of European finance ministers in the Latvian capital of Riga, no agreement was reached with the Greek government on the repayment of loans. Greek Finance Minister Yanis Varoufakis made clear, however, that his government was ready to impose extensive pension cuts and labour market “reforms” in order to reach an agreement with the troika (European Union, International Monetary Fund, European Central Bank).
Even before the finance ministers’ meeting, Varoufakis published a comment on his blog in which he made far-reaching concessions to the troika. He assured it that negotiations since Syriza’s election victory in January had already brought “much convergence” between Greece and its “European partners.” The remaining differences, he said, were “not unbridgeable.”
He went on to assert that the Syriza-led government would promote entrepreneurialism, create an independent tax commission, continue the privatization of state property and “rationalize the pension system (for example, by limiting early retirement).”
The elimination of early retirement benefits is one of the central demands of the troika. The retirement age was already raised to 67 in 2012. Numerous exemptions, however, have allowed most workers to retire earlier. The “limiting” of exemptions means nothing less than the blanket enforcement of the higher retirement age.
Such a lengthening of the work life of Greek citizens amounts to a massive pension cut. And with the official jobless rate at 25 percent, few workers are able remain employed until they reach 67. Entire families already depend on a single pension to survive.
Syriza (Coalition of the Radical Left) previously declared pension cuts a “red line” that it would not cross. The fact that Varoufakis threw this line overboard in the run-up to the finance ministers’ meeting made clear that there were no limits to the attacks on the working class the supposedly “left” government was prepared to carry out in order to reach a deal with the troika.
Prime Minister Alexis Tsipras, the leader of Syriza, added his own assurances that his government would adhere to the reactionary policies of the EU. At an EU summit on Thursday, he signed onto the so-called “ten-point plan” for immigration policy. The plan provides for the ramping up of police and military operations to block migrants from reaching European shores and lays the foundations for a large-scale military intervention in Africa.
At the meeting, Tsipras met with German Chancellor Angela Merkel for over an hour. The German newspaper Die Zeit reported that Merkel insisted Greece quickly implement the demanded reforms, while Tsipras protested that his country had already made “enough sacrifices.”
Tsipras expressed the hope that Greece and the EU could still come to an agreement by the end of April. Greece urgently needs an outstanding tranche of loans amounting to over 7.2 billion euros. In order to pay back wages and meet loan commitments, the Syriza-led government has already plundered the public treasury.
After the meeting in Riga, Varoufakis said it was necessary for a deal to be reached quickly. “We agreed that an agreement will be difficult,” he said, “but it will happen and it will happen quickly because that is the only option we have.”
Despite the groveling of Syriza, EU representatives showed little willingness to compromise. Eurogroup president Jeroen Dijsselbloem said after the meeting that there could be no paying out of loans if the Greek government did not submit a detailed “reform” program. Everyone was certain, he said, that the time for an agreement was running out. The responsibility for that lay with Greece.
Dijsselbloem added that “significant differences remain” between the EU ministers and Greece. Austrian Finance Minister Jörg Schelling reproached the Greek government for presenting no concrete proposals. He said, “I strongly urge that we now get something on the table that can be decided upon.”
Reuters reported that the Slovenian finance minister, Dusan Mramor, met with Varoufakis behind closed doors and suggested a “Plan B.” The Greek finance minister later called him “anti-European.”
According to those present, the finance ministers’ meeting became hostile. As Varoufakis, in a conference call, clarified the details of loan payments in the coming week, one of his interlocutors denounced him as a “time-waster, gambler and amateur.”
Tsipras was also rebuffed. French President François Hollande warned him to speed up the imposition of social cuts. After a short meeting with Tsipras, he said, “Greece must continue to provide the necessary information and show that it can make decisions about reforms.”
EU officials have made it more than clear that they are not prepared to make any concessions and intend to make an example of Greece. The social assault is to be carried out whatever the cost and serve as a model for the entire continent.