The $170 billion bailout for Greece will force Athens to commit to making another round of deep austerity cuts. As part of the deal, Greek workers are expected to suffer further wage cuts larger than the 15 percent already planned for the next three years. Under the agreement, Greece’s private creditors have agreed to take deeper losses on their Greek debts.
The bailout is being opposed by several unions and left-wing groups in Greece. Civil servants have been hard hit by the austerity measures which began in 2010. Wages and pensions have been reduced, benefits cut, and 10,000 people laid off in 2011. Under the new package, another 15,000 civil servants will be laid off this year. Additional pension cuts will affect both the private and public sector. The vice president of the Confederation of Civil Servants has been particularly critical of the deal.
Paul Mason talking:
what makes the headlines are, of course, the riots. And the riots continue. I’ve been covering these events for the last two years. They get more and more intense.
What doesn’t make so many headlines is what is happening to real people. I was able to visit a clinic in the Piraeus port. It had been set up to deal with people who fall through the social security net, which is mainly undocumented migrants. So it was volunteer doctors and free healthcare and free food. That’s about as basic as it gets. In the last six months, they’ve been swamped by Greek citizens, because they—Greek citizens are falling through the safety net in a Europe that is supposed to be—well, what Americans think of it as quasi-socialist. It has a welfare state. And yet, we’re seeing those starving people and homeless people, huge numbers of drug addicts and homeless people on the streets. It looks and begins to look really almost borderline developing world, parts of Greece now.
they have a system whereby you pay a little bit into the healthcare, and you pay a bit for your medicines, and you pay a little bit for your treatment. But what’s happened is, of course, the solutions imposed on Greece by the IMF and the European Union have involved raising taxes very dramatically. So they had an austerity tax that they collected through the electricity bill. Somebody showed me their electricity bill: 350 euros per month. Per month. So, what is that in dollars? Four hundred? But most of that is tax. And if you don’t pay it, your electricity stops. Now, this person earned 500 euros per month. So, the money you have to pay for your healthcare, it’s just no—well, it’s food first, then healthcare, and so people just can’t afford it.
you would like to believe that they could win, they could beat all odds and stay in the euro and avoid default. But up to now, every one of the failed bailout packages was signed off by the IMF and the E.U., and they all involved meeting, you know, the Greek problem with austerity. So you cut spending, you raise taxes, you impoverish people. Leave aside the minimum wage, wages in general are going to have to fall 15 to 20 percent to meet—in the private sector. This is no longer just a public sector thing. Now, I think, and most analysts think, that they are on a route to default and that the last week’s—or this week’s deal has basically been about ringfencing the rest of the eurozone for if and when that happens. Having been there, I think it’s when.
And then there’s, on top of that, the whole question of political instability. You mentioned left-wing groups in your introduction. I think there’s a bit—in the mainstream media, there’s a bit of a “does not compute” going on. The combined vote, for the communists, Trotskyists and ecologists—so these are left-wing parties with hammer and sickle on their flags—is 43 percent right now in the polls. That dwarfs the equivalent of the GOP and the Democrats. And I think there’s an element of “We don’t want to see that.” But that is what you get when people are told, you know, “Your life is—your future is over.” There’s no way, I think, from any early election, that a stable government can emerge that can do this thing they have agreed to do.
What’s happening, though, is the two parties—because these two parties are there from the last election three years ago, so they have a majority right now, even though their popularity is slumping. I think, as they pass them, more and more MPs are chipped off. And these two parties in power splitting is not great, if they then stand for elections, and their own members get to ask them, “Well, what are you going to do about this?” During an election, pressure goes on the mainstream parties as well as the ones at the extreme. And, of course, the right as well as the left are growing as a result of this crisis. And remember, this is a country that had a civil war between the right and left after World War II. So, I think that that’s that on that situation. I think it’s—they’re just not going to be able to make it work. The instability is going to bring down the plan. Or it’s 90 percent certain, in my mind, that the instability in Greece will just—you can’t push through this level of austerity with a weak government.
it’s Greece, it’s Europe, it’s North Africa. We are—you know, we are living in a time where the world has, in the last couple of years, erupted in a way that many people thought they would never see again since the 1960s. And I think the Greek events—I mean, Greece isn’t all riots. It’s Occupy camps. There you had one of the first ones, called the indignados camp, in their main square. In Europe, across southern Europe—you know, I think only me and Glenn Beck have been talking about this, in a way. I have seen the crossover, the potential crossover, from North Africa to southern Europe to the United States, and the similarities between what is happening. I take a more—a sort of more sort of standing above it standpoint than Glenn does.
But it’s—there are links. There are common factors. And the most important one, everywhere, is what you saw in that bar, what I call the graduate without a future. You find them on Tahrir Square. You find them in Syntagma Square, Greece. You’ll find them outside—you know, in Zuccotti Park, New York. Once the economic crisis switched off that narrative that things are going to get better, you’ll have a better life than your parents, I think people in the Middle East lost their fear, people in Europe and America have lost their apathy. And there’s a lot to be sort of angry about once you look at real life. In my book, I’ve—one of the chapters in it is where I drive from Oklahoma to L.A., following the route that Steinbeck’s Joad family took.
We’re in a economic crisis. There was a drought in Oklahoma last summer. I thought, well, let’s just drive along 66, or parallel to 66, and see what it’s like now. It’s stunning, what you find. I think much of the mainstream media misses this. One of the most amazing things was to find a homeless encampment in Albuquerque, which, of course, was set up—again, there’s always this parallel—for people who maybe had drug and alcohol problems. But now, what do the people running it say? The people coming in are the American middle class, people who have been running a branch of McDonald’s, holding down a decent managerial job, two weeks later, homeless, jobless and sleeping on the floor with 80-odd people they don’t know.
Financial Times reporting, that U.S. taxpayers will subsidize part of the $26 billion settlement owed by five leading banks to resolve claims over faulty foreclosures and mortgage practices. A clause in the provisional agreement, which has not been made public, allows the banks to count future loan modifications made under a previous foreclosure-prevention initiative toward their restructuring obligations for the new settlement. This is quite something. So this is a big deal that was worked out with all the U.S. attorneys-general in the United States and the banks, supposedly penalizing them, a $25-$26 billion settlement, but in fact a bailout for them.
It’s hard not to see the Greek bailout as a way of protecting the European banking system. It’s hard not to read that report as, yet again, a decision to bail out banks and bankrupt countries, because don’t forget this: the financial markets at the moment are focused on Greece and Europe. At the moment that is solved, they will focus on your country, because you are $14 trillion in debt, and there are—there is doubt about whether your institutions can one day deliver the austerity that those financial markets will demand to make that debt stable.
So I think, look, that the underpinnings of this new global unrest are that from Cairo to Greece to New York to Albuquerque, people are sick of seeing the rich get richer during a crisis. That’s what they’re sick of. And until we start hearing solutions, both at the grassroots level and at the top level in politics, that go beyond that, that explain to us what the new story is about capitalism, these unrests, these revolutions, the unrest, the protests, I think, will go on, because it is about a generation that doesn’t know what the story is anymore. What is the story about how my life is going to get better? Once you do that, and then you add in networking and technology and the ability to express oneself and move around the mainstream media, you’re in for years, I think, of discontent.
And nobody believes the most optimistic scenario. I mean, look, they’re in what economists call a death spiral. So, the economy is shrinking, and the debt is getting bigger. Of course, Greece has had a big debt write-off, and that is tangible. That’s real and material, and it will be welcome. But as they try to implement the austerity, I think most observers think they can’t do it. And if they did, it will produce a deep recession that will make the lives of the people I saw on those streets very angry, very dislocated from politics, even more harsh, and they will get even angrier, if not despairing. Some are already beyond the anger stage. Some are in a state of just individual despair. Greece is an extreme, an outlier, but it does—of course, it does show what happens if you let your debt get out of control. It also shows what happens if you think—if you only see austerity as the solution to indebtedness.
– source democracynow.org