For years they have been encouraged to live beyond their means, taking advantage of the cheap credit on offer since Greece joined the euro in 2001. Now, the rug is being pulled from under their feet.
ATHENS - Athens is no stranger to public protest. On average, there are more than two rallies — of varying size — a day in the city center. This was the case even before the economic crisis took hold of the country, when many Greeks would find anything they could to complain about.
Now, it seems, they really have cause to protest.
The austerity measures passed by Parliament on Wednesday so Greece can qualify for euro110 billion ($145 billion) in emergency loans from other eurozone members and the International Monetary Fund were unprecedented. They herald the kind of spending and wage cuts that no Greek government would have ever considered, let alone implemented.
Public-sector workers, of whom there are close to a million in Greece, are seeing their annual salaries being cut by 15 to 20 percent. Many will also lose their jobs as the government begins downsizing the civil service to save money. The private sector is also being hit. Closed professions, such as lawyers and cab drivers, are to be liberalized and labor laws will be changed to make it easier and cheaper for companies to fire employees.
On top of that, VAT (value-added tax, similar to a sales tax) has risen sharply — the top rate has gone up from 19 percent to 25 percent since the start of the year — and increases in fuel tax have made visits to gas stations a painful experience. Everybody is also affected by plans to slash pensions and make people work longer before they can claim any retirement benefits.
In a country where there was never more than a trickle of structural reform, this austerity package is a tidal wave that is crashing down on Greeks.
Anger at corruption
They are angry because for years they have been encouraged to live beyond their means, taking advantage of the cheap credit on offer since Greece joined the euro in 2001. Now, the rug is being pulled from under their feet. People who have taken out mortgages to buy homes, loans to purchase cars and credit cards to pay for overpriced basic goods are being asked to meet all these commitments with a much lower income than they had budgeted for.
This is not what angers Greeks most, though. What you will hear time after time, both at the protests and at workplaces and cafes, is that this crisis confirms the failure of the country’s political system. In other words, that for years politicians have been bleeding the country dry, looking after themselves and their friends and failing to build a robust economy and a country equipped to deal with the challenges of the 21st century.
There is anger at the pervasive, high-level corruption for which no politician is ever punished. People are also furious that no government has ever tackled influence-peddling in the public sector. The Greek branch of Transparency International estimated that Greeks paid almost euro800 million ($1 billion) in bribes last year. This is another drain on household budgets but more importantly it creates a sense of injustice, a sense that to get anything done you have to play by the system’s warped rules.
This feeling of unfairness is compounded when tax evasion also goes unpunished. Salaried professionals and civil servants have their wages taxed at source but many Greeks do not. And, what they declare often bears no resemblance to what they actually earn. The government believes that tax evasion could be worth up to euro30 billion ($38 billion) a year, or 12 percent of the country’s GDP. Allowing one part of the population to consistently get away without paying while Greece’s public finances are propped up by the same people all the time creates incredible resentment. That’s why you hear many Greeks say they will put up with the austerity measures if the government ensures that everybody pays their fair share. If people believe that the usual suspects, who in many cases are wealthy businessmen, doctors and lawyers, are allowed to get away with it, then the level of anger will go up several notches.
Patience is finite
Some of the rage that already exists is being channeled through the strikes and public protests that get so much international coverage. Getting out onto the street, making your opposition known and ensuring your voice is heard is one way of airing your frustrations. Of course, Wednesday’s protest was overshadowed by an arson attack on a bank in central Athens that led to three people being killed. As tragic as this event was, the people who carried out the attack had nothing to do with those who were there to engage in legitimate protest. But it is exactly this legitimacy that is in question, as there are doubts about how representative the unions, which organize the general strikes and the protest marches, are.
The ADEDY civil servants’ union and the private sector GSEE union represent close to 3 million people but less than half of these workers are active members. Also, neither union ballots its members before they go on strike and their leaders have very strong political affiliations. In such a fraught atmosphere as the one Greece finds itself in, it is not clear that the unions speak or act on behalf of the majority of workers.
For many of those who feel unrepresented, there seems to be no outlet at the moment. The lack of trust in the political parties means people are not turning to them either. These are people who will not go on strike or protest in the streets. These are people who will do their job honestly. These are people who will take the hit from the new cutbacks and adjust their lives accordingly. These are people who are willing to give the government a period of grace to rescue the economy.
However, their patience is finite. If they see the money from extra taxes being wasted, if they feel that politicians are still cutting deals to help themselves to public funds, if tax dodgers are left untouched, then their anger will erupt as well. And nobody will be able to tell them they have nothing to protest about.