Five years after OXI: Lessons from Greece's austerity struggle

Five years after OXI: Lessons from Greece's austerity struggle

On July 5, 2015, over 60% of the Greek population voted in a referendum against the EU and Eurozone austerity policies. This event was not just an election, but a clear expression of the desire for self-determination and a new economic policy. Greece's political landscape since 2011 has been marked by major mobilizations and the rise of left-wing parties that have raised arms against the burdens of the economic crisis.

The economic crisis that began in 2008 was triggered by the bursting of a real estate bubble in the USA and resulted in massive loan defaults. Greece was hit particularly hard because the conservative government presented manipulated budget figures in 2009. In order to avoid insolvency, Greece applied for aid loans from the IMF and EU in 2010, although these were tied to strict austerity requirements. The Troika, consisting of the IMF, ECB and EU Commission, closely examined the implementation of these requirements.

The path to voting

At the same time, the Greek economy collapsed by more than 25%. Over 50% of young people were unemployed and a third of the population lived below the poverty line. This led to massive protests and the emergence of social movements inspired by similar movements in Spain. In 2015, SYRIZA, a small left-wing party, emerged as the strongest political force with 36% of the vote and formed a coalition with the anti-austerity party ANEL.

A referendum was announced under Prime Minister Alexis Tsipras to check approval of the eurozone's austerity policies. On July 5, 2015, 61% of voters voted “No” (OXI) to the austerity measures. However, this clear mandate for a break with austerity cast doubt on Tsipras' resolve just three days later when he applied for new aid loans. On July 13, 2015, the Greek government signed a new memorandum containing even tougher measures.

The consequences and reflections

The political leadership was blamed for this capitulation, and not the mobilized population. Despite the high expectations placed on SYRIZA, the party was unable to bring about the changes promised. Tsipras said he had no regrets about calling the referendum as it was important for the dignity and feeling of the people of Greece. He described this period as historic and acknowledged the euro zone's fear of risking a domino effect that could inspire other indebted countries. The new finance minister, Euclid Tsakalotos, signed the Troika's tough austerity measures, which included pension cuts, tax increases and privatization, two weeks after taking office.

Today, Greece is described as a model of economic success, but with third-lowest wages in the EU and a GDP that has not reached 2008 levels 17 years after the crisis, the Greek experience raises essential questions about the role of the EU and the possibilities of left-wing government projects. Brexit 2016 also revealed a political shift in Europe, with right-wing forces gaining influence, while the left continues to struggle to develop solidarity and effective strategies.

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