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Times are very tough, but…

The Future of Greece May Not be as Bad as It Looks

by PATRICK COCKBURN

Maria Svoronou has three jobs and was finishing a twelve hour day as euro zone leaders were finalizing Greece’s rescue package in Brussels. For all her hard work, she earns only Eur 870 a month and says that “if the situation gets any worse, I won’t be able to survive.”

Ms Svoronou, aged 33 and highly educated with a degree from Edinburgh University, has a job teaching film at a private college in Athens, which she enjoys and for which she is paid Eur 10 an hour. Her second job is teaching primary school children road safety, and the third is translating the dialogue in Bugs Bunny cartoons from English into Greek for children’s comic books for Eur 1.60 a page.

She says she likes all three jobs and “I am better off than all those Greeks who are unemployed.” But her total earnings are only just enough to live on and she is seeing if there is any country with better prospects to which she can emigrate.

Greece is full of well-educated but poorly paid people who expect their pay to drop further or to lose their jobs entirely over the next few months. In central Athens mental health workers have occupied the Ministry of Health building, protesting that swingeing cuts in the mental health budget are having a catastrophic effect on their patients’ care.

The protesters point out that the suicide rate in Greece has risen 40 per cent because of the crisis in the latest period for which figures are available. Andonis Sakellaris, who works for the mental health department of the Ministry, says “the people who are killing themselves include businessmen who have lost their assets and even teenagers who see no future for themselves.”  The suicide rate, once the lowest in Europe, is now the highest.

The 400 mental health workers taking part in the occupation mill about gloomily chain smoking and playing cards in the hallways of the Ministry. The police have made no attempt to remove them, but nobody is taking much notice of their action which started on 9 February. Many work for state funded NGOs that are about to go out of business while others are expecting their salaries to be cut further. Markos Ephthimolous, who works with Alzheimers victims, says “our average monthly wage is Eur 900 which is being cut to Eur 600 and you can only live on that for 15 days. Most of us have not been paid for three to five months and some got nothing at all in 2011.”

Sitting in the Ministry lecture theatre, the mental health workers, highly qualified and speaking fluent English, say the out-patient care they have been giving to people suffering from autism, schizophrenia and other mental illnesses, will soon be abandoned. “People will be sent back to mental asylums,” says Antonis Dimaris, one of the leaders of the occupation who normally looks after people suffering from autism.  “We are going back to the Middle Ages.”

The mental health workers’ complaints underline the drastic effect of the austerity measures and their arbitrary nature, as if the dysfunctional Greek state has abdicated its responsibilities.

Not everybody is a casualty of the crisis and some are making money out of it. Forty minutes drive south of Athens down a long ugly highway lined with car show rooms and dealerships, Christos Ioannou, the manager of Autocredit company, runs a pawn-broking business for rich people with a sudden and desperate need for cash. They hand over expensive cars, motorcycles and yachts in return for a loan.  “Business is good,” he says.

Mr Ioannou estimates that about 20 per cent of his customers cannot make repayments, so he keeps their vehicle, or they ask him to sell it on their behalf. He proudly lists the names of the cars – Ferrari, Lamborghini, Mercedes, Capri — that have passed through his hands since he entered the high end of the pawn broking business seven years ago. Many of his customers these days are in construction or property, sectors that have been devastated by the crisis.. In a garage behind his office he shows a large black vehicle. “It is a Ferrari California worth Eur 313,000 and was brought by a man in the construction business.” Nearby was an exotic American motorcycle, theoretically worth a lot of money, but Mr Ioannou says he was having difficulty selling: “nobody in Greece has the money to buy it.”

Most of the vehicles left on his hands go to Germany “because there is no market in Greece for big-engine cars.” He adds that “for the moment there is no money in Greece for any business activity.”

This is hardly surprising. All Greeks, from mental health workers to car dealers, pawnbrokers to translators of Bugs Bunny, live in an environment of complete uncertainty that paralyzes activity. Nobody knows if they will have a job in a few months and, and if they do so, whether or not they will be paid. If they are paid, they do not know if will it be in euros or devalued drachma.

The one group of people in Greece who have always said the Greek state was rotten to the core are the anarchists. Sitting around a table in a building called “Nosotros”, Nikos, who did not give his family name, said “Greece suffers from a clientist system based on corruption. Parties used patronage to buy millions of voters. The bourgeoisie has never invested its money here.” I said this sounded very much the analysis of the Troika (EU, IMF and European Central Bank) emissaries but Nikos and the other anarchists were unembarrassed by the coincidence of views.

The anarchists had all taken part in the demonstrations, not to change government policy but so people could show solidarity with each other and demonstrate their opposition to the state. “People don’t believe in the political system anymore,” said Vangelis, another anarchist. “It is not a question of saving the banks or the euro, but changing Greek society from the bottom up.”  He may be right but both the Troika and the anarchists, in their different ways, will have their job cut out to do this.

Greece is like an Arab oil state without oil. It has an overgrown and expensive state machine hard wired with webs of patronage and corruption. In the Middle East this is a crude, unfair but partially effective way of distributing oil wealth and binding recipients to the state through jobs and favours.

In Greece borrowing took the place of oil. Membership of the eurozone gave the country the same triple AAA credit rating as Germany, enabling it to borrow what it wanted at cheap rates. Euro membership, like oil wealth elsewhere, was a disincentive to political, economic and social change because the money was there to pay off friends and foes.

Greece is very much a divided society and the divisions are different from the rest of Europe. From the civil war in 1946 to the fall of the colonels in 1974 the country was dominated by the right which looked after its own, from ship owners to small businessmen who paid few taxes. From the eighties on, the centre left Pasok party was in the ascendant and expanded the state, giving jobs and social welfare to its supporters. Everybody was happy until the money ran out.

And the money really has gone. While the Troika (EU, IMF and European Central Bank) devise elaborate schemes for reform, the government is often simply not paying its employees or paying them very late. There is, in any case, something absurd about expecting a dysfunctional state machine to reform itself at a fast pace under foreign supervision.

There is a second more specific parallel with the Middle East in recent history. Sitting here in central Athens in recent weeks, I was reminded of the beginning of the US occupation of Baghdad in 2003. The Americans thought they were in control and they were not, but they were going to be held responsible by Iraqis and the rest of the world for anything that went wrong.

The political ice in Athens is even thinner than eurozone leaders imagine. For the moment, they appear to have all the cards in their hands. The main Greek parties have signed up to the new austerity deal in order to get the Eur 130 billion loan and the Eur 100 billion write off by private bond holders. Greece is effectively going to have a managed and limited default except that it is not going to be called that to avoid triggering the insurance element in credit default swaps.

There is no chance that a Greece can be rendered sufficiently competitive by the new austerity measures that it will be able to pay its debts. The country lacks natural resources, manufacturing industry or an international service industry; windmills and fish farms will not be enough.

But the future of Greece may not be as bad as it looks. The mammoth efforts made by European leaders to prevent a total default underline the fact that, for all their protestations to the contrary, they dare not let Greece go publicly broke. The profound impact of the recent financial negotiations on everything from the price of oil to shares in New York stock exchange, show that Greece can still blackmail the rest of the eurozone by threatening to totally renege on its debts.

There is a second possible benefit for Greece if the myth is maintained that it is doing what the Eurozone wants and this is likely to work. The international hysteria surrounding the dire state of the Greek economy is self-fulfilling. It has frightened people into withdrawing their bank deposits and refusing to invest. The Troika’s plans will almost certainly not work, but a period of calm might at least end the present economic paralysis.

PATRICK COCKBURN is the author of “Muqtada: Muqtada Al-Sadr, the Shia Revival, and the Struggle for Iraq