“We can neutralise the neoliberal measures in the agreement”

Georges Katrougalos, Greek Minister for Labour, tells French newspaper l’Humanité about the room for manoeuvre Tsipras’s government still has left, even in light of the memorandum extorted by the Troika on 13 July. In his view, the Greek left and Syriza must remain in power to take advantage of this room for manoeuvre.

Athens, Greece, special correspondent. Given the agreement extorted by the institutions in Brussels on 13 July that the Greek government must implement, will you still be able to carry out the policies you intended to?
Georges Katrougalos: That is the very issue at hand right now. The situation is much more complicated than before, there’s no doubting that, because we have new restrictions that come from the memorandum. However, we mustn’t overlook one thing: the way the agreement is worded still gives us room for negotiation when it is applied. I can already foresee that applying this agreement will be a battlefield, just like the negotiations were. To give you an example, my ministerial portfolio includes the big issues of employment law and worker protection, and we now see ourselves required to change legislation and introduce “European best practice”. For us, “European best practice” means the European social model; this isn’t revolutionary, it has an emphasis on social dialogue and collective bargaining, etc. They, at least the International Monetary Fund (IMF), see “European best practice” as the latest wave of deregulation, like the Macron law in France. Given these conditions, our strategy is to show the European dimension of what is currently happening in Greece. Today we ask the European Parliament to get involved in monitoring the implementation of the memorandum. In my own scope, I have asked the Employment and Social Affairs Commission to monitor the negotiations on employment and pensions.
What are you expecting from the European Parliament in this context?
GK: It can play a number of roles: guarantee the transparency of the discussions on the one hand and on the other establish, as I see it, that Greece genuinely is where the Europe of the future is being created. If “European best practice” in terms of employment effectively imposes social deregulation, the process won’t stop with Greece. France, Germany and others will follow suit. Successfully neutralising the neoliberal measures in the memorandum, which is what we intend to do, hinges on two factors: making the negotiations truly European and the social movement in Greece.
You talk of “neutralising the neoliberal measures of the agreement”, weren’t you able to do that during negotiations? 
GK: We underestimated the resolve of the extreme neoliberals in the European Union; they were prepared to destroy the Greek economy completely to extort this agreement from us. Or perhaps we overestimated the level of democracy that exists within the European Union. At national level, democracy has worked. We held a referendum and the people made themselves heard, but the prime minister found himself faced with an impossible dilemma, a diabolical alternative. There was a risk of totally destroying the real economy, with banks closed for unlimited amounts of time. It was a financial coup d’etat. The banks weren’t closed because they had to; Greek banks didn’t have solvency problems like the banks in Cyprus or Ireland, there was just a problem accessing cash. In the same circumstances, during the 2012 Greek elections, the same problem was solved by raising the limit of how much cash could be accessed… this time the European Central Bank (ECB) decided to hang us out to dry by limiting access to liquidity for Greek banks. It was a political weapon that was used against us.
We were forced to sign the agreement. Now we have to try and pursue left-wing policies. It won’t be easy, that’s for certain, but the alternative is to stop governing and hand over the power to the parties of the old system that brought Greece to where it is today. In fact, it’s important to emphasise that our relations with the European Institutions aren’t our only problem; here in Greece we also have the problem of becoming truly democratic and breaking with oligarch powers. I couldn’t countenance handing back power to the political parties that belong to this old system. We have to try and pursue left-wing policies, even if it is very difficult.
What steps to you plan to take to do so?
GK: We want to fight against oligarchy and tax fraud. That is our job! It won’t be easy because the tax department is under-staffed. The institutions agree with us on this point; they want to combat tax fraud. For us, the goal is to achieve social justice by spreading the tax burden.
But when it comes to redistribution measures, the European institutions reject your proposals each time.
GK: It’s true, they’ve always been very hostile to social justice and tax redistribution… The most striking example is when we proposed a special tax on people with an income over €500,000 a year!
You mentioned the referendum which was a very clear democratic expression in Greece, with a huge number of young people and low-income voters taking action and voting “no”. Why weren’t you able to take advantage of this power?
GK: We weren’t able to… The balance of power was not in our favour, to crushing effect. This is why I say that democracy worked at national level, but that it failed completely at European level. Yet the referendum did manage to stem the tide of austerity, it is no longer a huge and inflexible mass. European socialists will struggle to identify with purely neoliberal measures. I think they fear that if they accept this neoliberal approach lock, stock and barrel, they were disappear from the European political landscape, as we saw happen to Pasok in Greece.
Ordinary people in the street are saying that by voting “no” on 5 July or, for some of them, by voting for Syriza last January, they took a risk, the risk of losing what little they still had in order to put a stop to austerity, and today they think that ultimately Tsipras hasn’t lived up to their expectations. What’s your reaction to that?
GK: I understand why they are disappointed. The referendum was the highest expression of democracy in Greece. But on an economic level, we didn’t have a realistic alternative. It was that or the destruction of the real economy. Given the incredibly tight timeframes we’re working with, I don’t see an alternative.
After the resignation of Alexis Tsipras, and with elections on the horizon in September, a faction of Syriza has split from the party to create a new one, Popular Unity, which is laying claim to the legacy of the “no” vote in the referendum. Can the government you are part of still stand for this movement against austerity?
GK: I believe so. Our problem isn’t the new party that has been created, it’s not a civil war among the left. In fact, the more left MPs, the better! The real challenge is ensuring the left secures an absolute majority and can form a leftist government that can try, in the face of constraints and restrictions, to apply leftist policies. So I see no issues with comrades who have different ideas about governing… The real problems are still the Greek oligarchy and neoliberalism!
To extricate the country from the vice, Popular Unity proposes to introduce a number of measures including stopping repaying the debt or approaching emerging BRIC countries for support. What do you think to these new approaches?
GK: These are things we’ve tried to do since we came into office, in truth. We’ve been in touch with everybody. We have sought to forge links at all possible international levels: from Russia to Venezuela, and even Iran! The answer was the same everywhere: “We can’t give you support at a level that would replace the loans from the European Union”. I am not opposed to discussing alternative plans at all, quite the opposite. But in this specific case, there were no options at any time. The only alternative plan we saw would have been to destroy our country’s economy!
Will this agreement give the Greek economy a boost?
GK: Not only is the economy very fragile, but at the moment we don’t know if we’ll be able to offset the number of elements in the memorandum that will add to the recession. It also depends on whether we receive the promised €35 billion and on our ability to apply the other elements of our policies. There is a lot at stake: the day is far from won, but all is not lost.
So is it your strategy to progressively and steadily reverse the elements of the agreement and the monitoring that has been imposed on you?
GK: Exactly. We want to identify and use the loopholes that exist in the memorandum. Let me repeat, it’s not just a question of finding alternative measures: what we agreed is very open to interpretation in a number of cases. This is why we need to negotiate at European level, and not just bilaterally with the institutions.
What is open to interpretation?
GK: The essence of the memorandum is transforming Greek society and relations between the state, the markets and citizens. Deregulation would spell the end of employment law and social rights – that’s a critical point. I’m not saying that because it falls within my scope as minister for labour. Greece has been chosen to play out this experiment of social destuction because the political system was very easy to manipulate, but the goal is without a doubt to roll this out across the rest of Europe tomorrow.
The European left has followed your struggles against austerity and today there is some distress about the wall you have hit. What message do you have for the rest of Europe?
GK: Solidarity is very important. It’s good that people see that what is happening in Greece concerns the whole of Europe. I don’t think we should be disappointed or distraught. We remain true to our ideals. But one also has to appreciate the complexity of the situation. If we win the elections, as I hope we will, we will have a second chance for Greece and for Europe.

Interview by Thomas Lemahieu, published on 26 August at L’Humanité, with the title: Georges Katrougalos « Nous pouvons neutraliser les mesures néolibérales de l’accord » Translation: transform! europe