When there are riot police in full gear standing in front of the Finance Ministry to protect it from disabled protesters riding wheelchairs and using walking frames, you can be pretty sure your country is heading in a worrying direction.
The protest by disabled Greeks, including Paralympians, who face cuts to their benefits as part of the latest austerity package, was just an entr?©e ahead of the main course of protests and strikes expected over the next couple of weeks as the governments gets closer to sealing the 11.5 billion euros of spending cuts the troika has demanded.
The fact that Greece?s disabled – who live in a country that already does everything it can to lay obstacles in their path ? will soon have to survive on lower benefits speaks of the growing social cost of the crisis.
Ultimately, though, their opposition and disquiet will hardly register. Their protest will be overshadowed by the unfurling of banners by groups that carry greater sway in the decision-making process.
Already this week, police, firefighters and coast guard officers have taken to the streets. Judges are due to begin two to three weeks of protest action from Monday. The fear of further deep cuts to public sector salaries are threatening to undermine the very functioning of the state, as those suffering the reductions, the pillars on which the country rests, resist what they see as excessive intervention.
This discontent threatens to transform Greece from a faltering state to stalled state. There has yet to be a convincing argument made by the government or the troika about why cuts equivalent to about 6 percent of Greece?s fast-retreating GDP will be conducive to economic recovery. So, reports of further reductions to pay, pensions and benefits as well as the possible scrapping of the tax-free threshold and increase in retirement age are received by the public as the clattering of two empty entities: the directionless Greek government and the dogmatic troika, determined to exact its pound of flesh.
This morale-sapping theater is now in its eighth act. Greece has received seven bailout instalments since May 2010. Almost each one has been ushered in by the same tug-of-war we are witnessing now. Each time, Athens has failed to deliver on its ambitious promises, each time the troika has ratcheted up the pressure, pushing down on all the sensitive spots it can identify with all its strength. Each time, Greek society is poorer, wearier and less certain of its future. Each time the government finds it more difficult to manage politically the passing of a new round of measures that suck money out of a choking economy.
This time, things are a little different, though. Greece remains well off its reform targets but on the fiscal side it is ahead of schedule. Budget expenditure for the first eight months of the year was 5.9 percent better than the target. Revenues were 4.7 below the target but rising. Overall, the primary deficit had been slashed to 1.29 billion euros, some 70 percent better than the target.
The numbers reflect the repeated cuts and tax hikes of the last three years, they also speak of the sacrifices being made by a sizeable part of the population. Greece has something substantial to bring to the table this time. On the other side, the troika has little to show for the moment. Greece has been starved of funding and the butt of scorn since the summer. Its lenders are dangling the carrot of an extension to the fiscal consolidation period, even though the bailout expressly allows for extra time if the recession is worse than forecast. This week, Portugal was granted with minimum fuss an extra year to meet its targets for exactly this reason. In Greece’s case, the recession is on course to be at least two times deeper than the memorandum estimated but the decision on an extension is being dragged out.
Meanwhile, the promised tranches have been delayed, the vitally important bank recapitalization has stalled and Friday?s Eurogroup meeting indicated that the next loan instalment might not arrive until November.
Greece is being run dry as it is kept waiting until the latest measures are agreed. The coalition government ? whose formation is a rare achievement by Greek political standards ? is coming under greater stress by the day as it moves further away from its election pledges and closer to policies that threaten its cohesiveness. The pressure to fire civil servants is forcing New Democracy and PASOK in particular to come face-to-face with the destructiveness of its past.
Perhaps the troika sees this as the only way it can prize out the concessions it wants. The problem with this tactic is that for many Greeks – perhaps enough to tip the country into a morass – it will simply compound the impression that their government is accepting a diktat to appease European political and public opinion, rather than reaching a negotiated settlement on how to escape from the crisis.
The most notorious diktat – in fact the one that provides the origin of the word – was the Treaty of Versailles, in which the victors of the First World War imposed impossible terms on defeated Germany. John Maynard Keynes warned soon afterward that the crippling pressure put on Berlin would be counter-productive.
?If Germany is to be milked, she must not first of all be ruined,? he wrote. Keynes?s assessment is as true today as it was then.
[Kathimerini English Edition]