Mark Rutte & Jeroen Dijsselbloem: Everything they didn’t know about austerity and were afraid to ask (or admit)
For the last few years after the crisis I couldn’t get my head around the fact that so many Dutch people knew so little about Greece, and yet they felt the need to express their views in a very loud and provocative way, and pass judgment. The first few months of the crisis in Greece, Dutch tabloids like De Telegraph, came out with front page reports from Greece and published photos of Greeks enjoying their morning coffee at certain cafes in Athens. The headline said something like “The Greek economy is going down and the Greeks are still enjoying life as if everything is fine”.
From the first minute the real causes of the crisis were high-jacked by the populist notion that the Greeks are to blame for their fate, that the Greeks have been corrupted, that the Greeks have been cheating and lying, and that the Greeks now want the North Europeans to pay for their missteps. Such a public view on the matter was needed so that the fierce austerity that was to be imposed on Greece would be justified and the people of Europe would have to show their tough love to their EU partner.
In the last few weeks I had the chance to ask Prime Minister Rutte and the euro group president Jeroen Dijsselbloem a few questions about Greece. My goal was to see how much they knew about the situation. What I found was not only ignorance, but also misguided understanding, gimmicks instead of real knowledge and a perverse use of terms that describe the approach the Europeans have over the Greek issue.
Rutte and his Greek family
I asked Rutte about the link between austerity and the rise of the extreme right, nationalist, anti-Europe parties, with Greece’s Golden Dawn and France’s Marine Le Pen in mind. He by-passed the core of the question, and eagerly proceeded to explain how he sees the Greek issue. He was equally eager to defend the austerity measures, in line with chancellor Merkel’s views about the necessity of such measures for countries like Greece, Portugal and Ireland. This was no news. But there was one thing he said that came as a big surprise to everyone present at the press conference.
Some of my family is from Greece and one even had to travel from Greece to the Netherlands to find a job here because of the economic uncertainty. So I do realize and I know first-hand the huge impact this had on the Greek society.
The minute Rutte uttered the phrase “some of my family is from Greece”, I realized that these two countries have no real knowledge about each other. If the prime minister’s main source of news and understanding of the situation is based on a member of his family, if such “props” or gimmicks need to be deployed by Rutte to convince about his “first hand” knowledge, then you know there is something missing here. And that is REAL information.
You can listen to all the questions I asked the prime minister and the answers he gave in the special program of Hellas Pindakaas, aired on 8.11.2013. To listen, click here. here
What made the Dutch prime minister throw this firework in the air and then refuse to comment further on it? It is much easier to impress by saying that you have relatives from Greece; therefore you have first-hand knowledge. These “fireworks” fill the void that real reporting and real information have left in their absence. The truth is no fairytale. It takes time to sink in. And if you have been feeding the public with stereotypes about Greece via De Telegraph, or via the rhetoric of one-time government partner Geert Wilders, then the truth sounds suspicious, even when it is said. Fact: There are no correspondents of major Dutch newspapers in Athens. There was a time that only Ingeborg Beugel spoke out in the Dutch media about the other side of the Greek issue, the reality of the program and its impact on the real economy and the society. Many Dutch used to mock her for expressing her sympathy for the Greek people and their problem and some still do it even today. In an interview on Hellas Pindakaas Ingeborg said that in the first years of the crisis she received threats by anonymous Dutch men because she dared to support the Greeks against the troika and its policies.
When the leaders of Europe know nothing about each other’s’ society, then stereotypes and prejudices flourish. The South is poor and lazy, the North is hard working therefore prosperous. That simple. As if we learned nothing from the WW2 and the stigmatization and scapegoating of whole nations. The peoples of Europe, like their leaders, became so alienated that hated each other’s’ guts. The crisis brought out our worst self and at the same time, made it easier for certain words and terms to lose their meaning. For example the word solidarity became just another word we use but do not fully understand or comprehend or mean.
Dijsselbloem is taller than an ostrich – but his head is still in the sand…
Next in my quest to find how much Dutch politicians know and understand about Greece, was Jeroen Dijsselbloem. I attended the Europe House Lecture 2013 in The Hague and asked Mr. Dijsselbloem the following question. You can see the question and his answer on video via this link here (on 28:08 second).
Question: Hans-Werner Sinn the German economist and President of the Ifo Institute for Economic Research, a close advisor to Angela Merkel and one of the most influential economists in Europe, said in an interview he gave to the Greek newspaper Real News.
What troika is demanding is impossible. The Greek society is in no position to survive the austerity that is needed for a sufficient devaluation and for competitiveness. The strategic approach of the euro zones officials will push these countries into the abyss. I see a lot of similarities with Germany in the years 1929-1933. It is inhumane and very risky to expose a society to such grave dangers. The strategic approach of the euro zones officials could destroy not only the Euro and the societies of the South of Europe, but also the very basis of the European idea.
He is only one of the prominent economists who speak against the austerity and the approach of the euro zone towards the debt crisis. How can you be so sure that your approach is the right one, that it will work, and what gives you such certainty?
And do you consider the human cost of the policies you implement? Do you consider the people who suffer from the crisis, the unemployed 60% of the young people, the homeless, the home owners who get evicted, the shop owners that have no customers, the people who eat from the garbage; – do you consider them as collateral damage of an economic plan that has to go through no matter what? At any cost?
Answer: You described the Eurozone approach as austerity, which is wrong. The euro group approach deals with budgetary imbalances and risks. Why? Because a number of countries were so heavily indebted and were making so little money, that they could no longer go to financial markets and finance thems elves. That’s rather a fundamental problem. And Greece was one of those problems, one of those countries.
The euro zone stands ready to support Greece and will further support Greece, even beyond the program as well. But the main point is not austerity. There is no, for the long run, for Greece, no other approach, than Greece has to become more competitive, has to be making money again, and has to deal with its structural deficit. That’s the only way to become sustainable again, and in the long run to become independent of a program. And there is no easy way I am afraid. But we do take into consideration the effects and we do take into consideration the toll that it’s taking of the people of Greece.
Dijsselbloem and the non-austerity
What a paradox! Although austerity has become the dominant dogma of the (German) Dutch politics in the last few years, Mr Dijsselbloem decided to put his head in the sand and call austerity by a less aggressive, more benevolent term. He was looking for ways to convince the European citizens that austerity works in Greece, and one of such ways is to call it by a different name.
Words have definitely and intentionally lost their meaning. EU officials now call austerity “dealing with budgetary imbalances and risks”. Prime Minister Rutte called the cuts in salaries and pensions “structural reforms”. Right now in Greece, the law that protects home owners from being evicted (from their first house) is demanded by the troika to be abolished, so that the banks can take your house if you have no money to pay your mortgage. And the negotiations are also stuck because the Greeks do not want to completely deregulate the labor market and allow for massive dismissals. These two measures are also called necessary “structural reforms”. Measures upon measures that seem to fit only the big interests and leave the people unprotected. Solidarity – another word that has lost its meaning. Solidarity amongst equals, amongst partners, means right now that countries like Germany make profit out of lending money to Greece. And for those countries it is more profitable to have a crisis, to have a strong euro, to have the Greek issue not solved but on going until 2025 and even further.
Austerity Figures – The (sad) story in numbers
Here are some figures that the media or the politicians conveniently omit from their reports and speeches. Figures that show how little our European leaders know about the dire straits other countries are facing. Figures that show that no matter how you call austerity, the results are still detrimental for the vast majority of the Greeks.
350.000 businesses and homes have had their electric energy supply cut because they couldn’t pay the bill. A bill which for the last 2 years comes with an additional emergency tax, imposed by the government to cover the void in state revenues.
56 business owners end up in jail every day because of the recession and because they cannot pay their debts.
Greece has lost 25% of its pre-crisis GDP in the last 3 years.
Unemployment in the youth has reached a record 60%. In the general population is 27%.
Reports from health authorities in Greece raise concerns that some troubled drug users may think to self-inject HIV to claim benefits, amid the country’s deeply troubled economy.
The prices of goods are still very high! In a super market in the suburbs of Athens, buying the cheapest low cost products: 2 lit of milk, half a kilo of yogurt, 6 eggs, half a kilo of toast bread and 200 gr of feta. In Greece you pay: 8,55 Euros, in France: 6,50 Euros, and in Germany: 4,73 Euros.
It would be impossible to report on all the austerity and liberalization measures wish were implemented over the last 4 years. Even the Greek government has difficulties monitoring its own policies. Nobody really understands what’s going on. The only obvious thing is progressive chaos and less money in people’s pockets, a direct consequence of badly conceived and badly implemented austerity measures.
What do economists say on the matter?
Famous economists and Nobel Prize winners Joseph Stieglitz and Paul Krugman criticized those methods:
Such policies can only be adopted at a time of strong economic growth and it would be inefficient and even dangerous within a context of a crisis.
The troika demands an even more radical austerity and an implementation of a liberalization program. The resulting recession could be a catastrophe and could increase the debt, instead of reducing it. Paul Krugman wrote on July 21 2010,
I and others have watched with amazement and horror, the emergence of a consensus in policy circles in favor of immediate fiscal austerity.
On May 22 2010 Stieglitz explains that
If Europe goes down the route it is taking, there will be a disaster. We have learned since the great depression that austerity is not the answer.
Stieglitz compares these austerity measures to medieval medicine. He says:
it is like bloodletting, where you took blood out of a patient because the theory was that they were bad humans. And very often, when you took the blood out, the patient got sicker. The response then was more bloodletting until the patient very nearly died. What is happening in Europe is a mutual suicide pact.
The troika sees an internal devaluation as the solution to the Greek issue. Here is a description of internal devaluation from the Bloomberg economic information website: “The country has to restore competitiveness more brutally, by cutting wages, which in turn requires persistently high unemployment to suppress workers bargaining’s power”. How can such a project be officially implemented by European institutions to one of their own member states?
What do the Greeks say on the matter?
In spite of the dire consequences of the austerity and the way it has been criticized by prominent economists, in spite of the way that the situation has evolved, we still hear the same litany. Dijsselbloem even said in his lecture that the ministers of Euro group are losing their patience as new reforms have to be applied as soon as possible and only a strict enforcement of austerity measures will improve the present situation.
Austerity is the only way. This is what the leaders of Europe want for poor debt-ridden countries like Greece. Any other plan, less strict, more growth-oriented would not pass through their parliaments in Berlin and The Hague, since their public opinion has been poisoned with bias from the start and the real information about the real effects of austerity is missing from the public discourse.
But how do the Greeks describe austerity? And what do the real people have to say on the matter? This quote is taken from the documentary “Chronicles of a European Winter- Athens”:
People are deeply depressed because suddenly you understand that the sign that you saw written on the streets, you are stealing our future, it is actually true. Because you don’t know what to hope for any more. You don’t know what to plan for any more. And even if you hope for something or you want to plan it, you don’t know what is going to happen tomorrow. I mean, it’s a joke, you go away for 2 days and you come back and it’s a different government. You don’t turn on news for a little while, you come back 2 days later and there is a new austerity measure. We are being slapped around the face. This fatigue, it’s not just fatigue, it’s like imagine this huge hand that is slapping you on one side of the face and by the time you come back and recover , before you recover it slaps you around the other side. And it goes like this all the time. The austerity is relentless.
For the last 4 years ordinary Greeks have been called on to pay for a crisis which was caused by a shaky financial system. For the last 5 years the contributions required of the financial system have been practically nonexistent. And very little has been done to improve the stability of the system. Especially since more money is to be gained from a volatile environment, eg. by speculators and funds and the markets in general. The reason is simple. The financial system is more or less immune to any political decision which might erode its prerogatives.
And the leaders of Europe, ignorant of the real impact of such austerity and arrogant enough to deny that there is any austerity at all, will continue to say that they have great respect for the sacrifices of the Greeks. Respect, which is just lip-service, since at the same time the same respectful leaders shamelessly ask for even more of these sacrifices from the Greek people.