Eight Years After EU-IMF Bailout, Greece Sees Poverty, Suffering, and Want

Far from “bailing out” Greece, the impacts of eight years of harsh austerity are manifested in a marked increase in poverty, suffering, and want. And far from “ending,” the austerity measures attached to Greece’s three successive “bailouts” are slated to continue for decades to come.

by Dr. Michael Nevradakis

ATHENS – It is a tale of two realities. Later this week, Greek Prime Minister Alexis Tsipras will give his annual speech to the nation – Greece’s equivalent of the State of the Union address — at the 83rd Thessaloniki Trade Fair.
Fresh off of a recent reshuffle of his cabinet, the main theme of Tsipras’ speech almost certainly will be Greece’s “success story,” highlighted by its recent “exit” from the “bailouts.” Greece’s emergence from the third set of loan agreements with the European Union and IMF was triumphantly proclaimed by Tsipras in another recent address, held symbolically on the island of Ithaca.

If one looks more closely though, one will see a reality markedly different from that which is being triumphantly celebrated. Thessaloniki – Greece’s second largest city and capital of the Greek region of Macedonia – has filled with posters proclaiming that Tsipras is unwelcome. Major demonstrations, which might rival last winter’s massive ralliesagainst a Macedonia name compromise, are being organized to coincide with Tsipras’ visit. The prime minister himself will be protected by 3,600 police officers and members of the riot police — the same violent riot police that, prior to his election in 2015, Tsipras promised to abolish.


As for that triumphant speech in Ithaca proclaiming the end of the bailouts and associated memorandum agreements? Eyewitness accounts and the photographic record from Tsipras’ visit expose a different reality: one of paltry crowds populated largely by SYRIZA party hacks and day-trippers, not elated ordinary citizens. Indeed, funeral bells tolled from local churches during Tsipras’ visit, while banners and protesters alike jeered the prime minister.

Tsipras’ jubilant speech in Ithaca came on August 21. Just one day later, most of Athens was impacted by an hours-long power outage, during which the city’s “news” radio stations droned on about the “end of the crisis” or aired pre-recorded programming. That same week, the island of Hydra, a tourist haven, went without power and water for two days. Within eight days of Tsipras’ Ithaca speech, blackouts also hit the popular tourist islands of Tinos and Skopelos. Previously, in mid-July, the start of a lecture I was about to present in the tourist area of Athens was delayed a half-hour by a power cut.

Relatively minor as these incidents may appear, they are not the sign of a country “emerging from the crisis.” They are the signs of a country whose infrastructure, after eight years of EU- and IMF-imposed austerity, is crumbling. And the power outages are, in the big picture, a minor inconvenience compared with what the country has been forced to endure over the past decade. Far from “bailing out” Greece, the impacts of eight years of harsh austerity are manifested in a marked increase in poverty, suffering, and want. And far from “ending,” the austerity measures attached to Greece’s three successive “bailouts” are slated to continue for decades to come.

Dismantling an economy – and a nation
In his analysis, Éric Toussaint, spokesman for the CADTM (Committee for the Abolition of Illegitimate Debt), summarizes the goals of Greece’s “bailout” program as follows: bailing out private banks with public funds; providing the new public creditors (European governments) with enormous coercive powers over the national governments of countries such as Greece; keeping those countries firmly within the Eurozone system; delivering more neoliberal policies to these countries; and reinforcing a pan-European authoritarian form of governance with a democratic facade.

In practice, this is exactly what has transpired in Greece. In a recent tweet, Jamie McGeever of Reuters spelled out the details: GDP shrank by 25 percent; official unemployment was as high as 27.8 percent and continues to hover around 20 percent, despite the emigration of 500,000 mostly young Greeks; youth unemployment reached 60 percent; suicide and depression rose sharply; and the national debt-to-GDP ratio skyrocketed to 180 percent. Youth unemployment remains at 40 percent today despite the massive “brain drain,” while this map illustrates the sharp GDP decline in Greece since 2004.

Credit | European Parliamentary Research Service
Economist Jack Rasmus further elaborates: employment remains 17.5 percent below pre-depression levels; skilled workers’ wages have been slashed by 35 percent, unskilled workers’ by 31 percent. The minimum wage has been reduced by 22 percent, pensions have been repeatedly cut, and the age eligibility to receive a pension has been raised by 10 years.

While Rasmus describes the Greek crisis as an economic depression, Paul Craig Roberts deems it a genocide, with effects worse than those of the Great Depression. Greece’s birth rate has plummeted to below replacement level, public assets were sold off, and somehow the debt grew anyway. Roberts argues that the money lent to Greece was provided in order for interest to be paid to the country’s creditors, who were not to lose a cent from what they were owed.

If you thought the Greek “bailouts” were all about the country’s “excessive” debt you would be wrong. In 2009, at the onset of the Greek “crisis” the Greek debt-to-GDP ratio was deemed “unsustainable” at 126.8 percent. The end-of-year projection for 2018 is 191.3 percent. Notably — despite a dip from 172.1 percent in 2011 to 159.6 percent in 2012, the year of the Greek debt “haircut” (or PSI — for “private sector involvement”), when Greece lost sovereignty over its debt as it was taken over by official actors (i.e., European governments) — by 2013 the ratio was back up to 178 percent. A great deal of Rogaine must have accompanied that “haircut.”

Skeptics will merely chalk up the higher debt-to-GDP ratio to Greece’s reduced GDP, which magnifies the debt amount by comparison. This is only part of the equation though, as Greece’s debt in real terms also increased during the “bailout” years, from 310 billion euro in 2010 to 345 billion euro today, and may surpass 360 billion euro by the end of the year. Pass the Rogaine.

We are told, however — by the IMF, the pro-SYRIZA press, and the Oxford-educated “Marxist” Greek finance minister Euclid Tsakalotos — that this new, larger debt is “sustainable” – as opposed to Greece’s smaller but “unsustainable” 2009-10 debt levels. In particular, this was the claim after a “landmark” debt agreement between Greece and its creditors at the Eurogroup summit this past June. As part of that deal, Greece receives a 10-year extension of the maturity of European Financial Stability Facility (EFSF) loans, a 10-year grace period on interest and amortization repayments, and a final disbursement of 15 billion euro (to be added to Greece’s now-“sustainable” debt). Analyst Yannis Koutsomitis points outthat this agreement does not tie debt repayment to GDP growth, does not cut interest rates on Greece’s outstanding loans, and does not include buybacks of high-interest loans — but argues that this is nevertheless a deal “Greece can live with.”

Four decades under the Sword of Damocles
What else will Greece have to live with, for decades to come? Despite the exultant claims of Greek digital policy minister and Tsipras confidant Nikos Pappas that “those that wanted permanent oversight have been soundly proven wrong,” foreign economic oversight is precisely what Greece will look forward to until the year 2059, when 80 percent of the current debt is expected to have been repaid.

This will encompass fiscal oversight, the liquidation of non-performing loans (read: more home foreclosures and auctions), oversight over “social services,” the continuation of labor and market “reforms,” the continuation of privatizations of public assets, and continued “reforms” in the public sector. In other words, everything that’s been going on in Greece these past eight-plus years. Quarterly “review missions” will be dispatched by the European Commission to Greece to provide “enhanced surveillance,” ensuring “implementation of needed reforms.”

Indeed, according to the head of the European Stability Mechanism (ESM), Klaus Regling — who noted that the ESM is Greece’s biggest creditor, to the tune of 204 billion euro — Greece will be more closely monitored by the ESM and the other “institutions” compared to other countries that were “rescued.” Regling added that Greece “must prove” that it will not roll back reforms. The first quarterly “review mission” will arrive in Greece on September 10, less than three weeks after the “end of the crisis.”

Greece has also agreed to maintain an annual budget surplus of 3.5 percent through 2022, and 2.2 percent each year thereafter until 2060. What this means is that the Greek state is obliged to spend less than it earns in revenue. This is permanent austerity. As an added nudge, in a recent statement regarding the upcoming “review mission,” the European Commission lectured Greece to continue agreed-upon “reforms,” reminding Greece that it agreed to maintain 3.5 percent surpluses.

A man counts his change in Athens, March 8, 2018, as thousands of pensioners rallied against another planned round of bailout-related cuts. Petros Giannakouris | AP
Are such surpluses sustainable? Economists Barry Eichengreen and Ugo Panizza studied 235 countries, finding that in only 36 cases were countries able to maintain, for a five-year period on average, a primary budget surplus of at least 3 percent of GDP. In the same study, they found that there were only 17 cases in which countries maintained a primary budget surplus of at least 3 percent of GDP over an average of eight years, while there were only 12 cases (or just 5 percent of the countries studied) in which countries could maintain a primary budget surplus of at least 3 percent of their GDP over a 10-year period. It should be noted that Germany, the purported paragon of fiscal responsibility and restraint in Europe, was not one of these countries.
As an added bonus, Mario Draghi, the head of the ECB, announced that Greek bonds would no longer be accepted as collateral for loans, effective August 21 when the “bailout” program ended. So much for a “common” market — or for “recovery.”

What is instead considered acceptable as collateral by the Nobel Prize-winning EU? Greek public assets — practically all of them. Public assets have been transferred for a period of 99 years to the “Hellenic Corporation of Assets and Participations” (HCAP), which oversees the entity in charge of the privatization of said assets. And although almost a decade’s worth of privatizations have not proven to be a money-maker — as only 5 billion euro in revenue have been raised instead of a projected 50 billion (blamed by Reuters on, among other things, “union resistance” and “bureaucracy”) — the head of HCAP assures us that Greece won’t renege on its pledged privatizations, including the national natural-gas utility, national oil refinery, and stakes in the public electric and water utilities. The government is also said to be considering the privatization of the historic site of Thermopylae, as well as the historic Zappeion building within the National Gardens of Athens. SYRIZA claimed to oppose such privatizations prior to being elected in 2015. And should Greece fail to meet its debt or deficit obligations, these collateralized public assets will be up for grabs.

A prerequisite for the June debt deal — and the “end” of the “bailouts” — was the fast-track passage of an omnibus bill through the Greek parliament earlier that same month, containing still more austerity and commitments for “reforms.” This bill includes the commitment to maintain the aforementioned primary budget surpluses, a pledge to raise appraised property values (leading to hikes in property taxes SYRIZA at one time promised to abolish), the hiring of new tax collectors, “reforms” to social insurance, a pledge to take action against non-performing loans (resulting in property foreclosures and auctions), and further privatizations (including strategic ports and highways).

The above comes in addition to “reforms” previously agreed upon as part of the third memorandum, which was signed in 2015 just weeks after 61 percent of Greek voters rejected further austerity via referendum. This includes a new round of scheduled pension cuts of up to 18 percent. And, as the IMF was quick to remind Greece recently, these pension cuts, as well as a further planned reduction in the tax-free threshold, must be implemented. As the well-known song goes, “the show must go on.”

This is despite the fact that the IMF has often been presented to Greece as the “good cop” of the troika, one that has insisted upon debt relief for Greece, admitted “mistakes” in its “bailout” program for Greece, and “apologized” for said “mistakes.” Yet here is the IMF insisting upon the very same austerity. As another popular song goes, “sorry, not sorry!”

Continuing the stream of crocodile tears, Bob Traa, the first IMF representative to Greece following the commencement of the country’s “bailouts,”stated that the crisis has resulted in a faster demographic slowdown than expected. This is what Paul Craig Roberts had referred to as a “genocide.” These statements from Traa came sans any self-criticism regarding the IMF’s role in these developments.

Indeed, anyone who is familiar with the IMF’s work in Latin America, Africa and Asia understands that the fate that befell Greece was the expected outcome. Of course, many present-day liberals and “leftists” now support the IMF and neoliberal economic policies, including so-called “free trade” deals. It therefore is ironic to see Financial Times analyst Peter Spiegel – not noted for his anti-austerity views – calling out the June debt agreement as one that is worse than the aforementioned “haircut” of 2012.

And writing for The Washington Post, which was itself favorable to the “bailouts” in past years, Matt O’Brien pointed out that, with the surpluses Greece is obliged to maintain, Greece faces four more decades of austerity, while its economy is not likely to reach 2008 levels until 2030.
Not everyone is such a sourpuss, however. For instance, Germany has earned 2.9 billion euro in profits on the Greek crisis via its bond holdings. For Austria, profits were only 112 million euro, a deal that was practically unprofitable according to some Austrian financial analysts.

Tangible human consequences
Germany and Austria, among others, may have reaped profits, but most Greeks have reaped nothing but misery over the past decade. The percentage of the population in Greece facing material deprivation has doubled since 2009, to over one in five. Greece’s tax burden, which ranked in 13th place in the EU in 2008, is now the heftiest in the EU, with a tax-to-GDP ratio of 27 percent, while social services are slashed. In a recenteditorial, eKathimerini, Greece’s English-language paper of record and a proponent of neoliberal policies, admitted that the country’s middle class finds itself “in despair.”
The human impact can perhaps be most clearly seen in Greece’s health-care sector. A recent University of Washington study found a marked increase in Greece’s death rate during the years of austerity and, in particular, an increase in deaths from preventable causes. Furthermore, the study identified increases in early childhood mortality, in incidences of tuberculosis and HIV, and in depression and suicide. The percentage of individuals with unmet health-care needs nearly doubled since 2010.

These unmet health-care needs, so often viewed in the numerical abstract, can be seen in more moving individual terms in Greece today. Recently, a 42-year-old man traveling alone on the Athens-Thessaloniki highway fell ill and followed the signs to the nearest health clinic in the town of Kamena Vourla, only to find it was permanently closed. He flagged down a driver, who phoned in an ambulance, but by the time it arrived, the man had passed away.
In a remarkably similar incident, recently in the northern Greek town of Margariti, a 48-year-old mother of two underage children fell ill but, as in Kamena Vourla, found the local health clinic out of operation. Furthermore, there was no ambulance available to transport her to a hospital in the nearby city of Preveza. She, too, passed away.

On the Aegean island of Symi, a popular tourist destination in the summer months, the island’s only doctor is officially “on duty” 24 hours per day, seven days per week.

State hospitals workers stage a rally opposing austerity measures affecting healthcare in Athens, March 15, 2017. Yorgos Karahalis | AP
And increasingly in Greek hospitals, particularly public hospitals, not only are there shortages of basic medical supplies, but also of doctors themselves. Over 20 percent of available positions remain vacant, as budget cuts prevent the hiring of new doctors while many Greek doctors have fled abroad. A close friend of mine, a nurse in the Boston area, states that her hospital has been inundated with freshly-arrived doctors from Greece — and job applications from still more.

While all this has been taking place in Greece’s health-care system, SYRIZA’s “new Greece” is continuing the same ridiculously corrupt practices as marked the past. For instance, Haralambos Panotopoulos, previously the owner of a tire-repair shop and with no apparent medical experience, was appointed by SYRIZA’s deputy health minister Pavlos Polakis to the position of vice president of the public hospital of Santorini. This position pays almost 4,000 euro a month in addition to other perks, including a car and residence, at a time where 48 percent of the population earns an income at or below the poverty line, a bar set very low at 384 euro per month. Panotopoulos’ only apparent “qualification” for the position is his unabashed support of SYRIZA, as openly demonstrated on his social media accounts.

While keyed-in tire-shop owners “live the dream” in SYRIZA’s Greece and are appointed to plum posts, many others are not so fortunate. In a studyon the “brain drain” by the Hellenic Federation of Enterprises, 61 percent of those surveyed who have emigrated during the crisis possess advanced degrees. Almost 20 percent were engineers, while another 12 percent were computer programmers.

And while the young are departing, the Greek elderly have reduced pensions to look forward to. While SYRIZA, as part of its “success story” rhetoric, has recently made overtures about rescinding the aforementioned scheduled pension reductions of up to 18 percent, the EU hasdismissed such rhetoric as “premature.” More to the point, in a recent interview with Greek daily Ta Nea, German finance minister Olaf Scholzwarned Greece that there can be no reneging on agreed-upon pension cuts. In total, pensions have been reduced 23 times during the years of the crisis.

In the meantime, the fire sale of the century is fully in progress — and is not just confined to public assets, but also includes people’s homes and assets. One thousand auctions of foreclosed homes have been slated for this month alone, contributing towards a target of one millionconfiscations of property, salaries, pensions, deposits and other assets in 2018. Indeed, almost half of outstanding loans in Greece are no longer being serviced. In response, Greek banks, in accordance with Greece’s obligations to its lenders, are planning to ratchet up legal actions against the holders of such loans beginning this month.

The crisis years have also seen a two-thirds decrease in the consumption of (excessively taxed) heating oil, leading to clouds of noxious smog in Greek cities from fireplaces and makeshift furnaces lit by Greek households that cannot otherwise heat their homes. This has been coupled with a 7.4 percent decrease in consumption of diesel fuel. Electricity is being cut off to poor households even though they qualified for the “social residential” rate and are purportedly protected. However, plenty of fuel seems to be available for vehicles belonging to German “polizei” and the German coast guard, which have been spotted throughout Greece, including by yours truly on the island of Samos in August 2016.

All that talk about reform…
While German police vehicles roam freely on Greek roads, the corruption bonanza continues unabated. This was recently highlighted by the Financial Times, which addressed the continued patronage and clientelism prevalent in Greece’s public sector. This corruption often attains absurd proportions. Recent cabinet appointee Katerina Notopoulou, for instance, was once part of the troupe of striking cleaning women who had been relieved of their duties by the previous New Democracy-led government. Most of those women have since been able to cash in on their “activism” with cushy public-sector posts – even prior to Notopoulou’s cabinet appointment, she had been the head of Tsipras’ Thessaloniki office. Notopoulou’s mother was, in turn, the beneficiary of a patronage hire at a hospital in Thessaloniki during her daughter’s tenure as the head of Tsipras’ office there.euro
In another widely publicized recent incident, Aristeidis Floros, the former executive of the Energa power company, was released from prison on “health grounds” after claiming a greater than 65 percent “disability,” which would qualify him for release. Floros had been serving a 21-year sentence for grand embezzlement (of up to 257 million euro) and a pay-for-hire murder attempt. Following an outcry, Floros’ release wasrescinded, as his medical documents were found to be “questionable.”

Earlier this year, the aforementioned SYRIZA minister Nikos Pappas made a big show of publicly touting the newly-established Hellenic Space Agency (HSA). It did not take long for the propaganda campaign to fall apart: soon after its establishment, world-renowned scientist Stamatios Krimigis, with tenures at NASA and Johns Hopkins University on his resume, resigned from his post at the helm of HSA. In his resignation, Krimigisstated that the agency had become an “unreliable bureaucratic structure” and a “puppet for politicians in charge.” Not surprisingly, it was laterrevealed that in the point system for evaluating new job candidates at the HSA, those who are invited in for an interview receive 40 points, but possessing a doctorate degree earns candidates only five points.

And in late July, just prior to the catastrophic fires in the Athens region, revelations appeared that businesses owned by relatives of Alexis Tsipras had received “favorable” debt write-off, in addition to accusations of insurance fraud. Meanwhile, several relatives of Tsipras and high-level SYRIZA personnel have been appointed to various plum patronage positions.

Prior to being elected, SYRIZA also promised to root out corruption in the media and to “smash the oligarchs.” Earlier this year, SYRIZA insteadissued nationwide television licenses to five outlets, all incumbents and all oligarch-owned. A radio station operating illegally in Athens and based in Piraeus, “Smooth 99.8,” looks set for ex post facto “legalization” following its purchase by Chinese interests. Chinese interests also happen to operate the port of Piraeus, fully privatized by SYRIZA.

Protesters from private TV channels tape photo of Greek Prime Minister Alexis Tsipras, top, and Defense Minister Panos Kammenos to a lamppost outside parliament, in Athens, Oct. 19, 2016. Thanassis Stavrakis | AP

Even in instances where the justice system functions in Greece, it is subject to outside interference — as in the case of the prosecution of former Greek statistics chief (and ex-IMF employee) Andreas Georgiou on charges relating to accusations that he inflated Greece’s deficit and debt figures,laying the groundwork for the “bailouts” that followed, when a section of the foreign press corps in Greece rushed to Georgiou’s defense. One example is Marcus Walker, the South Europe bureau chief of The Wall Street Journal, who called Georgiou’s prosecution a “persecution,” and “witch hunt,” adding his belief that Georgiou “reported [the] Greek deficit accurately.” Ludicrously, an online crowdfunding campaign was launched to raise money for Georgiou’s legal defense against said “persecution” — raising over $41,000, including a cool $500 from Miranda Xafa, former IMF representative to Greece and outspoken proponent of austerity.

Of course, none of this comes as any surprise to those who understand Greek politics. For all the talk of a “leftward swing” following SYRIZA’s election, and of “hope” and “change,” SYRIZA and its governing partner, the right-wing Independent Greeks, are largely comprised of personnel from the two previously incumbent parties in Greece, PASOK and New Democracy. For foreign correspondents such as Michael Martens of the Frankfurter Allgemeine Zeitung, however, Tsipras and SYRIZA represent “statesmanship” and a new Greece — as opposed to the “old Greece” of the likes of New Democracy.


Michael Martens@Andric1961



Respected @GreekAnalyst I dare to disagree. What we hear from #Mistotakis is the old Greece talking, the Greece that failed and brought #Tsipras to power. If this comes through, Tsipras and Kotzias have demonstrated statesmanship. Never thought in my wildest dreams I´d say that.

The Greek Analyst@GreekAnalyst
Greek opposition leader @kmitsotakis stands (rightly) against the “bad deal” brought by the Syriza-led govt on the Macedonian name dispute. https://twitter.com/g_evgenidis/status/1006598281739325440 …

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Michael Martens@Andric1961



Greek opposition leader Kyriakos #Mitsotakis up in arms against solution of Macedonia name dispute: “Recognition of a Macedonian language is an unacceptable national concession” Et cetera pp. This is the old Greece talking. The Greece that failed and brought Tsipras to power.
8:34 PM - Jun 12, 2018
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These tweets came in response to the recent unpopular agreement between Tsipras and the prime minister of Greece’s neighbor that calls itself “Macedonia,” according to which the country’s new name will be “North Macedonia” – seen by many in Greece as a betrayal – while its candidacy for NATO and EU membership will be allowed to proceed. The specter of a deal, and the agreement that followed, resulted in widespread rallies throughout Greece, to which the SYRIZA government responded by expelling diplomats of longtime-ally Russia, accusing them of helping to foment the rallies.
This and other geopolitical issues — such as continued tensions with Turkey (exemplified by Greece granting asylum to eight Turkish servicemen accused of participating in the failed coup against Turkish strongman Recep Tayyip Erdogan, and Turkey’s kidnapping and six-month detention oftwo Greek soldiers), and the overwhelming burden Greece has endured, described as a “boiling point,” with regard to the issue of migration (exemplified in a recent agreement between Tsipras and German chancellor Angela Merkel, sending 2,000 migrants back to Greece from Germany) — are to be analyzed in a forthcoming column. And this doesn’t even include the Greek government’s appalling response to and outrageous statements regarding the destructive fires in the Athens region in July, which have thus far claimed 98 lives (to be analyzed in a forthcoming piece). In the immediate aftermath of the fires and as Greece mourned, Tsipras vacationed comfortably in the seaside villa of a shipping magnate.

It should, therefore, come as no surprise that in a recent Pew Global poll, 53 percent of Greeks stated their belief that life in their country was better 50 years ago, as opposed to only 28 percent who believe it is better today.

Matt O’Brien of The Washington Post argues that the Greek crisis is only over if you don’t live in Greece. But for Jeroen Dijsselbloem, former Eurogroup chief and the ex-finance minister of Holland, such talk is simply sour grapes and the product of ungrateful Greeks with a “big mouth.” Dijsselbloem is the same figure who once stated that the people of Southern Europe “wasted” their money on “booze” and “women.” Solidaridad!

In his speech in Ithaca, Tsipras stated that Greece has “reached its destination.” If the goal was the economic destitution and submission of Greece, he would be correct. This much is certain: far from being “bailed out,” Greece and its people are still suffering. And far from “ending,” the “bailout” commitments and austerity are set to continue for decades more.

Top Photo | An elderly man passes by homeless men in Athens, April 23, 2018. Thanassis Stavrakis | AP
Dr. Michael Nevradakis is an independent journalist presently based in Athens, Greece. Michael is the host of Dialogos Radio, a weekly radio program featuring interviews and coverage of current events in Greece, and is a member of the communication faculty at Deree – The American College of Greece. He was previously a Fulbright scholar and completed his Ph.D. in Media Studies from The University of Texas in 2018.