Pity the Greeks

 
A Greek family Families are under pressure - with some moving back in with grandparents

ATHENS: Europe is out of sympathy with Greece. It is the country that threatens the dream of "ever closer union". It is blamed for undermining the very existence of the single currency. The White House frets that the country could endanger the world economy. Greeks are caricatured as lazy and feckless.

Europe's leaders have lost patience and turned up the threats. The message is clear. The Greek government must either live up to commitments to reduce its deficit, or the next tranche of bail-out money will be withheld.

So, last weekend, a new tax was pulled from the hat. A property tax. At first - as usually happens - it was well received in Brussels.

But then the doubts set in. The tax will be levied on all property owners with the rate determined by the size of the property and its location.

I met a Greek television producer whose apartment is 100sq m (1,000 sq ft). She expects to pay around 700 euros (£600) in tax.

It will be collected via the electricity bill - the most reliable way for collecting taxes in Greece.

But, almost immediately, there were problems. The power workers said they would not collect such a tax. The government responded by saying any short-fall would be charged to the union. Nobody quite believed that.

And then there is the not-unimportant detail that nearly 15% of people are already behind on their utility payments. That will surely go higher with the new tax needing to be paid next month. The threat is that if you don't pay, then you'll be cut off.

Drastic drop

Now I met over the weekend an IT specialist, Gerasimos Melissaratos. He lives in an apartment with three children. The property tax will cost him 700 euros. He has already had to pay a "solidarity tax" that was close to 1,000 euros. His salary - because he works in the public sector - has already been reduced by 20%. The expectation is that a further wage cut lies ahead - of up to 30%. His wife is a nurse. She too has seen her wages cut by 20%. Few families anywhere can survive such a drastic drop in their available income.

But this has become the common story of the middle class. Joanna Karellas and her husband Vassilis and their three children were at a bike fair this weekend. They, too, say the situation is desperate, with their income down because she works in the public sector.

When their daughter started back at school there was a shortage of school books.

They say that confidence in the government and in the austerity plan has collapsed. In a matter of hours they were the third middle class family to tell me they were eyeing moving to Canada and Australia. Greece could be on the brink of losing its best and brightest.

Everywhere are signs of a country under strain. There are countless stories of young people in their 30s moving back in with their parents. Some 15% of Athens' shops have closed. When fruit and vegetable markets close, there are reports of people scavenging for the damaged fruit.

Tipping point

There is, at best, sullen resentment. At worst a seething anger. The protests are so regular that they almost escape comment. Even the tax collectors have been on strike. More strikes lie ahead.

Greece is close to that tipping point where almost whatever new austerity measure is implemented will fail. Significant sections of society are in a state of resistance.

An anti-austerity protester shouts at police officers outside the Greek parliament 18/9/2011 There is a sense that Greeks have been pushed close to a tipping point

Many Greeks are humiliated. They watch their leaders take their orders from outsiders. They no longer have a say, or so it seems. Unknown inspectors from such organisations as the EU and the IMF decide their future.

But, as the Greek finance minister Evangelos Venizelos said at the weekend, the international community "is not even sure whether Greece, as a society, as a nation, has the will to do all that must be done to escape the crisis and take the competitive position it deserves within the European and the global market".

European leaders have told Greece it must reduce its deficit this year to around 7%, or the next tranche of bailout money will be withheld. Greece needs 8bn euros by mid-October - or it runs out of cash.

This weekend the German Finance Minister, Wolfgang Schaeuble, issued another stern warning.

"Membership in a monetary union is an opportunity," he said, "but also a heavy burden. Measures for alignment are very difficult. The Greeks must decide whether they want to bear this burden."

And he went on to say that "nobody should be under any illusion: without a positive assessment by the troika of the European Commission, European Central Bank and International Monetary Fund that Greece is fulfilling its commitments, the next tranche cannot be paid. "

New austerity measures are being lined up.

Again, the Greek Finance Minister, Evangelos Venizelos, casts the present dilemmas in a dramatic light.

"I think that the Greek people's pride and the need to protect the post-war achievements of the country and the things that Greek men and women laboriously achieved over the past 60 years - and not merely the past 37 years since the restoration of democracy in 1974- are the kinds of criteria that force us to act in this way," he said.

So, pity the Greeks. Even if they avoid default they face years of austerity. Many would prefer a default, with all its unknown dangers. It is a country living on a dangerous edge where many doubt the measures that the government is introducing.

 
Gavin Hewitt, Europe editor Article written by Gavin Hewitt Gavin Hewitt Europe editor

Comments

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  • rate this
    +7

    Comment number 1.

    Pity yourselves! We are FED UP in Greece having an 80+% of the population working for peanuts and paying taxes to sustain the 20+% of a worthless 'elite' who have been holding jobs and salaries they are not worth only due to political parties. And we are even more FED UP with 'allies' (Germany, France and UK of course) wanting a piece of whatever we have for PEANUTS! It's time to REACT vs. BOTH!

  • rate this
    +3

    Comment number 2.

    It is too late for Greece. The austerity measures cannot now achieve their stated goal, as the "tipping point" as is well put in the article has surely been reached. Once everyone starts to leave disaster beckons.

    Default and Euro exit are surely inevitable and the Greek people can build again.

  • rate this
    +31

    Comment number 3.

    As Greece only entered the Euro due to it's debt figures being covered up by Goldman Sachs as Der Spiegel has commented at length, surely a lawsuit against the US bank is in order?

    What is disturbing is that the same "easy" targets are getting hit again and again with extra taxes. Are the Greek billionaires hurting? Thought not.

  • rate this
    -3

    Comment number 4.

    The Greek people elected their governments who allowed the overspending and overcommitting. Their politicians knew they were breaking the EU financial rules. Now it is time for the people of Greece to pay the piper.

  • rate this
    +5

    Comment number 5.

    Greece is merely the most egregious example of what happens when a country continually spends money it doesn't have.

 

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