The Greek experiment
- 7 April 2014
- From the section Europe
Greece remains Europe's laboratory; an economic experiment.
In the past week the country's minister for European Affairs, Dimitris Kourkoulas, was quoted as saying: "We have lost 25% of our GDP since 2008... we have been in seven consecutive years of recession. This has never happened in modern history. Even in the Great Depression of 1929, the American economy was in recession for just three years."
An anniversary approaches: Nearly four years ago, Greece was bailed out.
It was never meant to happen. Under the treaty setting up the eurozone, countries were protected from having to take on the debts of others.
It was, in all but name, a no-bailout clause. But back in April 2010, Greece could no longer fund itself and the survival of the eurozone was at stake. So rules were ignored. Over time Greece received two bailouts, receiving loans of 240bn euros (£200bn; $325bn).
All of this came at a price of harsh austerity.
Greece had to slash wages, pensions, prune the public sector and raise taxes in order to make its economy competitive inside a monetary union.
Salaries were cut by around 30%. For teachers the reduction has been closer to 40%. As wages fell, the economy slumped. Many Greeks resisted, seeing this as an assault on their way of life with a policy "made in Berlin" and carried out by Brussels. On one day of Greek protests the police fired over 2,000 rounds of tear gas.
Which brings us to this week.
On Wednesday, there will be a nationwide strike - by some estimates the 36th since 2010. On Friday, German Chancellor Angela Merkel visits Athens.
Last time she made the journey 4,000 police were deployed to protect her from demonstrators, some of whom mocked Mrs Merkel by dressing in Nazi uniform.
'A new Greece'
This time, we are told, it will be different.
Weariness and resignation have set in and the Greek economy now has its cheerleaders.
Competitiveness is up. The deficit has fallen. There is a primary current account surplus, excluding debt repayments.
The markets have taken a shine to the Greek banks.
Growth of 0.6% may re-emerge later this year.
Prime Minister Antonis Samaras talks of a big step being taken towards "a new Greece". Certainly he has a case, but all of this has been bought with deepening inequality and poverty.
So while Europe's leaders speak as if the crisis is past, a succession of reports tell a different story. A recent survey by Roman Catholic charity Caritas portrays the social fabric at breaking point.
"What we are seeing is growing inequality and the appearance of a whole class of new poor," says the charity's social policy officer Artur Benedyktowicz.
Another report says that 44% of Greeks had an income below the poverty line last year. A quarter of the population are at risk of poverty. Unemployment remains stubbornly close to 28%. There are fewer Greeks employed than at any time in the past 33 years.
Only last week the Greek parliament agreed further austerity measures - including the sacking of 11,000 public sector workers - in exchange for the latest tranche of bailout money.
The leader of the Greek opposition Alexis Tsipras accused the finance minister of being "the key administrator of a death contract against the Greek people".
The government says the last of the cuts have been announced.
And yet it is worth casting a glance at Greece's debt-to-GDP ratio. It is at an unsustainable 175%.
The target is for public debt to be 124% of GDP by 2020.
German Finance Minister Wolfgang Schaeuble concedes that Greece may yet need a third bailout, and no debt restructuring comes without a price. Athens is hoping that it can use its lower deficit to open negotiations on reducing its debt burden.
So the Greek experiment - to save the single currency - is unprecedented in modern times.
The improving statistics should not be ignored or discounted but neither should the new poor, a lost generation, the thousands of Greeks who have left for Australia and Canada. That, too, is part of the Greek story.