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Austerity & Bailout Programs: Greece’s Groundhog has been greeting daily for the last 6 years

The Greek government is confident that no contingency measures will need to be automatically implemented because Greece will reach the crucial target set the the country’s European creditors, a 3.5% Primary Surplus in 2018.” We proposed the contingency mechanism, it’s not measures, it’s not a new austerity program,” Prime Minister Alexis Tsipras told an extraordinary meeting of the cabinet on Tuesday.  And from the Contingency measures curse he moved to Greek Dept Relief of the future.

“Debt relief will create totally new atmosphere for economy, provide fiscal breathing space,” Tsipras told his government ministers. I have no information about whether the ministers started to dance out of joy. Probably they didn’t.

In the same festive mood, Tsipras’ junior coalition partner Panos Kammenos heralded something like the future is bright and full of prosperity, and I heard him shortly saying on state broadcaster “investment will come, jobs will be created”  and “the era of creditors is over.” I must admit I did not hear the whole Kammenos statement as I had just opened the door to go buy some cigarettes, before their prices will explode, together with the prices of everything that moves, stands, flies and crawls on this indebted Greek soil.

A package of €1.8billion euro with hikes in indirect taxes, VAT raises, special consumption taxes and extra taxes here (cigarettes, unleaded fuel, beer, coffee, internet, cable tv) and there (heating oil, natural gas, unified property tax) is expected to be voted at the Greek parliament before May 24th, so that for one more time the government will wear the uniform of the good pupil and appear before the judges of the  Eurogroup full hope to be awarded with a bailout trance and more discussion on Debt Relief.

The first round of 5.4 billion measures have successfully passed through the parliament: 1.8 billion for Pensions Reform + 1.8 billion for new Taxation. The legislation is … lots of pages and I do not write each change and reform.

Surfing through an incredible number of paragraphs, percentage, exceptions, criteria and categories of workers as stated in the pensions reform and new taxation is not an easy task. But generally, I can say that the two legislation have winners (taxation for annual incomes 30K-40K) & losers (tax-free threshold went down to 8.636 euro).

And at the very end, with a little cut here and a little cut there, every employee and pensioner will see less money in his bank account every month. That’s the point of austerity measures, isn’t it? To keep devaluing internal Greek life to bypass the needed currency devaluation that is not possible in a common currency zone.

On the pensions reform one good thing is that pension calculation will take into consideration all the earnings respectively the contributions through the whole working life. this will eliminate one mismanagement in the Greek public sector that used to calculate pensions based on the last monthly wage. This had the effect that thousands of civil servants would accept “promotion” just a month before they would go into retirement. That was the reasons that thousands in early retirement with 25 years would get a pension equal to the wage they received before they retired. No wonder, civil servants and utility workers unions are outraged against the government.

Of course, the cuts in pensions, supplementary pensions and lump sums do not affect the public sector only and here come the real problems. as black labor flourishes, average salaries are between 500-1,000 euro.

The government has approved the scheme of national pension of 384 euro after 20 years of work + the normal pension based on contributions.

But in Greece’s private sector, black labor flourishes, average salaries are between 500-1,000 euro and unemployment was still at 24.2% in February 2016. roughly one in four Greeks is still without work, older labor craft has no chance to get a job or even go to pension before 67 or else they will have to live on a bag of peanuts. Younger generations must be content with part-time contracts of 290 euro per month, if they are lucky to get something in big companies.

So, now what? With bailout over bailout and measures over measures and “structural reforms”, doe anyone believe that investors are just waiting around the corner to bring their money here and create jobs and property? The banks are still reluctant to give loans and capital controls do not make business life any better. What is odd is that I did not hear a single word about “lifting the capital controls” in any of the euphoric statements of the government. Last year’s predictions were seeing the lifting of capital controls sometime in June 2016.

Over the weekend, after Monday’s  Eurogroup and until today (Thursday) the public discussion in Greece is still focusing on the “contingency measures” of the future and drops down the 5.4 billion package of the present that will be implemented as soon as possible with the option of implementing the new tax hikes retrospective as of 1.1.2016 – A decision on this is still to be taken.

So, now what? Are we happy? No, we are not. One in four Greeks hit by unemployment in the last 6, 7, 8 years will not be able to participate in this wonderful 5.4 billion measures package. They are socially isolated, live on soup kitchens and some peanuts given as “humanitarian program.” They keep sinking socially, economically and mentally because the life vest they wear is fake.

Another part of the Greek population manages to survive with a low-paid job for a couple of months and find himself “unemployed” again for another half year. An always rotating scheme in times of bailouts-austerity vicious cycle that is called “rescue” of Greece – not of the people.

I am honestly tired to keep writing about the same thing, the no-way out, for six whole years. I am honestly tired of The Greek Groundhog Day which is not a series on television screens but a non-stop tragedy for the lives of real people. It’s not a comedy, it’s not a joke. The Greek Groundhog has been greeting daily for the last 6 years.

PS Later on that Tuesday of festive mood, I heard that Panos Kammenos visited Tsipras and brought him a present: two ties. A symbolic move for the Prime Minister of Greece who had said when he came to power in January 2015, that he will wear a tie once the “bailouts are over!” I only hope Kammenos picked up a classic style, otherwise the ties could be outdated when the time comes for Tsipras to wear them.

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2 comments

  1. I’m with you. I’m tired of all this public, macho chest-thumping from all the Greek politicians about how they showed-up Europe when in private all they actually do is fall on their knees and beg and plead with the Europeans not to spank them too hard. How many people remember Tsipras saying that no deal would be signed about new measures unless he had IN WRITING a promise of debt relief. Yeah fat chance. Instead what we got was Tsipras agreeing to new measures IN WRITING with vague talk about debt relief at some point in the indeterminate future. And he has the gall to say he delivered. And for the record, I don’t think Mitsotakis will be any better. He’ll not only rush to pull down his own pants, but will also hand the whip to the Europeans himself

  2. Giaourti Giaourtaki

    You could buy as many Zanté you can get and “smuggle” them into the north, sell’em in trendy “subcultures”, hype’em before their production gets aborted.
    Since then government tables are made to dance on? May be Kammenos jumped on one but in the last second someone told him that Pangalos tried this once too…