Leo Panitch Greece in Suspended Animation

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I'm Sharmini Peries coming to you from Baltimore.

Greek finance minister Yanis Varoufakis on Tuesday announced that Greece will pay the 1.6 billion Euros they owe the IMF beginning June 5th. The country has been cash-strapped, and negotiating with its creditors the Troika, made up of the IMF, the European Central Bank and European finance ministries for months now.

To discuss this I'm joined by Professor Leo Panitch. Leo has just returned from Greece, where he has been discussing the current situation with his colleagues and friends. Leo Panitch, as you know, is a professor of political science at York University in Toronto. He is the UK Deutsche book prize winner for The Making of Global Capitalism: The Political Economy of American Empire.

Leo, thank you for joining us.

LEO PANITCH, PROF. OF POLITICAL SCIENCE, YORK UNIVERSITY: Glad to be here, Sharmini.

PERIES: Leo, you've just returned from Greece. Give us a sense of the people you met with and what they're saying.

PANITCH: I should say, the sense one gets politically when you're in Athens right now is that the country is in a state of suspended animation. Everybody is waiting to see what will happen in terms of the outcome of the negotiations. The kind of movements that propelled Syriza into office, into the state, are not in motion. One of the ministers, Aristides Baltas, who is minister of culture, education, religion, and sport, which is the largest ministry in Greece, described this as a immobilized movement. And this is of course problematic, because emblazoned on Syriza's program is the argument that even when we enter the state, we'll only be able to do what we want to do insofar as there is a diversified, multidimensional movement of subversion in society behind us.

Well, that is not bubbling up. It's immobilized. That's not to say that there isn't still massive support, there is. But not in the form of movement, not in the form of the kind of creative things one saw with the solidarity networks where people were sharing pharmaceuticals, food, et cetera. They're not turning themselves into alternate forms of an economy, an economy of need and talent and creativity rather than an economy of profit. Not on their own, at any rate. And the government is so preoccupied with the negotiations, committed as they are to staying in Europe--while committed as they are, very equally and strongly committed to stopping the torture, the economic torture visited on the Greek people, that they too aren't oriented to animating and mobilizing at the base.

That's the overwhelming sense one gets when one's there. It's a very difficult situation. And it's fascinating to watch it playing out in real time.

PERIES: Leo, finance minister Yanis Varoufakis did announce apparently that they will be able to pay the 1.6 billion owed to the IMF coming up in June. How did they manage to do that?

PANITCH: They haven't done it, it's smoke and mirrors. And it contrapredicts the commitment that other ministers have made, most recently the Interior Minister [Voustis], who I heard say the same thing two weeks ago in a public meeting in Athens, that they would not even pay the 300 million that are due on June 5th rather than pay the wages and salaries and benefits that are due at the end of the month.

There's some talk now that the three payments that are due to the IMF in June might be bundled together and paid at the end of June rather than the first small installment on June 5th. What's going on I think--and in that sense I don't think that Varoufakis was [inaud.], is negotiations of the kind that will find means of coming up with the money from elsewhere inside the IMF, or from the European Central Bank, that will effectively allow them to move one pot of money from one area of debt to another pile of money, to the IMF. Neither of them wants to play an end game here. Although the inner cabinet of ten ministers said June 5th is the absolute deadline and they made a unanimous commitment, and I know this for a fact, every single one of them, that they would not pay the 300 million to the IMF rather than pay wages and salaries.

They will all find the way around getting past that June 5th deadline. And what looks to me the case, although no one admits this in public, is that the Europeans will keep on, or the Troika will keep on drip-feeding Greece, because they don't want them out either. Above all, the Americans don't want them out, I must tell you.

PERIES: And why is that?

PANITCH: Well, because it's a very fragile geopolitical situation, with what's going on in Eastern Europe now, and what's going on in the Middle East, and the Americans don't want a shift in the geostrategic situation whereby Greece, which has always been a very key country in the Mediterranean geostrategically, moving out of the Western orbit.

So I don't think that this is going to get settled. I think that this will continue to be negotiated. There will be a means, I'm pretty sure, of evading these deadlines for payment, or making the payments as occurred with the previous 750 million that was owed the IMF in May, where where the IMF suddenly discovered that Greece had a 650 million account with the IMF and they used that to cover that payment.

I don't think one ought to be paying quite as much attention to this dance of payments and this dance of deadlines, than the media would want us to. Sure, there's intense negotiations going on. But I think they all want them to continue, in a sense. It could get to the point where in exchange for another very significant bailout, if you want to call it that, or delay in when Greece needs to pay its debts, the Greek government will agree to a form of words, and to some measures that they would need to undertake anyway in terms of tax collection, and in terms of rationalizing the pension system and the VAT system, so on, that they'll strike an agreement [inaud.] The Europeans will be able to say, you see, even this government has agreed to structural reforms. And Syriza will say, and will mean, that we're the ones who are implementing these reforms, and we'll implement it in a way that will not penalize poor and working people in this country. That's the scenario we're facing.

And those inside Syriza who are proposing to pull out of the negotiations, return to the Drachma, impose capital controls, et cetera, I think know themselves, I think this applies even to those who are inside the cabinet of that [persuasion], that they will not break the collective discipline, and break away from the majority, even if it's a narrow majority inside the cabinet and inside the party on this issue.

I should also say that they themselves are not very impressive, the left platform, in terms of mobilizing. The type of alternate economy, the type of alternate production, the kind of transitional production that would be needed were one to find Greece outside of the eurozone, or even more drastically outside of the European Union.

PERIES: Leo, let's take that up in the next segment, what you described as being Greece in suspension, Greece in, Greek government waiting to see what the Troika will do, and everything seems to be so much up in the air as you described. Let's in the next segment take up the options available for Greece in terms of both economic development and dealing with this financial crisis.

PANITCH: Very good, Sharmini.

PERIES: Thank you for joining us on The Real News Network.