It’s Christmas time for Greek pensioners. But what amounts to a rather modest gift from their government seems to have led to a major international rift threatening calamitous consequences for the austerity capital of Europe.
In recent days a row has broken out with between PM Alexis Tsipras and the IMF-led coalition of -international lenders over a so-called bonus payment to pensioners. The row threatens debt relief the economy we are told it badly needs. There’s growing speculation that this has been deliberately engineered by Tsipras whose popularity has been sliding and who is planning a snap election, to face the Greek people for a third time in less just 2 years. Tsipras, once the hope of people in Greece and across Europe, has been losing support ever since he blinked first in a stand-off with the Troika last year over whether he’d implement draconian austerity policies in return for international help in servicing the country’s huge debts. Latest opinion polls put his Syriza party some 15% behind the conservative New Democracy Party, leading with about 35% of the vote.
At the weekend, in a speech to European Left parties that some interpreted as the start of an election campaign, he stated: “Our creditors need to keep in mind that the Greek people have made enough sacrifices and now it’s time for them to fulfill their obligations. We are decisive that we will never surrender our people to the ‘yes men’ who want Greece in the straightjacket of austerity for many years ahead. We have delivered on our obligations and our creditors need to do their part. I’m optimistic that Greece will achieve its goals. But we will never accept the logic of ‘eternal austerity’ that destroys Greek society.”
The problem with 42-year old Tsipras is that people in Greece have heard that speech before. And many just don’t trust him anymore. He got himself elected in January 2015 on the back of promises he’d finally loosen the austerity-grip that has been killing Greece. But in the end he accepted even harsher cuts than he’d originally opposed, signing up to major pension counter-reforms, tax rises and a mass privatisation programme. In the birth place of western democracy, many feel democracy has been in effect suspended. All key decisions in the country appear to be made in Berlin, Brussels and Washington. Local elites, as Tspiras says, are simply ‘Yes’ men. And ordinary citizens are paying the price.
New figures released in recent days show an epic social catastrophe. In a country where 350,000 families do not have a single earner, nine out of ten jobless do not receive unemployment benefits, according to the Greece’s statistical authority ELSTAT and the General Confederation of Greek Workers. The study also found that women suffered a higher rate of joblessness than men, (27.2%) and among younger people (15-24 years) the figures was a shocking 47%. Unsurprisingly this has led to a massive exodus: in the past six years, since the first international ‘bailout’, some 300,000 highly skilled professionals and workers have gone abroad to look for work.
A separate report, also from ELSTAT found a significant increase in deaths from respiratory diseases, with 12,231 in 2014 compared to 7,994 in 2000, a growing number of deaths due to psychological illnesses – from 84 in 2000 to 669 in 2014 and rise in suicides to 565 in 2014, compared to 382 in 2000. And for those seeking medical help, things look grim. A study published this summer by the Panhellenic Federation of Employees at Public Hospitals found that cuts – including 4,000 fewer staff, 35,000 job vacancies and 200 mothballed intensive care units – had left hospitals, medical centres and ambulance services ‘in a state of dissolution’. The picture of collapse can be seen across the public sector.
Not for the first time, international lenders are in public disagreement on elements of the austerity package, but not the essence that it should continue. The IMF says Greece needs a “radical restructuring” of its public sector, although far from being “bloated”, as the cliché rolled out in the international media goes, it’s actually substantially underweight, compared to more advanced economies.
What the Greek people think is really the last thing on the minds of foreign politicians lording it over the Greeks – and the unelected, hyper-powerful officials at their service. For example, an opinion poll conducted by Pro Rata for Efimerida ton Syntakton daily indicated that 50% of Greeks had a positive view of the pension payment, while 19% were neutral on the matter. The ill-named bonus (can you imagine a banker getting excited about 300 Euros!) was also backed by a strong majority of 196 MPs in Parliament.
It’s understandable then that Greeks remain deeply hostile to the Washington-based financial policeman with a poll earlier this year want the IMF out of Greece, believing it is ‘blackmailing’ Greece.
What may make people especially suspicious of the motives behind the renewed tension between Tspiras and creditors is that it comes less than a month after he cleared out his cabinet of the remaining resistance to his pro-austerity policies. These included: the shipping minister, Theodoros Dritsas, who was against further investment in Piraeus port by the Chinese conglomerate Cosco; Panos Skourletis, the energy and environment minister, who had vehemently opposed the partial privatisation of the Public Power Corporation and has been moved to the interior ministry; and Aristides Baltas, removed as culture minister. Reliably pro-privatisation, pro-market types like US-based economics professor Dimitri Papadimitriou were promoted, or as in the case of Euclid Tsakalotos, the including Oxford-educated finance minister, retained. Tsakalotos had replaced in mid-2015 the outspoken anti-austerity rebel Yanis Varoufakis.
Whether Tspiras can clinch a win for the third time in a row remains to be seen. To date Kyriakos Mitsotakis and his ND party – while offering no alternative that would favour ordinary working people – seems the only other game in town. Some had invested hope in a left split from Syriza, calling itself Popular Unity, that was created after Tspiras accepted a third “rescue” package in July 2015 and ahead of the September 2015 elections. But while Syriza returned a majority once again, in part due to a big fall in turnout as disillusioned voters stayed at home, Popular Unity failed to reach the 3% bar to get a single seat in parliament. Far right Golden Dawn are polling as much as 10%, which, given developments elsewhere in Europe and the globe, is nevertheless deeply worrying. The communist KKE, whose linked trade unions are fighting a valiant battle of resistance in the streets, and Pasok-Dimar, the rump of the former social democratic behemoth, are meanwhile vying for 4th place, each with around 8%.
So what of the pensioners and the chances of a little seasonal cheer? International lenders including other European governments responded to the announcement that they would get their Christmas present by suspending debt relief for Greece, and with elections due next year in arch-austerity champion Germany, it seems they are very unlikely to budge. Pundits speculate this is in any case this all about Tspiras trying to shore up short term support among an electorally important group.
But Greece’s senior citizens don’t feel too grateful. In protests in recent days, some dismissed the bonus as ‘crumbs’. After a dozen or so pension cuts nearly half of Greece’s elderly have fallen below the poverty line, having to get by on an income of less than 665 euros a month. After rent, utility bills and health care, they barely make ends meet. Moreover, the debt relief at stake would reduce Greece’s public debt by 20 percentage points of GDP by 2060. As always seems to be the case, the sacrifices of the many take a while to feed through to rewards. Some of Greece’s senior citizens may be thinking that they haven’t got that long.