The crisis engulfing the country has led to violence, recriminations and widespread hatred of politicians, writes Karen Kissane in Athens.
At the beginning of last year, they were both in work. By the end of it, they were both unemployed. Now, like many young city people, Vasso Simu and Panagiotis Vovos have been forced by what Greeks call “The Crisis” to return to the simpler life on the land that their grandparents had led.
Simu and Vovos are both 31. She had been an adviser in an insurance company, he had been a computer programmer. Unemployed and with no future in the city, three months ago they moved back to his mother’s village on the island of Evia, two hours’ drive from Athens.
“We wanted a new life in the countryside,” Simu says. “We have our own garden: tomatoes, aubergines, peppers, beans, corn. We will make our own olive grove.” She works in a restaurant to earn them cash but they hope eventually to make a real living out of selling what they grow.
Meanwhile, they love the traditional life. “Every day we are swimming in the sea,” she says with satisfaction. “We get up early and collect the eggs. Right now Panagiotis is filling the ground with water and then he will fix the house of the chickens. I make marmalade and all the food for us to eat. We are very happy.”
There are not many Greeks who can say the financial crisis has led to happiness. The economy has been crippled by five years of recession, aggravated by an extreme austerity drive that has driven up taxes while public spending, wages and pensions have been slashed. Unemployment is at 23 per cent and is close to 50 per cent for young people.
The national debt is so mountainous that Greece might default on its repayments and walk away – out of the euro and back into the drachma, out of the European Union and into a lone and fragile future.
All of this is enough to make tomorrow’s Greek election, a rerun of a poll six weeks ago that failed to deliver a government, the most important since the end of World War II. It will effectively be a vote on whether Greece should continue to accept the tough terms of its financial bail-out by the “troika” of the EU, the European Central Bank and the International Monetary Fund.
This means it is also an election that Europe’s leaders are watching with bated breath. If Greece defaults or leaves the euro, there will be a domino effect across the rest of the troubled zone, with Spain, then Italy, and even Belgium and France facing investor flight and unsustainably high interest rates.
Spain and Italy endured a market storm this week as the Greek election drew near, despite the fact that eurozone leaders agreed to a €100 billion ($126.1 billion) rescue package for teetering Spanish banks.
On Thursday, Spain’s Foreign Minister warned of impending doom for the eurozone as his country’s borrowing costs reached an unsustainable 7 per cent. Jose Manuel Garcia Margallo told his wealthier neighbours: “If that Titanic sinks it takes everyone with it, even those travelling in first class.”
The threat of a Greek default is real. The main conservative contender in the Greek election, the New Democracy party, wants to change some terms of the bailout but basically supports the deal. But a left-wing party that also has a good chance of coming first, Syriza, has promised to renegotiate or even tear up the memorandum of understanding. Default even has a nickname now: “Grexit.”
A printing house is rumoured to be on stand-by to produce drachmas should they be needed. European banks and political leaders are drawing up contingency plans for an emergency. Ordinary Greeks have their own contingency plans; they are pulling up to €800 million a day out of banks to try to safeguard their savings by hiding them in their homes or squirreling them away overseas.
Greek domestic politics are always roiling but are particularly fevered now because people of all political stripes are furious with the major parties – conservative New Democracy and socialist PASOK – that have led their country to ruin. If there is one thing that unites this fractious nation, it is a withering contempt for its inept (and often corrupt) leaders.
Leo, who does not want his surname used, is a fine arts graduate, a former chief executive of a private school and most recently an icon painter who supported himself happily by painting for 20 years until the crisis struck. Two years ago, he found himself with no orders for icons and no money to pay rent. He ended up living on the streets of Athens.
He was taken in by a hostel, Klimaka, and is living there until he qualifies for the age pension in a year. He won’t be voting tomorrow.
“I do believe that my vote is valuable and [should] not to be spent on those crooks,” he says. “I am very angry with the politicians, particularly those who ruled for the last 25 years and present themselves for our votes now. They don’t accept that they are failures.”
He refused to elaborate, saying the language he would have to use to describe them would not be fit for a family newspaper.
Voters have physically attacked politicians in the street. Many demonstrations against the bailout terms have ended in violence. Last week, the rage leapt into the political arena itself with an incident that has become known as “the slap”.
Ilias Kasidiaris is a spokesman for Golden Dawn, a party described by some as extreme right and others as neo-Nazi. In a live TV debate he lost his temper after verbal goading from a female communist MP and struck her. He also threw a glass of water at another female politician. He later blamed them for having provoked him but he faces assault charges.
While prosecutors have no doubt he did wrong, comments on social media were more evenly divided. A Facebook page was set up with the title “God bless his hands” (a Greek expression that is the equivalent of “serve her right”). It gained 4000 fans in a day.
The caption below a photograph of Kasidiaris said: “Today Ilias did what all the Greeks wanted to do for a long time – slap the political system and its representatives.”
Michalis Spourdalakis, professor of political science at Athens University, says: “A man beating up a woman is not acceptable in Greece, but beating up a woman who is a politician, that’s OK. This is because [people think that] as a woman she is out of her place to be in politics, and also because politicians are hated.”
Spourdalakis says he did not believe the doomsayers who warned two years ago that the consequences of the austerity measures insisted upon by the bailout would be a disaster. He now thinks they were right.
“There has been loss of income, an undermining of the basic functions of hospitals and schools and universities – everything,” he says. “Seventy thousand small businesses have gone bankrupt. There have been very strong anti-authoritarian measures; police have been beefed up and have been very aggressive against demonstrators.
“And there’s no dialogue any more; collective bargaining has gone in this country, and it has been part of the tradition of Western democracies since the 19th century. All this has happened in just two years.”
Leonidas Vatikiotis, who teaches political economy at the Varna Free University of Cyprus, says it is the most brutal austerity program imposed on a developed nation since World War II. It has shrunk the middle class and triggered “generalised poverty” and “social genocide”.
“People can’t pay the loans for their own homes; they are homeless at 50 or 60, and ashamed of it,” he says.
“In the centre of Athens we have 25,000 homeless, and usually they were in the middle class. They weren’t workers or public servants, they were shop owners or self-employed.
“Athens is a ghost city at night, with people wrapped in blankets waiting in the shadows.”
At the same time as Greeks are earning less, welfare is shrinking, with the closure of 54 hospitals and 1000 schools last year. This is a big problem in the remote mountains where sending children 30 kilometres to school in winter is dangerous. “You can’t compare Greece’s school ratio with, say, Sweden’s, because Greece has different geography,” Spourdalakis says.
The consequent loathing of establishment politics has led to a polarisation in Greek voting patterns. At the last poll on May 6, voters savaged the main parties that had supported the bailout deal, parties that had dominated Greek politics for decades, and turned instead to parties that were further left and further right.
The ultra-nationalist Golden Dawn shot to prominence when it won 7 per cent of the vote and entered parliament for the first time with 21 seats. It was buoyed by a wave of hostility towards illegal immigrants – it wants to send them “home” and lay landmines to protect borders – as well as concerns about street violence and crime. Its new status is being linked to a spate of assaults on immigrants.
But the real arm-wrestling tomorrow will be between New Democracy, which won 18.5 per cent of the vote last time (120 seats) and the new left-wing coalition Syriza, which got a close-run 17 per cent (52 seats). (In Greece, the party that wins the highest percentage of the vote is awarded a bonus 50 seats.)
The Syriza leader, Alexis Tsipras, whose coalition contains 12 parties of greens and socialists, has promised to stand up to Europe over the terms of the bailout.
He says Greeks have been duped into thinking that there is only one way out of their economic mess, “through the cruel austerity [German chancellor] Madame Merkel and the IMF have inflicted upon us”.
Tsipras has also won brownie points by attacking the corrupt political elite and crooked bankers. “Greeks who vote for Syriza are not expecting Syriza to solve all the problems,” Spourdalakis says. “They vote just in hope of a breath of fresh air and as a small step towards self-respect. There’s no way in this country we can have a troika going into every public office and telling us what to do. Greeks are insulted.
“But they also lean towards Syriza because it is not corrupt and because it supports them in the struggle against the memorandum. Syriza were there in the protests, they were tear-gassed too, they were jailed with them. That’s why they trust them.”
Polls show Syriza neck-and-neck with New Democracy, but neither is expected to win outright in the 300-seat parliament. “We are hopeful we will be the first party and confident we can find a framework to come together [to govern] with the Democratic Left and perhaps the Communist Party,” says John Milios, a professor of economics who has helped write Syriza’s economic platform.
He says the party accepts the main goal of the bailout terms: a primary surplus in the budget. “But it’s impossible to achieve the goal of growth, which is required for a primary surplus, while paying €110 billion in interest by 2020. If we follow this austerity program we would have to further reduce wages and pensions and dismantle welfare.”
Milios says the party will prevent further cuts in the income of most people, returning the minimum wage to €751 a month (it had been cut to €560) and reintroducing collective bargaining.
“We need to work out how to make the debt viable and take specific measures for stronger growth rates.” This would involve big infrastructure projects to boost employment, he says.
Big projects such as the Athens Olympics in 2004 were a large part of what got Greece into trouble in the first place. Spending on stadiums and roads gushed on the strength of easy credit, but public revenues, strangled by tax evasion, did not keep up with the outgoing torrent.
Business and citizens did their bit, too. They borrowed lavishly for consumer goods and for property, which ballooned into a bubble that burst, leaving many over-burdened with debt that outstripped their assets.
At least the disaster has not stripped Greeks of their sense of humour. A young man dressed up for a carnival party this year in a black dinner suit and hired himself a fancy car for the evening. He told other guests: “I’m coming as the 1980s!”
Many are now reassessing their values along with their budgets. Fay Vernikou, 29, and Kostas Hatzipanagiotis, 31, are another young couple who fled to the island of Evia when they foresaw hard times.
He used to work for a publishing company and she was a primary school teacher in Athens. They were not unemployed when they chose to move three years ago, “but you could see what was coming”, Hatzipanagiotis says. “It was the time of the first austerity measures.”
He says Greeks had the mistaken idea they could be consumers without first creating anything. He is trying to become more self-sufficient, including by growing his own food, but confesses ruefully that he is struggling to wean himself off TV and the internet.
“The crisis is our fault as much as anyone else’s fault,” he says. “Sometimes Greek society is hoping for a fairy godmother. We always put the blame on politicians but we also played a part.”
He won’t be voting tomorrow because he doesn’t think elections make a difference: “People need to organise into small groups and set up co-operatives to change our lives. We shouldn’t expect politicians to solve anything.”
Milios also thinks the current crisis brings as its flip side an opportunity for change, but while Hatzipanagiotis is thinking small, he is thinking big.
Milios sees the mess as being about the failure of Thatcherism and neo-liberal policies that gave too heavy an emphasis to markets and business, and not enough to the human needs of society.
If Greece can force a renegotiation of its loan terms, it creates space for a discussion “about a different kind of society, one based on social needs and not on the interests of the few or the maximisation of profit as a prerequisite of accomplishment of any goal”.
He also sees his party’s stance as a spur to the saving of the euro. Many economists believe it will survive only if the European Central Bank guarantees the debt of all members and issues European bonds to raise money for them. This option is fiercely resisted by Germany and its Chancellor, Angela Merkel.
But her party is expected to do badly at the next German elections, Milios says. “We expect that the whole European structure will change. I think we are playing a role as the initiator of this process.”
First published in The Age.