Thirty-six years since the restoration of Democracy, Greece passes its most severe financial and social crisis.
The Greeks are angry with the corrupted political system which led the nation to the precipice of bankruptcy.
At the same time, the people realise THEIR own responsibilities too; the Greeks seem to regret tolerating this situation for almost three decades.
For that they have empowered George Papandreou and his government to do their best in order to rectify the sins of the past. But, the cost they have to pay is too big.
The draconian austerity measures imposed by the EU-IMF bailout package must create great concern about the future, thus thousands of Greeks protest in the streets almost daily.
There is a general feeling that the EU punishes Athens for fudging statistics, while it protects the rest of the eurozone by huge defence packages of 750 billion euros (nearly $1 trillion).
From its side, in order to shore up liquidity in problematic markets, the European Central Bank decided to buy eurozone bonds.
Unfortunately, the EU didn’t exhibit the same approach when the Greek crisis appeared.
Without doubt its a positive thing that Spain, Portugal or Italy will be protected from international speculators and hopefully won’t face Greece’s mounting problems.
But, on the other hand, the EU defence package actually proves that the IMF-EU solution for the Greek crisis, under the terms and conditions agreed to, was too harsh.
While eurozone’s other “dysfunctional” economies will adopt moderate austerity measures, the Greeks will see tremendous cut-backs in their, already low, salaries and pensions.
With a rapidly decreasing purchasing power, the market of the country is going to fall into an even deeper crisis.
It is expected that unemployment in Greece will rise up to 14 per cent in 2011 without any prospect for economic growth.
Furthermore, according to official IMF data, the Greek public debt will be around 146 per cent of the GDP by 2015.
But, in fact, it is the real economy (e.g. family budgets, small businesses, labour market) that will shoulder the effects of the recession during the next decade.
The austerity measures of the IMF-EU rescue package consist an onerous deal for the Greeks who observe a shrinkage of their income accompanied by the highest market prices in the Union.
They ask themselves: why do they have to make such enormous sacrifices while their fellow EU citizens, for example the Spanish or the Portuguese, are already protected by the defence package agreed on May 9th?
Why did Mrs. Merkel disincline to protect Greece’s economy, a fellow member-state, when its economy was being attacked by international speculators?
In fact, the Greeks are called to pay the double of what they owe. Beyond the public debt itself, Greece’s social cohesion is diminishing day-by-day.
The IMF-EU rescue package, offers a solution to the state’s problem, but will significantly deteriorate the economic position of the middle and lower classes during the next few years.
This would amplify even more the feeling of injustice and the political consequences can’t be predicted.
The Greek government still has an option – to renegotiate the terms of the rescue plan.
Some really gruelling measures imposed to the Greek people have to be reconsidered or withdrawn.
The government along with the EU must safeguard the labour rights and interests of employees while lower salaries and pensions won’t be obliterated by huge cut backs.
At the same time, there is a huge need for the implementation of a modern developmental program aiming to support the truly productive sectors of economy: agriculture, tourist industry, lower and middle-market companies.
It seems that the present IMF-EU rescue package may prevent Greek State’s bankruptcy – nonetheless, it probably leads to the “bankruptcy” of the masses, of the middle Greek family, of the low pensioners and the small businesses.
The government of George Papandreou must act courageously in order to ward off the danger of social dissolution. A new bailout package, under new terms, is urgently needed.
Nicolas Mottas is specialist in Greek and Balkan Political Science and Diplomatic Studies and a freelance writer for various publications in Europe and a regular contributor to Neos Kosmos.