With a national unity government now formed in Greece, in a last-ditch effort to save it from financial Armageddon, it is worth taking a closer look at the affect of draconian austerity measures on the Greek people – because, where Greece leads, we tend to follow.
It is no secret that crippling austerity measures are killing any chance of economic growth in Greece but, with the media concentrating on sporadic violent protests, the suffering of ordinary Greek people at the hands of their inept government and the troika has received scant attention.
While the stereotype of the lazy Greek abounds, and tax evasion is a serious problem, in reality most workers are taxed at source and work longer hours than the Germans but their salaries have now been decimated by all of the extra taxes and charges that have been heaped on top of them in the last couple of years.
The New York Times, in a piece on Sunday, interviewed the owner of a jewellery shop in Athens. He said he had not made a sale in over three months and was unable to light up his display window, to show off his merchandise, because he is unable to pay his electricity bill.
“The politicians are playing games with the people. This city is boiling. I am not a protester but soon the top on the kettle will pop,” he said, adding that his regular clients owe him over €14,000.
Elsewhere, the economy proper has already contracted by five percent this year while manufacturing is down by six percent.
Even before the government agreed to slash the number of public servants by more than 30,000 last month, unemployment levels in the country had shot up to between 17 and 18 percent – a figure that analysts fear could climb a further five percent by the end of this year alone.
Social workers have said that they have seen a consequent “unprecedented” increase in the numbers of “new” homeless forced to take to the streets. This is backed up by recent figures which revealed that there are now 20,000 people living rough in Athens.
Meanwhile, a doctor working in a poor area of the city has said Athens is on the verge of a “humanitarian crisis” and said more than 50 percent of the children he examines are malnourished.
Auto sales, a good indicator of the plunge in retail sales, are at their lowest level since 1993 and many of those who do have cars can no longer afford to insure them so, in the last three months, the number of uninsured drivers increased by 500,000, bringing the total to 1.5 million.
Finally, in a sure sign that the country has little chance of recovery, Greek banks have lost €46 billion in deposits, equating to 20 percent of the country’s annual economic output, since January 2010.
As the political situation deteriorated in the past few months, the flight from deposits accelerated with bankers saying between €10 billion to €15 billion left accounts between September and October alone.
And what has been the reaction of the markets, and the other eurozone countries, to all of the suffering inflicted on the Greek people since this crisis erupted?
“This is a bit of a sideshow – markets will react favourably to this but they won’t rally hard on the news. Italy is the bigger issue,” was the attitude of one trader quoted in the New York Times yesterday.
In short, nobody in a position of any authority or influence – the markets or Merkozy – give a damn about the Greek people. All they care about is that the government, any old government, agrees to the draconian cutbacks that are guaranteed to turn the country into an economic wasteland for at least a decade.
The message to the Greeks from Europe? Suck it up and stop endangering the rest of the eurozone.
No wonder that last week’s Prime Minister, George Papandreou, had a mini nervous breakdown and decided to announce a referendum on the measures without first consulting with Merkozy.
Of course, it did him little good other than further humiliating him and, by extension, the citizens of a sovereign state. He was “summoned”, not invited, to a meeting with the terrible twosome and told in no uncertain terms that there would be no referendum.
Then, obviously feeling like she was on a roll, Mrs Merkel was reported by the BBC to have summoned Italian Prime Minister, Silvio Berlusconi, to a separate meeting to “discuss with him the possibility of a change of government”.
It really is quite extraordinary that democratically elected heads of state, no matter how infuriating, are reduced to the status of gormless pawn in a game that is being orchestrated by the Germans and the French.
The fact that Merkel are her tiny sidekick feel no compunction about blithely suggesting prime ministers, all of whom have been democratically elected, should just step down to allow their bailout plans progress with more ease is not only deeply worrying, it’s completely insane.
And before we start slapping ourselves on the back in this country, our weakling government already demonstrated its obsequious subservience when it repaid €715 million to unsecured bondholders in Anglo Irish Bank – you know, the only ones that we had absolutely no obligation to pay.
The government tells us this is necessary because they’re afraid Merkozy will shout at them at the next eurozone summit, and maybe summon them to their political assassination room, but really, they’re a bunch of useless bluffers who seem incapable of defending the interests of the people who elected them, aka: you and I.
When this crisis first erupted in 2008 the then-government, and the then-opposition, told us that the worst case scenario would be ten wasted years of depression and recession.
Well, guess what? That’s exactly what we’re going to get under the government’s latest ingenious plan which will see over €12 billion slashed from the real economy while the government digs deep to repay in full the nearly €4 billion that nonexistent toxic banks owe to speculative investors.
Sometimes, it really feels like we’ve all gone through the looking glass.