The austerity measures, privatizations, salary and pension cuts, and all of the other measures implemented during the years during which the Greek economy was purportedly being “bailed out,” will remain in place. Indeed, it’s full steam ahead for all of these policies.
ATHENS, GREECE (Analysis) – Hundreds of thousands of Greeks took to the streets of Thessaloniki, Greece’s second-largest city, on Sunday, January 21, in a mass rally opposing a compromise on the part of the Greek government regarding the Macedonia name dispute with Greece’s northern neighbor, temporarily recognized by the United Nations as the “Former Yugoslav Republic of Macedonia” (FYROM).
As talks between the governments of Greece and FYROM have progressed, seemingly out of the blue and after a very long period of dormancy, a significant percentage of the populace in Greece is seizing the opportunity to participate in the first large-scale street demonstrations in the country since the days leading up to July 5, 2015 referendum rejecting an austerity proposal put forth by Greece’s creditors. That referendum result was of course subsequently rejected by the “radical left” SYRIZA-led coalition government.
The Thessaloniki rally was, for many of its participants, more than just an opportunity to have their voice heard regarding the Macedonia name dispute. It was also a chance to speak out against the numerous other difficulties ordinary Greeks are facing, in the midst of an economic crisis that has been ongoing since 2010. Some of the speakers at the rally, and many participants as well, spoke out against austerity, forced home foreclosures and seizures, privatizations, and a host of other policies that the current government promised to oppose but instead has faithfully implemented since taking office in January 2015.
This promises to be the case this coming Sunday as well, at the follow-up rally being organized in Athens. This rally is set to take place in Syntagma Square, outside Greece’s parliament, the site of many massive protests in the past, including the “Indignants” movement opposing austerity in the spring and summer of 2011. And — while numerous representatives of SYRIZA were quick to label the Thessaloniki rally “fascist” or “nationalistic,” the purported domain of Greece’s far-right Golden Dawn party — Sunday’s rally in Athens will feature, as one of its main speakers, Greek composer and cultural icon Mikis Theodorakis, who is widely associated with the Greek left.
When the SYRIZA-led Greek government isn’t busy denouncing the demonstrations, it is touting its economic “success story” and Greece’s supposed exit, in August, from its memorandum (loan) agreements with the country’s “troika” (the European Union, the European Central Bank, and the International Monetary Fund) of lenders. SYRIZA has boasted about the country’s forthcoming exit from these memorandum agreements — including the one it implemented in July 2015 following its rejection of the referendum result — since the summer of 2017.
Most recently, such claims were repeated by non-elected Greek Finance Minister Euclid Tsakalotos. In a softball interview with Reuters earlier this week — where Tsakalotos was pictured in his office with a decal of the PAOK football club, owned by pro-SYRIZA oligarch Ivan Savvidis, in the background — Tsakalotos stated:
We’ve been outperforming our fiscal targets, the economy is returning. … To those people who think we need something more, like a precautionary credit line or whatever, they are just pushing the key question back and I don’t see any reason for that.”
According to Tsakalotos, Greece will not only emerge from the memorandum agreements and troika oversight in August, it will also not require a precautionary credit line to fund the country’s needs in the short term. Instead, Tsakalotos claims, the government has built a “safety net” of funds that can last the country a year or more. Tsakalotos went on to issue vague promises regarding growth, “reforms,” social policies, talks regarding debt relief, and an economy that is turning the corner.
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What went unmentioned by both Tsakalotos and the Reuters journalists, however, is that an exit from the memorandum agreements in no way absolves Greece from the harsh austerity that has been implemented there since 2010. While SYRIZA is attempting to market an “exit from the memorandums” as a selling point in light of parliamentary elections — slated to be held no later than September 2019 — and European parliamentary elections in the spring of 2019, such an exit simply signifies the conclusion of the loan agreements the current and previous governments signed with the troika.
The austerity measures, privatizations, salary and pension cuts, and all of the other measures implemented during the years during which the Greek economy was purportedly being “bailed out,” will remain in place. Indeed, as will be shown below, it’s full steam ahead for all of these policies.
As part of the SYRIZA-led government’s propaganda efforts, the Greek state “re-entered the bond markets” in the spring of 2017, via a 3 billion euro bond sale. It was the first such entry into the markets for Greece since late 2013, when the coalition government of the center-right New Democracy and the Panhellenic Socialist Movement (PASOK) completed a bond tender, again amidst proclamations of a Greek “success story.”
What went unmentioned in the Reuters interview, however, is that the bond yield (interest rate) of 4.625 percent was not only much higher than that of other crisis-hit countries in Europe, but higher than or comparable to that of such economic superpowers as Vietnam and Botswana.
These claims of a Greek economy on the rebound were repeated by SYRIZA and by media mouthpieces following last spring’s bond tender, even though the journalists in the aforementioned piece seem to have overlooked this bond issue, stating that one has not taken place in over three years.
Greece’s Prime Minister Alexis Tsipras, left, speaks with German Foreign Minister Sigmar Gabriel during their meeting at Maximos Mansion in Athens, March 22, 2017. Gabriel is in Greece on a two-day visit as he is suggesting his country could offer to pay more money into the European Union, arguing that investing in Europe is “an investment in our own future.” (AP/Thanassis Stavrakis)
German newspaper Frankfurter Allgemeine Zeitung recently described Greek Prime Minister Alexis Tsipras as the man who might go down in history for saving Greece from foreign economic supervision, while the Financial Times, in early January, fawned over Greece’s “remarkable turnaround” under Tsipras’ leadership. Another German newspaper, Die Welt, also gushed over Greece’s economic recovery in 2017, writing that Tsipras may even be able to solve Greece’s debt problem and, perhaps mockingly, added that he might even finally wear a tie.
Tsipras, in an interview on New Year’s Day, described 2018 as “the year of Greece” and has repeated the claim that Greece will emerge from the memorandums in August. At his annual State of the Nation speech at the Thessaloniki Trade Fair in September 2017, Tsipras promised an exit from the bailouts in 2018, “help” for workers and youth, and an end to creditor supervision of the Greek economy.
Such boasts on the part of the SYRIZA-led Greek government, and such omissions on the part of the global mainstream media, overlook the inconvenient reality that, barring some truly radical change, Greece will in no way be able to absolve itself of austerity and international financial oversight for the foreseeable future. This is because of the commitments the current government has made, which chain the country to a strict set of economic measures for decades to come.
Initially, in May 2016, the Greek parliament passed a 7,500 page omnibus bill, sans any parliamentary debate, that transferred control over all of the country’s public assets to a fund controlled by the EU’s European Stability Mechanism for a period of 99 years – that is, until the year 2115. Not even Marty McFly and Doc Brown traveled that far into the future!
Second, Greece’s loan commitments to the “troika” of lenders are set to continue, at the current rate of repayment, until 2059, as reported recently by the German newspaper Handelsblatt. That is the year when Greece is expected to have repaid the balance of the loans it has received, as part of its so-called “bailouts,” since 2010.
The same article pointed out that the Greek government has made commitments to implement further austerity measures through 2022. These measures — totaling 5.5 billion euros and agreed upon in June 2017 in what is, in essence, a fourth memorandum — include no less than 113 demands on the part of the troika, encompassing new privatizations of public assets and pension reductions. Other measures foreseen as part of this deal include a reduction in the tax- free income threshold and the further dilution of already-decimated worker rights. No increase in the also-decimated minimum wage is foreseen, nor are any new social measures to be implemented until 2023, despite Tsakalotos’ promises to the contrary.
In connection with this agreement, assets slated for privatization include such strategic holdings as 25 percent of Eleftherios Venizelos International Airport in Athens, the remaining regional airports that have not already been privatized, Greece’s national defense industry, and the Corinth Canal.
Third, the SYRIZA-led coalition government has committed to the maintenance of annual primary budget surpluses of 3.5 percent through 2023, and then 2 percent annually through 2060. In plain language, what this means is that the state will spend less than it earns in revenues. If revenues therefore decrease, expenditures will be slashed accordingly. And, as foreseen in the 2017 deal between the Greek government and the troika, should there be shortfalls in these fiscal targets, automatic budget and spending cuts are to be immediately implemented through at least 2022.
Here it should be noted that the net revenues of the Greek state declined in 2017, falling to 51.27 billion euros from 54.16 billion euros in 2016, leading in turn to a reduction in the pre-tax primary budget surplus from 2.78 billion euros to 1.97 billion euros. With state expenditures having reached 55.51 billion euros, Greece now faces a post-interest deficit of 4.24 billion euros, resulting in an increase in the country’s public debt. These figures will inevitably lead to the imposition of the automatic cuts agreed upon with the troika in 2017.
For those keeping score: Greece’s economy was said to be in dire crisis and endangering the whole of the Eurozone in 2009 with a debt-to-GDP ratio of approximately 127 percent. In 2017, after eight years of “bailouts,” this figure reached 179 percent. Yet the Greek economy is being touted as a “success story” and one that will, of course, remain firmly placed within the Eurozone.
While taking its backward victory lap, the SYRIZA-led government has made celebratory claims regarding the reduction in Greece’s official unemployment rate, which once hovered close to 30 percent but has since declined to 20.7 percent. It bears noting though that the total and per capita costs of labor have remained steady during this period, indicating that new jobs that are being created are on the very low end of the income scale. Furthermore, the percentage of those employed part-time or otherwise underemployed has increased in recent years. These individuals are not officially considered to be unemployed.
What also bears mentioning is the frightening “brain drain” — mass emigration — of Greeks during the years of the economic crisis. Approximately 500,000 to 600,000 Greeks are said to have left the country during the past decade. These losses do not just consist of unskilled or low-skilled laborers: 12,408 medical doctors, to take one example, have emigrated in the past 10 years. This means fewer skilled and educated professionals are living in Greece, spending their incomes in Greece, paying taxes in Greece, and contributing to Greece’s pension system.
In other words, unemployment is on the decline, just as long as all the unemployed give up and leave the country or accept low-wage jobs for which they are overqualified, receiving a pittance as an income.
Further illustrating the above, Greece ranks second in the world in negative wealth growth during the 2007 to 2017 period. On average, Greek households lost 37 percent of their wealth over this period, second only to Venezuela at 48 percent.
Greek pensioners stand with other retirees as they gather to take part in an anti-austerity rally in Athens. Greek retirees are struggling to survive on ever dwindling pensions with repeated cuts imposed by successive governments as part of their country’s three international bailouts. (AP/Petros Giannakouris)
In January, the SYRIZA-led coalition government voted into law a new omnibus bill, totaling 1,531 pages, that is chock full of new cuts and still more austerity for Greece’s ravaged populace. What do this bill’s measures encompass? Some highlights of the newly-passed legislation include:
It bears remembering that SYRIZA, prior to its initial election in 2015, campaigned on a platform of stopping further sell-offs of public assets and reversing previous privatizations. These measures come in addition to previous agreements that the SYRIZA-led government made with the troika, which will lead to the loss of the equivalent of up to three monthly pension payments for recipients beginning in 2019, and additional pension reductions impacting 2.7 million recipients, who will face cuts of up to 40 percent.
Even employees at SYRIZA’s owned-and-operated media outlets, including the “Sto Kokkino” radio station and the Avgi newspaper, have faced cuts. Three workers at “Sto Kokkino” were recently fired for refusing to sign a new contract that would have reduced their salaries by 20 percent. These firings have led to employees staging repeated work stoppages at these outlets.
These are not the signs of an economy that is recovering. They are instead signs of an economy that continues to sputter, ravaged by austerity and widespread public despair.
It is this despair that might show its face at Sunday’s protest outside of the Greek parliament in Athens. It could be said that this is the moment of truth for the Greek people, who were lulled into complacency after the overwhelming referendum result rejecting troika-imposed austerity was overturned by the SYRIZA-led government that many once believed would keep its campaign promises, stand up to the creditors, and end austerity.
Will Sunday’s rally be as big as many in Greece are expecting, and will it have any tangible political result, above and beyond the Macedonia name dispute that served as its initial impetus? We should find out soon enough.
Top Photo | Members of the Communist Party-affiliated labor union shout slogans during a rally in Athens, Jan. 15, 2018. Greek lawmakers, eying the end of eight years of bailout programs, approved more painful austerity measures, as strikes and mass protests brought much of Athens to a standstill. (AP/Thanassis Stavrakis)
Michael Nevradakis is a PhD candidate in media studies at the University of Texas at Austin and a US Fulbright Scholar presently based in Athens, Greece. Michael is also an independent journalist and is the host of Dialogos Radio, a weekly radio program featuring interviews and coverage of current events in Greece.
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