After a brutal four year austerity offensive that has gravely undermined the quality of democracy and thrown millions into unemployment and poverty, the representatives of the European bankocracy finally find themselves forced onto the defensive. With Greece possibly facing new elections in January and the Coalition of the Radical Left (Syriza) still firmly in the lead, and with the leftist upstart Podemos now polling first in Spain, where elections are scheduled for later next year, the prospect of a break with the neoliberal doctrine in the European periphery now seems closer than ever.

International bankers, European leaders and domestic elites are clearly terrified. EU commission chief Jean-Claude Juncker sparked controversy last week when he called on Greeks to “avoid the wrong outcome” and warned against voting “extreme forces” into power. Juncker, a close friend of Greek Prime Minister Antonis Samaras, even declared that he would prefer to see “known faces.” Last weekend, the EU commissioner for economic and financial affairs, Pierre Moscovici, flew to Greece to implicitly express the commission’s support for the Samaras government. While Moscovici was not as explicit as his boss, he nevertheless declared that the commission has “its preferences” and openly snubbed Syriza’s leader Alexis Tsipras by refusing to meet him.

It is clear that something has changed. To paraphrase Raimundo Viejo, a prominent autonomist intellectual and Podemos organizer in Barcelona, the fear is changing sides. These days, virtually all that leading politicians say appears to be an expression of this fear. “Everything is hanging by a thread,” the Greek finance minister and deputy premier Evangelos Venizelos declared last week, “and if it is cut it could lead the country to absolute catastrophe.” Officials claim that their fears are justified by the reaction of the markets to increased political uncertainty. Greek bond yields have shot up and the stock market lost a massive 20% last week on investor fears of new elections.

Investors are already putting Syriza to the fire before it even has a chance to prove itself. When two senior Syriza officials met a group of investment bankers in London last month, one allegedly circulated a memo in which he dramatically declared that Syriza’s economic plan is “worse than Communism” and “everybody coming out of the meeting wants to sell everything in Greece.” The government has gratefully latched on to this panicky bankerspeak. “Even if we lose [the vote for president],” a Samaras aide told The Guardian, “We will win because voters will blame Syriza for the chaos that will ensue. And that will assure us victory in a national election.” Once again, EU leaders, bankers and Greek elites are in cahoots. This time, though, it’s clearly the bankocracy that’s on the defensive.

Much of their fear-mongering, of course, is wildly exaggerated. As the Greek economist Yanis Varoufakis has shown, the collapse of the Athens stock market was bound to happen anyway – even under a conservative pro-austerity government – as the EU/IMF bailout of the Greek banking system gave rise to a stock exchange bubble that saw the valuation of Greek banks skyrocket for no reason other than the opportunities for speculative gains for Greek oligarchs and US hedge funds. It was always clear that this speculative bubble would have to burst sooner or later – and the Samaras government, fully aware of this fact, clearly prefers the inevitable to happen now so it can pass the blame on to Syriza.

Similarly, fears about higher borrowing costs are misplaced as Greece is currently not borrowing on private markets anyway. Whether Greek debt trades at 5% in secondary markets or at 9% is irrelevant as long as the Greek government itself is not tapping these bond markets. Fears about the EU cutting off emergency credit are also moot as Greece now runs a small primary budget surplus (i.e., leaving out interest payments, it receives more in taxes than it spends), meaning that if it stopped repaying its debts to foreign creditors the government budget would effectively be balanced and it wouldn’t depend on EU money to meet immediate payment needs. Of course this would preclude Syriza from pursuing the kind of expansionary fiscal policy it has promised to its voters, but the outcome would be a far cry from the utter catastrophe currently predicted by Samaras and Venizelos.

Syriza’s achilles heel at this point is the Greek banking system, which remains very weak and which continues to rely on the willingness of the European Central Bank to accept its junk bonds as collateral for cheap ECB loans – basically a form of EU monetary financing of Greece’s private banking system. Ambrose Evans-Pritchard writes that “Mr Tsipras is expecting to receive a call from the ECB within weeks of taking office reminding him that Greece owes some €40bn in support for the banking system. This will be a veiled threat to pull the plug, as [the ECB] threatened to do in Ireland, and came close to doing in Cyprus.” Evans-Pritchard adds that he is “reliably informed that [Tsipras’] answer to any such call will be: “do your worst.””

Tsipras is able to play this game of chicken because he knows that, if the ECB were to cut Greek banks off from cheap credit, the government would have to come to the rescue by nationalizing them. This, in turn, would require the injection of liquidity that the Greek government does not presently have. In other words, the decision to cut the Greek banking system off from ECB financing would compel the government to reintroduce its own currency to save the banks and restart private lending, effectively forcing Greece out of the euro. Tsipras and his advisers are gambling that Europe will be unwilling to push Greece this far, since they realize that Spain would be next.

For Spain to be drawn into the vortex of renewed market panic would obviously spell mayhem for Europe. Greece’s debt has largely been socialized – over 75% of Greek bonds are now held by European taxpayers, the IMF and the ECB – so a Greek default and euro exit would no longer pose a direct threat to the European banking system. But a Spanish default and euro exit would be a different story altogether. Too much financial and political capital has already been invested in saving the single currency to allow a bunch of leftist professors to come along and spoil the party. Or so the leftist professors seem to reason. “The EU is run by statutes and regulations,” Syriza’s shadow development minister George Stathakis, professor of economics in Crete, just told Paul Mason. “I don’t think the ECB would cease funding Greek banks for reasons of political favouritism.”

If elections are to be held in January and Syriza ends up taking power, its leaders will immediately ask Greece’s creditors for a cancellation of 50% of all debts and will ask the ECB to commit to providing low-interest loans to the Greek government for the next 60 years – a form of government financing that is forbidden under current ECB statutes and that the Germans are extremely unlikely to consent to. When asked how a Syriza government would try to fight unemployment, Stathakis put it simply: “The government would create the framework and expand public investment but that’s about it. The private sector would create most of the jobs.” This is hardly the type of Maoist insurgency one would expect to see given the loud and repeated expressions of existential fear in the halls of power.

It should be clear by now that Syriza and Podemos are not the forces of radicalization but of normalization. While both parties are run by weathered leftist intellectuals and activists from a variety of traditions – ranging from Trotskyism to Maoism to Eurocommunism and post-autonomism – their economic programs are far from anti-capitalist. Both parties have long since dropped the confrontational references to debt audits and unilateral moratoriums. Initial proposals to nationalize (and even socialize) the banking system and other key industries have all but disappeared. Syriza’s and Podemos’ leadership are both firmly committed to staying in the euro. For all their supposed radicalism, Syriza’s and Podemos’ most recent economic proposals clearly take their cues not from Marx or Lenin – not even from Poulantzas – but from Keynes and the post-Keynesians.

At the same time, it is clear that in the present context of neoliberal fundamentalism, anything that goes against the interests of finance capital could somehow be construed as radical. It is therefore understandable that Syriza and Podemos are looking for allies in high places – in order to gain credibility and break through the ideological cordon sanitaire that the European elite has thrown up around them. They have been quite successful in this respect. While EU leaders remain stubbornly attached to their self-destructive austerity doctrine, there are some signs that the elite consensus may be shifting – and Syriza and Podemos have recently received support from unexpected places. The influential Financial Times columnist Wolfgang Münchau has declared that the “radical left is right about Europe’s debt.” In its latest economic document, Podemos boasts that even the IMF agrees with its proposals on debt restructuring. And Nobel Prize-winning economist Paul Krugman – a devote Keynesian with little interest in radical politics – has recently referred to Syriza as a “relatively benign” force.

At the same time, there are signs that Syriza’s leadership is seeking rapprochement with local oligarchs. Yiangos Charamboulos, a former chairman of the Greek capital markets committee, told the Financial Times that “Mr Tsipras is changing his tactics and becoming more business friendly. If he forms a government I would expect that he takes on board the recent market reactions and makes an opening to international lenders.” Reuters recently ran a similar report about Podemos, noting how the party has been toning down its radical rhetoric – undoubtedly taking a cue from Syriza’s experience in the 2012 elections, which the party narrowly lost after Samaras waged a successful electoral campaign based on the same type of fear-mongering he is displaying today.

Nevertheless, Syriza’s and Podemos’ critics on the far-left would be wrong to confuse this electoral pragmatism with “selling out.” Both Tsipras and Iglesias have said from the very beginning that they intended to win – and to win, you simply need an electoral majority. These are the rules of the game, and Syriza and Podemos have been very clear from the start that they intended to stick to these rules – to the dismay of some in the movements who would have liked to see a more transformative project emerge from the squares. But ultimately both parties are a reflection of the balance of social forces. Stronger movements would have forced them to maintain more radical positions. Without movements, there would have been no prospect for an anti-austerity government to begin with. The point is not to complain and feel betrayed but to get organized and continue the struggle.

This brings us to the responsibility both of the grassroots movements in Spain and Greece, and of those who sympathize with the plight of Spanish and Greek citizens abroad. Sadly, we do not have the luxury to wait (forever) for the objective conditions to ripen or for our own anti-state counter-powers to rise to splendid perfection. If Syriza and Podemos are not brought into government soon, the grave humanitarian crisis will only further deepen. More schools and hospitals will be closed. More public services will be canceled. More beaches will be privatized. More workers will be laid off. More families will be evicted. More people will die. Much of the damage will be irreversible — if we do not stop them now it will simply be too late. This is not the time for sectarian bickering. A victory of the radical left is urgently needed. It will relieve some of the extreme social pressures that currently inhibit many from taking more direct action. It will provide crucial breathing space to the movements.

At the same time, this sense of short-term urgency and political responsibility should not blind us to the “long-term urgency” of bringing about genuine social transformation. Winning the elections and installing a leftist leader at the head of government will not be enough. The crisis of capital and the state run much deeper than the party affiliation of those in government. As Antonis Broumas and Theodoros Karyotis recently put it, “Today, more than ever, the conquest of state power does not equal the conquest of social power.” The movements will need to define a long-term strategy and develop a visionary project for the radical democratization of every aspect of society. They will need to build a post-capitalist future from below. Greece and Spain remain at the forefront of this struggle, but the left cannot allow its ambitions to be lowered to the point where “Keynesianism in one country” becomes the ultimate horizon of the radical imagination — and, needless to say, international solidarity cannot limit itself to tweets or petitions in support of Tsipras and Iglesias.

At least a serious beginning has been made. The fear really is changing sides. Now let’s give them even better reasons to be absolutely petrified.

Jerome Roos is a PhD researcher in Political and Social Sciences at the European University Institute, and founding editor of ROAR Magazine. Follow him on Twitter @JeromeRoos.

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