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Peter Hadden

Greece – the prospect for world capitalism

(December 1989)

From Militant Irish Monthly, No. 178N, December 1989–January 1990.
Transcribed by Ciaran Crossey.
Marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

In Greece during the 1980s, we have seen conditions of turmoil and political Instability which are set to become the norm for all the major capitalist countries in the 1990s.

The 1980s began with a huge swing to the left and a sweeping to power of the PASOK (Pan Hellenic Socialist Movement) government in 1981. In this election the combined left vote, PASOK and the Communist Party, (KKE) was over 60%.

The nineties will begin without a stable government in Greece. Two elections in 1989 have failed to produce a government. Instead we now have a temporary coalition involving all the parties plus so-called experts and led by an 85-year old. This arrangement will last only a few months before fresh elections must be held but with no certainty that the political deadlock will be broken.

In four successive elections the combined vote of the left parties has been over 50%. This fact more than any other indicates the political consciousness and the power of the Greek working class. It is an unprecedented feat which is causing the capitalists internationally to look on Greece with incredulity and dismay. One capitalist paper has commented that the Greek working class suffer from ‘anti right wing syndrome’.

The lefts’ ability to block the way to a right wing government has been despite the role of PASOK and KKE leadership. PASOK was elected in 1981 on a slogan of change. Greek workers wanted to break from the capitalist policies of the past. Greek capitalism was itself in a parlous state in 1981 having been severely hit by the world recession.


Three hundred major firms were on the verge of bankruptcy, many others not far behind. The PASOK government took over some of those problematic Industries but with the intention of handing them back to the private sector when they became profitable. Overall some reforms were introduced but the economy was left in private hands. The result was crisis and stagnation.

The capitalists responded to PASOK by withholding Investment. Investment fell by about 25% during the first four years. Between 1982–87 there was no growth so Greece largely missed out on the world boom, PASOK re-elected in 1985 faced stagnation, a growing public sector deficit and inflation rising to 25%. They cowered completely to the pressures of Greek and introduced a vicious austerity programme. Devaluation, expenditure cuts and wage cuts were all means by which the burden of the crisis was to be shifted onto the backs of the working class.

This programme met with fierce opposition from the working class. Throughout much of the 1980s, there have been industrial movements by the Greek workers but the biggest movement came in 1985/86, in response to the austerity programmes. Greece was convulsed by strikes and mass demonstrations as the anger of the workers was reflected through the trade unions and on the streets.

Despite this opposition PASOK succeeded in pushing real wages down by about 12% in two years. The last years of PASOK saw living standards stabilise but there was no catching up for this loss. Overall workers were worse off under PASOK. This resulted in deep discontentment with the PASOK leadership.

The final period of the PASOK government up to the summer of 1989 was dominated by the revelations about financial and other scandals involving PASOK ministers including the Prime Minister Andreas Papandreou. A crooked banker, head of the Bank of Crete, Kostokas, claimed that he personally bribed senior PASOK figures, put money in PASOK funds, and that the financial position of his bank where some $200 million had gone missing was covered up with government help.

The Greek capitalists and press had a field day with these scandals. For more than a year they have made the news in an attempt to demoralise PASOK voters and to weaken or split the party. The right wing were confident that this would ensure a landslide for their party, the New Democracy, in 1989. They did not reckon with the political sophistication of the Greek workers.

Workers condemned the scandals but they knew that the right-wing politicians were as corrupt as PASOK’s leaders. One worker commented: “The only difference between the thieves of New Democracy and the thieves of PASOK is that PASOK are amateurs – they get caught.” Workers could see what the right’s economic programme would mean.

It is estimated that Greek public sector debt at the end of 1989 would equal 100% of the Gross Domestic Product, with a large public sector and current account deficit and inflation of 14%, the capitalists are demanding more austerity. New Democracy’s programme in June 1989 was out and out Thatcherism, for privatisation, for cuts and for the closure of problematic industries. Greek workers voted against this programme.

They turned again to PASOK and also to the Left Alliance, whose main component was the KKE, giving these parties 52% of the vote and successfully blocking the right. This election was a huge defeat for the Greek ruling class. A new left government could have been formed. This is what, the Greek workers were demanding. However, the KKE leaders refused to participate in a government with PASOK or even to support a PASOK government from the outside. Instead and in the name of clean and honest government, they committed an act of treachery which their supporters and the majority of Greek workers will not forgive lightly.

They entered a government of the right so that prosecutions at Papandreou and other Ministers for the scandals could succeed. The KKE have paid for this treachery. Many members including Central Committee members have resigned. The Youth Section has been driven out of the party, taking some 5,000 members and a wider periphery. In the November 1989 elections, while the PASOK vote went up from 39% to 41%, 16% of KKE voters deserted the Left Alliance, whose share of the total vote fell 2%.


The November election produced a stalemate. The left won over 50% of the vote, but neither side held an outright majority in Parliament. The balance of power was held by independents including one Green. A further election would have been necessary in December but both PASOK and the KKE agreed to participate in a temporary all-party government. This decision will be greeted with widespread opposition by Greek works. It is a repeat of the betrayal of the KKE in the summer but this time committed by the leaders of both parties.

This new government has begun attacks on living standards, a range of price increases have been announced, together with an increase in taxes. The battle against the disastrous policies of PASOK and KKE leaders must be conducted inside the workers’ organisations, particularly inside PASOK which is the pre-dominant organisation of the Greek workers. In Greece we have had a foretaste in the 1980s of what is likely to happen in all the workers’ organisations in Europe in the 1990s.

During the 1980s, the Marxists around the newspaper Xekinhma, a sister paper of Militant, were expelled from PASOK. In the run-up to the 1989 elections, they were re-instated by the PASOK rank and file. Xekinhma is now in the forefront of the opposition to PASOK leaders’ participation in government; it is demanding the democratisation of the party which up until now has been run autocratically by Papandreou and a coterie around him.


The demand for a PASOK government on a socialist programme will strike an increasing chord with the Greek working class. On the basis of the crisis of capitalism, the fighting traditions of the Greek works and of the programme of Marxism, the Marxists of Xekinhma can become a mass tendency in Greece. The Greek working class can continue to play its role in the vanguard of the works in Europe and the world during the Red Nineties.

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