What is happening to Greece is a tragedy of epic proportions and it has all the qualities of the classical period. There are many parts where the old chorus has reason to wail and lament.
As I write we are of course in the middle of the play and there are still different outcomes possible. However I have been saying for some time that the prospect for economic and political sanity is slim.
The main point of contention between Greece and the international institutions like the European Union (EU), International Monetary Fund (IMF), central and private banks is the prescribed medicine of austerity.
Austerity has a human face we must not forget. In an article “WHERE IS MY EUROPEAN UNION?” Alex Andreou reports:
Last winter in Athens, I was approached by a well-dressed and immaculately groomed elderly lady. She asked me for a few euros because she was hungry. I took her to dinner and, in generous and unsolicited exchange, she told me her story.
Her name was Magda and she was in her mid-seventies. She had worked as a teacher all her life. Her husband had been a college professor and died “mercifully long before we were reduced to this state”, as she put it. They paid their tax, national insurance and pension contributions straight out of the salary, like most people. They never cheated the state. They never took risks. They saved. They lived modestly in a two bedroom flat.
In the first year of the crisis her widow’s pension top-up stopped. In the second and third her own pension was slashed in half. Downsizing was not an option – house prices had collapsed and there were no buyers. In the third year things got worse. “First, I sold my jewellery. Except this ring”, she said, stroking her wedding ring with her thumb. “Then, I sold the pictures and rugs. Then the good crockery and silver. Then most of the furniture. Now there is nothing left that anyone wants. Last month the super came and removed the radiators from my flat, because I hadn’t paid for communal fuel in so long. I feel so ashamed.”
Austerity as part of the neoliberal gospel has been tried before in South America, Asia and now in Europe. It has been widely criticised by most leading economists like Nobel Prize winners Paul Krugman writing today in the New York Times and Joseph Stiglitz formerly chief economist of World Bank, a position he had to give up when challenging neoliberal orthodoxy, today in a piece titled “Europe’s Attack on Greek Democracy”.
Most of what you’ve heard about Greek profligacy and irresponsibility is false. Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.
So why didn’t this (the crisis) happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.
Finally, acceding to the troika’s ultimatum would represent the final abandonment of any pretense of Greek independence. Don’t be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done. These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way. This isn’t about analysis, it’s about power.
Even one of the main proponents of austerity, the IMF, has itself admitted that austerity was a mistake and did rather harm than help the different patients it was tried on. Even in the case of Greece the IMF admitted this as the Guardian reported under the headline “IMF admits: we failed to realise the damage austerity would do to Greece“.
Don’t get me wrong. I am the first who noticed visiting Greece a couple of years ago that avoiding taxes appears to be a national pastime. I am all for a tax reform to make the rich, some of them billionaires, pay their fair share for the first time in their lives. I am all for frugality in government spending, which the Greeks did not exercise when they squandered billion on the 2004 Olympics to international applause. I understand that the Greek government at the time fiddled the books with the help of Wall Street banksters Goldman Sachs, to get into the Euro zone.
However it is not only morally wrong to punish the most vulnerable who bear the least responsibility for the mess, it is also economically totally counterproductive to try to squeeze blood out of a stone. There is no economist with half a brain who thinks Greece will be able to pay back the 240 billion dollars or so it owes. I have been keeping an eye on the international media over the last years of the unfolding crisis and noticed the difference between the political sections where you see the inflammatory stories about the Greeks being lazy and retiring at 55 and the business/economic sections where everyone agrees that Greece will not be able to pay its creditors and the sooner they accept the inevitable, bite the bullet, accept the ‘haircut’ and get on with it the better.
But that is not what it is about anymore. Since the election of the left wing Tsipras government in Greece
there is much more at stake than the fallout from the global financial crisis like a 240 billion dollar debt, structural problems and economic recovery. In the past the international institutions had to deal with compliant right wing neoliberal governments in Greece with which they were doing deals to prolong the suffering without facing the reality.
This has all changed with the new left wing government elected on a anti-austerity platform with a brilliant and therefore often described as arrogant English university economics professor and finance minister, Yanis Varoufakis challenging neoliberal orthodoxy. To challenge austerity is sacrilege is blasphemy. No ideology or religion can let heretics get away with it. Greece must be punished and banished from the union of right thinking more or less neoliberal countries of Europe.
The irony is that in 20 years time Greece will be still there, while the same is now becoming more doubtful by the day for the Euro, the IMF and even the European Union.
The neoliberal gods in Washington, New York, Brussels, Frankfurt and Berlin are seriously pissed off. They openly insult their Greek counterparts by calling them children and treating them like children who dare to ask quite legitimate questions like “Why do we need to do this ? Because we say so !”
This modern Greek tragedy has already claimed thousands of lives by suicide and reduction in medical care.
I am reminded of the ancient Greek mythology where lesser beings who defied the gods were severely punished. Prometheus springs to mind. He was punished by being chained to a rock for eternity to be attacked by an eagle every day picking out his liver, which regrew only to be picked again the next day. Among his ‘crimes’ was that he tricked Zeus into eternally claiming the inedible parts of cows and bulls for the sacrificial ceremonies of the gods, while conceding the nourishing parts to humans for the eternal benefit of humankind. He also stole fire from the olympus to give it to humanity. From the perspective of us humans not a reason for punishment, really.
The sad moral of the tragedy : When dealing with the gods – be it from the ancient Olympus or today’s neoliberal capitalist nirvana – if you don’t want to be severely punished whatever you do :
Don’t piss off the gods !