Anger, despair as Greece struggles under bailout terms

Tuesday 14 February 2012 19.47

By Tony Connelly, Europe Editor, in Athens

Outside the unemployment office in downtown Athens the mood among applicants is one of grim resignation. “I’m not optimistic I’ll be able to find something soon,” says Bujar Arapi, a 33-year-old construction worker who has laboured in the building trade since he was 15. “I don’t see any future at least for now. I’m really worried about the future of my kids as well. No matter what I do I don’t seem able to bounce back.”

Like many other Greeks who become unemployed the safety net is limited. The government provides a minimum salary based on the number of stamps an employee has accrued over his working life, but after one year it elapses. For Bujar that means relying on the salary his wife makes as a part time cleaner.

Unemployment is hitting Greeks across the board. In financial services and in the construction sector the slump has been dramatic. The only sectors which are holding up are the IT and tourism sectors.

The slump in employment has been dramatic. At the Kariera employment agency located near the imposing new Olympic Stadium, managing director Alexandros Fourlis points on his computer screen to one graph falling steadily, another rising exponentially. The first shows the number of jobs declining since the collapse of Lehman Brothers in 2008 (multinationals were the first to stop hiring, local Greek firms followed), the other shows the rise in applications for by people coming to the agency. “In 2008 at the beginning of the crisis,” he explains, “there were 20 applicants for every job; today there are 350.”

The crisis has forced normally well qualified people to eventually look for work in jobs for which they are overqualified. This leads to a loss of morale, lower wages, and limits the access of those who would normally start on the bottom of the ladder before moving up.

As a result Greeks are emigrating in numbers. “I’ve been forced to take this decision because there is no future in my country,” says Ivi Vamvakidou, a 31-year-old civil engineer who is moving to the Gulf state of Oman to join a Greek construction firm. “I’m jobless here and the salaries are very low. So I decided to go.

“I can feel that it’s going to be a long time, I’m going to have my family there, I’m not going to come home. I’ll just come back to see friends and family for holidays. I’m sad and angry.”

This is the highly charged atmosphere in which Greeks find themselves. At the same time the country has been virtually held up as untrustworthy by those eurozone countries which are having to bail Greece out. The signals from the meeting of eurozone finance ministers on Thursday February 9 could not have been clearer: Greece had broken too many promises to reform its economy and to abide by the terms of the first and now second bail-out programmes.

Specifically Greece needed to cut a further €3.3 billion from the public budget in 2012 in order to remain on track to cut its deficit and to keep its debt level sustainable. Eurozone capitals also demanded that Greek politicians sign up to the new programme which would release the second bail-out worth €130 billion, and that they bridge a funding gap worth €325 million.

‘We are at a critical point,” according to Loukas Tsoukalis, Professor of European Organisation at the University of Athens. “The economy is in deep recession and the prospects are for a deeper recession. Society is angry and many people are in despair.”

The violence which accompanied Sunday night’s vote in the Greek parliament attested to that anger. The fact that 43 Greek deputies voted against their own parties to reject the terms of the second bail-out adds profound political uncertainty to the mix.

At present the new unity government under prime minister Lukas Papademos relies on the support of the centre left PASOK party, the centre right New Democracy and a number of smaller parties.

According to Professor Tsoukalis, the fact that both parties – normally sworn enemies – largely supported the plan, is encouraging. “The good news is that the Greek political class seems to be finally facing up to reality,” he says. “They are building a coalition which is alien to Greek politics.”

What is less certain is the commitment of the leader of New Democracy to the bail-out plan. Antonis Samaras has always criticised and resisted the bail-out programmes when in opposition. Now that he is poised to lead the next government with an election due in April or May, his words are being closely parsed to see what his intentions are.

Speaking in parliament the night of the vote he said: “I ask you to vote in favour of the new loan agreement today and to have the ability tomorrow to negotiate and to change the current policy which has been forced on us.”

There’s plenty of room there for the kind of ambivalence that Germany, the Netherlands and Finland simply cannot abide.

The European Commission’s view is that the second bail-out programme is more about reforming the sclerotic Greek economy than about piling on more austerity, as many Greek politicians and protestors have claimed.

A commission source says that many of its elements deal with making the tax system much more efficient, reducing corruption and cleaning up the health sector and its dispersal of overpriced drugs (Greeks pay more for drugs than any other EU country).

Other elements reinforce key demands in the first bail-out programme which were not implemented by the previous PASOK government, such as the reduction of 15,000 jobs in the public service as part of an overall plan to reduce it by 150,000 by 2015.

Professor Tsoukalis agrees.

“Structural reforms cannot be identified with more austerity. Structural reforms are coming very late to Greece, so liberalising services, liberalising the labour market, improving your tax collecting machinery… these are all to the good. Of course, resistance comes from vested interests, it does not come from the majority of the population. And this is a message which needs to be clearly articulated and explained to the public. Very often most of the people do not understand that structural reforms are for the benefit for the large majority of the people. They are not against their interests,” he says.

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