Greece in Debt, Eurozone in Crisis | The Nation


Greece in Debt, Eurozone in Crisis

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The Greek verb agorevo means “I speak in public.” But agora also is the market. The market was an area of politics. When you try to separate the two, as neoliberalism does, trying to create a purely economic market place, then there is no democratic control.   —George Papandreou, Interview with Open Democracy, 2004

Are we the prodigal children of a neat global economy and an all-successful Europe? Or was the system ailing since its youth?   —from Debtocracy, a Greek documentary

Athens—When he was elected prime minister in 2009 at the head of Greece’s Panhellenic Socialist Movement (PaSoK), George Papandreou was going to wipe out corruption, open up politics, rejuvenate the country’s sclerotic economy. “There is money,” he said then, although he must have known there wasn’t any in the public coffers. Less than two years later, he has allowed the “troika” of the European Commission, the European Central Bank (ECB) and the International Monetary Fund to bind him on the horns of an impossible dilemma: either the Greek government implements a second round of austerity measures more savage than any yet endured by a developed country, with deeper cuts and tax hikes and a wholesale, cut-price sell-off of its public assets, or Greece faces default on its sovereign debt and imminent bankruptcy.


  • Demonstration in Greece
  • Debtocracy

About the Author

Maria Margaronis
Maria Margaronis
Maria Margaronis writes from The Nation's London bureau. Her work has appeared in many other publications,...

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Parliament is preparing to vote on the new measures, which are opposed by more than 70 percent of the population. Trade unions have begun a two-day general strike; around Syntagma Square, small bands of agitators in face masks and hoodies—the so-called “known unknowns”—clash with riot police. Choked by clouds of tear gas, thousands of peaceful demonstrators are trying to hold their ground.

Since the end of May, Syntagma has overflowed with Greece’s aganaktismenoi (cousins of the indignados who filled Spanish squares this spring), here to refuse the troika’s blackmail and demand their democracy back. The crowd has been huge, politically diverse and overwhelmingly nonviolent. There are people here from all walks of Greek society; at times the rhetoric is that of a national resistance. A neat elderly couple on their first demonstration push through the crush because their pensions have been slashed, prices are rising and they just can’t make ends meet. Vassilis Papadopoulos, a 50-year-old unemployed truck driver living on loans from his mother, has come all the way from Corinth wrapped in a giant Greek flag, with a look of despair in his eyes and saucepans to bang together. This is a movement, he says, against the political system: “They’ve all cheated us. They destroyed the banks, our pension funds. They invested our social security money in bonds for their own benefit.” Farther down, in the square itself, something entirely new seems to be taking shape: a liberated zone in which an open conversation has been going on for weeks. University professors, passers-by, unemployed laborers, all get their three minutes with the microphone. There’s a medical tent, a “time bank,” a “team to promote calm.” When riot police cleared the square with clubs on the night of June 15, these protesters didn’t fight. They simply walked right back, picked up the rubbish and repaired their neighborhood.

The Greek debt crisis is said to threaten the survival of the eurozone and a global financial meltdown worse than the one set off by the collapse of Lehman Brothers in 2008; each new prediction of default sends frissons of panic and flurries of speculation through the markets. In June the ratings agencies said that German Chancellor Angela Merkel’s plan to persuade Greece’s private creditors to roll over the debt into longer-maturing bonds would be deemed a “credit event”—finance-speak for a default that triggers debt insurance policies, in which American as well as European banks are heavily implicated. That, Merkel told the German Parliament, could have “uncontrollable consequences” for financial markets. At the eleventh hour, an EU summit agreed in principle to a new rescue package of up to 120 billion euros, but demanded further cuts and tax hikes to close a 5.5 billion euro “black hole” in the existing plan. The markets rebounded. But Papandreou has to push the augmented austerity package through a resistant Parliament before Greece can get the final tranche of last year’s 110 billion euro loan. Without it, the country will be broke by mid-July. Deputy Prime Minister Theodore Pangalos has said that if that happens, we are likely to see tanks on the streets of Athens.

Already parts of Athens look like New York City circa 1980, with shut-up shops, derelict buildings and graffitied walls. The effects of the game of chicken being played out by bankers and politicians are visible in the way Athenians walk now, head down and defended, through once-safe neighborhoods; in the irritable, shamed anxiety you see on people’s faces. Depression is endemic; suicide rates have soared. For Greeks, this is much more than an economic crisis. It is a social and political convulsion unlike anything seen here at least since the fall of the colonels’ dictatorship in 1974.

* * *

At a church-run soup kitchen in a dusty park, with his white hair combed back and his clean shirt neatly buttoned, Takis Karis is eating beans from a take-out container. When I ask what brought him here, a furious despair bursts through his gentlemanly manner: “We come so we won’t be hungry. Otherwise, we may as well kill ourselves.” Karis owned a factory, but his business went bankrupt; now he sleeps in the last of the company vans. He has lost his family and, he feels, his country. “You’re speaking to someone who was a Greek, but I’m not a Greek anymore. We’ve given up everything—flag, traditions, family, pride—for money. There is no state, no borders. They brought in 4 million migrants so they could have cheap labor for the Olympic Games and created an unemployment problem.” Niazi, at the same table, joins the conversation in fluent if accented Greek; he came here (legally, he stresses) from Alexandria twenty-seven years ago. He used to make shoes, but then the Chinese arrived and he, too, lost his business. The government, he says, should deport all illegal migrants. “If there is a Europe it has to be for Europeans, not Africans and Asians. An honest man can’t live in Greece anymore. What Greece needs is a new Papadopoulos [the dictator whose junta took over in 1967].” Karis agrees. “Under Papadopoulos, everyone had a job. People would go out and enjoy themselves all night.”

Such rhetoric is not new in Greece, but it’s become more common. A poll in June suggested that 23 percent of Greeks would favor a “strong leader” who could make decisions unencumbered by Parliament; another 31 percent would prefer the country to be managed by a “team of experts.” These numbers reflect the widespread (and not inaccurate) view that a political class steeped in cronyism and corruption has run the country aground and plundered the public purse; hence the cries of “Thieves!” that ring out nightly in Syntagma Square. But they also reflect something more dangerous: a sense of powerlessness, resentment and humiliation that finds no foothold in democracy, reaching instead for scapegoats and too-easy answers.

Athens is living through a double nightmare. Unemployment in Greece is officially at 16 percent, up by 40 percent in a year—42 percent among the young. Those with jobs face wage cuts of up to 30 percent, tax and price increases, public services in chaos. The social fabric is tearing. Father Andreas, the young priest running the soup kitchen, calls the situation “desperate,” as more and more families find they can’t support their own. At the same time, there is an uncontainable migration crisis. Tens of thousands of Afghans, Iraqis, Pakistanis, Bengalis, Somalis and North Africans are packed into crumbling buildings owned by slumlords, mostly Greek, who double as traffickers. Around Omonia Square, migrants search in rubbish for bottles, cables, clothing, anything to sell. The charity Médecins du Monde has declared a humanitarian emergency; in the lobby of its small clinic young men wait for hours, three deep against the wall.

Like the debt, the migration crisis has a European dimension. Greece is a main entry point for people trying to reach the EU from the Middle East, South Asia and Africa; 150,000 entered the country without papers in 2010 alone. Most of them cross the Turkish border, where the government plans to build a seven-mile wall; hundreds are detained there in conditions unfit for animals. Few want to stay in Greece, but under pressure from the EU the government has tightened controls over the exit points, turning the country into a giant lobster trap to keep migrants from reaching London, Paris or Berlin. According to the 2008 Dublin II Regulation, refugees have to apply for asylum in the first EU country they reach; Greece has 54,000 pending asylum applications and an approval rate of 0.3 percent.

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