Jeff—Saturday
For those of you who’ve wondered what’s been going on in Greece since
November 8, 2016—or, for that matter, anywhere else in the world outside of 725
Fifth Avenue (NYC), 1600 Pennsylvania Avenue (WDC), and Mar-a-Lago (FL)—here’s where
things stand.
The Grand Kabuki play of bailout back and forth is well into its third
run, featuring Greece’s left wing SYRIZA Prime Minister again railing at his
country’s EU and IMF creditors over additional austerity measures they insist
Greece follow as a condition for the disbursement of more funds in July. And
they want an answer by Monday.
The smart money is on Greece’s Prime Minister capitulating once more,
after an encore performance of Sturm und Drang. At least that’s been the modus operandi so far, what with SYRIZA
having raised the nation’s VAT to 24%, cut pensions by 40%, dramatically
increased taxes on land, cars, gasoline, cigarettes, etcetera, and cut close to
six billion euros from public wages (though recently announcing 40,000 new public
sector hires—widely seen as an effort to counter their party’s sinking poll numbers).
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| Greece Prime Minister Alexis Tsipras |
The Prime Minister has little choice but to go along with Greece’s lenders’ demands if he wishes to cling to his position, for anything leading to snap elections would likely send SYRIZA and its far-right coalition partner out of power.
A new poll shows 8 of 10 Greeks holding a negative view of SYRIZA’s
achievements in its two years in power, and has SYRIZA trailing its
center-right opposition party, New Democracy, by 16.5 percentage points.
Nine of ten respondents believe things are headed in the wrong
direction, and their responses to other questions on what they see as their country’s
fortunes are equivalently dire. More than three quarters of respondents see
things getting worse.
And they appear to be correct. “Experts” had predicted that fourth-quarter
2016 growth in Greece’s economy would exceed its third quarter growth of 0.9%,
but instead it fell by 0.4%, with unemployment remaining at 25%, manufacturing
activity recording its largest decline in 15 months, and import prices reaching
their highest level in 70 months.
As one reporter (Mediapart’s Martine Orange) observed:
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| Martine Orange |
“European officials may argue that their bailout is
working, they welcome the recovery of Greece and the budget surpluses, but the
situation is quite different: passively we are witnessing the low-noise
collapse of a whole country….
“In seven years Greece's GDP decreased by a third. Unemployment
affects 25% of the population and 40% of young people between 15 and 25 years.
One third of companies have disappeared in five years. Successive cuts imposed
everywhere in the name of austerity now bite in all regions. There are no more
trains, no more buses in whole parts of the country. No more schools,
sometimes. Many secondary schools had to close in the most remote corners
because of lack of funding. Per capita spending on health has declined by a
third since 2009, according to the OECD. More than 25,000 doctors were
dismissed. Hospitals lack personnel, medicines, everything....
“One fifth of the population lives without heating or
telephone. 15% of the population has now fallen into extreme poverty compared
to 2% in 2009
“The Bank of Greece, which cannot be suspected of
complacency, has drawn up a report on the health of the Greek population,
published in June 2016. The figures it gives are overwhelming: 13% of the
population are excluded medical care; 11.5% cannot buy prescription drugs;
People with chronic health problems are up to 24.2%. Suicides, depression,
mental illness show exponential increases. Worse: while the birth rate has
fallen by 22% since the beginning of the crisis, the infant mortality rate
almost doubled in a few years to reach 3.75% in 2014.”
Ms. Martine’s bottom line to all of this is simple:
“After seven years of crisis, austerity and European plans, the country is
exhausted, financially, economically and physically.”
As she sees it, the entrenched unwillingness of Greece’s creditors
to accept debt relief—instead insisting on further punishing austerity
measures—as the only way out of this eternal quagmire, seems motivated by a
desire to force Greece into Grexit…at least from the euro.
Putting it succinctly, she writes, “Pushing Greece out
instead of granting it the necessary restructuring of its debt, at a time when
geopolitical tensions have never been so strong, where Donald Trump explicitly
attacks the construction of Europe and bets on its breakup, seems incomprehensible.”
How apt.
With so much in play—SYRIZA driven to stay in power at
seemingly any cost, Greece looking for a shining knight with a magic wand to salvage
it from financial extremis, and the attention span of the world driven by
140-character tweets—what happens there next may be just that. Incomprehensible.
Let us pray.
—Jeff
