A general strike has paralyzed Greece in protest over rather timid austerity measures by the Papandreou government. With a budget deficit at about 13 percent of GDP, markets fear national bankruptcy. Were that to occur the Greek economy would collapse, Greek banks would be unable to roll over short-term loans, the government would be unable to borrow, and life in the Hellenic Republic would change drastically for the worse. In return for financial help from the European Union, the government has proposed to freeze (not reduce) government salaries and to cut spending a number of areas.
If the Greek public were rational, they would grab this deal and the attached EC aid with both hands. But it appears otherwise. The country is paralyzed:
The public sector strike brought services to a standstill in Greece, with the airport being shut and hospitals only accepting “emergency cases,” world media reported.
The government’s decision to freeze public sector salaries, trim armed forces spending and reduce government agencies, to cut on public spending as well as raise the retirement age have been interpreted by Greek trade unions as a “declaration of war.”
The latest to join the protests were the taxi unions in the country.
Taxis in the capital were to go on a general strike on February 11, after the association of Attica taxi drivers (SATA) declared a 24-hour strike starting at 5am, Greek daily Kathimerini said on February 11 2020.
Taxis in other major cities and towns nationwide were expected to follow the actions from their colleagues in the capital, the report said. Taxi drivers were up in arms against the impact of the new tax reforms announced by the government.
SATA denounced the Government measures, saying that they they “would create a series of new problems and make our occupation more difficult, if not impossible.” Taxi drivers were considering further strike action in the following week.
Meanwhile, Greek farmers who have been up in arms against the government decisions, staged blockades along the Bulgarian – Greek border for the fourth week running, while 18 blockades were manned at major arteries and junctions in the north of the country.
Markets worldwide rose Tuesday in a relief rally when news leaked that the German government would support a bailout. The Germans, it appears, have round heels—despite repeated warnings that they never would fund a bailout of their profligate southern neighbor, they have reached for their checkbook. One reason may be that European banks (mainly German and Austrian) own the bulk of Eastern Europe’s $1.4 trillion in external debt. Were Greece to fail, all the weaker sovereigns would be in trouble, including the so-called PIGS (Portugal, Ireland, Greece, Spain) as well as Hungary, Ukraine, and so on.
But the Greek public might not accept even a rather mild austerity program. Initially I considered this merely a negotiation: the Greek unions would noise, the Germans would shake their fingers, and ultimately a deal would be cut. But there is a nasty air of Nihilism to this. With nearly 30 percent youth unemployment, Greece is a political tinderbox. It erupted in December 2008 with youth riots that shut the country down for a week. The riots began with the shooting of a young man, but escalated in to a national general strike on Dec. 8, 2008. Wikipedia observes,
The shooting happened during a period where the Greek society faced a variety of difficulties in the midst of a worldwide economic slump. In a survey conducted shortly after the events for the Greek newspaper Kathimerini, 60% of the respondents considered them to be part of a wider “social uprising”.[156][157] Many people were concerned with corruption scandals, most of which involved mishandling of public money, the spread of poverty, the increasing rate of unemployment amongst young graduates[158] and the slowing economy as the effects of the global economic crisis began to show.[7] The local student community—which formed the main body of protesters—had also been in significant turmoil since 2006, being opposed to a series of proposed laws regarding the reform of the country’s education system.[6] Many of the student demonstrations in relation to these laws in early 2007 turned violent and resulted in clashes with the police,[159] though the perpetrators of the incidents of violence and vandalism, then as in December 2008, should not be necessarily identified with the students.[160]
As in many other countries, young people are faced with expensive studies[161][162][163][164] and are especially affected by unemployment. However, in terms of unemployment Greece is comparable with France, Germany, or Portugal; has a lower unemployment than Spain or Slovakia; and has more unemployment than Italy, Bulgaria, or Cyprus.[165] Similarly, young people also represent a declining demographic group, compared to baby boomers, resulting in a weaker impact of the youth vote in political life, though this is also not particular to Greece.
Greece, sadly, suffers from an extreme case of Euro-sclerosis. Its fertility is in the 1.3 to 1.4 range, which means that its elderly dependency ratio will rise from 27% at present to 64% in 2050. Unlike most of its EC partners, Greece has no industry of importance. Due to declining family size and emigration, the average Greek family has acquired several properties by inheritance, and the country rode a real estate boom in vacation properties. Taxi drivers took three-month seaside vacations.
Problems that seemed postponable for a couple of decades have leapt into the present as a result of the Great Recession, and Greeks have the choice of becoming noticeably poorer, or catastrophically poorer while taking down a good part of the financial world with them. The old game is over, and the national tantrum might take Greece over the edge.
Where is the Simonides to write the country’s epitaph? It might read something like:
Passerby, tell them in Brussels
We didn’t pay our bills.
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