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In Greece, a second flight from reality has begun in earnest. In Aphidnai, a small town north of Athens where local residents lost their exemption from a roadway toll due to the austerity measures forced on Greece’s debt-ridden government, a movement known as “Den Plirono” (“I Won’t Pay”) was born. The sentiment has gone national, and many citizens brazenly refuse to pay highway tolls or bus and subway fares, which have risen 40 percent. In a country with a reputation for lax law enforcement, such a movement is apparently effective in the sense that many people are getting away with such protests. At the same time, it is a recipe for economic suicide, as the specter of default once again looms large.
Greece is currently servicing a $159 billion bailout loan. It’s overall debt is $491 billion in a country with 11.3 million people, which comes to $43,450 of debt per person (sound familiar?). Last Friday, the Greek government addressed the current crisis, laying out plans to privatize some key government businesses, including Europe’s biggest betting firm, OPAP, and reduce its stakes in others, such as telecom company OTE, and the Public Power Corporation. Regional airports and port authorities will also be privatized.
“Optimistic” forecasts conclude that Greece can raise $72 billion from such privatization. Benefit cuts, effective tax hikes and other measures would save about $33 billion in 2012-2015, bringing its budget deficit down to about 1 percent of GDP in 2015 from 15.6 percent in 2009. ”The government presented today a broad and specific mid-term fiscal plan up to 2015,” Finance Minister George Papaconstantinou explained to Reuters. “This shows the commitment and willingness to proceed with fiscal consolidation and proceed further with structural reforms.”
Unfortunately, the debt markets weren’t buying it — literally. Borrowing premiums rose to record levels last Thursday, perhaps spooked by a comment from Werner Hoyer, one of Berlin’s deputy foreign ministers and a member of the junior coalition party Free Democrats (FDP), who said it would “not be a disaster” if Greece were forced to restructure its debt. “[If Greece's creditors agreed that talks with Athens] would be helpful toward a restructuring of the debt, then of course this would be supported by us,” Hoyer was reported as saying. Adding to the uncertainty was the fact that a speech by Greek Prime minister George Papandreou earlier on Friday to address the debt crisis was seen as lacking in details. Papandreou promised to provide them after the Easter holiday. “The plan will be completed in the coming weeks and will be then submitted to parliament,” Papandreou told a cabinet meeting. “Today we are presenting the basic guidelines of a roadmap that will lead us from the Greece of crisis to the Greece of creativity,” he promised.
Yet government has seen disappointing revenues due in large part to an ongoing problem with tax evasion, and a deepening recession which threatens to undermine fiscal targets required by the EU and IMF. Further complicating efforts are Greek labor unions which have threatened to once again go on strike to protest austerity measures they see as futile. “It doesn’t matter how much family silver they sell, it won’t work,” said Nikos Kioutsoukis, general secretary of GSEE, the country’s largest private sector union. “After these announcements, we will take action.”
Mr. Kioutsoukis’s comments reflect the anger of those opposed to maintaining the present course, including the I Won’t Pay movement, whose “civil disobedience” translates into outright thuggery. Activists, who many Greeks believe are spurred on, or hijacked by, left-wing political parties, have covered ticket machines on buses and trams with tape, even as thousands of people refuse to validate public transport tickets when they take the subway or the bus. Doctors from state hospitals have blockaded pay counters to prevent patients from paying consultation fees. A bus inspector hired to crack down on fare dodgers was shot. Thugs attacked Antonis Loverdos, the health minister, during a hospital visit in Athens, and James Watson, the 83-year-old Nobel Prize-winning geneticist, was attacked as he prepared to give a speech at the city’s university in Patras.
Social commentator Nikos Dimou explains the ease with which many Greeks engage in such behavior. ”There is a general culture of lawlessness, starting from the most basic thing, tax evasion or tax avoidance, which is something that Greeks have been exercising since their state was created,” he said.
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