Domestic economic and political developments
The position of Greece in the international imperialist system and the EU
9. Greek capitalism, as was noted in the 15th and 16th Conventions of the Party, is at the highest and final stage of its development, in the state-monopoly stage, and remains in an intermediary and dependent position in the world imperialist system. In the EU of the "15" it continues to hold one of the two lowest places. In the enlarged EU of the "25" it has risen to a more upgraded position. It has powerful political and military dependencies on the USA, NATO, and the EU, which have been formed over a long period of time.
Basic characteristics of the imperialist stage of Greek capitalism have been reinforced such as: the export of capital to the European and international markets; its participation in imperialist wars and interventions; its participation in the planning and the promotion of anti-worker and anti-popular measures dictated by the principle imperialist centers and unions, such as the EU and NATO. At the same time, Greek capitalism is experiencing the consequences of competition, the sharpening of antagonisms and contradictions in the uneven capitalist development.
Greek capitalism appears more developed than others in the Balkans, including Turkey. However, a more developed capitalism does not mean a capitalism which is free of crises, nor does it imply an established position among the capitalist economies and states.
The position of Greek capitalism today in the Balkans is not secure on the long term. Turkey has the pre-requisites such as an internal market and a strategic position, for rapid capitalist development, also favored by the prospect of Turkey's joining the EU. Romania also has certain pre-requisites for upgrading its position in the capitalist Balkans. The enlargement of the EU sharpens the competition between Greek industrial and agricultural products and those of Poland, the Czech Republic and Slovakia. The Greek trade balance is already negative with Hungary, the Czech Republic, Slovenia and Slovakia and only due to its great surplus with Malta and Cyprus, does it appear positive in total with the 10 new member states of the EU.
During the period following the 16th Convention, the export of domestic capital for direct investment was reinforced, especially in the Balkans but also in the Middle East, the Black Sea region, in Europe, the U.S.A., even in China. Greece appears to hold first place in direct foreign investment in Bulgaria, Albania and in FYROM, while also important are the investments in Serbia and Romania. Among the most powerful exporters of capital in Greece are banking and powerful industrial manufacturing groups in the sectors of food, industrial minerals, metal, petrol products, telecommunications and trade.
In 2003, 65% of business profits were concentrated in about twenty colossal enterprises that cover all sectors. About one dozen domestic monopoly groups were further strengthened in the corresponding European and international markets in regards to the concentration and accumulation of capital, profit-making and the share of sales. Greece holds the greatest share, 46%, in the banking sector in the Balkans, Turkey and Cyprus.
Capitalist development in the Balkan states, together with the initially great destruction of their productive forces, created favorable international conditions for the development of Greek capitalism. Greek capitalism took advantage of the need that existed to link the European capitalist market with those of Eastern Europe and Asian republics of the former USSR. Initially in competition with Turkish capitalism and later, to a large extent, in cooperation with it, Greek capitalism advanced its position in the energy transport sector between Western Europe and the oil and natural gas resources in the aforementioned regions.
The options of the ruling class in the energy sector focus on two complementary directions; in the promotion of "the competitive operation of the energy market" and in the "upgrading of the role of our country in the energy networks of Southeastern Europe, the Black Sea and the Eastern Mediterranean."
A port - land - port transport connection between Western Europe and Asia via Greece, with port - Egnatia Highway serving as an axis a direct port connection Thessaloniki - Taiwan - China is being planned.
The construction of infrastructure for transportation and the exploitation of land resources will continue to constitute targets of capitalist profiteering. The 4th European Support Framework also serves these targets, while new incentives for direct foreign investment in the same sector, even if smaller than the previous period, are being offered.
Greek shipping capital maintained its strong position in European and international shipping. It increased its transport capacity and its profits. It became more aggressive. Greek shipping capital promotes the line of a return to the Greek shipping registry, under the condition of quick implementation of new pro-shipowner and anti-worker measures in order to enhance its competitiveness. It is the sector of Greek capital that negotiates from a position of power in the EU and brings to the surface several contradictions between its associations and the management of the EU.
On Greek soil, US military bases of strategic importance operate and were used for the occupation of Iraq. Despite occasional governmental proclamations for a reduction in military spending, Greece is directly and indirectly involved in the militarization of the European economy, in the export of capital and wars and the redistribution of markets. From a geo-strategic point of view it is more connected with the region to which the center of international tension is being transferred, the region in which the structuring and restructuring of alliances and opposing poles is manifested. The Aegean is included in this zone and is attracting the interest of the USA and Turkey, because of its general importance in the particular region. The reduction in military service time does not reflect the intention to reduce militarization but the transfer of emphasis on the creation of a professional mercenary army, fully compliant with NATO directives.
The course of the Greek economy and employment
10. The Greek economy maintained the highest yearly increases in the Gross Domestic Product (GDP) compared to the corresponding Euro-zone average over the past four years. The cycle of capitalist crisis for the Greek economy was not synchronized with that of the EU. Most of the largest economies in the EU experienced a crisis in 2003. A large part of the total increase in the GDP was the result of a significant increase in construction due to Olympics building projects and those of Energy. The rates of increase in construction have already been reduced in 2004.
At the same time, there was a crisis in manufacturing in 13 out of its 22 branches, among which are branches that experienced dynamic development after 1994. A crisis occurred for the second continuous year (2002-2004) in the production of capital goods and was extended in 2003 to intermediate and durable consumer products. There was also a crisis in air transport and telecommunications.
Unemployment took on greater dimensions in exporting manufacturing branches with a low organic synthesis of capital such as textiles, clothing, and leather. As a result, in certain areas the concept of "deindustrialization" was reinforced and came to be considered as a unique Greek phenomenon. In this particular case, one must take into consideration the totality of the industrial production index and the re-organization of land-use corresponding to the concentration of production and the work force; e.g. the simultaneous increase in concentration in Attica overall and a shrinkage of industrial zones in Lavrio, in the 2nd district of Piraeus, in Thessaloniki and in Patra. A certain shrinkage in local production occurs due to the export of capital and the transport of productive investment e.g. from Macedonia, Patra to neighboring Balkan states with the cheapest work forces.
Restructuring in manufacturing occurred within different branches of production at the expense of branches such as textiles, clothing, and leather. This occurred following the lift of protection on domestic production after Greece joined the EU and the Greek market gradually opened up to competitive products from third countries. Bilateral agreements of the EU with other customs unions, as well as World Trade Federation agreements, were developed to promote EU penetration within corresponding areas such as Asia, Africa, and Latin America.
Greek industry, especially manufacturing, became more exposed to the new conditions of capitalist competition. The relative delay in industrial development, the small size of the Greek economy, the legacy of military - political dependencies of the Greek state after the Second World War, the joining of Greece in the EEC and the formation of a united European market, weakened Greece's competitive position. The comparative delay in the development of enough branches with a high organic synthesis of capital and a high added value especially the share of industry in the GDP worsened even more in comparison to that of Portugal.
The accumulation and the concentration of capital in certain industrial branches and the strengthening of certain industrial groups was not enough to fully compensate for the shrinkage in other industrial branches and the destruction of smaller units.
The reduction in the share of the total Gross National Product (GNP) and the reduction in employment in manufacturing branches of low organic capital synthesis and agricultural production are in tune with the corresponding general trend of contemporary developed capitalism. The same is true for the increase in other industrial branches and sectors of the economy that are characterized as "services".
Bourgeoisie conceptions and statistics wrongly interpret the increase in employment in the "service industry sector" and its corresponding increase in economic activity in the total Gross National Product. It appears as a distortion of capitalist development in characteristically smaller and more delayed capitalist economies. Except for the methodological mistake to include in the definition of the "service sector» the primarily industrial branches of transport and telecommunications, the increase in employment in the service sector in Greece continues to follow the general trend of capitalist development.
The service sector in Greece holds the smallest share in the GDP (59%) compared to that of the EU (69.4%).
The commercialization of Education, Health and Welfare, Social Security, Athletics and Culture advanced at rapid rates.
Agricultural production is stagnant. In the period 1995-2003, the average yearly increase in its total gross value was negative. The result was that the Gross Domestic Agricultural Product in the total GDP was reduced from 9.1% in 1995 to 6% in 2003.
The protracted stagnation in agricultural production, which is institutionally safeguarded by quotas and co-responsibility levies, in combination with the increase in the market demand for agricultural production resulted in an agricultural trade deficit. The dependence on animal products, mainly from the EU, increased. It was accompanied by a tendency for the accumulation and concentration of agricultural production especially in branches that are not directly connected with agricultural land, such as livestock.
Accumulation remains low in comparison to the average of the "EU of 15". Productivity is equal to that of 44.6% of the corresponding EU average. Agricultural employment is four times that of the corresponding EU average. The total volume of paid labor in the agricultural economy is equal to that of 47.3% of the average of the "EU of 15."
During the twenty-year period, 1980-2000, 182,000 family farms were wiped out and the Agricultural Bank of Greece began the process of confiscating financial/property assets of a further 70,000 family farms. The New Democracy government measures regarding farmers' debts do not solve the problem; they do not inhibit this trend.
The revision of the Common Agricultural Policy and the agreements of the World Trade Federation will accelerate the rates of accumulation and concentration in Greek and EU agriculture, but generally they will be delayed in terms of the level of development of US capital accumulation.
The participation of Greece in the Euro-zone made difficult the use of currency policies in fiscal administration. The results of fiscal administration were worsened; an evident tendency even in the biggest and most powerful economies of the EU.
The import of commodities from the markets of countries in the East and the West is increasing, with the general agreements of freeing up the markets. The problems of shortages and public debt are being aggravated.
The course of Greek capitalist development and the corresponding developments in the EU confirm that the slogans regarding "conversion" and "a strong Greece" in the leading core of the EU are misleading. Uneven development within the framework of the EU is an indispensable element of its capitalist character.
The main goal of the Greek bourgeois state is to promote big domestic capital in the international capitalist market, even if it means long-term fiscal difficulties, even if the destruction of smaller and less competitive sections of domestic capital continues.
In the last 5 years, salary workers and self-employed businessmen with staff are the categories with a growth tendency. In addition, salaried work is the only category that presented a continuous tendency towards growth. Its contribution reached 59.9% of total employment and exceeded 2,430,000 million workers. The great majority of salary workers belong to the working class which includes unemployed and immigrants.
Self-employed businessmen without staff were reduced by 27.5 thousand in 2003 that is by 2.65% in comparison to 1998, despite the fact that this annual reduction was interrupted during the two-year period 2002-2003. In the period 1998-2003 a trend of reduction in the number of employees in family enterprises by 106.6 thousands, that is 23.4%. A small increase was marked by self-employed businessmen with staff by 4.8 thousand, which is 1.6%.
- The total number of employed in 2003, in comparison to 1998 showed a small increase of 105.3 thousand or 2%.
- Part-time employment exceeds 11% in the private sector.
- Agricultural employment between the two census counts 1991 and 1999-2000 was reduced by 14.6%.
- A special characteristic of the past 15 year period for the Greek economy is that of the wave of economic immigrants.
The anti-people policies in the restructuring of work relations are already taking hold in the public sector in Greece. There are different categories of workers: permanent, sections of permanent workers that participate in the administration of the Community Support Framework programs with higher salaries, 8-month contract employees, while part-time temporary work is being institutionalized.
The restructuring of the Public Sector demands a small number of well-paid public employees, capable of responding to the contemporary needs of the European Union market. At the same time, a greater institutional flexibility is necessary so that the administrative mechanism can use cheaper workers or sub-contract out to private capital.
It is connected as well to the modernization of repressive state mechanisms, with the intensification of police enforcement and the attack against bourgeoisie rights and freedoms. It is in compliance with the modernization in administrative and monetary and credit functions, necessary for the movement of capital through the markets.
Some of the more important characteristics of the position of working and people's forces in the otherwise prosperous for capital Greek economy are: the new downgrading of public Health, Education and Social Security, due to the greater commercialization in those corresponding sectors; the restriction of basic social control of prices in popular energy consumption, water supply, telecommunications and mass transport with the privatizations and the great cost of mass transport and the Olympic works due to bad construction and delays; the intensification of exploitation with the unfavorable settlement regarding the total time of paid work and its payment; the lack of certainty about employment, the high percentage of unemployment; the assimilation of the institution of local government in the policy of capitalist restructuring. The local government bodies directly promote the policies of privatization, the commercialization of social policies, of local works.
The negative situation is recorded as reflected by social indicators of bourgeois statistics e.g. the poverty level, protracted poverty, in the relationship between private and public funding for Education and Health, in available income, in the comparative level of the high cost of living, in the high debts of working class families.
The course of Greek capitalist development expresses a clear tendency to downgrade the peoples' income and conditions of work and living, in comparison to the capabilities of production, scientific-technological development and the contemporary needs that they create. The general tendency, the worsening of the position of the working class and an important part of the middle class strata in both relative and absolute terms is also manifested in Greece, especially with the promotion of capitalist restructuring,
The Political Forces
11. Throughout the period following the 16th Congress of KKE, the Party's estimation on the character and strategy of the two major bourgeois parties - New Democracy [N.D.] and PASOK- has been verified, as they both have been serving and promoting the interests of the monopolies and the imperialist institutions. The weakening of those two parties' political and ideological influence on the working class and youth constitutes a serious precondition for a change in the political balance of forces and the establishment of the Anti-imperialist, Anti-monopoly Democratic Front [AADF].
All ND and PASOK governments have been and are at the service of capitalist profiteering. It is their intention to simply "manage" the consequences resulting from the worsening of working/life conditions of the working class and other lower strata, so as both to facilitate the enforcement of their general strategy and to keep popular unrest in check.
During the previous elections - local elections in 2002, national and European ones in 2003- people's discontent was expressed by the diminishing of PASOK's power in national and European institutions, while strengthening ND's participation accordingly.
However, ND is being confronted with a variety of obstacles during the rapid realization of its policy. The flow of foreign capital demands a rapid reactionary restructuring of the welfare sector and industrial relations. ND is unsure of how to secure its victory in the latest elections, while dealing with people's discontent, at no political cost.
The government promotes a misleading social profile aiming at increasing its influence over the "center-left" political spectrum, without departing from its bourgeois neo-liberal character. Whatever its strategy, it deploys the "arsenal" provided by the institutional framework and takes advantage of the policies put into effect by the previous government [PASOK], in order to preserve the same line of policy.
Having faithfully exercised the same neo-liberal line of policy, PASOK, as the major opposition party, is now facing similar difficulties,. PASOK's internal crisis is not only a result of the defeat in the latest elections but is deeply rooted in its ideological and political nature. PASOK's programme and character is of a bourgeois and neo-liberal nature, a feature that prevents any possibility of differentiation from ND.
The so-called social policies of PASOK and ND, are limited to mainly one choice: through state intervention, depending on the pressure the popular movement exerts on it, to set a poverty limit, for either a short-term or long-term period, followed by retrospective wage raises and poor pensions and pension supplements; the preservation of a low-quality - if not unspeakably poor- semi-public health system; a social welfare system which generally speaking, the lowest paid, lowest pensioned and the unemployed part of the working class and the other social strata are forced to use because they have no other choice. It preserves an outdated educational system which sustains and is directly interrelated to private capital, serving its need to create cheap labour.
Both parties, ND and PASOK- each one taking its turn in the country's governing- systematically foster delusions, corrupt and threaten consciousness by promoting a financial policy totally hostile to the people's interest.
Their amendments, such as the retroactive raise of the tax-free limit of employees and pensioners, are late and are a result of the popular movement and the threat of upcoming elections and after all they are necessary for the very functioning of the system. As a rule, they are accompanied by anti-labour interventions in tax scaling. In the short run, whatever positive effect they have on the people's income, is annulled and accompanied by unchecked tax breaks and reinforcement for big capital which deepens class confrontation and polarization.
As far as Synaspismos is concerned, it continues to support old-fashioned social-democratic ideas as well as imperialist policies of the European Union. As a supporter of opportunism and despite all the favouritism it has been granted over the past 10 years, it hasn't managed to achieve it declared goal of increasing its political influence at the expense of the KKE and to influence the latter's political orientation.
In fact, Synaspismos' poor results in the elections of 2004, has sharpened oppositions and various tendencies towards conflict within this party. The escalation of such conflicts embraces the issue of the party's very functioning, the nature of its political statements - whether to follow classical social democracy or the current social-democratic liberalism- as well as its coalition policy.
People's Orthodox Alert (L.A.O.S.) appears to represent the political expression of the nationalist, xenophobic and racist theories.
As a general conclusion, whatever managerial policy is applied in Greek or international capitalism, more or less liberal or of Keynesian form, it cannot relieve the capitalist economy of its crisis.
e-mail:cpg@int.kke.gr
