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Greek crisis: crisis of democracy

Greeks are paying the price for austerity measures that they didn’t ask for

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Police brutality: protesters clashed with riot police in central Athens as a major anti-austerity rally degenerated into violence outside Parliament last year. Photo: AP Photo/Lefteris Pitarakis.

28 May 2012

Since the elections of May 6, Greece has dominated media headlines in Europe, with the focus being upon the Greek left party SYRIZA who - on a platform of reversing austerity - won the second place. As negotiations with the other political parties came to a standstill and failed to produce a viable government, new elections have been announced for June 17.
Greek citizens will once again have the opportunity to vote again on the austerity program that has devastated their lives for the last two years. The unemployment rate has passed 21 per cent, more than 30 per cent of small businesses have closed down, while half of Greece's youth are without work. Wages have fallen by a third since 2009 and more than three million people today live in Greece with less than 300 euros, while prices in basic commodities have been sky rocketing. At the same time, suicide rates are on the rise in a country that had once the lowest suicide rates in the world. As a result, and because of the economic depression it has created, the austerity program has failed to meet its fiscal targets and the country's debt continues to mount.
However, far from advancing a discussion on the fact that a European society is being dismembered by austerity which failed to give the long-needed fiscal reforms, and accountability which, on the contrary, shrunk the country's economy by nearly a fifth; the political and media debate is portraying Greece as a spoilt child that needs to be taught a lesson. Democracy is being replaced by a dictatorship of media and financial institutions that through the means of an ideological terrorism are determined to push further devastating austerity programs with very little discussion over their necessity and their efficacy. In this blunt atmosphere even the constitutional right of a nation to decide upon its fate through legitimate elections had been severely undermined by those voices that try to reduce the importance of the electoral vote to a referendum on whether or not Greece should stay in the Euro.
Warning over an 'unfavourable' result of the upcoming elections in Greece, the British PM David Cameron indicated - from the NATO summit in Chicago - that an ejection of Greece from the euro is credible and preparations are being made in that direction. In the same line IMF head Christine Lagarde warned from London that if the Greek people reject the austerity measures in the forthcoming elections "then someone has to pay the price", alluding that the tax payers of the other members of the euro zone would have to support Greece financially for longer.
It is becoming evident that in times of crisis, democracy is in peril. In countries such as Greece and Portugal, democratic control over economic policies has been suspended for the foreseeable future. Portugal is the third country to be bailed out after Greece and Ireland and the austerity measures have plunged the economy in deep recession. All major parties in Portugal agreed upon a bail out conditional on measures that include tax hikes; freeze on state pensions and salaries; and reduction of unemployment benefits. After the defeat of the Socialists who signed the $114 billion bailout bringing deeper social cuts in the country, a coalition government of conservatives and right wings parties sworn to implement the radical neo-liberal policies in the country.
From the very beginning citizens in Greece have opposed to the austerity measures with general strikes, demonstrations and occupation of squares. The answer was unjustified police brutality, tear gas, injuries and the attempted murders of journalists and citizens (police brutality has a long history in Greece and even the murder of teenagers by the police forces is not unprecedented). In the last protests of February 2012, the coalition government of the conservatives and the socialists headed by an unelected banker approved additional harsh austerity measures while more than one hundred thousand people had gathered outside the parliament. The protests ended up in clashes with the riot police amidst clouds of tear gas and flames.
When police brutality is not effective, ideological terrorism by the mainstream media and the political elites begins. What we actually experience is a shift toward an undemocratic, authoritarian way of making decisions in Europe on economic policy. The European political and economic elites fail to understand that democracy and social justice, values upon which the concept of the European Union was built, are now being undermined by unilateral imposition of severe social cuts and wages slashes that impoverish nations and give rise to extremism and chaos.
The debate is not just about growth and austerity, although Europe has failed to produce a good policy of balancing growth and fiscal reforms. The major question is as to whether people are allowed to master their own choices or if they will be swept aside by a dictatorship of a powerful elite that imposes its will over the people.

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Dear Ms. Megaloudi, Feel free to persist with your sophistry but In Greek we have a saying : “knowing half the truth is more dangerous than knowing nothing at all”. The Loan Agreement, otherwise known as the Memorandum is not an austerity program. It entails 63 provisions, most of which relate to implementing growth enhancing structural reform such as opening up monopoly activities and closed professions to competition, revamping tax policy, modernizing the antiquated public administration system, modernizing the inefficient health care system, financial sector regulation, land registry, deregulating transport infrastructure, unbundling network activities, renewable energy implementation, reforming the inept judicial system, cutting down pharmaceutical costs. Have a read; it is in the public domain. These reforms are what economically thriving countries like Australia implemented of their own free volition, in stages, starting two decades ago. It is not rocket science, or reinventing the wheel. The issue for Greece is that none of these structural reforms have been implemented because of fierce resistance from interest groups, large sectors of the population that opposed reform of any type because it would disrupt their parasitic lifestyles. If you live in Greece, as I do, you would know this, it is in your face every day. Unless ofcourse you are blind because of dogma or ideology which I would suggest is the case. A part of the Memorandum does indeed include austerity or frugality measures. This is what Thomsen of the IMF is referring to in your selective quote. As the first commentator below quite rightly stated “Austerity, many economists agree, as I do, is not the only medicine for Greece, growth is essential”. Indeed, but real economic growth cannot come about unless the structural reforms, modernizing the economy, are implemented. And these cannot be implemented whilst irresponsible populists (including politicians and journalists, whether simply naïve or in the service of particular interest groups) whip up a frenzy of sensationalist reaction from people who know little better but who are caught in the economic death spiral brought on by stagnancy, lack of transparency, corruption and obsolescent administration which strangely you fail to mention at all. Please refer to recent studies concerning corruption in Greece and its affect on the economy, published by Transparency International and the OECD. Your failure to take objective data into account, when writing about the Greek economy, and the reasons for its dysfunctionality is startling, to say the least. You state that “The 1.2 million unemployed come mainly from the private sector”. No, they do not come mainly from the private sector; they come ENTIRELY from the private sector. Public servants in Greece have permanency of tenure, are never assessed for performance, and cannot be fired for any reason at all, including theft. Then you state that there “are about 150.000 pending layoffs in the public sector without any alternative solution”. What “alternative solution” do private sector employees have? This is indeed false reporting. The Memorandum calls for a reduction in public sector employees by the end of 2014, by 150.000 persons, mostly to be achieved through retirements and a redundancy program with benefits, including 70% of their salary for two years, similar to which many countries have implemented including Australia. You quite conveniently completely overlook the fact that Greece’s dramatic public debt problem was brought on by decades of overspending in the public sector to create virtual jobs, of no substance, through a system of political cronyism that a large sector of the population engaged in. The economic downturn in “production of 8%” that you mention is the result of the strangulation of the private sector by the public sector protégé political establishment which has focused on keeping its electoral base as intact as possible, at the expense of reform. Are you aware that the state owes hundreds of millions, possibly billions to the private sector in the way of fees and unreturned VAT payments? Are you oblivious to the fact that this is why private enterprises are shutting down? Do you not know that only the private sector can produce wealth and create real jobs in any economy, if left uninhibited by a interventionist meta-soviet style state such as in Greece? Had the huge fettered corrupt and inefficient Greek public sector be downsized two years ago and structural reforms implemented in a timely way, the economy would not still be in a death spiral but re-bounding with growth where the real jobs are, in a robust private sector. These are basic common sense principles. If you were at all familiar with what took place in the state of Victoria, Australia, in the 90’s, or what has indeed occurred elsewhere in the world you would be aware of this. You talk about cutbacks to the country’s education system, completely ignoring that Greece’s teacher to student ratio is the highest in Europe, twice that of Finland, which has arguably the best education system in the world according to many global indicators, measured in results. Your understanding of the subjects that you touch on is completely superficial. Moreover you make no mention at all that Greece has a huge primary deficit of 4 billion euro annually. This means that the country does not make enough money to sustain its current level of expenditure. The international financial markets will no longer lend money to Greece, only the EU/ECB/IMF will by virtue of the fact that Greece is in the Eurozone and in the EU. The loan, lifeblood of Greece, underwritten by these lenders is provided at an interest rate of 2.8%, whilst Spain and Italy, both lenders of money to Greece, through the Memorandum are forced to borrow at 6% themselves on the international market place. Why on earth should European taxpayers and even the people of Brazil (who are called on to share greater burdens through their contributions to the IMF) continue to provide unlimited funds to Greece which is living beyond its means and whilst it steadfastly refuses to implement structural reforms? Finally, because there is just too much misinformation in your article and subsequent response to my comment, your claim that there have been “attempted murders of journalists and citizens” by police and then proffer cases of “police brutality” during mass demonstrations as proof of this. Highly emotive, highly subjective and highly sensationalist, as is your entire article.
I am sorry the other previous readers feel this way ... with all due respect I feel there arguments are quite subjective need to look at the big picture here ... Franceska I felt you are putting forward some truths that other main stream media avoid . Thank you ! I grant you that systems & attitudes in Greece have to change ... there is a bigger picture here though ... Greece is spiralling, no amount of austerity will bring it back from the brink & of course it is the ordinary Greek people once again , [who can't afford to live already], who will pay for the crisis in the system which was spurred on by previous corrupt Greek governments that got the country into this mess - while being rewarded for taking on these massive loans - that benefited Germany & France [they made profits out of this - supporting private sector]. Greece is but a test case for the rest of the world to see how far the establishment can push & get away with & once they do other countries are not immune !! Of course the Greek elite who can afford to pay don't ... the rich seem determined that it will be the ordinary people - not them - to pay. This constant argument re tax evasion ... “Greek workers pay their taxes, which are unbearable. For tax evaders, speak to PASOK and New Democracy so they can explain why they have not touched big capital and have been chasing normal workers for the last two years.” What is happening in Greece today is a global issue. It's about the have & have nots not about the Greeks versus Germans .. Persa NSW
I just read the article. Absolute ROT, disgraceful lies, distortions and rubbish. As a Greek citizen, doing the daily grind in Greece, living this self-imposed slow death I am appalled at such ridiculous unprofessional dogmatic ideological journalism.... Where can one start? The distortions of reality in the article are so many. "Greek citizens will once again have the opportunity to vote again on the austerity program that has devastated their lives for the last two years." The loan agreement is not an austerity program, for Christ's sake. Austerity, frugality, cutting back is inherent ofcourse, and for a country that lived beyond its means for decades only common sense. But the structural reforms also inherent in the program, which are meant to open up the economy from a closed mafia style soviet operation and breathe life and transparency into it have NOT been applied because of resistance from the entrenched mafias that comprise Greek society today. The bloated, useless, wasteful public sector has not been cut back, wasteful bureaucracy and corruption is still rife, taxes are not even collected and nothing functions. The middle and upper class thieves (doctors, lawyers, notaries and scores of others) still operate as a law unto themselves, there is no effective cross checking of their incomes and tax dues, the only people that are taxed to death to sustain the worthless public sector are private sector employees who have no way of avoiding it. Those still in the workforce that is, because the 1.2 million unemployed are comprised ENTIRELY of people from the private sector. The others, clients of the political establishment now flocking to SYRIZA, have permanent tenure, live on borrowed money and are now punishing the former major parties for daring to support the memorandum which calls for structural reform. "The unemployment rate has passed 21 per cent, more than 30 per cent of small businesses have closed down, while half of Greece's youth are without work.", the author says, completing failing to mention that this has happened because busin...esses have been strangled by the political establishment that have failed to implement the reforms, all for the sake of protecting their cronies and political power base in the public domain. ‎"Suicide rates are on the rise in a country that had once the lowest suicide rates in the world", claims the author, again not providing any statistics and selectively ignoring reality which is that Greece still has one of the lowest suicide rates in the world. Experts in this field have repeatedly stated that generally speaking ordinary people do not commit suicide due to economic downturns, but their resolve to survive is strengthened in every way possible. Other underlying factors push people to these extremities, mental illness being the main one, although this is not absolute. Using such emotive language reveals total shallowness.. "The austerity program has failed to meet its fiscal targets and the country's debt continues to mount". What rubbish!! The country's debt has just been severely cut due to the PSI managed primarily by the "unelected banker". The deficit has also been severely cut. The Memorandum has not met it's other fiscal objectives simply because it has not been applied. Then there are total digressions from logic."Democracy is being replaced by a dictatorship of media and financial institutions that through the means of an ideological terrorism". How is this ridiculous statement substantiated? ‎ "Unjustified police brutality, tear gas, injuries and the attempted murders of journalists and citizens". Who attempted to murder the journalists, the police? Which journalists? Overall very poor reporting. I am quite surprised that Neos Kosmos even published such an article. Very disappointing.
"the former major parties for daring to support the memorandum which calls for structural reform " ... are you for real !!! the former major parties assisted to create this situation ... they have all been in on it from the start ... covering up for each other .... it's not just about reforms ... you go on to say "Experts in this field have repeatedly stated that generally speaking ordinary people do not commit suicide due to economic downturns, but their resolve to survive is strengthened in every way possible" I don't know what experts you are referring to but the ones I have heard say completely the opposite ... the reports out of Greece .. so what is all that false too ??? I communicate regularly with family & friends in Greece & they are telling me these facts themselves ... good reporting & I congratulate Neos Kosmos for being brave enough to allow a balance of opinions ... as journalism should be .... WELL DONE !!
That the article is full of lies is your personal assumption that has little to do with reality. As it is your own personal assumption that the loan agreement is not an austerity program. I can refer you to the words of Paul Thomsen, senior International Monetary Fund official who oversees the organization’s mission in Greece, that has actually admitted that the “austerity program” (as he put it in his own words and it’s very easy to verify the statement by a simple search in the web) and its emphasis on fiscal consolidation has failed to work and that “there is a limit on what society could endure”. The 1.2 million unemployed come mainly from the private sector (although I should remind you that are about 150.000 pending layoffs in the public sector without any alternative solution) but you fail to mention that the collapse of incomes and government spending has led to the sky rocketing numbers of unemployment in the country. The economic depression that the austerity measures have caused shrank local production by 8.5 per cent, reduced dramatically the consumption capacity and as a result tens of thousands of local business had to shut down. Public sector salaries have been drastically cut as have pensions. Labor and collective bargaining rights that were won decades ago were unceremoniously liquidated, also opening the road to severe cuts in the wages and salaries of private-sector workers. Brutal budget cuts have also hit Greece's education and health care systems, while more generally destroying Greece's already meagre welfare state. The adoption of such measures at a time of crisis has predictably led to an economic depression, with the Greek economy expected to shrink by over 20 per cent in a matter of a few years. These are facts that can not be refuted either we like it or not. That Greece is in great need of fiscal reform and greater accountability is a fact that we all agree on. However, the cause of reform, no matter how urgent, is not well served by the unilateral imposition of sudden and savage cuts in public services. Such indiscriminate cutting slashes demand a counterproductive strategy, given huge unemployment and idle productive enterprises that simply has not been put in place in Greece. As to the suicide rates, indeed Greece had one of the lowest rate of the world and the country still ranks low in the world scale (given of course the fact that many suicides are not declared as such since the omnipresent Orthodox Church does now allow a proper funeral to people who take their own lives). However there is a 40% rise in suicide rates according to three studies published by the accredited medical journal The Lancet, and although a direct link between economic depression and suicides is not easy to establish, it can not also be excluded. Last but not least, I need to answer to your questions about police brutality and attempt murders of journalists. It seems that you are not aware of the events that caused international outrage (including condemnation of the incidents by Amnesty International, Reporters without Borders and SEEMO) and prompted the federation of Greek journalists to issue a statement condemning the police brutality. To mention just a few names: photojournalist Marios Lolos in April 2012 had to go through surgery for head injuries after severe beating receiving blows in the head by the police forces; journalist Manolis Kipraios suffered from permanent hearing loss after a member of riot police fired a stun grenade against him last June; Dimitris Trimis broke his arm after he was violently pushed and kicked by the riot police. Blows on the head with clubs, brutal kicks and firing stun grenades to people are actually murder attempts, but it seems that Greek police has immunity when it comes to justice.
Austerity, many economists agree, as I do, is not the only medicine for Greece, growth is essential, but austerity was not forced on Greeks by a conglomerate of capitalist banks and western European states as this feature asserts. It is naive to think that there is a conspiracy to destroy Greece and its people. Those of us of the Diaspora who have lived and worked in Greece agree to the lack of civic responsibility and corruption which resulted in this crisis. Most Greeks (not all) were taking advantage of the capacity to borrow money but failed reasonable tests of compliance. Most Greek small and large businesses, professionals such as doctors, architects avoided income tax - that's not a myth it is a reality I lived in Greece. People were retiring at 50 or receiving a range of pensions – again not a myth - who pays for that when the national economy is run like a political fiefdom. Billions of subsidies aimed at making the agricultural sector productive have gone down the gurgler. An absence of innovation and research at Greek Universities is disgraceful, the list goes on. The state reflects the people and most Greek citizens in the post 1980 period had no appetite for governance, for paying fines, for paying taxes. It is cruel to see pensions halved and people suffering, most of all youth unemployment Yet other small nations which were born out of crisis and hardship like Greece, have prospered, Singapore, Israel, Malaysia, even Malta and Cyprus did what Greece should have. The Greek state and its citizens did little to embrace the responsibilities which come with running responsible governments or being responsible citizens. Now many on populist left and right portray Greece as a victim of capitalism or foreign control when in reality Greece is a victim of corruption, hubris and as we used to say when I lived there, "arpa kola". Spain's, Portugal's and Ireland's issues may look the same and result in similar outcomes but have a very different starting points - and they will ride out the storm and regenerate, they do not blame all else except themselves. While rightly one may see protests against austerity in these nations - a terrible strategy on its own - one does not see the adolescent capacity for Greek citizens to seek to blame all others except themselves. Greece has to develop its intellectual, educational, manufacturing, technology and tourism assets - areas that have been left to wither over the last 40 years. Greek citizens need to take responsibility hopefully it’s not too late. The failure of Andrea Papandreou and most that followed, left and conservative, to urge citizens to care for their nation, to pay taxes, to seek a sustainable path to development and a valid national pride, not dangerous ethnocentrisms resulting anti-foreigner sentiments, is at the heart of a system of political patronage. A nation of 10million people does not need 1million public servants. I have seen in the past with my own eyes the tragedy of young Greeks educated in London and Paris coming back and waiting aimlessly until someone, a link or mate, got them a job in the public service, or some small family business. I remember seeing young Greeks at my grandmother's village hanging out in cafenia while immigrant labourers, myself and some Aussie mates, collected olives. Of course we were called 'malakes' by the work averse local youth. Equally I saw and met highly skilled, hard working, multilingual young Greeks unable to chart a career path or develop a business due to less qualified public servants and red tape blocking their way. I remember the shock of my aunty and uncle when I decided as a Greek Australian to work to pay for my year holiday their response "Why would you work as a waiter, you have a degree, you will embarrass us" - a typical Greek middle class response. Why? Because many of the post 1975 Greek middle classe Greeks gauge their success by European standards not Greek, not middle eastern or even Asian. They have no sense of Greek society or state they lack innovation, technical skills but are high on self image. Greek politicians since the 1970s have been more adept at rousfeti, rather than securing intellectual, capital investment of the Greek Diaspora. Lambis SA

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