A pensioner cannot afford to turn on his heating. A professional footballer is on strike because he has not been paid. Meeting the people brings home the full impact of austerity on the Greeks.
Standing in the centre of tourist Athens on a sunny autumn day, there are no obvious signs of economic crisis. Visitors from many countries walk up the steep paths on the sides of the Acropolis, the city’s highest point, to see the historic Parthenon close up.
The less energetic confine themselves to the magnificent Acropolis Museum that was opened in 2009. Hawkers sell trinkets to the tourists as they do the world over.
A short walk through the winding alleys of the Plaka district reveals a different Athens. During my time in the city there were no mass demonstrations or violent protests in the central Syntagma Square, but there were hints of earlier unrest.
Groups of riot police and other law enforcement units were dotted round the area. There was also plentiful graffiti on most available walls, along with numerous posters, despite the best efforts of clean-up teams.
There are myriad signs of austerity and of protest action in the city. Many shops are closed or about to close, while others offer sharp discounts. (Perspective continues below)
Aldi, the giant German discount supermarket, has left the country, as have several other large foreign firms. Bags of rubbish are piled up high by the bins as a result of a dustmen’s strike. People still drink in cafés and shop in malls, but the malls are not crowded.
But it is when you start talking to people that the human impact of the crisis begins to become apparent: a pensioner, an ex-steelworker, who plans to use an old-fashioned stove in his small home as he cannot afford to use the installed heating; a nursery teaching graduate who cannot find a job and can only afford to go out to a café once every week or two; a professional footballer who has gone on strike because his team cannot pay him; a lawyer who is considering emigrating with her husband to Scandinavia as he has not been paid for eight months.
The crisis affects all sections of society, to a greater or lesser extent. Taxes have risen sharply, pensions have slumped and unemployment has surged.
Many young people are trying to emigrate to western Europe, North America or Australia, but competition is tough. Older people in Athens are becoming more reliant on getting provisions, such as olive oil and vegetables, from their home village or even moving back there.
Many Albanian migrant workers are reportedly moving back home because their standard of living will be higher there than in Greece.
There are also many unexpected ways in which the crisis manifests itself. The English term “haircut” is audible on the radio news and visible in newspapers. Meanwhile, the authorities are clamping down on dissent.
A referee stopped a Greek Super League football match between Panathinaikos and Ergotelis recently after some fans unveiled a banner with anti-government slogans. After the match there was a massive police operation to catch the perpetrators.
While the Greek authorities are suppressing protests, the government is coming under the control of international agencies. Officials from the “troika” – the European Commission, the European Central Bank and the International Monetary Fund – are moving into Greek ministries.
In effect, the country is becoming a colony of the European Union (EU).
It is also likely that the pervasive fear of crime and anxiety about immigrants is at least partly related to the economic insecurity. The more prosperous Greeks have bolstered the alarm systems on their homes, and many have bought guard dogs.
”In effect, the country is becoming a colony of the European Union”
Many Athenians are wary of walking in poorer areas of the city for fear of encountering drug addicts or having their bags snatched. Far-right groups have attacked immigrants.
All of this is, of course, before any additional austerity resulting from last week’s EU agreement. According to an earlier estimate by the Financial Times, the average Greek take-home income is likely to fall by the equivalent of 14% in 2011 alone. This figure takes into account both spending cuts and tax increases. It follows earlier falls in income in 2009 and 2010.
If last week’s agreement is implemented, it should be remembered that the 50% haircut being imposed on holders of Greek debt will include domestic institutions.
The value of assets in Greek pension funds and social security funds will plummet. Without an injection of funds from the government, it is likely they will have to cut their payments sharply.
Other measures in the agreement may also hit the Greek people, but these had not been made public at the time of writing.
Economists often euphemistically refer to the impact of the crisis as “internal devaluation”. Such terminology suggests it is on a par with currency movements. It is a way of discussing human suffering as if it is akin to numbers on an Excel spreadsheet.
Of course, many would argue that the Greeks are only paying the price for a prolonged credit binge. But it should be remembered that the average Greek is not responsible for the economic chaos that is afflicting the country.
Indeed, there is a strong argument that the structure of the eurozone is one of the main causes of the crisis. Locking together highly diverse economies in a monetary bloc was always likely to prove a recipe for instability.
In the event, the eurozone economies seem to have diverged further since the bloc’s foundation in 1999 rather than converging.
Greeks are paying a heavy price for a technocratic arrangement that was always likely to prove unviable.
Daniel Ben-Ami is a writer on economics and finance. His personal website can be found at www.danielbenami.com.