Why It's Still Kicking Off Everywhere (13 page)

Around 1 p.m. the whole of Syntagma Square becomes a battle zone. The protesters—not just the Bloc now, but also the socialist youth from the leftist groups, the horizontalists, the nationalists and the
indignados
—make repeated charges up the steps of parliament towards the phalanx of visored riot police, to be repulsed by stun grenades and thick gobbets of gas.

In the lulls there are mini-confrontations between trade unions and the Black Bloc; the Communists shout that the anarchists are provocateurs. At no point do the Communists and trade union stewards join in the fighting: eventually they form up and march away. As in London, there are rivers of antagonism flowing between the anarchists and the organized labour movement. The difference here is that this forbearance, and the organization imposed by the workers' movement, is all that stands between order and chaos.

Now, in mid-afternoon, things become eerily quiet. With the famous riot-dog Loukanikos leaping around joyfully at their head, the youth form up behind anarchist banners and try, once again, to march on parliament. The streets are littered with the debris of missiles. By now everyone is masked against the tear gas—the journos, the rioters, the police—and there is a weird silence, except for the occasional pop of tear gas or smashing of glass.

In the side-streets—abandoned by police, shops shuttered—you see isolated individuals, masked, texting; some people are hammering at a piece of marble, breaking it up to make rocks. A few yards away, couples who have been protesting walk hand in hand, everybody shambling wearily in different directions. It's like a scene from a Lowry painting, but imbued with menace.

I decide to walk back to my hotel, down the wide thoroughfare that links Syntagma with Omonia Square. Usually clogged with cars, it's completely clear. Crossing a side-street, I pass a group of youth protesters occupying the street corner; it's the same on the next corner, and the one after that. Central Athens is under the control of the protesters—not that they are trying to exert control, but, nevertheless, they are in charge. Every shop is shuttered; some proprietors have closed out of fear, others because the shopkeepers' association declared a three-hour shutdown as part of the general strike. There are no bystanders.

Two young lads take their shirts off, wrap them around their heads and dance in front of a fire they've lit across one of the side-streets, just out of projectile range—they hope—from a platoon of police. The police tactic is to make regular incursions into this eerie mayhem. They are gradually breaking it up, restoring uncertainty and danger for the rioters but not exactly ‘order'.

Glued to my iPhone, I wander into a Henry Miller novel. I'm in a neighbourhood with transvestite prostitutes on the street corners; a barefoot drunk is slumped on the ground, his face deathly white; a woman hops mechanically from foot to foot, hair matted, eyes flickering; a junkie couple argue in the doorway of a shop; migrant beggars sit on the sidewalk, one holding a cardboard placard scrawled with the words: ‘I am hungry.' A group of African street-sellers wanders along, smiling; there's nobody to buy their wares, but nobody to hassle them either. There are no police, no ordinary people, no traffic. Just silence.

For a few hours the protesters more or less control central Athens. They don't smash many banks—but they do break the resolve of German Chancellor Angela Merkel. And, technically, they bring down Papandreou's government.

At 9 p.m., just as the last Molotovs are being thrown, Merkel abandons the idea that banks should lose money as a result of giving Greece leeway on its debt repayments. Shortly afterwards, the EU and IMF agree to waive conditions on the €12 billion tranche of bailout money that will tide Greece over until September 2011.

Papandreou, meanwhile, is in a panic. First, he attempts to create a government of national unity. He invites the centre-right opposition party, New Democracy, into a coalition and even offers to stand down as prime minister. But who would want to govern Greece? New Democracy spurns Papandreou's offer, so he declares the formation of a ‘new government', reshuffling the cabinet. For hours, one insider tells me, he fails to achieve even this: ‘nobody will pick up the phone'. The politicians are safely shuttered away with their bodyguards in their private offices, unable to communicate face-to-face.

As Papandreou goes on TV to announce the reshuffle, car horns begin blaring across Athens. In Syntagma, where their camp has been razed and trampled by the police, the
indignados
move slowly back, knocking tent pegs in and dressing head wounds. Loukanikos the riot dog has become world-famous thanks to a YouTube montage of his exploits, and somebody has created a Twitter account for him (@rebeldog_ath). He lolls exhausted on the pavement, with a look that seems to say, like Arnie, ‘I'll be back.'

The tax collectors

The next morning, just around the corner from the Greek finance ministry, I spot a group of fashionable young women sitting around a trestle table in the middle of the street, beside the tents where they spent the night. They are fresh-faced, devoid of the tattoos and nose-studs you see among the
indignados.
They could pass as young civil servants, accountants or lawyers—and that's exactly what they are.

They are part of a group of 100 graduates who, eighteen months before, had passed the exams to become tax collectors and customs officials in the finance ministry. But there is no money to employ them. Most are now living with their parents, eking out a living on benefits.

Once the
indignados
had taken Syntagma, these quietly angry young women decided to set up camp right on the doorstep of the ministry they'd hoped to work in. Anna Palamiotou, in her early twenties, has the composure and perfect English of a ballet tutor or an upmarket ski coach:

The whole problem is: our future is unpredictable. Even our short-term future. In three to six months' time we don't know what will happen. We hope, of course: that's the best we can do. We try to keep hoping, personally, as a nation, as a community.

The irony is that more tax collectors and customs officers are exactly what Greece needs. It was the culture of ‘respectable'—and therefore acceptable—tax evasion that helped sink the country's finances in the first place. Now, all parties claim to want it fixed. But with the deficit so high, the Greek state has been ordered to shrink, not grow: so, despite their educational qualifications, Anna and her friends are stuck here on the street.

During the riots, they were shocked to see masked anarchists and Kevlar-clad riot police rampaging down the street they are camped in. ‘They crushed our chairs,' Anna says, arching her eyebrows at a pile of plastic shards, like a schoolteacher might tut-tut about an untidy classroom. But they've found some new chairs, where they sit texting, iPodding, chatting and sipping coffee. What would it take to make them leave? ‘We have no plans to,' she says.

Following the cabinet reshuffle, Papaconstantinou is out of the finance ministry. He has been replaced by Evangelos Venizelos, a big-bellied party operator who has never run a finance ministry in his life. Anna's message to Venizelos is stark: ‘He has to take some measures, of course. But he has also to know the people have made many sacrifices and we have a limit beneath which we can't live. He has to respect us.'

It was against this deep, calm intransigence that the strategy of both the EU and PASOK would begin to founder.

Who pays?

Since their summit at Deauville in October 2010, Merkel and Sarkozy had been haggling over a crucial detail of their euro-wide bailout scheme: when and how to impose losses on the banks and pension funds exposed to Greek bad debt. Sarkozy, backed by the ECB, insisted that the private sector should not be forced to take losses; Merkel, under electoral pressure, favoured imposing losses on the banks, but only after 2013. Now, though, 2013 was looming, as was the need to design a permanent European bailout mechanism to replace the one improvised in 2010.

As the riots raged, extensive briefings were quietly given to the press, warning that any private-sector losses arising from a Greek default would trigger a Lehman-style event that could start a second global recession.

Bank analysts frantically began trying to calculate the impact of a Greek default—but it was impossible. Even now, three years after Lehman, the opacity and complexity of the financial system stood in the way. Greece, by this time, had debts of €340 billion. One half of these debts were held by Greek banks and pension funds, which meant that if the country defaulted, the entire Greek (and Greek Cypriot) banking system would go bust. Because the Greek state, too, would be bust, it would be unable to bail out its own banks. In case of an uncontrolled default, there was a high likelihood that ATMs would close and people would lose their savings.

The other half of Greece's debts were held by northern European banks and states, and by the ECB; they, too, would be dragged into fiscal crisis by a Greek default. But there was even more to worry about.On top of the actual debt, the global derivatives market had facilitated the erection of default insurance positions worth an estimated $1 trillion. These ‘credit default swaps' would act like an accumulator bet, and significant losses on Greek debt would explode like an anti-tank missile, straight through the armour of the entire global system.

It would, said one bond market contact, be a ‘Credit-Anstalt moment': he was referring to the Austrian banking collapse in 1931 that turned the Wall Street Crash into a global slump. Syntagma Square had become the front line of the global financial system.

Merkel told journalists: ‘We wouldn't be able to control an insolvency. We all lived through Lehman Brothers. I don't want another such threat to emanate from Europe.'
¹

So for the second time in three years, banks and hedge funds who had lent money speculatively to a basket-case entity would be indemnified by the state, in this case the EU. But the EU—it turned out—would not be strong enough to cope. And meanwhile the problems of social order and legitimacy—in Greece and across the eurozone—were only just beginning. Two weeks later they would erupt, spectacularly, in Syntagma.

One thousand rounds of tear gas

29 June 2011.
The Greek parliament is due to vote on the EU's austerity plan at 4 p.m. A general strike is under way, causing energy brownouts and paralyzing Greece's airports and ports. The union marches are, as always, uncoordinated. In central Athens, the Communists are blocking one entire four-lane avenue, headed by stewarding groups toting chunky banner poles and crash helmets; the PASOK unions are doing the same a few streets down. The nationalists are still clustered around the iron fences and makeshift barricades in front of parliament. The mood is gloomy.

‘We're facing two routes to bankruptcy,' one leftist protester tells me. ‘There is no positive outcome. I shouldn't be saying this, because I am supposed to be against it—but we need a Chirac, a de Gaulle. Where is Chirac? Where is the leadership going to come from to sort this out?'

Like many on the left, she fears a nationalist or authoritarian outcome to the crisis. But the Greek left—pitifully weakened by its divisions—seems unable to go beyond oppositional slogans. Faced with this, many horizontalists have undergone a kind of ‘regime change of the mind'—switching off from mainstream politics, living haunted lifestyles among the oil paint stores and graffiti-encrusted walls of Exarcheia. ‘Our generation,' she continues, ‘that's spent their whole lives since Genoa fighting for change, feels exhausted.' A burst of explosions in Syntagma Square cuts the conversation short.

It is 2 p.m. I head for the square, but it is hard to get there. A tide of people is streaming backwards, away from the fighting: earth mothers, grandmothers, old men with their shoulders hunched to their ears, gasping for breath, fleeing the violence and the tear gas.

Suddenly there are only thirty metres of empty street between me and a melee of anarchists and riot cops. A man grabs me, his face white-caked, finger stabbing towards the parliament building: ‘These cops,' he says,

paid for by the Greek people, defending the Greek parliament so it can sell the country to the international banks! I'm a salesman in a furniture company: we lost 80 per cent of our turnover in a single year. What am I supposed to do?

The
indignados
regroup inside the square. At the back are those who are prepared to resist, but not attack. Young women run up to you and squirt you in the face with Maalox as a kind of gesture of solidarity. Some people are singing. We're all under the trees, densely packed, tense: everybody's eyes are glued to the few hundred protestors who are slugging it out toe-to-toe at the top of the square, near the Parliament. Tear gas and stun grenades rain down. Now, to the beat of alter-mondialiste bongo music, a few hundred
indignados
surge up the steps towards the parliament. I go with them, filming on a tiny stills camera to avoid the attentions of the police and some protesters, both of whom have taken to attacking mainstream TV crews.

All over the square there is the incessant clatter of people breaking up the marble balustrades and steps to make missiles. A tear-gas canister spirals down and lands at my feet; a guy in a hoodie tries to boot it, but he slips on something and does a parkour-style backflip. Another guy kicks it but it spins into another group of rioters, who kick it back, and it becomes—for one of those fleeting moments that lasts a flickering hour amid the violence—an extreme-sports version of five-a-side football.

I reach the top of the steps just in time to see a group of twenty policemen converging on one guy. As he disappears beneath the steel-tipped batons a man beside me, his friend, lets out a howl of fear and despair. As we retreat, I realize the liquid we're slipping around on is blood.

On the shuttered frontage of the Hotel Grande Bretagne somebody has spray-painted: ‘Fuck May 68, Fight Now'.