Austerity or how the European Union and the Greek governing class destroyed Greece’s economy

An anecdote: in our travels through Greece in the 1980s, our daughter suffered from car-motion sickness. She wrote in her diary: “We left Delphi, and I felt sick. Mom stuffed me with bread, and I threw up. Dad told me a Greek tragedy, and I felt better.” She was twelve but understood catharsis.

We need a catharsis from the myths in the media about Greece. Greeks will go to the polls on Sunday, 25 January. Syriza, a party consisting of a left front, is likely to win. Its platform promises a renegotiation of the debt, running to 185% of Greece’s Gross National Product; it promises relief from “austerity” (the impoverishment of the masses); it promises a return to a policy of public services. None of these measures are radical. Nevertheless, a predicted Syriza victory has got the European Union’s knickers in a twist. Why? Because they know that the chain of the capitalist order breaks at its weakest link. That weak link is Greece at the moment, having mounted numerous general strikes, countless protests, and popular mobilizations to register i disaffection with the policies imposed by the European Union. . Then, too, there’s the potential of a bad example: as Greece breaks the chain, so may other weak links—potentially Spain, Italy, and Portugal.

There is no doubt that we are witnessing a revolutionary moment in Greece. Not a revolution but a potential for revolution—and the looming tragedy is that it could end in the eventual clutches of the fascist right, if the real revolution, as I see it—the expropriation of the expropriators—fails to occur or is not even an option at this time.

If Syriza wins and compromises with the Troika (the IMF, European Central Bank, and the EU), there will be a revolt by the electorate. If Syriza goes radical once in office, the wrath of Merkel & Co. will descend on the country. In either case, it will be turmoil, and it will be a turmoil that the right will exploit. The Troika will favor accession of the far right (now jailed) to power, especially if the Greeks take to the barricades, either in disillusionment with Syriza or in support of its leftward turn.

It is crucial, therefore, for Euro-capitalists to prepare the ground for a justification of intervention of the rudest kind in rebellious Greece. Tactic #1 is blaming the victim. For example, to the question of what are the causes of the catastrophic debt, the propaganda answers are:

  • Excess in social spending. The truth is that from 1998 to 2007 Greece spent $5.400 per capita on social services—half of the amount spent by France and Germany. In the same period the Greek economy grew by 4% per year.
  • Greeks are lazy; they don’t like to work. In fact, they work the longest hours in Europe: 2.017 per capita per year. Internationally, they are at 34th place, after South Koreans.

To understand the pressure of austerity on Greek working people, here are some official facts:

  • Unemployment runs at 27.6 %; for those under thirty five, the percentage is over 60%
  • 3,800 workers are sacked every week
  • Between 2010 and 2013, 30% of industries have closed
  • Workers receiving unemployment benefits have diminished by 63.7%
  • Youth at risk of poverty is 40%
  • Since 2010, the loss in wages for those who work runs to 38%; for pensioners it is 45%
  • Family income has diminished by 39%
  • Infantile mortality has increased by 42.8 %
  • 20% of children has not been vaccinated
  • One million Greeks (out of 10 million) have no medical assistance
  • 44% of Greeks cannot afford heating
  • 800,000 Greeks depend on church assistance for food

So, who’s to blame?

  • Tax exemptions: Greek capitalists and the church. A few hundred Greek ship magnates own the second largest merchant ship fleet in the world, yet they are practically exempt from taxation, a provision prefigured in the Greek Constitution of 1975. The church is the greatest landowner in the country. They own hotels, tourist centers, real estate, and industries. The priests are paid by the state. Then there’s flight of capital (about 600 billion dollars) and the 6,575 offshore companies of which only 34 pay taxes.
  • Military spending: Greece spends 3.1% of its Gross National Product on the military, more than France and Great Britain, the two European states with the biggest budget for the military. Between 2005 and 2009 (just before the explosion of the crisis), Greece was the fifth biggest armament importer in Europe—38% of its imports. Greece bought 26 F16s from Lockheed Martin and 25 Mirage 2000 from France’s Dassault. with a contract of 1.6 billion euro. This made Greece the third biggest client of the French military industry in the first ten years of the century.
  • The delirious expense—6.5 billion euros—on the 2004 Olympics, which saw the public debt rise from 181 billion euros to 201 billion.
  • The interest on the state debt owed to the member states of the EU: 40.6 billion euros per year.
  • Governmental corruption: Germany’s Siemens, for example, has admitted paying 1.3 billion euro in “tips” to government officials to secure construction contracts for the Olympics, thus damaging the Greek construction company, OTE.

Now, I ask you—is any of this the fault of the Greek people? A resounding NO must be the answer. The fault lies with their greedy, corrupt, and irresponsible rulers, who have plundered Greece in the interest of the class they serve at home and abroad.

Luciana Bohne is an Intrepid Report Associate Editor. She is co-founder of Film Criticism, a journal of cinema studies, and taught at Edinboro University in Pennsylvania. She can be reached at:

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One Response to Austerity or how the European Union and the Greek governing class destroyed Greece’s economy

  1. I agree with you totally . Add to the list (So, who’s to blame?) and the pharmaceutical expenses in Greece. Greece and Ireland spent the most per
    capita on pharmaceutical products, with spending of
    EUR 584 and EUR 563 respectively, compared with an
    EU average of EUR 376. Other countries that spent in
    excess of EUR 500 per capita on pharmaceutical products
    in 2008 were France, Belgium and Spain.Pharmaceutical spending accounted for 1.7% ofGDP on average across EU countries, ranging from
    below 1% in countries such as Luxembourg, Norway
    and Denmark, to more than 2% in Lithuania, Greece,
    Bulgaria, Hungary, Portugal and the Slovak Republic.
    Source: OECD Health Data 2010; Eurostat Statistics Database; WHO National Health Accounts.
    Also the regulations of the European Union in different markets create large economical problems in Greece in favorite of the north countries. Imagine one country famous for yogurt and feta geese with limitation in the production of milk only in 800.000 tons. That is responsible for the very low export in feta geese only 35.000 tons because the investors in this field can’t produce large quantities. And the sugar industry in Greece that produced 320.000 tons forced after the 2006 regulation of EU to limit the production to 35.000 tons. The result is that the large France and German companies now sell sugar in Greece without local competition (5.000 Greek workers out of job plus 9.000 Greek farmers without contracts).