Greece has been mired in a steady economic decline for the past 4 years, reaching a new low this month with nearly 27 percent overall unemployment and youth unemployment upwards of 62 percent.
Austerity, the alleged panacea for Greek economic woes, does not appear to be working as businesses and capital continue to leave the country. The crisis seems to have opened the political space for right-wing nationalist groups like Golden Dawn, which has gained a foothold as a mainstream political party that blames immigrants for crime and economic strife.
Human rights organizations have reported a sharp increase in police discrimination and violence against immigrant communities in Greece.
Some economists claim that no other viable alternatives have been put forth by European Union leaders.
“I don’t think austerity seems to be the solution, but nobody seems to have a better alternative, said Barry Bosworth, an economist at the Brookings Institution in Washington, D.C., to Mint Press News. “We are witnessing a vicious end game.”
Losing competitive advantage
There isn’t one single problem responsible for the ongoing Greek crisis, but experts posit that it stems mostly from a labor market that can’t compete with other workforces across the EU.
“From an economic point of view it [Greece] simply isn’t competitive inside the EU. The cost of production is too high to compete with other states in the eurozone. The fact that they are not competitive inside the eurozone means that there are just no jobs. I think the economy is gradually collapsing. We don’t expect positive growth for some time,” Bosworth said.
Bosworth contrasts the eurozone economy with the U.S., where an economy in decline in one state leads job-seekers to move to others where there are better career opportunities — ideally with the assistance of the federal government to smooth transitions.
“In the U.S. if people can’t get jobs, they leave. We make most of the economic adjustments to stay competitive by having people move. That discipline forces us to adjust,” he said.
In practice, moving away to find work strains families and puts a toll on personal relationships. Twenty-three-year-old law graduate Christina Zahagou will soon leave for Germany and anticipated difficulties in adjusting to a new country.
“I don’t want to leave my friends and family,” she told BBC News. “Abroad I will struggle to find friends, at least in the first year. But I have no other choice. It’s a sacrifice I’m willing to make because I can’t find anything hopeful here in Greece.”
Like so many her age, Zahagou is one of millions who simply can’t find jobs. Youth unemployment has soared in recent months. The latest jobs data shows that Greeks 15 to 24 remain the hardest-hit, with 58.3 percent in that demographic unemployed. In certain regions, nearly 3 out of 4 youth are without work. According to a report by the Telegraph, Greece’s Western Macedonia region had the highest level of youth unemployment in the European Union, with 72.5 percent out of work in 2012.
“How long can these countries sustain youth unemployment of 50 percent? What do people think the end game is going to be?” Bosworth said.
Since the outbreak of the country’s financial crisis in 2010, 120,000 Greek professionals have left to find work in other countries, many of them going to Germany and other states with stronger economies. It’s a brain drain that experts believe will have grave repercussions for the future.
“Greece is going to be left with a collection of elderly people with no jobs,” Bosworth said.
The EU was designed to create a single economic bloc in which citizens could move freely from one country to another to work and study. Thus far, it hasn’t worked out as planned.
“It’s all amazing how closely aligned wages remain in the U.S. Labor mobility is part of the mechanism we use to moderate these things. I think it works because we have 200 years of doing it. Europe was not that kind of system. They are more insular and less flexible.
There isn’t a European culture as much as there is a French culture, a Greek culture and a German culture,” Bosworth said.
Austerity, the alleged panacea for these financial woes, seems to have exacerbated the state of economic decline by creating more unemployment when the Greek government is forced to purge public sector jobs to reduce government expenditures. The Greek government decided decided to shutter its state-run television and radio broadcaster this week, sending 2,900 people into the ranks of the unemployed.
The New York Times reports that the firings are in keeping with a promise to creditors to dismiss 4,000 civil servants this year. The government plans to fire 15,000 public workers by the end of 2014.
These promises were made as a condition for economic bailouts provided by other EU member states in order to stabilize the Greek economy. The lack of control over their own currency has placed Greece in a difficult situation.
“They actually did have a large public debt which would have been manageable if they had control over their own currency. In the U.S. if rates start to rise, we can print more currency. That starts to pressure the Greek fiscal system,” said Josh Bivens, director of research and policy at Economic Policy Institute, in an interview with Mint Press News.
Xenophobia and discrimination
When politicians fail to provide jobs and stability, fringe political groups step forward to blame immigrants for the failure of the economy. Right-wing nationalist parties are beginning to gain a small foothold in mainstream Greek politics, claiming that immigrants — most coming from the Middle East and Africa — are to blame.
Toward that end, Golden Dawn, a right-wing nationalist party that blames immigrants for taking jobs and importing crime, won 5.3 percent of the vote in the November 2010 municipal elections in Athens.
Since then, the group has gained broader public support by providing food and security services to citizens of Greek heritage. Golden Dawn candidates received 7 percent of the popular vote in the 2012 general elections, enough for the party to enter the Parliament for the first time with 21 seats. Following a second round of balloting in June, their share was reduced to 18 seats.
Their virulent anti-immigrant message has led the party to advocate for the transfer of immigrants into camps as well as calls for land mines along the borders to prevent asylum seekers from entering the country.
“We will struggle for a Greece that is not a social jungle because of the millions of immigrants they brought here without asking us,” said Golden Dawn Leader Nikolaos Mihaloliakos at rally last year.
The trend is reflected in police tactics, as well. Human Rights Watch reports, “Between August 2012 and February 2013, Greek police forcibly took almost 85,000 foreigners to police stations to verify their immigration status. No more than 6 percent were found to be in Greece unlawfully, suggesting the police are casting an extraordinarily wide net.”
Tupac, a 19-year-old Guinean asylum seeker, told Human Rights Watch that in early February police officers forced him and other immigrants passengers out of a bus in central Athens: “[P]olice officers came to the door and said ‘All blacks out, all blacks out.’”
Human Rights Watch says that this is becoming a common tactic for police who frequently stop people who appear to be foreigners, subjecting them to “unjustified searches of their belongings, insults, and, in some cases, physical abuse. Many are detained for hours in police stations pending verification of their legal status.”
Undocumented immigration is on the rise, as seen by the influx of Iraqis, Afghans and Palestinians in recent years. Many of them are political refugees searching for an escape from war.
Jobs are scarce in Greece, but it’s not because immigrants are stealing those jobs. Businesses have packed up and left for more stable economies to do business.
“Because the situation doesn’t look hopeful for the future, companies will not move production to Greece. If anything they are leaving Greece. The capital is leaving the country, taking away jobs. It’s a terrible situation,” Bosworth said.
Protests continue
Speculating on the outcome of the explosive situation is a difficult one even for economic policy experts.
“My guess is that the most likely scenario is that Greece stays in the EU and endures years of sky-high unemployment. The alternative would be a painful couple-of-year adjustment process if it leaves the EU. I think politically it’s just very unlikely. The likely time for that to happen has probably already passed,” Bivens said.
Even if unemployment remains at current levels, Greece could see a continuation of strikes and general protests that have rocked the country in recent months. In one recent action, Greek workers carried out a general strike on May 1 to protest the plight of the economy.
Thousands of Greeks walked off the job in the second general strike against austerity measures this year, shutting down tax offices, disrupting public transportation and leaving state hospitals to operate with skeleton staffs of emergency employees.
Greek labor unions have become key to organizing the general strikes. After the closure of the state television station this week, two major unions — the General Confederation of Greek Workers and the Civil Servants Confederation — called for a general strike in support of the thousands who lost their jobs.
Protests like this have become commonplace, at times attracting upwards of 250,000 people in demonstrations across Athens. In one protest held February 2012 outside Parliament, thousands of people gathered as ministers discussed austerity measures that would include cuts in government spending, wages and pensions. Several buildings were set on fire, including a bank, cafes and a movie theater. Twenty-five protesters and 40 officers were injured in the clashes.