Economic crisis and Greece: protests in Athens & media views in Germany
Economic crisis and Greece: protests in Athens & media views in Germany
Walter Sebastian and Lee Jay Walker
Modern Tokyo Times
The European Union and the tangled web of Greece isn’t going away and with unemployment of around 20% then not surprisingly many people are at the end of their tether. More demands on Greece which includes the minimum wage to be reduced by 22% and more cuts within the civil service, at a time of alarming unemployment figures, means that the nation remains on the brink.
Spain is also blighted with mass unemployment and the figure is slightly higher than Greece. Therefore, when you consider the low unemployment figure of 4.1% in Austria and the declining rate of 6.7% in Germany, it is abundantly clear that a two-pronged Europe is emerging within Europe. The unevenness of the economic crisis is also highlighting the huge differences within economic performance, government spending, pension issues, and other important areas.
Obviously, during severe economic downturns then nations like Greece, Spain, Hungary, and others blighted by the current economic reality of parts of Europe, are faced with enormous political convulsions. The European Union social experiment also faces severe problems and if past history is a judge of possible consequences, then far-right and far-left movements will try to exploit the situation. Therefore, the situation is very serious because the gap between the real world of unemployment, governing elites, European technocrats, and the general public isn’t based on consensus and this can clearly be felt in Greece.
The Prime Minister of Greece, Lucas Papademos, is trying to deflect the austere budget cuts by making it known that the alternative to not implementing major economic reforms is even worse. Obviously, the general public will be divided on this issue and while some may sympathize which his predicament, others will simply feel abandonment. Also, the nature of “outside pressure and control” is creating tensions because it is highlighting the impotence of Greece.
Lucas Papademos commented that “A disorderly default would set the country on a disastrous adventure…It would create conditions of uncontrolled economic chaos and social explosion.” He continued by stating that “The country would be drawn into a vortex of recession, instability, unemployment and protracted misery and this would sooner or later lead the country out of the euro.”
In Germany powerful views have been expressed about the current economic crisis in Greece which is unleashing so many tensions within the European Union. The Frankfurter Allgemeine Zeitung commented that “The Greek misery has no end. This is true in two senses. On the one hand, the way in which the negotiations over the next bailout are dragging on … feeds doubts that Greece will be rescued — and whether it even can be rescued.”
“The other side of the Greek misery is more tangible. Even though they were never fully implemented, the series of austerity programs have brought the economy to a standstill and forced the people, who are continually being asked to make new sacrifices, onto the streets. … Greece presents a desolate picture, in terms of its economic structures, competitiveness, social cohesion and political system. In other parts of the world, it would be called a failed state. It is time that the Europeans admit that fact and take the necessary action.”
These words by the Frankfurter Allgemeine Zeitung highlight the severity of the ongoing crisis in Greece. Also, to comment that “In other parts of the world, it would be called a failed state” would have been unimaginable in the past. After all, these words usually apply to places like Somalia, Afghanistan, and so forth. However, now this is being commented about Greece and clearly alarm bells are ringing in many European capitals about the ongoing crisis.
The Financial Times Deutschland also comments strongly about the current economic crisis by stating that “Greece is currently trying to do something impossible: which is to reform the economy in the midst of a deep depression. That simply doesn’t work.”
Further down in the article it was stated that “It is high time to give the Greeks hope of growth once again. The fact that many reforms are still needed in Greece is no reason to drive the country into complete ruin through disastrous crisis management. That doesn’t help the Greeks. And neither does it increase the chances of German taxpayers having to pay less.”
It must be remembered that German unification put enormous strains on the economy of West Germany in order to rejuvenate and implement a unified German state after the demise of East Germany. Therefore, German taxpayers and politicians also fear the price that Germany may have to pay and opinions are sharply divided.
Also, given the past history of Europe then the “German question” still remains and the right wing Greek political party called LAOS made its views clear. The leader of this political party, George Karatzaferis, stated that “Of course we do not want to be outside the EU, but we can get by without being under the German jackboot…I would rather starve.”
In the Süddeutsche Zeitung it was stated that “The EU partners and the Greek government have a baleful fear of the truth. Which is the following: Greece can’t actually be saved (with the current approach), not by slashing the minimum wages, and not with cuts in salaries, which are supposed to remain frozen until the country has lowered its unemployment rate from nearly 21 percent to 10 percent. But where will the new jobs come from? After all, there is hardly a major company that wants to invest in Greece at the moment, which also means there is little hope of achieving the planned revenues from the privatization of state-owned assets. Lower wages also mean lower tax revenues and less consumption.”
“But if the country can’t be saved by turning the thumb-screws, then what? Then the only alternative is radical debt relief on the part of the major private creditors, the banks and the hedge funds. The European Central Bank would probably also have to write down some of its holdings of Greek debt. Then, Greece would need a Marshall Plan on top of that. All of this is expensive, and progress will not happen overnight. But there are no longer any real alternatives.”
These views by the Süddeutsche Zeitung are based on the current reality of Greece and it is abundantly clear that demands and target figures can’t be met. The recent riots in Greece will also happen in the future but the extent and seriousness remains up in the air. This applies to if the riots can be contained or if they will spread and grow in power throughout Greece. However, like the Süddeutsche Zeitung comments “progress will not happen overnight” and with massive unemployment and growing poverty – then politicians in Greece must brace themselves for more riots, political tensions, and other areas of discontent.
In the Die Welt it was stated that “The agreement reached in Athens between the Greek government and the international donors … has not prompted high hopes on either side. Greece promised what it had to, in order to get the new aid package. And the troika acted as if it — against its better judgment — actually believes that the Greek economy can be healed. But the pictures of the demonstrations and the burning German flags show that they didn’t reckon with the Greek population. Ultimately, the crucial thing is not the politicians’ willingness to carry out reforms … but the will of the people. And the Greeks seem unwilling and unable to accept, for the sake of the stability of the single currency, cuts that go far beyond what we in Germany have ever experienced in terms of austerity measures.”
“Even the new, larger aid package will not calm the situation in the over-indebted country. Every few months, there will again be emergency meetings, nocturnal negotiations and supposed breakthroughs. But let’s not kid ourselves: It’s not possible to really rescue Greece this way. From an economic perspective, the country needs to leave the euro zone, because it is economically too weak and its administrative structures are too underdeveloped to be able to keep up with the others. But in political terms, the would-be rescuers and the Greek government have an excessive fear of such a step. The donors would prefer to close their eyes than take the necessary steps.”
Finally, in the Handelsblatt which is a financial daily it was commented that “During the poker game with their creditors, the Greeks have been acting as if they had a joker up their sleeve. That joker was the threat of declaring bankruptcy and triggering a panicked chain reaction among investors…But that isn’t a trump card. The main victims of a disorderly bankruptcy would be the Greeks themselves.”
“Both sides are lying through their teeth. … The only way to ‘save’ Greece is through an orderly national default. Without such a new beginning and a long-term strategy for growth, Athens is lost.”
The spectacle of Greece should be worrying nations like Spain because you have massive uncertainty in many capitals and the mirror may look different in Greece, Spain, Hungary, Portugal, and a few other nations, but the debt reality shares a familiar face. Also, sentiments of nationalism between Greece and Germany can be felt within the corridors of power and within the general population. This in itself shows that the social experiment and “New Europe” was always a mirage but is it better to have “a mirage” than nothing?
This question remains unanswered throughout the European Union because the “grand design” during times of economic growth and stability does appear that the “mirage” is obtainable. However, during severe economic downturns it would appear that technocrats are out of touch and unable to bridge the gaps that exist. At the same time national governments have a deep responsibility for the policies that they enacted and like usual, it is the workers who suffer the folly of others and for common people on the ground this is all too evident.
Japanese Yen Exchange Rate
