The fourth austerity package became law in June, 2011. It called for the sale of government property to foreigners in order to collect 50 billion euros (about $60 billion dollars). Gee, I wonder how much the Parthenon went for. It also mandated the lowering of pension payments by up to 14%. A 2% tax was also initiated.
In early 2012, a fifth austerity plan was implemented. According to Wikipedia, among other measures it forced a 22% cut in minimum wage from the current 750 per month. Holiday wage bonuses (known as the 13th month, this is standard policy in the rest of Europe) are permanently cancelled. 150,000 jobs cut from state sector by 2015, of which 15,000 shall be cut by the end of 2012. Pension cuts worth 300 million in 2012. Changes to laws to make it easier to lay off workers. Health spending cuts. Industry sectors are given the right to negotiate lower wages depending on economic development. Privatizations worth 15 billion by 2015, including Greek gas companies DEPA and DESFA.
Later that year, a fifth and sixth austerity packages were voted into law. Wikipedia states that, "[these] measures include pension cuts on average between 5% and 15% and an increase of the retirement age from 65 to 67. Wages of civil servants are cut again by up to 20%. Some workers from the public sector will lose as much as 30% of their salaries."
The seventh austerity package was approved in mid 2013 and among others, the package contained the layoff of another 15,000 public employees along with the banishing of Greece's leftist parties. Why the interest in the parties of the left as opposed to the neo-Nazi groups who are also growing stronger?
After the first two packages, the above austerity programs always came with a loan from the IMF or EU which also meant that Greece was saddled with even more debt every time. Yet again, I cannot stress this enough, those who caused this crisis are: greedy banks that sabotaged the Greek budget and earned a hefty return to boot; France and Germany insisting on selling needless armament to Greece to the tune of many billions of dollars; the rating agencies who downgraded Greek debt meaning loans at higher interest rates; and the uber-rich Greeks who almost never paid their taxes. Those who were (and still are) saddled with the burden to pay for the above atrocities are the poor, the new poor, the working class, the sick, and the elderly who have to retire later for less money.
So just where does the money from these loans go?
According to Forbes, the 254.4 billion euros of loans have paid for the following: 81.3 billion euros are paid back to the lender banks to pay for prior loans that are maturing, 48.2 billion euros go to the near insolvent banks just to prop them up, 45.9 billion euros go to reducing the overall debt from other loans, 40.6 billion euros go to pay for interests on current loans, 27 billion in loans go to keeping the government from shutting down, 9.1 billion euros go directly to the IMF for their loans, and 2.3 billion euros go to something called the European Stability Mechanism (whatever). Of the total of 254.4 billion euros, less than 20%, 48.2 billion, are actually accessible to the people. Of course, that same money is accessible to the rich as well who know that they will not be asked to pay it back. A whopping 70% of these loans return right back to the banks that issue them in the first place.
Personally, I can relate to their frustrations. While living in Mexico in the early years of the 1980s, I saw the peso devalued from 22 per dollar in 1980 to 200 per dollar four years later. This was because of a series of loans by the IMF which destroyed the Mexican economy. When I started working there in 1980, my salary per month was 24,400 pesos, or roughly US$1,200. A middle class type of salary. When I left four years later it had more than doubled to 58,000 pesos, but the effect of the devaluations meant I earned the equivalent of US$290. Unemployment soared to 35% and inflation was nearly 100%. All of this occurred because the IMF had decided that Mexico needed a lot of their money (up to $80 billion) along with a healthy dose of austerity. The peso reached over 3,000 to the dollar in the 1990s before the government finally crashed. Mexico needed more and more money just to pay the interest on the money they got before.
Back to the humble beginnings of the new Government, Syriza.
On January 26, 2015, the official paper of China, Xinhuanet, stated "[that]China congratulated Greece's left-wing SYRIZA party on its success at the general elections on Monday, expressing willingness to advance bilateral ties with the new government. China and Greece have enjoyed a traditional friendship and China attaches great importance to bilateral ties, Foreign Ministry spokeswoman Hua Chunying said at a regular news briefing. She said China was willing to work with Greece to deepen exchange and cooperation in all fields and advance the comprehensive strategic partnership between the two countries." Agreements worth billions of dollars of Chinese investment in the country have already been signed. Where the EU and Western banks see only austerity and trickery, China sees opportunities to invest in a growing partnership.
There certainly are other ways to end the ugly downward spiral of more and more austerity, less employment, more poverty and greater suffering. Iceland has already proven it's possible. Back in 2008 they decided that they, the citizens of Iceland, were not responsible for the debt incurred by poor judgment on the part of their banks and complicity on the part of their government. They said no to bailing out London's banks. They replaced the management of those banks responsible for the crisis and voted that government out of office. Within three years the country became even more robust than when the crisis had started. According to RT, their unemployment is one of the lowest in Europe. Standard and Poor's has upgraded their bond ratings and the new government has agreed to write off up to $32,600 of mortgage debt for every homeowner in the country. Their currency is stronger than ever.
The bottom line is the fact that Greeks have been lied to by all the governments, left and right, who promised short term pain for long term gain. They all painted a rosy picture of the future if only the Greeks accepted a few years of pain and suffering. But those few years have already come and gone. Since the beginning of the new millennium Greeks have been promised Nirvana, yet fed nothing but pasture burgers. There is a way out of their mess. Iceland found it. Sweden followed it. Norway saw it coming and prepared for it. This is nothing like the song, "To Dream the Impossible Dream." The Greeks know that a path exists and they firmly belief that Syriza will find it and use it. Only time will tell, but if the few encounters to date with their leader, Alexis Tsipras, is any indication, this is by far the best chance the Greeks have to rid themselves of the Kiss of Debt.
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