Where is Greece now?

Greece is planning to change the law for the creation of unions and limiting the right to strike.

Francois Hollande
French President Francois Hollande visited Athens and expressed his sympathy with the unemployed and those suffering under the Troika-driven austerity programme [AP]

How different does Greece look now than compared with 2009, when the economic crisis began? 

Back then, much of the public cautiously hoped Greece’s economic woes would be transient and solvable by the government. Οnce the bloated public sector was reformed, the argument went, Greece would return to growth within the European framework. 

The majority of the population acknowledged that some reforms were indeed needed to save the economy, even if the solution meant a lower standard of living. 

But last week, Greeks woke up to a harsh fact to see how badly the debt-crisis has hit them, when two 20-year-old students died of carbon monoxide poisoning after using a makeshift heating stove to warm up their home in the city of Larissa, as they could not afford to buy expensive heating oil or gas this winter. 

Five years after the crisis started, everybody acknowledges that the government’s plans do not aim merely to fix the economy, but to fundamentally alter the country’s political system. What began as a series of reforms to fix competitiveness and service the debt has become a cruel process of deprivation with several authoritative turns on the way. This threatens democratic decision-making and social cohesion. 

Greece, which ranked 18th in the UN’s development index in 2008, fell to 29th place by 2011, having lost almost 40 billion euros of its GDP. It is now in its sixth year of recession. Unemployment in 2009 was estimated at 9.6 percent. Today, the country has the highest rate of unemployment in the EU, with an official figure of 27 percent. That means 1.5 million people are out of work. Three and a half million people live below the official poverty line and 35 percent of all workers are unable to clear their mortgages and bank loans. 

Humanitarian crisis

As a result, a humanitarian crisis has hit a nation which was considered to be developed, but now the market reclassifies it as “emerging“. Large groups of people like migrants, elders in need of medical treatment, pupils from poor families, single-parent families and families with both parents unemployed are being cut off from the protective net of the welfare system. 

Public health is worsening, medication is becoming harder to get for many, suicide rates have tripled and the number of homeless who now occupy the centres of larger cities has increased. Marginalisation and exclusion are the main fears of most young Greeks who now face an unemployment rate of 62 percent and have to solely depend on their families to survive or immigrate. 

Social fragmentation also generates dangerous reflexes that have made traditionally hospitable Greek society turn xenophobic. The gap between those in fear of exclusion and those who are already excluded is spreading hate and fear. As several NGOs had predicted, the level of violence directed against migrants has reached alarming levels. Two Golden Dawn sympathisers were recently caught after stabbing to death a Pakistani immigrant in downtown Athens. Every other day, it seems, a new case of hate violence emerges. 

Reports of torture in Greek police stations have caused groups like Amnesty International and even the UN to release strong statements naming this a human rights crisis as well as an economic one. The government, which decided to deal with the country’s economic woes under the ideological mantra of TINA (“there is no alternative”), has adopted the supplementary concept of “law and order” to deal with social decay.

 Thousands rally against austerity in Greece

However, with a large part of the police force leaning towards extreme right-wing politics and having to defend socially unjust decisions, order doesn’t seem like an idea that can be applied equally to all. While hate crimes go largely unreported or downgraded both in the media and the judicial system, participating in protests is penalised and stigmatised as anti-social behaviour. 

Just a few weeks ago, subway workers were forced to cancel their strike under an old law, dating back to Greece’s authoritarian rule which was not applied by any government since then. A week later, seafarers were forced to abandon their strike under the same law. The government is planning to go further, changing the law for the creation of unions and limiting the right to strike. 

What’s more, as part of the plan the government will decide the level of minimum wage each year starting in 2014 depending on the economy’s competitiveness! George Mergos, the general secretary of the Ministry of Finance, stated that the lower salary now in effect, 586 euro per month, is too high for the economy’s standards. However, the government denied Mergos’ claim. On the other hand, representatives of 11 multinational companies recently had a meeting with development minister Costis Chatzidakis and asked the permission to employ young workers for no more than 300 euros per month.

But a few days later, commissioners Olli Rehn and Maria Damanaki insisted that the discussion is still open in the European Commission which thinks lowering salaries is a way to boost competitiveness in some European countries. Many are afraid that under the Troika mandate for internal devaluation, maybe the Bulgarian basic salary of 156 euro per month, or the Romanian one of 123 is not so far away.

Balancing the budget

This year, the government is expected to lay off 25,000 employees from the public sector, probably causing a domino effect in the private sector and reducing consumption even further. 

So where is the country now and where is it heading? The Greek government and the IMF agree that the country will finally balance its budget this year, but it will do so at a devastating cost. Taking the deficit from 10.7 percent in 2009 to zero in 2013 without tackling tax evasion, restoring economic justice, in conditions of economic depression and based solely on cuts in the cost of workers, was a task that demanded the sacrifice of society. 

The devastation is even worse in light of the IMF’s public admission that its calculations for Greece were false. While the organisation estimated the fiscal multiplier to be 0.5 units – meaning that for every additional euro in tax revenue, the GDP would lose half a euro – in reality it was proven to be almost 2 units! What these numbers mean is that unemployment, poverty and suffering were miscalculated driving tens of thousands more into misery. 

So, last week, when tens of thousands of workers all over Greece took to the streets once again, there was so much more to demand than higher salaries and pensions. A day before the protests, French President Francois Hollande visited Athens for a few hours and expressed his sympathy with the unemployed and those suffering under the Troika-driven austerity programme. 

But the Greek unemployed couldn’t care less for the sympathy of a social democrat who was elected with the promise to offer an alternative plan to Europe, one of growth and inclusion, only to end up following the German conservatives in the fiscal discipline doctrine. The only purpose of his visit to Greece was to bargain for cheap Greek assets and natural resources for French companies. 

Now, many are looking towards the Bulgarian workers’ struggle with hope. The neighbouring country served as a model to Greek public opinion. The fall of the government there after the Bulgarian workers’ protests is yet another sign that neoliberalism is not the right way to go. Neither for Greece, nor for any European country. 

Matthaios Tsimitakis is a journalist based in Athens.