What’s it like living in a country that is running out of time, choices and, most of all, money… facing the possibility of national bankruptcy? I’m not talking about what the European Union and the International Monetary fund are doing to shore up an economy or the impact of a “junk” rating on the national debt, just what is life like in this Mediterranean country of spectacular islands, historical treasures and a place on some of the most beautiful coastlines on earth?
A series of tax hikes, governmental spending cuts and austerity measures that have been required by EU and IMF lenders have changed the individual lifestyles of ordinary Greek citizens. The April 23rd Guardian UK: “Greek trade unionists and civil servants who on [April 22nd] walked off the job to protest the mere presence of the officials in the capital have unanimously proclaimed that further spending cuts and tax hikes will lead to a ‘social explosion’ – a threat that inevitably will pile the pressure on a government that has been forced, against its will, to implement the cost-cutting policies...The average Greek has suffered a 30% drop in income since the measures were announced. Anger over the IMF – whose intervention has been widely derided by Greeks – is already running high.” Pensions are frozen or being cut, civil service pay is sliding downwards, and many are losing their jobs.
The April 30th New York Times sets the priorities in overall cuts and tax increases: “Union and government officials said Greece … pledged to raise its value-added tax to 25 percent, to freeze civil servants’ wages and to eliminate public sector bonuses amounting to two months’ pay. They said the government intended to increase taxes on fuel, tobacco and alcohol… Among the most significant features of the plan, a Greek government official said, would be a measure making it easier for the government to lay off some of the many thousands of public sector workers, whose low levels of productivity and high wages are a big contributor to Greece’s debt problem. Until now, the government has not been able to lay off civil servants, whose employment rights are in effect constitutionally guaranteed…. Another reform high on the list is removing the state from the marketplace in crucial sectors like health care, transportation and energy and allowing private investment.”
The April 29th New York Times provides a typical example of how this financial crisis is impacting small business owners: “Vicki Apostolopoulou, 38, the manager at a costume jewelry store on a busy shopping street, said customers had stopped buying months ago. ‘They come in,’ she said. ‘But they don’t open their wallets anymore.’” Pay cuts and lean living follow years of careless borrowings – the government to enact populist social programs (while hiding the real cost and deficit realities from the voters) and the private sector to catch up to the European lifestyle (now that Greece was a member of the EU) they saw next door – have tanked this fragile economy. The global economic crisis ripped apart the assumptions that growth would take care of it all.
And of course, the pièce de résistance – the annoying habit that made some German members of Parliament (Germany is the richest EU “Euro” nation and the bastion of loans needed to save Greece) tell Greece to sell-off some of its islands to raise money – is the Greek proclivity not to pay taxes. “‘There has always been this way of thinking in Greece that the thieves ar e the clever ones and the ones who don’t steal are the patsies,’ said Petros Anagnostou, 46, a book dealer. ‘We have to develop a conscience as a community, to see ourselves as a collective society. If it is a jungle out there, then we will eat each other and end up in a place like we are today.’” The Times.
Yet the Greek populace knows that the burden of “paying taxes” will fall on the middle and lower income groups. The rich – who keep massive wealth off-shore (and lots of wealth has moved off-shore since this financial crisis began) – just don’t pay taxes much at all, and there is absolutely no sign that they are ready to start anytime soon. The February 7th Guardian UK: “Traditionally, the country's super-rich, not least ship owners and mercantile elite, have favoured the Swiss bank and off-shore account. But now huge sums are also being spirited away to banks in Cyprus. ‘Very big transactions are going through [neighboring] Cypriot banks,’ [said analyst, Kostas] Panagopoulos. ‘Greeks feel that Cyprus is not only close, but safe.’… In the 29 years since Greece entered what was then the European Community, it has increasingly become divided between the very rich, who live in Hollywood-style opulence in the outer suburbs, and the poor, who are forced to survive on pensions of €500 a month.
“While a fifth of the population lives beneath the poverty line, some 20% of Greeks are believed to earn more than €100,000 annually – even if, according to income tax records, 90% declare salaries of less than €30,000 a year… ‘Greece has a lot of rich people who are not being taxed properly because there is so much tax evasion,’ finance minister Giorgos Papaconstantinou, told the [British newspaper] Observer. ‘If you look at the actual numbers, you will see that the number of people declaring over €100,000 a year is roughly 15,000,’ he said. ‘I don't think that there is anyone in this country who believes there are only 15,000 Greeks earning more than €100,000 a year.’… The growing flight of funds from Greece has whipped up much resentment among the public. ‘It's revolting,’ said one popular radio chat-show host last week. ‘After pillaging the country, they flee with their ill-gotten gains at the very mention of the word tax.’”
No wonder ordinary Greek citizens blanche at the thought of bearing the burden on their own, why protests, even riots, have exploded in reaction to austerity measures that impact ordinary people, while the super-rich completely avoid any of these social costs. But someone is going to have to pay the piper… and unless the Greek government figures out how to make those at the top cover their rightful share of his burden, it will in fact be the ordinary Greeks who suffer alone. “For Paul Koptides, who works in a car rental agency here… [he sadly laments:] ‘We did this to ourselves… It is our problem. It’s not Germany or Europe’s fault. We did this to ourselves.’… The financial crisis has left many Greeks worried about what kind of a year they are heading into and where they can safely save their own money…
“Some like Costas Papadakis, an air force pilot taking the day off in Athens, said he was working on not panicking because that would only make things worse….He said he did not think the Germans had behaved well toward Greece. But he shrugged, saying he would have done the same thing in their position… ‘We will have to learn to pay taxes,’ said Mr. Papadakis, 27, who was enjoying a frothy coffee at an outdoor cafe. ‘It will be all right. Other people do it.’” The Times. Getting used to living with 30-50% less income for at least the next three years – for those who still have a job – is staggeringly difficult. It is a financial crush that most Americans would find impossible to deal with, but it defines Greece’s future if it in fact can convince the IMF, the EU t o extend a financial lifeline. If Europe and the IMF don’t do enough, things will get worse… much, much worse. Germany (the obvious EU leader in this mess) dithered, facing popular pressure at home and demands for super-austerity concessions, and the European Union leadership faltered… which only accelerated the ratings plunge and the cost of a Greek recovery; the IMF may be the last man standing. And then there’s Portugal, Spain, etc., etc., etc.
Posts
No comments:
Post a Comment