Christos Konstantis / Economy

The Greek Economy: What Happened? What’s Next?

Yesterday the Greek Parliament decided to approve the third memorandum since the beginning of the economic crisis. The government implemented the new fiscal plan with 153 votes in favour, 128 votes against and 18 votes “present”, which, in effect, is a blank vote.

This happened when the public and private sector were on a general strike for 48 hours! Yesterday 250.000 people were gathered in front of the Greek Parliament stating that they would not allow the ratification of this economic plan, which they feel does not allow them to survive with a civilized way.

At this point I would like to state that the unemployment rates in Greece are over 25% (1.2 million people are unemployed), 29% of children live in poverty and the shrank by 7% and there is a possibility that it will shrink even further to 10% after 2012! As you can imagine Greece has to deal with not only an economic crisis but with humanitarian crisis. I will not state my personal opinion whether this program should have been approved or not but instead would like to underlined my anger that this crisis should end soon. If not, I fear that the most democratic country in the world will continue to be ruled by an undemocratic party!

There is no person in Greece who could declare that this new agreement between the Greek State and Troika is “light” version. This fiscal plan encloses the most difficult austerity measures that have been implemented by a European Parliament. The coalition government has planned more “cuts”, from 5% to 25%, to pensions and salaries in the public sector, to abolish the national collective bargaining agreement (which has been in force in Greece since 1934), to set limitations to the social system including hospitalization, marriage allowance, medicines, healthcare etc. For example, if someone needs to be hospitalized in a public hospital due to an emergency, he has to pay 25 euro whether he is able or not! The memorandum forces the Greek people to move into a sort of labour and social jungle!

But what is the purpose of all these austerity measures? Of course the giant, vast instalment of 31.5 billion euros allows the Greek State to continue to exist and to make haste with development and progress after 6 years of recession! But is this enough? I say no! Our European partners ensured the government of Mr. Samaras that if they succeeded to get the approval of the Greek Parliament regarding the new memorandum, they would allow a disbursement of the instalment. Where is the trap? Because of course there is always a trap! Europe has not yet decided if they will approve the disbursement of the whole amount or are going to disburse in instalments (the second option would be bad news because, it could possibly put the coalition government in danger). Moreover, bear in mind that Greek liquidity will only last until 16 November 2012 and if the European partners will not approve the instalment then I fear that we will be eyewitness to a historic event in Greece!

Let’s get back to Greek political life. As I mentioned above, yesterday the Hellenic Parliament approved with a majority the new memorandum that will avoid Greece getting closer to a fiscal cliff and having to deal with a possible default. This process created some losses. The centre-right party (New Democracy/Nea Dimokratia) fired one MP,the centre-left (Pan-Hellenic Social Movement/PASOK) 6 MPs and the third partner of this government, the other centre-left party (Democratic Left/Dimikratiki Aristera), decided to vote “present”. This was due to the fact that they were opposed to any change to the labour market. Yet, they would vote in favour of the implementation of the national budget! The problem is that the fired MPs of both parties are determined to cause more problems in government by taking initiatives in order to unite the whole left sector of the Parliament. Let’s cross our fingers and hope that after the implementation of the National Budget our European partners will give their approval for the Big Instalment…

Christos Konstantis


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