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It’s not going any better at all with Greece

The EU and the Greek government are manipulating the facts to cover up the results of the unsuccessful austerity policies in Southern Europe. “The policy which was based on austerity, privatization and liberalization deepened the crisis instead of bringing about any solutions.”

The Euro-crisis of euro is already in its third year and it continues unrelentingly. Nevertheless it is overall stated that the crisis is almost over. The North faces no problem. Spain, Portugal and Ireland have solved their own problems by following the recipe of the EU: large cuts in social security and salaries as well as abolishing working rights. Even Greece is on the right track because its state finances have improved through the cuts in the benefits and the increase of taxes.


These arguments are simply a summary of the official story of the spokesmen of the EU and the Greek government. Every citizen with basic understanding of the crisis knows that these kinds of arguments are far from the reality. The crisis affects not only the countries in the South, but the whole Europe.

Let us not forget that the second largest economy of eurozone, France, is placed under the strict supervision of the European Commission due to financial problems. Let us also not forget that the improvement in the state finances of several countries (including the Netherlands) can be attributed to a logistic trick of the EU which excludes specific expenses from the calculation of the budget deficit.


Perverse structure

No, the crisis is not over, because its causes – the liberalization of the financial sector and the perverse structure of eurozone – are not yet tackled.

According to the Troika (European Commission, IMF and European Central Bank) and the Greek government, Greece has a primary surplus of 500 million euros. However according to data of Eurostat, Greece has a primary deficit of 17 billion euros in the first nine months of 2013.

Moreover, and contrary to what the European Commission and the Greek government claim, the course of the Greek economy is anything but positive. The retail sales index is reduced with 8.1 % in 2013. The volume index is reduced with 6.7%. The investments make up only 12% of the GDP (gross domestic product), the seventh lowest percentage in the world! Most probably, the GDP of Greece was reduced with 7 % in 2013 despite the explicit prediction of European Commission and IMF for a small recovery. The sovereign debt has climbed to 170 % of the GDP and is now much higher than before the crisis.

The repeated statements of the European leaders and the Greek government that the austerity policies are effective and the recovery of the economy can occur at any moment goes against all facts. The harsh reality for the common people in Greece is not portrayed at all in this fantasy image.


No access to healthcare

28 percent of the workforce is unemployed. Two-third of the young people is out of work. Approximately one million workers receive their salary with one to twelve months delay. Salaries have been reduced by over 50 percent. The gross minimum wage is 586 euros (510 euros for the youth). The unemployment benefit (WW-uitkering in Dutch) is 360 euros and there is no social assistance benefit. Nearly three million people in Greece do not have access to health care because they can’t afford health insurance. Even pregnant women who come to public hospitals to give birth, may be rejected because they are not insured. Some heavily frequented hospitals are closed and the medical staff has been fired because of the cuts.

According to UNICEF, one out of three children in Greece, is at risk of poverty and social exclusion. Which are the causes? Rising unemployment and cuts in social benefits. 292,000 children live in households without working adults and have for this reason no access to health care.

The new taxes reinforce the regressive tax system in Greece, where the rich pay traditionally very little while the middle class and the poor bear the heaviest burden. There are even poor people whose homes are in danger of being confiscated because they cannot afford paying their taxes. The abolition of the protection of the private homes of poor debtors was a hard requirement imposed by the Troika.

Why do the European Commission and the Greek government try to present another reality? Is it because there are elections next month in the EU? The support for governments that are advocates of austerity and the EU is falling rapidly. The heads of governments and the EU-top still want to present austerity policies as effective even, if necessary, with the use of fictitious data. In Greece, this necessity feels stronger than ever. The coalition parties will most probably face a historic defeat in the upcoming elections and their European austerity partners want to prevent this. For this reason, the Greek government gets again permission to manipulate statistics and magically make a surplus from a large deficit. The way is simple: the 0.5 billion surplus of the Greek government-budget does not include the unpaid liabilities of the government to Greek companies and semi-public institutions.

Presenting the other southern countries as good examples of austerity policies, is also wrong. For example, the 0.1 percent growth of the Spanish economy should be seen in conjunction with the 28 percent unemployment rate and the largest debt ever (almost 100 percent of GDP) .

A sober observation of the facts inevitably leads to only one conclusion: the policies of austerity, privatization and liberalization did not offer any solution, but rather led to a deepening of the crisis.

by Dimitris Pavlopoulos
Dimitris Pavlopoulos works as an assistant professor in Sociology at the VU University in Amsterdam.


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