Tuesday, 15 November 2011

Greece: Back to Interbellum?

For two years, Greece's economy has been in a constant downswing. This does not only lead to an internal breakdown of the Greek welfare state, but furthermore plants powerful seeds for nationalistic ideas amongst EU citizens.

Nowadays, Greece finds itself in the eye of the cyclone of the worst financial crisis since the end of the Civil War in 1949, which followed the destruction suffered during the Second World War. After the fall of the military junta of 1967-1974, a period of relatively regular parliamentarian democracy commenced. The entry of Greece in the European Communities was greeted as a substantial step to European integration. In 2000, Greece was considered to meet the convergence criteria and was admitted as the 12th member of the Eurozone. On 1 January 2002 drachma (δραχμή) belonged to the past, replaced by the single currency. At that time, almost ten years ago, nobody could foresee the financial crisis that hit Europe in 2008.

The Greek government, which was elected in October 2009 with the motto “There is money”, reached an agreement with the so-called Troika (IMF, European Commission and ECB) and signed the Memorandum of Understanding (MoU) in May 2010. The national debt at that time amounted to 120% of GDP. The deficit increased up to 15, 6%. A series of harsh austerity measures have been taken throughout the last 18 months: horizontal cuts of wages in the public and private sector, most of the pensions touch the minimum limit of € 350 per month, excise taxation on most of the products and services, decrease of public expenses in the sectors of education and health welfare are parts of the mosaic of the Greek reality.

In October 2011, the situation in Greece cannot be regarded as ideal. The public debt reached the astronomic height of 170% (second highest worldwide, only behind Japan), unemployment rate up to 18% (unofficially, more than 30%), 365.000 jobs have been lost throughout the last 12 months, consumption has been reduced more than 40%, recession will still hit the Greek economy with a rate of 6%. However, all these figures could be regarded as recoverable, if there was a hint of regeneration of the Greek economy, though this is not the case. An enormous wave of educated people abandons Greece and immigrates abroad. The –by far- most educated Greek generation is deprived of a bright future in homeland. After the 50s and the 60s, when thousand of Greeks immigrated to Australia, USA, Canada, Germany, Belgium and other European countries in the search of promise land, Greece is bleeding once more.

The most alarming aspect of this crisis, though, may not be the financial parameter of it, but the retreat to a period of intense nationalistic ideas. A week ago, a new TV show named “Go Greek for a week” was broadcasted on Channel 4. The concept of this reality show is very simple and catchy. A number of British people are behaving like modern Greeks- they do not pay any taxes, they do not work more than 8 hours per day, they go on holiday more than any other European.

German populist media like “Bild” and “Stern” do not hesitate to parallelize Greeks with lazy beggars sneaking into the European family and asking for money for free from the Germans tax payers. In February 2010, on the cover of the magazine “Stern” there was the statue of Aphrodite of Milos –which was found without any of its hands- raising the middle finger of its right hand, while a few months later the same statue was shown as a beggar with the right hand stretched and pleasing for money.

However, just a look to the official statistics provided by the EUROSTAT may lead to the opposite conclusion. According to these figures, the Greeks are the most hard-working Europeans in the private sector and proportionally among the worst paid employees. The total number of holiday in Greece rises up to 27 days per year on average, while the Germans and the Belgians enjoy about 44 days off on an annual basis. Regarding tax evasion, some aspects of this phenomenon have to be clarified. In Greece the employees and the pensioners, that is the main corpus of the medium class, pay their taxes on a regular basis. However, there is a large number of self-employed people, like lawyers, doctors, businessmen etc, who actually do not pay taxes according to their income. This burden, inevitably, has to be assumed by the weakest part of the society. This unfair situation has caused the angry reaction of thousands of people demonstrating outside the Parliament, demanding a more fair taxation system.

Throughout these two years, Greeks have been submitted to a kind of unprecedented racism, encouraged by populist politicians and media. It seems that Greece has reached the point of no return, also, because of the irresponsible behavior of a large part of the Greek political system and population during the last three decades, which has led to the formation of a gigantic, unproductive public sector, parasitic business activity and unfair taxation system. However, generalizing is the wrong approach to this reality.

The fear of a retreat back to the dark period of Interbellum is present. The vision of European integration appears to become blurry. Unfortunately, the lack of charismatic leaders and the imposition of extremely harsh austerity measures, that push mainly the medium class to the margin of the European society, is likely to lead to an explosion of anger, mistrust and hatred not only between the different social classes, but, also, between the European nations against each other.

By Gergios Malos