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The Cafe
Transcript: The end of the European dream?
The Cafe travels to Athens, find out what the future holds for the birthplace of Western democracy.
Last Modified: 23 Oct 2012 06:29

Please read the full transcript for The Cafe episode Greece: The end of the European dream? below:

Mehdi Hasan:
Greece isn't just broke; it's close to being broken. An economic depression has pushed society to the extremes … with fascists and anarchists competing for control of the streets, and immigrants fearing for their safety.

Hello and welcome to a new series of The Café. I’m Mehdi Hasan and this week we're in Athens, a city reeling from a seemingly never-ending recession.

The Greeks invented the word chaos to describe complete confusion and disorder. Crippling debts, rising taxes and savage spending cuts have pushed the country today to the brink of economic and social collapse. Queues at soup kitchens are lengthening, the number of homeless people is mounting, and the suicide rate has doubled.

Greece may be the birthplace of western democracy, but two elections in the space of just two months suggests a dysfunctional political system, and it's the IMF and the Europe an Union that seem to be calling all the shots around here.

Some say the Greeks brought this on themselves, that they're lazy and feckless and don't pay their taxes; others blame the country's membership of the euro. So can Greece escape this crisis? Or is it forever cursed with being the economic basket-case of Europe ?

Joining us in The Café are Nikitas Kanakis, the Greece director of the charity Doctors of the World. He used to focus most of his attention on refugees, but now has to also deal with the humanitarian crisis affecting ordinary Greek families.

Eva Kaili was the youngest member of parliament for Pasok, the Greek socialist party, which ruled Greece for most of the past four decades. Pasok is now the junior partner in the current coalition government.

Costas Lapavitsas is a Greek economist and a professor at the University of London. He's the author of the new book "Crisis in the Eurozone" and believes Greece must leave the euro if it's to survive.

Yanos Gramatidis is president of the American Greek chamber of commerce, representing the biggest businesses in the country. He supports both austerity measures and structural reforms to the economy.

Konstantina Pilioura is a post-graduate law student at the University of Athens. She's part of a new generation of Greeks who are looking for work, but living in a country where youth unemployment stands at more than 50 per cent …

and May Zanni is the deputy international secretary of New Democracy, the biggest party in government. She's adamant that Greece should stay in the euro and comply with its international commitments.

Thank you all for joining me here in The Café in Athens. I want to kick off with you Yanos. You're a businessman, you know what's going on in the economy out there, how bad is it? how bad a state is the Greek economy in?

Yanos Gramatidis:
The economy is actually in a very bad shape. We have thousands of small and medium sized businesses locked down, impossible to operate under this situation because there's a lack of liquidity everywhere, and because of the austerity measures suffered primarily by the population, you don't have consumers anymore, so we really need to boost consumption so that we boost the economy again. At the same time, the state itself, the public economics, are in a very bad situation. We have an enormous debt and, at the same time, we have a very significant deficit, which means that we are spending more than we would use.

Mehdi Hasan:
Costas, you're an economist, give me some numbers. How bad is the Greek economy?

Costas Lapavitsas:
I think the Greek economy has entered the depression.

Mehdi Hasan:
Not just a recession a depression?

Costas Lapavitsas:
Not a recession, it's no longer a recession, this is a depression. The figures are comparable to the great depression of the 1930s in the United States and elsewhere. Unemployment, for instance, is already almost 23 per cent, youth unemployment is well over 50 per cent, and it's bound to rise in the coming period. You add it up, this is war-like conditions.

Mehdi Hasan:
War-like conditions?

Costas Lapavitsas:
War-like conditions. I know it's hard to believe when the sun is out and when you're in this place in Athens, but do believe me, Greece; the Greek economy is dying on its feet. These are depression conditions and it's easy to confirm even further if you look at investments which have been contracting for five years on the go. Consumption, which has also begun to contract very seriously. People are pulling back, they're not spending like they used to. Exports have reached a ceiling, and they're not expanding anymore and now public spending will also be further reduced this year, so things are bound to get worse.

Mehdi Hasan:
It's only gonna get worse. Things aren't getting better.

Costas Lapavitsas:
Basically Greece is withering away, that's basically what's happening. It's dying on its feet, and it will continue to do so as long as these policies continue to follow.

Mehdi Hasan:
May, you're with New Democracy, the ruling party…

May Zanni:
I am.

Mehdi Hasan:
…who is to blame for all this? How did Greece get into this condition where the economy is withering away?

May Zanni:
It's not a recent phenomenon. what's driven us here is, I would say, 30 years of the wrong model being used, and that's why I’m thinking there's no quick fix solution here, what we need to do is restructure everything really.

Mehdi Hasan:
So it's a domestic problem. When i talk to Greek people, there seems to be a divide. There's some people who say this is our fault, we got here through our model, through overspending, through borrowing, through not paying taxes. There's others who say no, it's the fault of the euro, the Europe an Union, the Germans. Where do you sit in that debate?

May Zanni:
It's very easy to just point the finger elsewhere and say it's not us, it's the foreigners or the euro, but that's not true. I don't believe we've been in a better shape if we weren't in the euro, or if we weren't helped. I mean we are being helped right now by the EU and the IMF and all that, we just have to look back and see what went wrong and see what we can do right now, where we stand.

Mehdi Hasan:
Eva, you were in parliament in the Pasok party, when Pasok was in government, when this crisis intensified, do you share may's view that you can't… it's too easy to blame foreigners and Europe ans?

Eva Kaili:
Well as a part of EU, but I do believe that we could have handled the crisis better. So it's a matter for Greek politics in the last 30 years, yes indeed, but also the Europe an Union didn't manage to find the right recipe to get us out of this crisis, out of this mess, and as you see now it's not a Greek problem it's a problem of Spain, Italy, a banking problem that's all over the world. So I think that the combination of these two problems created such a huge crisis that's almost now a depression in Greece, so I think that we need to find a solution altogether and it's not that we ask for the EU to give us something, or to lend us money without paying back, we just need some time to fix our economy, but we also need time for the whole Europe an Union to be more stabilised and to be able to get our markets over the recession. So it's not just a Greek problem, it could cause a domino effect all the decisions made for Greece.

Mehdi Hasan:
Nikitas, tell me as someone who's a member of the middle classes, middle class job, a dentist, what's your situation been like over the past few years?

Nikitas Kanakis:
It's getting worse year by year, actually the most of the people in the middle class have lost more than 25 per cent to 30 per cent of their income, in the case of dentists, they have lost even about 50 per cent of their income.

Mehdi Hasan:
That applies to you then,

Nikitas Kanakis:
Exactly, yeah and the worst is that it is not a really clear future but even if, beside the people of the middle class that still they can phase the problem, the very poor people that we see in our organisation, they suffer and the first thing we need to do is stabilise the bottom level. If the people cannot survive with dignity, then we cannot make reformation, we cannot change things, and we cannot have a future.

Mehdi Hasan:
Costas, I wanna come back to you. you're someone who thinks, am i right in saying, that the fault can be placed elsewhere from Greece, that it's not the fault of the Greek model, the Greek economy per se for the crisis as we find it now, it's the fault of the euro or the Eurozone?

Costas Lapavitsas:
I’d be the last person to say that the Greek economy and Greek society doesn't need root and branch reform and change. I’d be the last person to say that. Many, many things are wrong in Greece. and incidentally the people who are saying that they're gonna change everything in Greece, they are precisely the people who brought us to this pass. It's very important to say that. Suddenly, belatedly, they've realised that things are wrong in Greece. Where have they been all these years? However, it's very, very important to start from the general, and the general is that this is a Eurozone crisis, this isn't a Greek crisis. This is a crisis that essentially you find in Portugal, in Spain, in Ireland, and critically in Italy and elsewhere. It's a problem of the structures of the Eurozone, it's a problem of the monetary union and how this has panned out and let me put it to you differently. The structural weaknesses of the Greek economy were here 15 years ago too. Greece wasn't bankrupt and wasn't about to become bankrupt, and it did never 25 per cent contraction of gdp at that time. Things were wrong, it was an unequal society.

Mehdi Hasan:
But it wasn't like it is now.

Costas Lapavitsas
But it wasn't dying on its feet.

Mehdi Hasan:
Well let me ask Yanos. When you hear Costas make that point that, you know, you talked about a broken Greek model, but that model existed 15 years you weren't bankrupt, so how can you blame the model, rather than say the euro has cost us this?

Yanos Gramatidis:
Well I have a slight different impression. i believe that the international crisis, the world crisis, three years ago unfolded the problems of the Greek economy, and made them obvious, and that's why we had that explosive exhibition of the Greek problem. the country for many years was not competitive and that's why we see that we don't see many foreign investments, direct investments for this, because we are competitive. We don't have a tax system which is stable and fair. We don't have institutions to fight corruption, and we have to do something about it sooner or later because we accused that we have corruption in this country. Yes, we have corruption, but we have to fight corruption somehow, and we have to import best practices for this.

Mehdi Hasan:
Well we'll come back to corruption in a moment. I just wanna bring in Konstantina. You're not an economist or a politician, you're a student, tell me this, what do you and your student friends, where do you place the blame? Do you think it's a Greek problem or, as Costas says, it's a problem of the Eurozone for which Greece is being unfairly scapegoated?

Konstantina Pilioura:
To my opinion it's both, but we have to slightly distinguish the two. It's the Eurozone problem that affects us and it's the Greek problem that has some inherent weaknesses, let's say. In Greece the politicians didn't do what they had to do best that was to give the right example. So I think that they give them the right to do all those things that now the global community, you know, blames Greece for.

Mehdi Hasan:
Costas, can the Eurozone problem be solved by Greece pulling out of the euro, what's being called Grexit?

Costas Lapavitsas:
No, I don't think so. I don't think so. I think this is wishful thinking. i mean, perhaps i could explain. The Eurozone is a monetary union, monetary unions are very hard things, very rigid things, particularly monetary unions such as the one in Europe . When a weak economy chooses to join it, it chooses to follow certain rules which it might or might not be able to follow depending on its own internal structures. quite clearly the whole of the periphery of the Eurozone has not been able to abide by the rules. Greece being perhaps the worst case.

Mehdi Hasan:
But would Greece be a better place?

Costas Lapavitsas
Oh yeah. I think pulling out of the Eurozone, in my book, is the first step to Greece putting its house in order. I think it's the first step to reversing the policy of austerity to give the economy a breath of fresh air.

Mehdi Hasan:
Let me ask Eva.

Eva Kaili:
No, I disagree on that. Even if we exit the Eurozone, it would be the same thing. They would create the same problems. They have to change their mindset, and they have to change the policies, and the problem is not being in the Eurozone. The Eurozone creates, if you want, security net for us, for Greece, so i do believe that this is a minority saying that Greece will be better leaving the euro. This is something that would take us decades back and i do think that our problems can be solved. We've already started doing that. We have cut out spending, over l50 per cent, so exiting now the euro would just make it easy for people that want to make money out of Greece for the banks, from people that are waiting to buy land or to make investments more cheap, so would lose our value everything in Greece, so i do think…

Mehdi Hasan:
And what you're saying is the majority view, I believe, that most Greeks don't want to pull out of the euro?

Eva Kaili:
It's like the 80 per cent of the majority I talk to people all the time from all the parties, even if they voted against the government, they wouldn't vote for Greece to leave the Eurozone.

Mehdi Hasan:
Costas, you're in a minority, is what Eva's…

Costas Lapavitsas:
Of course…

Eva Kaili:
Of course.

Costas Lapavitsas:
…but I’m used to it. But the thing that's not being realised in this country is that it isn't a matter of choice, this is what's happening.

Mehdi Hasan:
You're saying it's inevitable, regardless of that.

Costas Lapavitsas:
I’m saying that this is the direction of events. you know, when I and a few others said, two and half years ago, the problem is the euro, people thought that we were lunatics, madmen, now everybody accepts that the euro is a problem. And everybody realises that the position in Greece…

Eva Kaili:
Who accepts that the euro's a problem?

Costas Lapavitsas:
The whole of the Eurozone accepts that, and everybody realises that Greece in the euro is a problem, that's why you have this…

Mehdi Hasan:
May, let me ask you.

Eva Kaili:
They all say that we should stay in the Eurozone.

Costas Lapavitsas:
Let me just come back to the Greeks though. Let me just come back to the Greeks. Now, according to the polls, 80 per cent of the Greeks are in favour of staying in the euro. Actually if you finesse the question, it comes out different now. If you ask people, are you prepared to make any sacrifice to stay in the euro; it's actually much less than 80 per cent. But let me put it to you differently. Even 180 per cent of the Greeks said we want to stay in the euro; it would make very little difference.

Mehdi Hasan:
We'll let me bring in May on that point. New Democracy is signed up to the bailout, signed up to the euro, but what if it's not about whether you want to do something or not, what if it's out of your hands? Is it inevitable that Greece is heading out of the Eurozone?

May Zanni:
I don't believe that. No, no, no, no, no, I don't believe in anything being…

Mehdi Hasan:
Bookies are placing their bets right now.

May Zanni:
Well they do their business and we do ours, I don't believe… we're masters of our destiny. We change, we do what's needed, we, you know, follow…

Mehdi Hasan:
Are you really masters of your destiny when you have a troika that kind of tells you how to set your economic policies, what cuts to make when, where? Are you really masters of your destiny? you really believe that?

May Zanni:
I think it's easy to say oh we've lost, you know, our sense of self over these, and quite a few people take advantage of the presence of the troika whenever they're in Athens.

Mehdi Hasan: This is the Europe an Union, the Europe an Central Bank and the International Monetary Fund, sure.

May Zanni:
Exactly. Exactly, and I’m just saying let's not look for scapegoats, let's reason out what needs to be done. and i don't think leaving the Eurozone will help. if nothing it will add to our problems. and we'll be, i don't know, it will take us years and years.

Mehdi Hasan:
Well let me ask Yanos here, leaving the euro is not what the majority of Greeks want, it's not what most political parties want…

Yanos Gramatidis:
It is a nightmare scenario.

Mehdi Hasan:
…not even syriza, the anti-austerity opposition party, wants to leave the Eurozone. Greek business, I’m assuming, doesn't want to leave the Eurozone.

Yanos Gramatidis:
Absolutely not.

Mehdi Hasan:
So what do you do about the fact that austerity, the preferred solution to this problem, doesn't seem to be working? You keep doing the same thing again and again, and the Greek economy keeps contracting again and again.

Yanos Gramatidis:
well you're absolutely right, i mean we can't go on like this. austerity, the way it was imposed upon the Greek people, it was the wrong decision because instead of the government going to reuse public spending, they went to the most obvious aspects, think the pensioners and think the workers and the private employees. it was wrong. this is what created the austerity.

Mehdi Hasan:
Well let me ask the two representatives of two parties that are in government. is this government, the current Greek government, going to lay off as many public sector workers as some people, like Yanos, would like to see laid off? Is that really gonna happen?

Eva Kaili:
well I don't know if it's going to happen, but we have retirement, early retirement, from a lot of people so the public sector is shrinking quite, I mean, seriously, in a serious way, and we need three or four years to make it. i think we'll get there, so I don't think that's the main problem. The problem was to create…

May Zanni:
I wish also talk about the social dimension of this. We already have over a million unemployed…

Eva Kaili:
so we just add to the unemployment, we wouldn't solve anything.

May Zanni:
what I’m saying is that there are other ways of doing it. of course people are going to be laid off, but you can't just take a brush and say that's it.

Mehdi Hasan:
Well let me ask…

Eva Kaili:
Let's say it's not a dilemma, it's not austerity versus euro. So it's not you have to decide if you want to leave the Eurozone so it's no more austerity, that's a dilemma that's fake. the thing is that we have to create growth with some time to do so, to do all the reforms, and we can do it in a better way if we stay inside the Eurozone because our whole economy is based in a different way than Argentina, for example, is working, is producing. it's a whole different economy, so that's…

Mehdi Hasan:
argentina, which defaulted on its debt about ten years ago.

Eva Kaili:
of course.

Mehdi Hasan:
let me just bring in Nikitas. there are some people, people like myself live abroad, we look at Greece, the stereotype is the reason the Greek economy is in a bad shape is because Greek people don't pay their taxes. is that fair? the tax avoidance accusation?

Nikitas Kanakis:
it's not everyone avoid taxes. if we forget that the poor people who have today an income of less than 500 euros, they have to pay more taxes or they have to have more cuts, there won't be a future.

Mehdi Hasan:
costas, you talked about people who caused the problems in the first place, do you think there's the political will in Greece to tackle this problem of tax avoidance? especially by the rich who help fund the system.

Costas Lapavitsas:
Not really. There are changes being made because of the intervention by the IMF and from the outside, but I don't think the problem is drastically confronted or dealt with but if I could just make a point about austerity. Austerity is not a choice of the Greek government; austerity is the official policy of the Europe an Union and of Europe an Monetary Union. It's been applied across the board and it's been applied with particular ferocity in Greece. And as long as Greece continues to abide by the rules of the monetary union, it will continue to have austerity. As for staying within the euro, the other issue that we didn't mention is of course debt. Greece has got an enormous public debt, which it simply cannot tackle, simply that that is unpayable, unviable. Greece will have to default and it will have to default very seriously. On its debt, its debt has become official. It will be very hard to default on this debt and remain within the monetary union and the third point is growth. There is a growth strategy that's been following Greece, it's a growth strategy of sorts which is liberalisation and privatisation. It's the same old ideas of the IMF and so on. There's nothing new in this, this has been about 30 years. it doesn't produce growth and it will not produce growth in Greece. What Greece can look forward to is continued contracting for several years and, after that, stagnation as far as the eye can see. This is the reality, and as long as it remains within the monetary union, that's what's gonna happen. There's not gonna be any growth in this country.

Mehdi Hasan:
Konstantina, do you believe politicians when they make promises or pledges right now? How much confidence is there in the Greek political system right now?

Konstantina Pilioura:
I don't think there's much confidence because they haven't proven that they can follow their promises up until now. There are many people my age they didn't even go to vote, and this means something.

Mehdi Hasan:
Yes.

Konstantina Pilioura:
Yeah.

Eva Kaili:
Maybe because most of the citizens want to listen that we'll promise everything to everyone and that's how it work until recently.

Mehdi Hasan: 
Well you were in parliament, and you were very critical of your own party, Pasok, that's been ruling Greece for a large period of time over the last 30 years. What's changed? Why should people now believe that this new democracy Pasok government is different to previous governments?

Eva Kaili:
I do believe that we're not trying to be likeable to people in Greece now.

Mehdi Hasan:
Well not likeable, but having people having confidence, trust.

Eva Kaili:
I know but, you know, if people trust promises that don't involve a whole reform in the Greek economy, and they're just promising everything to everyone, no more pensions cutting, no more salaries…

Mehdi Hasan:
They say no pain without… no gain without pain.

Eva Kaili:
Yeah. You can say that. If you say that, then you mislead people and create expectations that you can't handle. So we have to be serious. We don't have to be likeable, we have to be useful. We have to learn from our mistakes, so that's what I’m saying. And I do believe that in Greece we have to try and learn from our mistakes, and we have to show that we didn't only have incapable politicians in Greek, the whole Eurozone couldn't handle the crisis. They gave us the wrong medicine, it's not working. They don't want to make a step back. Merkel insists on austerity. I do agree that the austerity measures are…

Mehdi Hasan:
The German chancellor.

Eva Kaili
Yes. Everybody thinks that this will lead us into growth, it can't lead us into growth we have to find a different plan.

Mehdi Hasan:
So let me ask may, this is the birthplace of democracy in the west, Athens, Greece…

May Zanni:
so it is.

Mehdi Hasan: 
…and yet here's a country which has had two elections in the space of a few weeks, didn't produce a majority government, has now produced a coalition government. You have a troika. You have international foreign institutions coming in basically saying what you can and can't do it if you wanna carry on getting money. Has democracy become an overrated concept in Greece?

May Zanni:
No, not at all.

Mehdi Hasan:
Do elections still matter?

May Zanni:
elections do matter. Yes, we did have i think 40 per cent that did not vote in the past elections which I find disappointing considering how critical things are, especially the youth which basically it's their future. People no longer trust politicians and that's understandable given the circumstances. They’ve heard a lot of promises, but then we need to have not just results-oriented politics, we also have to have the kind of voters who ask the real questions.

Mehdi Hasan:
but if you talk to those people who are suffering, and you say we will do x, y or z, why should they believe you when they think, well actually Angela Merkel's going to make that decision, or the IMF is going to make that decision, Christine Lagarde the head of…? Why should they believe that Greek politicians have the power to use your phrase, to be masters of their own destiny? What’s the evidence?

May Zanni:
Well we are accountable to people, they're not gonna go and knock on the German chancellor's door and say, hey, you said that, and you did that. i mean i understand there is a clear lack of leadership in Europe and that's part of the reason that we are here right now. and people do not trust Brussels or whoever else is in charge, equally as much as they distrust Greek politicians, but that does not mean that we should end up in a democracy of the blameless, where everyone and anyone is at fault.

Mehdi Hasan:
Eva, do you resent the way foreigners view Greece? cause there's a view of Greece as kind of, forgive me, lazy, feckless, not working long hours, not paying taxes.

Eva Kaili:
No, we work like two or three jobs each and they work really hard. They didn't have a good tax system, but i do think that we have to change the way people see Greece. And it's a matter of young politicians now and new policies that should take place in Greece.

Mehdi Hasan:
Ok. well we're gonna come back in part two and talk about the human impact of the financial crisis in Greece, and the rise of far right parties here in the country. join us in part two.

END OF PART ONE

Welcome back to part two of the café here in Athens. Nikitas, in part one we were talking about austerity, about spending cuts, about what the government is doing to try and balance the books. What does that translate into in places where you work, on the street with real people? What’s the human impact of spending cuts in Greece?

Nikitas Kanakis:
Most of the people who see us, they medicine from their action in Africa, in Latin America, in cases of emergency

Mehdi Hasan:
That’s where you NGO's largely work.

Nikitas Kanakis:
Exactly. Now we have some clinics in Greece that we see people here and this year we have seen more than 40,000 people who come for free treatment and free medicines, and the number of Greeks who come in these refugee clinics, these were refugee clinics the previous year, there were five times more.

Mehdi Hasan:
Five times more.

Nikitas Kanakis:
Five times more. There are even people who come in to ask for food items. We have seen that the most of them, they have a family income less than 300 euro per month. Let me give you two examples to understand. Costas, for example, who come, who is unemployed now, he used to work in a private company, now he doesn't have a job for two years and he's diabetic, 50 years old. He doesn't have any insurance, this mean that he has to go around to find the medicines he needs. Let me give you another example. Seventy years old, with a small income of less than 500 euros. So he has to pay for his medicines, he has to pay for the special tax and electricity.

Mehdi Hasan:
He’s a 70 year old pensioner.

Nikitas Kanakis:
And then she has nothing to survive. What we will expect from that woman seventy years old to go to find a new job. We have to punish her because the country needs to change. And let give you a third example of a young mother who's very, very poor because her husband doesn't have a job, and she does the crime to have a child. And the state hospital ask her more than 500 euro to deliver, otherwise they will keep the certificate of the baby.

Mehdi Hasan:
They’ll keep the birth certificate if she doesn't pay 500 euros.

Nikitas Kanakis:
So what I’m trying to tell is that when you are in a country in a humanitarian crisis, and I keep insisting, because i have seen humanitarian crises around the world, that this is a humanitarian crisis.

Mehdi Hasan:
Is it an exaggeration, Nikitas, to say Greece is being reduced to the state of a developing country?

Nikitas Kanakis:
Possibly. people who see us from Africa, they will think what they are telling of they are in a nice place with a nice jacket, what they are talking of, but we have to keep in mind that when we talk about humanitarian crisis, we talk about people who don't have to eat, people who doesn't have medicines, people who cannot see a doctor, people who are homeless. And we see, in the past two years, more and more numbers come up. we don't compare ourselves with African countries, with all the respect to these countries, we compare with the rest of the Europe an countries and we see that we don't have any safety network at all. And if we don't make such a safety network, no one will care to help the development of this country.

Mehdi Hasan:
Costas.

Costas Lapavitsas:
But that's exactly the point. We’ve got a situation of a middle income country with all the usual accoutrements of that, being reduced to the state of a developing country, that's exactly what's happening. And I know that the World Bank has offered his good services to Greece, right? The organisation that specialises in helping developing countries par excellence, this is now an organisation that said we can help you. so Greece is very rapidly being reduced to the state of a developing country with all the attendant problems that they've been so well displayed.

Mehdi Hasan:
Do people here recognise that? is this something that's publicly acknowledged, or is it something people don't talk about?

May Zanni:
It is. We see it in the news every day. Most of us have noticed around the areas we live, the number of homeless people has gone up, i think it's 20,000 right now in Athens, which is huge. Because, you know, in Greece society and family are still quite tight; you're not going to let a relative out in the street, that's not happening. But we hear the stories and we witness them every day.

Eva Kaili:
We're also developing in a different way. We are a developing country, but in a different sector, because our policy didn't work out so you have to change our field of economic growth. We have to go back to tourism, to agriculture; we have to change our priorities, so this could be seen in a good and optimistic way, if you have politicians and politics that can program our future for the next ten years or 20, to have a more stabilised tax system that can bring investments in Greece. Because I know a lot of people that would like to invest in Greece and they're scared of taxes, and we don't want to invest it, they don't know what's going to happen. this is a problem that's… you know, Lagarde and Merkel and Cameron when saying all those things about Greece, they're not helping, they're just creating more problems.

Mehdi Hasan:
Back in April a 77 year old pensioner caught the news headlines, Dimitris Christoulas. He said, he shot himself in the main square outside the parliament building saying, "I can't see myself fishing through garbage cans for sustenance."

Nikitas Kanakis:
Every day we have a case.

Mehdi Hasan:
Of suicides?

Nikitas Kanakis:
And we have a lot of people…

Mehdi Hasan
Suicides that… Greece was a country with one of the lowest suicide rates, i believe.

Nikitas Kanakis:
But what happened here in Greece, people who have a background, a psychological problems background, now they funded no support from the family. It’s nothing to protect them. No one to care. [unsure of word].

Konstantina Pilioura:
And they don't hope for anything.

Nikitas Kanakis:
Exactly. And all these, creating new atmosphere for a lot of people to try to do it.

Mehdi Hasan:
Yanos, in part one we were talking about austerity, you're talking about the need to downsize the state, redundancies, make the public sector smaller. Isn’t that just going to increase the desperation, the poverty, the number of suicides, if you go down that road?

Yanos Gramatidis:
Well I believe that the rest of 2012 and next year, 2013, are going to be very difficult years for the country, but let's be optimistic in the sense…

Konstantina Pilioura:
You say difficult, but difficult means people dying.

So can Greece escape this crisis? Or is it forever cursed with being the economic basket-case of Europe ?
I say even more, even more. Yes, even more, but the situations in the economy cannot change from one day to the other. now we have a new coalition government, which has to have some space to breathe. we have to give them at least 100 days to present their programs to us. And also how they can exploit the foreign aid, because we need technical aid. We need the troika's aid and even if we were not obliged to have a troika, we should have invented a troika in order to assist us by bringing best practices in the country. We are working on a very thin line, where we have to care about rebuilding social justice on the one hand, and on the other hand by getting back the country to its normal track. But we have to give the chance to this government 'cause that's the best timing and there is an opportunity to do it today.

Eva Kaili:
And to have Greeks united and not divided.

Yanos Gramatidis:
Exactly.

Eva Kaili:
And the coalition government, which is something very rare in Greece to happen, so we have our national team, our best ones to handle this crisis, and we also have to try to convince Europe union. We have to become a union, not only an economic one, not only a political one, but a Europe an union about the people.

Mehdi Hasan:
Costas, you're shaking your head when Yanos was speaking then.

Costas Lapavitsas:
Sometimes I think these people live in a different country. Greece is in the middle of a huge recession which is gonna become deeper. This is reality, right? From now 'til the next six months, there are not gonna be any miracles. The room for manoeuvre of this government is next to nothing, zero. This is the reality of it. They will have to impose new cuts. i don't know where they're gonna find them, how they're gonna make them. Even if they implemented them, it is debatable whether these guys will actually bring in the results that they're hoping will come about.

Eva Kaili:
So that's why we need some time to apply all the reforms.

Costas Lapavitsas:
There isn't gonna be any time.

Eva Kaili:
Cause the austerity measures are not working.

Costas Lapavitsas:
There isn't going to be any time. the most there is gonna be possibly an extension of another year, and that's because…

Eva Kaili:
Two or three, that's what they're talking about or Lagarde is talking about.

Yanos Gramatidis:
And that's not going to be an issue of extension of the time, but we don't know…

Costas Lapavitsas:
Possibly. But here we're talking whether you're gonna be beaten with a whip or with a stick, that's the difference.

Mehdi Hasan: 
Those are the choices, is what you're saying.

Costas Lapavitsas
This is the choice.

Eva Kaili:
Well another dilemma I don't agree on.

Costas Lapavitsas:
So basically the policies of austerity will continue. They’re gonna get deeper. The country will find it increasingly difficult to meet the targets for paying the next instalment of the loan at every period. by December this year, i expect the situation to be once again critical. The reality is that exit will be forced from the outside, or the country will be teetering…

Mehdi Hasan: 
Exit from the euro?

Costas Lapavitsas:
From the euro. …will be teetering on the brink. That’s the reality. Now I just do not see how growth will come, from where? What will be the sources of growth?

Yanos Gramatidis:
It will take time.

Costas Lapavitsas:
Yeah, it will take so much time that the country will have died before it happens.

Eva Kaili:
But the country with huge advantages, we have a lot of things we could invest on, it's not only the land and the tourism and…

Costas Lapavitsas:
Investment has been declining for five years also.

Yanos Gramatidis:
You are absolutely right…

Eva Kaili:
I agree, but…

Yanos Gramatidis:
…but for the reasons that…

Eva Kaili:
…we need a couple of years to make new plans, not something that can happen.

Yanos Gramatidis:
…we could just explain.

Mehdi Hasan: 
Let me ask Konstantina. You’re a young person, you're a student, 50 per cent youth unemployment or more, are you someone… do you think…?

Konstantina Pilioura:
I can assure you that everybody talks about it. all of my friends, there is…

Mehdi Hasan: 
are they looking for jobs? are they finding work?

Konstantina Pilioura:
Yes. Yes, they're all looking for jobs, and i can assure you that they send pretty much like ten to 15 cvs every day, and they don't get any answer. or even if they do, they get rejected.

Nikitas Kanakis:
And do you know what's the price now, the salary, for hours, these days? 250 euros.

Konstantina Pilioura:
It’s about…

Nikitas Kanakis:
250 euros.

Konstantina Pilioura:
…200 euros for a young trainee lawyer, or maybe no salary at all.

Mehdi Hasan: 
so what are you and your friends thinking about doing? Those who can afford, are they trying to leave the country?

Konstantina Pilioura:
Yes. All the people that do have some money to spend, they do go abroad because they feel that there's gonna be a better future for them there. the idea is here in Greece.

Mehdi Hasan: 
Here’s where I’m confused.

Konstantina Pilioura:
And I wanted to add something. you were talking about suicide before, and i want to say that the rise of suicide also shows that it's not just people with psychological problems, or the lowest class people that have a problem, it's also the middle class that is suppressed by this situation.

Mehdi Hasan: 
here's where I’m confused. Yanos, you're saying you sound optimistic, you're saying let the reforms happen, coalition government, 100 days. You’re saying rich country, investment's possible. He’s saying humanitarian crisis. She’s saying people are leaving the country. is there a disconnect here?

Eva Kaili:
No, we had to face…

Mehdi Hasan: 
You’re not in two different worlds here?

Eva Kaili:
No, but it was a shocking way of handling the crisis. We didn't know how to handle it, European union didn't know how to handle it, so we're facing quite different things here in a different level. It’s the political thing, the economic one, the society, the problems…

Nikitas Kanakis:
You are right on this, but we need to put in the political agenda the humanitarian situation of the country.

Costas Lapavitsas:
Absolutely.

Nikitas Kanakis:
Because we have to understand that what happened in this country will have to put it back in the agenda and to see what we will do for these simple people.

Mehdi Hasan: 
Costas, 50 per cent youth unemployment, you mentioned earlier, more than 50 per cent , in countries where it's that high for that long, it only leads in one direction, social unrest, riots, extremism. is that where Greece is heading?

Costas Lapavitsas:
Well Greece has had low level social unrest for two and a half years, so it's not…

Mehdi Hasan: 
is it going to get worse if the situation?

Costas Lapavitsas:
It is quite likely. it is quite likely that as the situation becomes worse, we're gonna see serious unrest, anomic behaviour. Yeah, it is quite likely but I mean if I could just make a point of growth because it's very, very important, i think. The structural reforms that have been proposed to this country are in the usual mode, liberalisation and privatisation. They’ve been tried time and time again in developing countries, they've never worked, but they've been tried in this country. Let me give it the benefit of the doubt.

Yanos Gramatidis:
It’s not only this, there are other things too.

Costas Lapavitsas:
That is fundamental.

Yanos Gramatidis:
For instance to change the social security system, to introduce flexible labour in the market. You are talking for structural reforms everywhere.

Costas Lapavitsas:
Liberalisation and privatisation are…

Yanos Gramatidis:
Ok, that's fine. That’s fine.

Costas Lapavitsas:
…blanket, sort of envelope terms for this kind of thing. Let me give you the benefit of the doubt. Let us assume that they would work. let us, for the sake of argument. I don't think they will, but let's, for the sake of argument, assume that they would work. In the best possible scenario, it would take ten years for it to work, in the best possible scenario, because that's how it works and everybody acknowledges that. Not only this, but usually these measures are best implemented when there is also growth in the economy. These measures are not supposed to be a counterweight to austerity, which is how it's presented in this country. This is basically confusion and bad economics. Austerity is compressing everything, but we will liberalise and suddenly we will offset austerity. That’s not how it works.

Mehdi Hasan: 
You’re saying ten years best case scenario. May, in that ten years, what if extremist parties like Golden Dawn, which the world was horrified to see won seven per cent of the vote. Went from, I think, 20,000 votes in 2009 to nearly half a million votes a few weeks ago. How worried are you as someone who's in a mainstream centre right party, who looks over and sees a far right party on your heels?

May Zanni:
Well I think it's a way of protesting really. People feel that the state cannot provide adequate protection. There are entire areas of that in Athens where the police stands by really, and lets these groups of thugs take over.

Mehdi Hasan: 
Is it true that the police voted for Golden Dawn? Some say that half of the police force…

May Zanni:
disappointingly enough, it looks like quite a high per cent age did go for Golden Dawn as a protest, because the police are underpaid, understaffed, and they are asked to go out there and risk their lives for what is quite often a very double standard way of being treated by the public. they want to be protected, but they blame the police as well.

Nikitas Kanakis:
I believe it's deeper than protest. Not just protest, I’m afraid that it's deeper. That people move. Because when you are poor…

May Zanni:
so their ideas are being attractive.

Nikitas Kanakis:
…the easier way is to blame the other poor.

Mehdi Hasan: 
Well there's a lot of blaming of immigrants going on right now.

Eva Kaili:
Exactly it's the illegal immigrants, it's not protesting only. We have so many illegal immigrants, costs us like 10 billion each year to handle the illegal immigrants that come to Greece and we're like the borders of the EU. So this is something that's cost us…

May Zanni:
And not just that, we have areas of Athens that are being...

Mehdi Hasan: 
So you don't think immigrants are being scapegoated for the financial crisis, they're not being blamed?

Eva Kaili:
No, no, it's a huge amount of money that we're spending though.

Mehdi Hasan:
It is a genuine problem that needs to be dealt with.

Eva Kaili:
Of course it is. It’s a whole problem that we're stopping it from getting inside the Eurozone. We’re like the borders of the Eurozone.

Mehdi Hasan: 
But isn't the danger that mainstream parties like yours and May’s party have dealt with it so badly…

Eva Kaili:
Exactly, I agree.

Mehdi Hasan: 
…that the far right have been able to exploit it?

Eva Kaili:
Yes, absolutely.

Yanos Gramatidis:
Yes, but here my theory is that it was about the protest and it was, at the same time, a message to the political system that they have to change. i don't believe that these people have voted or the Golden Dawn, they actually believe in the principles or whatever in the campaign or the manifesto of the Golden Dawn.

Mehdi Hasan:
You don't think there's a bit anti-foreigner hostility right now?

Yanos Gramatidis:
It is only a reaction of the…no, no.

Nikitas Kanakis:
I hope so, but I’m not so optimistic. I think we have the same situation…

Mehdi Hasan: 
You think some of those views about foreigners and immigrants…

Nikitas Kanakis:
I see this every day, and we see people who even come in our practices, who talk about this and say you have to throw out these black people, these bloody Asians, because they are foreigners they're responsible. The people blame the other and also our politicians use them, as a tool...

Mehdi Hasan: 
Eva says that it's a legitimate problem that costs money. You’re saying it's wider than that.

Eva Kaili:
I don't know.

Nikitas Kanakis:
I think that the people now try to make enemies around. They are the Jews of the day.

Eva Kaili:
It’s insecurity. Insecurity and illegal immigrants.

Nikitas Kanakis:
Let me tell you, in my place…

Eva Kaili:
If you ask people around, the voters, they don't know what Golden Dawn stands for.

Nikitas Kanakis:
I’m from south Greece. I’m from south Greece. That is a place pretty secure. we don't have even immigrants in my village, and Golden Dawn have 20 per cent . Why?

Eva Kaili:
Security. Insecurity.

Nikitas Kanakis:
Security of what? There is not any immigrant. Even in Athens that is a problem.

Eva Kaili:
It's not that they believe what… they didn't even know if you ask them what Golden Dawn stands for.

Mehdi Hasan: 
Eva, were you embarrassed when you saw the results and they'd won 21 mps and seven per cent of the vote as a group?

Eva Kaili:
I could understand it. I could understand it. I know it's something that a transitional phase, it can explain it.

Mehdi Hasan: 
You hope it's a transitional phase.

Eva Kaili:
I hope but, you know, we know Greeks, we don't change. They didn't become suddenly voters for Golden Dawn, from one to the other.

Nikitas Kanakis:
But two elections, they take the same per cent that's it. Don’t forget it. For two elections, they... for two elections they voted them

Eva Kaili:
They didn't even have a program known to Greek people, so it's not something that's really solid. They voted for Golden Dawn, tomorrow they could vote for something else.

Mehdi Hasan: 
costas.

Costas Lapavitsas:
Greece hasn't had an immigration policy, a coherent immigration policy, ever. the policy was not to have a policy, and then it followed the so-called Dublin II agreement by the EU which basically sends Greece into a reception area, a kind of prison for immigrants. Right? so Greece has fallen into this trap. it's the Greek politicians who are to blame for this, who accepted this, but the people in working class and impoverished areas are feeling the pressure. Right?

Eva Kaili:
And the populism of the left of course.

Costas Lapavitsas:
So it is a real problem in the sense that there's a huge number of immigrants, relative to the population, these are people who are not very well cared for, the pressure is enormous. And fascism has taken advantage of this in the context of the crisis. But I wish to make a stronger point about the state doing this. Because there's talk about reducing the state and turning it into a more efficient and lean and mean machine, you know, from what it used to be. Actually I’m afraid that's not how it's gonna be and the vote of the police for Golden Dawn is a first sign of this. as the state becomes weaker, as it loses capacities, as it loses institutions and so on, the state will become more disorganised, more corrupt, and what we're gonna see is parastatal outfits associated with Golden Dawn and similar organisations, who are gonna be offering state-like…

Mehdi Hasan: 
you don't think it's a transitional thing.

Costas Lapavitsas:
I don't think it's transitional at all. The longer we will continue down this path, the more problematic will be the phenomena we're gonna witness as far as the state is concerned.

Mehdi Hasan: 
Yanos, we talked about immigrants being targeted, scapegoated, tackled, what's the view of a country like Germany? We hear a lot about Greek resentment of the Germans, is that fair? Is Germany right now being blamed for the problems of Greece?

Eva Kaili:
Well it is not the German people, it's Merkel, for example.

Mehdi Hasan: 
Angela Merkel.

Eva Kaili:
Yes, it's the policies of Merkel that created the whole problem in Eurozone, it's not only Greece.

Nikitas Kanakis:
I’m afraid is the easy way for our politician, I don't blame you particularly, generally speaking. You look for an enemy. Who’s responsible? The Germans.

Eva Kaili:
When they insist so much and their austerity measures, it's not working out…

Nikitas Kanakis:
Someone votes for this austerity measures in the parliament. Someone in the parliament votes…

Eva Kaili:
There is a problem…

Nikitas Kanakis:
…for the salaries to go down, it's not the Germans.

Eva Kaili:
Exactly, but the Golden Dawn is… that's what explains the Golden Dawn.

Nikitas Kanakis:
I hope it is, because if you go back in Germany, for example, in the thirties, that they weren't such a crisis, the Nazi party started from five per cent and where they have been. I’m not very optimistic for one simple reason, they vote for protest the first time, but after one month enough that a lot of things that have happened in the streets, people they…

Eva Kaili:
not a lot of things.

Nikitas Kanakis:
…they vote again the same people. When you vote twice, this mean something deeper than just protest and this is I’m afraid…

May Zanni:
It's a message i think.

Nikitas Kanakis:
I’m very afraid because I’m not sure what is the message about.

Mehdi Hasan: 
May, you think it's just a message.

May Zanni:
No, I think it's not just a message, it's the fact that they are disappointed by what the main parties have to offer. They feel the state has failed on every level in their everyday life, and they've decided they've have enough and they're going to go for the most outrageous and extreme party there is out there.

Yanos Gramatidis:
We should not blame the others, we should blame ourselves for our own faults. It is the only way we get out.

Mehdi Hasan: 
Let me put something to you. One of the most famous financial journalists, Michael Lewis, wrote a piece for Vanity Fair, very controversial, in 2010 after visiting Greece. He said, "it's a society that has endured something like a total moral collapse." is that fair?

Eva Kaili:
It's not.

Mehdi Hasan: 
No?

Eva Kaili:
No, it's not fair. They will blame us for everything now, you know it's not Greeks that change, it's the whole way that economy is working now and, of course, we have a kind of new democracy now. We have internet so information is out there. Everybody can find out what's going on, the scandal, the corruption. They can vote in a different way. They can vote they have to find hope. Things are changing the world, and we have to adjust. In Greece it's happening in the most shocking way, because we didn't have the politicians capable enough to stop and negotiate and present a different plan.

Nikitas Kanakis:
But we don't have a lot of time. We have a shortage of time and if the people continue to be hungry, then we will have a social collapse and a social tension. I’m very afraid about the winter. So any information should be very quick…

Eva Kaili:
Six months, one year.

Nikitas Kanakis:
Well, yes..

Mehdi Hasan: 
Well let me ask you this. We keep talking about time, let me ask you this as a final question. Where do you see Greece heading? What will Greece look like two, three, four years from now? Costas.

Costas Lapavitsas:
I would be amazed…

Nikitas Kanakis:
We know what Costas will say.

Costas Lapavitsas:
…if Greece is in the monetary union in two or three years from now I’d be amazed I think the situation will become critical pretty soon. I think this government is very unstable. I think it has every chance of falling before a year is out, and then there'll be a major crisis as far as Greece and the Eurozone is concerned.

Mehdi Hasan: 
May, Greece in three, four, five years time, what will it look like?

May Zanni:
Well we are in last chance saloon right now, but I don't think we flat lined yet and I’m optimistic that we can pull through, and remain in the Eurozone if we do get the help we need from our partners, if Europe remembers there's such a thing called solidarity out there and, as for moral collapse, i would say i see a new morality coming out of this crisis. Society pulling together communities, I’ve seen that around my neighbourhood, my old school helping each other really. Back to basics.

Mehdi Hasan: 
Yanos.

Yanos Gramatidis:
I believe that we will overcome the crisis within the next five years, not earlier than that and we have to take advantage in the meantime. We have to take advantage of the situation in Europe where we should actually support whatever discussion is made for a joint economic governance of Europe, which is extremely important for our country too. And I believe that wherever there is a crisis, there is an opportunity. I’m very optimistic that we will be doing the right thing at the end.

Mehdi Hasan: 
Konstantina, you're a student, you're the future.

Konstantina Pilioura:
Yeah, I think I’m very optimistic. i think that this crisis is a chance for us to look at our mistakes and try to fix them and Greeks do know how to strive, and I think that Greece will make it in some sort of time from now on.

Eva Kaili:
I do believe that we're going to make it. We don't have another option. Greeks want to stay in the Eurozone, and Greeks want to make it, and they don't want to be in the Eurozone like the black sheep of the Eurozone. So I do think we're getting there, and we made huge steps in two years. We’ve changed like almost everything, the way we think, our mentality. So just wait some time, give us some time.

Mehdi Hasan: 
Nikitas.

Nikitas Kanakis:
I’m trying to be optimistic, I have to be, but I’m very afraid that we will face more difficulties and i will see pictures that i have seen in Latin America. What I’m afraid that even if we recover in three, four years, we will have a society deeply divided, with less opportunities for the poor, with a lot of differences, and with less social mobility. Because the people who look to us, they have to remember Greece is not the difference, it's not the black sheep, it's the beginning of a Europe less social.

Mehdi Hasan: 
Well that's all we have time for. Thank you very much for joining me here in the café in Athens.

Eva Kaili:
thank you.

Mehdi Hasan: 
This debate will continue online, and next week you can join me in Istanbul for another café. Follow us on twitter: @aljazeeracafe | @mehdirhasan 

 

 

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