Yiannis Roubatis is a former member of the European Parliament and now heads EurActiv Greece.
"On Thursday, 20 October 2011, tens of thousands participated in demonstrations in the second day of a general strike called to protest the new austerity measures demanded by the Troika.
Shopkeepers, civil servants, construction workers, doctors, teachers, lawyers, dock workers, students, unemployed workers from the private sector and others took to the streets of Athens, Thessalonica and other cities calling for an end to further tax hikes and pay cuts.
All the major trade unions were represented and voters from the entire political spectrum, including the ruling Socialist Party, were on Constitution Square in front of the Parliament Building.
Parliament was discussing the new austerity measures and late in the evening on Thursday, the governing Party won the necessary majority but lost one more deputy who refused to fall in line.
She was a close personal and political friend of the prime minister, his first minister of the economy, a former minister of labour and the author of the pre-election PASOK (Pan-Hellenic Socialist Party) program on the economy. She refused to vote in favour of a provision of the law that will make it easier for companies to cut their costs by suspending industry-wide wage bargaining.
The government has lost the support of a huge section of those that voted it to power. As the problems mount, with the exception of the work of a few ministers, it seems disorganised and disoriented. Its dwindling and fragile majority makes it unable to articulate a convincing plan for the day after.
What makes things worse and the work of the present Greek government almost impossible are the policies chosen by its European partners for the solution of Greece's problems. These policies were a pre-requisite for the financial assistance given to the country. They sheltered Greece from the market's attacks but at the same time led the country to a deep recession.
The fiscal policies suggested by the Troika and agreed by the Greek government put the country in an economic downturn that makes it almost impossible to come out of in the near future.
There is no question that the rigorous structural reforms, the attack on corruption and mismanagement, the containment of government spending should have been implemented years ago. At the same time, there is also no question that unless all these reforms are followed by growth-driven measures, Greek society will not be able to survive this crisis.
The fiscal adjustment and the almost punitive and violent austerity program is devastating social cohesion and undermines the social capital needed for this sort of rapid economic and institutional transition.
Greece is a democracy and no matter the impatience of its state and private sector creditors, democratic procedures that have to do with values, solidarity, basic social protection and constitutional issues must be taken into account.
These issues are often forgotten when European leaders make declarations about the need for Greece to abandon part of its sovereignty and move on as if it were some 19th century colony in a far off land.
What is also forgotten is that the state of the European banks is the biggest contagion and not so much the Greek debt. It is convenient to focus on Greece's problems if that would take away the attention from the huge recapitalisation problems of the European banks.
Contrary to what the German tabloids claim, the Greek society is trying very hard to adjust to the new realities. The price tag for this effort is enormous.
- The GDP growth rate slumped to -10.2%
- High unemployment and negative investment rates diminished labour productivity to pre-2000 levels
- Real wages diminished by more than 15%
- The unemployment rate, 16.3%, reached the 1960 levels when thousands of Greeks had to emigrate so that they would not starve to death. Taking into account the real labour market conditions (flexible contracts, hidden unemployment) the 'real unemployment rate' will probably reach 22-23%
- Nearly one out of two young Greeks is out of the labour market
- Unemployment in the inactive population exceeds the total number of workers
- There is an ever-growing brain drain with the most dynamic part of the younger Greeks emigrating with all that will mean for the future of the country
Unfortunately there is more to this price paid by Greek society. Hospitals have no money to buy supplies. It is not uncommon anymore that the relatives of patients have to go out and buy the supplies needed for some operations.
Older people in the inner city are increasingly going to so called soup kitchens. The Archbishop of Athens serves more than 100,000 meals a day to people that would otherwise go hungry. Thousands more get food assistance from municipal organisations or NGOs.
In the first six months of 2011 crime has risen geometrically as shown by data released by police authorities. In the same period suicides increased by 40% and opinion polls indicate dramatic increases in the rates of social insecurity and fear.
According to a recent poll, 80% of all Greeks feel insecure. These 'fear statistics' must also be seen in the light of the more than 1,000,000 irregular (illegal) immigrants that are present in a country of 11 million people.
This is a volatile mixture and in a country that suffered immensely during the Nazi occupation, for the first time since the Second World War, an outright Nazi ideology party registered 1.5% in the polls, managing to elect representatives in the Municipal Council of the City of Athens.
Much is not understood about what is happening in Greece by other European citizens. No wonder, however, when some of their leaders are prone to reproduce myths about Greece and its citizens.
For example, German politicians often repeat claims about the unwillingness of Greek workers to work long hours. None of them bothered to look up the facts: Greek workers work seven hours more per week than German workers. They take less vacation time than German workers. They have less social benefits than German workers.
Recently, Chancellor Angela Merkel chastised Greeks for not using EU funding to help them with the present crisis. Probably, she was not aware that contrary to the widespread belief that Greece has absorbed only a small fraction out of the €20.4 billion earmarked under the EU structural funds, overall Greek absorption in October 2011 is very close to the EU27 average according to European Commission figures (Greece: 28.17%, EUR27: 29,36%).
Undeniably, a huge effort to accelerate absorption rates and implementation has been made by the Greek authorities over the last months (as regards ERDF absorption, Greece is currently in the eleventh position). This is in spite of major obstacles such as lack of national funds to match EU funds and reorganisational difficulties (such as major local and regional administrative reform).
To add insult to injury, much is made about the widespread corruption in Greece. To be sure, Greeks are not angels. However, in a country hard hit by lack of organisational structures, outdated public administration and much-needed structural reforms, it was one of Germany's most important companies that contributed to corruption on a scale hardly ever seen in Europe.
It was Siemens that spent tens of millions of euros in corrupt practices in order to secure contracts in Greece over the last two decades. To this day, none of these funds were ever returned to Greece, with the German authorities, using the influence they have under the present economic conditions, pressuring Greek authorities to 'close the issue' and go on with business as usual with this German industrial giant in Greece.
Recently, Jean-Claude Trichet, speaking to MEPs, underlined that "sovereign stress has moved from smaller economies to some of the larger countries. The crisis is systemic and must be tackled decisively". In the coming week, European leaders will announce their decisions about the systemic threats to the European economies and their decision about what they intend to do with Greece.
The Greek society has reached its limits as far as fiscal consolidation, labour market reform and forced and untimely privatisation are concerned. The austerity measures taken so far have brought misery and hardship with very little to be shown in terms of results.
Greek people are disheartened because they see no end to their sacrifices if there will not be any assistance for growth.
Greece's European partners and especially Germany have every reason to contribute towards a better future for Greece and its society. Not necessarily to show their solidarity. Not because they are morally obligated because of their past and the price the Greek society paid as a result of it. It is in the self-interest of Germany to contribute to Greece and the other countries of the southern Europe."