By Stas Margaronis
European Union mandated cutbacks in Greek government services and spending are winding down. However, the impact to the country has been devastating and could leave Greece in recession for years.
After the 2008 economic crisis, the European Union mandated the cutbacks so that Greece would repay debts that it owed banks.
In contrast, Portugal, which began to resist cutbacks in 2015 and increase government spending, is in the middle of an economic revival.
The Greek unemployment rate, which has been touted as improving, remains at 20%
Many younger Greeks, especially those with university educations, continue to leave the country to find employment in Europe or North America.
A Greek woman working in public relations left Greece to find work in the UK. She says she regrets leaving her country but working conditions and business practices in the UK are so much better than in Greece. More and more, when she rides the London subway she hears Greek spoken as others have joined her in leaving Greece.
Another Greek woman, a restauranteur in Florence, Italy, says that there are many more opportunities for opening up businesses in Italy than in Greece. She, herself, left Greece in 2010. Her restaurant features dishes that go beyond using filo dough to wrap spinach (spanakopita) and cheese (tiropita). She has expanded to include other vegetable wraps that include artichokes. These represent a return to traditional Greek cooking and a fusion with modern tastes and vegetarian cuisine. She also serves an unusual taramosalata, a fish roe that is transformed from its traditional orange color to grey using squid ink. She says: “The economic crisis is forcing many creative Greek people to find work abroad. As a result, we were able to hire a very talented cook from Greece who could not find work. Florence is a very cosmopolitan city where creativity is valued and many Italians are looking for alternatives to Italian cooking and love Greek food.”
The Greek newspaper Kathimerini reported: “Greeks have to work more than half of each year on average to maintain the state and data show that this trend is increasing. In 2018 Greeks will have to work 198 days to cover their taxes and social security contributions. Consequently, they won’t start working for themselves until July 18.”
The recent fires in Greece were exacerbated by cutbacks in government spending for fire and other emergency services as well as the failure to regulate housing development and clean up debris near the fire torn area, according to a Financial Times report:
“In Greece, which had not suffered a prolonged heatwave before the blaze, the dense illegal housing, high winds and slow response from authorities were key reasons why the fires became so devastating, says Efthymios Lekkas, an Athens university tectonics and geology professor. The impact was worsened because its emergency services have faced severe budget cuts during the country’s financial crisis. Local government officials in Mati also failed this year to complete an annual clearing of undergrowth required by law, leaving a thick layer of combustible pine needles and dead branches on pavements and in public spaces around the resort.”
The impact of refugees coming to Greece has been a strain on health care services already ravaged by cutbacks and austerity measures. Medicins Sans Frontieres (Doctors Without Borders) said in its 2017 report on conditions in Greece:
“Médecins Sans Frontières… has been providing medical and humanitarian assistance to asylum seekers and migrants in Greece since 1996. In 2014, MSF expanded its activities in Greece to meet the needs of asylum seekers arriving on the Greek islands and mainland.
Since 2016, MSF medical teams in Greece have offered a range of services including primary healthcare, treatment for non-communicable diseases, sexual and reproductive healthcare, physiotherapy, individual and group/family clinical psychological care, psychiatric care, and a comprehensive social support package.
In 2017, MSF provided services in Athens and in camps around the wider Attica and Central Greece Regions, the Aegean islands of Lesvos, Chios and Samos, and in northern Greece – in and around the cities of Thessaloniki and Ioannina.
Throughout 2017, MSF continued to witness the consequences of the European Union’s (EU) deterrence and containment policies on people’s health and wellbeing in Greece. The closure of the Balkan route and the implementation of the EU−Turkey Statement in March 2016, have left many people trapped on the Aegean islands and the mainland. In 2017, 60% of people arriving on the Greek shores were women and children.”
MSF is also assisting with health care in Greece where hospitals have been hit hard by government cutbacks and often lack elementary supplies such as gauze and suture forcing relatives of patients to buy these supplies to support the treatment of patients in hospitals, according to an MSF doctor based in Athens.
He explains: “The Greek healthcare system is supposed to provide healthcare to everyone but austerity measures have led to cutbacks in basic supplies. In addition, hospital administrators often fail to encourage competitive bidding which results in shortfalls that impact medical supplies.”
Antonis Karakousis , a writer for the newspaper To Vima, says prospects for the future are not bright:
“A number of events and developments have not allowed the country to capitalise on the results of so many sacrifices over the last years.
Though there has been fiscal progress, growth remains anemic and cannot free up the country and its sorely tried citizens. Businessmen and bankers remain reserved.
In tourism, there is an increase in arrivals, but tourism revenues remain on the same level. Next year, a possible decline in arrivals is expected, as neighbouring countries restructure their tourism industry. An increase in exports cannot cover the production void of the last eight years. Investment initiatives are not enough to create a current that could bring an economic take-off.”
In 2015, the Portuguese government decided that cutbacks demanded from banks for past debts was making a bad situation worse and so it decided to reverse course.
A New York Times report describes how increased government spending is helping Portugal’s economy bounce back while Greece’s economy is not:
“Ramón Rivera had barely gotten his olive oil business started in the sun-swept Alentejo region of Portugal when Europe’s debt crisis struck. The economy crumbled, wages were cut, and unemployment doubled. The government in Lisbon had to accept a humiliating international bailout.
But as the misery deepened, Portugal took a daring stand: In 2015, it cast aside the harshest austerity measures its European creditors had imposed, igniting a virtuous cycle that put its economy back on a path to growth. The country reversed cuts to wages, pensions and social security, and offered incentives to businesses.
The government’s U-turn, and willingness to spend, had a powerful effect. Creditors railed against the move, but the gloom that had gripped the nation through years of belt-tightening began to lift. Business confidence rebounded. Production and exports began to take off — including at Mr. Rivera’s olive groves.
“We had faith that Portugal would come out of the crisis,” said Mr. Rivera, the general manager of Elaia. The company focused on state-of-the-art harvesting technology, and it is now one of Portugal’s biggest olive oil producers. “We saw that this was the best place in the world to invest.”
Many Greeks accuse Greek prime minister Alexis Tsipras and his Syriza party of failing to live up to earlier promises to oppose austerity measures when they were first elected in 2015 and follow a similar path as Portugal. Instead, the critics say, Tsipras agreed to continued austerity measures demanded by the European Union that depress the Greek economy.
[1] Kathimerini, June 26, 2018
[2] https://www.ft.com/content/fdef0ece-918c-11e8-bb8f-a6a2f7bca546
[3] To Vima, July 23, 2018 http://www.tovima.gr/en/article/?aid=1006908
[4] The New York Times, Portugal Dared to Cast Aside Austerity. It’s Having a Major Revival, July 23, 2018