The Greek government is facing powerful public resistance to new austerity measures that foreign lenders are demanding in return for bailout loans. The country's main labor unions, ADEDY and GSEE, which represent 2.5 million workers, say they expect thousands to march to parliament on Wednesday to protest cuts in the public sector and a new property tax which will be collected through electricity bills.
The first general strike since June has grounded most international flights, halted trains and closed tax offices and some state schools. Hospitals are running on emergency staff. At the same time, inspectors from the European Union and International Monetary Fund continue their evaluation of Greece's finances to determine whether the country should receive $11 billion, the latest installment of a $150 billion bailout loan package, by next month. The Greek government said Tuesday it has enough cash to pay its bills only through November. (See photos of the protests in Greece.)
Finance Minister Evangelos Venizelos said Tuesday that Greeks must back the new measures if the country has any hope of meeting its deficit target for 2011, which was revised to 8.5% of gross domestic product from 7.6%. Along with tax hikes, budget cuts and the long-overdue reforming of the country's bloated public sector, the Greek government must also privatize some state assets and crack down on longtime tax evasion.
But winning public support for more austerity seems virtually impossible right now. Polls show that nearly all Greeks oppose more cuts and most believe the measures have done little to get Greece out of debt. More than a year of tax hikes and wage and pension cuts have decimated the middle class. Unemployment is at more than 16%. Personal bankruptcies, homelessness, suicides and crime are all on the rise. And yet the Greek government missed its deficit targets this year. Euro-zone finance ministers have decided to delay the latest loan payment, which Greece needs to stay solvent, because they don't think the country is trying hard enough to reform itself. More austerity, they say. (See photos of the global financial crisis.)
Yanis Varoufakis, a professor of economic theory at the University of Athens, is one of many economists who say austerity is actually killing an already weak Greek economy. "Anyone with any logic can see that this is not the way to jump-start the economy of a country that's in recession," Varoufakis says. Instead, austerity has put the economy in "a permafrost from which the Greek society has lost its capacity to react creatively to the crisis and to work itself out of the hole in which it has found itself."
Greeks have also lost faith in nearly all of their politicians. As the government party, center-left PASOK has suffered the most. "Right now, considering how big and unprecedented this financial crisis is, it's understood that the government committed the equivalent of political suicide a long time ago with the austerity drive," says Takis Pappas, a political science professor.
PASOK, which stands for the Panhellenic Socialist Movement, is led by George Papandreou, a quiet but stubborn sociologist and the American-born scion of Greece's most prominent political family. His grandfather and father were both premiers. His father, Andreas, who founded the party, was a Harvard-educated economist who built up the public sector to offer "jobs for life" to an emerging middle class in Greece. The civil service never became a bastion of Greece's best minds. Instead, it grew into an unwieldy monster overstuffed with party loyalists, many of whom were unqualified for their jobs.
Yet many Greeks, even well-educated ones, long desired a position in the civil service "because it was easy," Pappas says. "Now that option is gone. So for the government to restructure the civil service and make it truly productive, it has to make sure that it lays off not the bright, efficient workers but the ones who are not doing their jobs. It has to give people incentives to strive instead of rely on cronyism. The state needs to show that it has changed."
Anita Papachristopoulou, a 44-year-old environmental scientist who works for the Athens Water Supply and Sewer Company, says there's a grain of truth to the caricature of the lazy Greek civil servant worker. But she says there are thousands of Greek public-sector employees, like herself, who got their jobs through perseverance, not connections. "No one introduced me to anyone," says Papachristopoulou. "I just sent in my application cold, and I was lucky to get the job." (See why it's make up or break up time for the euro zone.)
Papachristopoulou says she was torn on going to Wednesday's demonstration, even though many of her colleagues will be there. She's worried about the usual street fights between anarcho-leftist activists and riot police outside parliament. Police always respond by firing tear gas at everyone, and the stinging clouds make her cough for days. "People are very angry," she says. "Even if we're not out on the streets chanting and marching, we're still angry."
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