Greece’s ‘Austerity’ Plan Is Anything But

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This attitude manifests itself in periodic temper-tantrum street protests and strikes by state workers. Government officials behave similarly in refusing to cut state jobs and services lest they alienate voters and find themselves out of a job. The procrastination seems to be based on the hope that the EU will inflate the currency—as Greece so often did when it controlled its money in the past—and print away the nation’s debts. Given that one in ten Greeks, and one in four employed Greeks, calls government boss, the country’s political leaders have made it nearly impossible to institute meaningful reform. The politicians have bribed the populace into supporting big government, and the populace’s dependence on the behemoth state has made it politically suicidal for politicians to cut into it. Not doing what is personal political suicide is surely national political suicide.

“That’s enough, we can’t take it anymore,” chanted protestors in Athens on Tuesday. The mantra is that there is nothing left to cut. The media is only too willing to repeat it. The New York Times characterized the initial rejected agreement as “a package of harsh austerity measures,” while the UK’s Independent claimed that the “austerity drive has sent unemployment to a record high of 18.2 per cent and the country’s finances into a spiral of recession.”

But Europe’s finance ministers know something that journalists do not. There hasn’t been an austerity drive. Sacrifices have been demanded of taxpayers, such as a 217 percent rise in property taxes. And this deprivation has resulted in three years of negative growth—with a debt-to-GDP ratio set to approach 160 percent this year. But there has been no state austerity program. Greece’s government increased its spending by six percent last year. What is austere about that?

Is there nothing left to cut? Child care is free in Greece. So is university education. Private colleges, and home schooling, are forbidden. The dole is a constitutional right. So is health care, which is provided by the state. The government picks up the tab on trips to the dentist and eye doctor. The country’s 2010 budget identified 74 state-owned enterprises worth 44 billion euros. Workers retire at an average age of 53, with decades of pensions acting as a severe burden on taxpayers.

“Nothing left to cut” is the rhetoric. Reality is closer to “Nothing has been cut.”

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  • Athenian

    I live in Athens.

    There's a lot of talk in the media about anti-troika anger in Greece. However, many people here were actually hopeful about the changes troika was going to enforce. The idea was that the EU would swoop in, dictate what needs to be done and our politicians would have to follow their orders. There was a lot of snickering about how the "EU was going to mess 'em up" only "mess up" wasn't the term used.

    That was naive.

    We haven't seen any of the promised – and hoped for – structural reforms. Believe me when I say that I know quite a few Greeks who would NOT be upset at Germans taking full control of the country. Others want the junta back. That's the state of things here.

    • Fred Dawes

      Can we say world bankers are buying up that country and will be working on the USA Real soon.

      • Athenian

        There are those who see this all this as some sort of plot to steal from Greece and those who privately ask, "Where is Papadopoulos when you need him!" The latter group is quite large.

  • diann

    It would be beneficial to North Americans to analyze what is happening in Europe, and take action to ensure we do not follow. Retirement at 53 is ridiculous – 25% of the employed working for the government – foolish. How can they keep a straight face while demanding support from the other EU countries? The idea of the EU has never made any sense to me, as that absolves individual countries from taking responsibility for their actions. This case is indication of that. I wonder how long the EU will last….

    • Fred Dawes

      We can do a Retirement at 62, in the USA but the system is setup to keep most of the money,
      The fact is the Foreign bankers have moved on most counties and have attacked retirement moneys in all areas from governmenr to IRA And have Raided most retirement PLANS of most people worldwide and the end game is mass world enslavement with the help of our governments worldwide that is what foreign bankers do.

      • Atikva

        That's right, let's get rid of "the bankers" and go back to barter.

        And let’s get rid of the Jews too (some of them are bankers, you know!), of the rich (i.e. anyone who doesn't rely on the nanny state to put food on the table) and of anyone who is energetic and not afraid of competition. How happy we will be then!

        What a moron!

  • StephenD

    It's like looking into a fun house mirror. As goes Greece, so goes the USA…unless real changes are made. We cannot continue to spend more than we take in and we cannot continue to take from our citizens in fees and taxes and hope for prosperity. What we must do is behave like any individual household would. Adjust your living standards to operate within the budget you have. Instead, it seems we form a government and implement programs and THEN determine how much we need to make it work. We should start at the other end; how much do we have to work with and form a government and programs that can function within it.

  • AntiSharia

    Greece should never have been admitted to the EU. And it should go back to the Drachma as soon as possible. This is what happens when a society is based on the idea of entitlement, sooner or later the government runs out of other peoples money. With the situation spiraling out of control so badly it is possible that the military might step in and take over. That wouldn't be the ideal solution, but it might happen anyway.

  • tanstaafl

    At least we cannot say that we were not warned.

  • Fred Dawes

    WATCH OUT we will see some really evil times, don't be surprised by anything you see or hear.

  • used to ba a liberal

    call me nuts if you like, but when I cut through all the he said she said type of stuff, all the extra information that we are given, a great amount of verbal hog wash. I can only see one thing at stake here, and that is European style socialism, hidden under the false impression of economic collapse, when really, it is socialism that is falling apart, and bussiness/ working people can't support the pigs at the trough. Socialism fails when it runs out of other peoples money, hence massive bailouts to prop it up, and ever wonder where 4 trillion of Obama's stimulis money disapeared to, try Europe. Run out of other peoples money,and the dominoes fall. Banks, insitutions etc.

  • Len_Powder

    Near retirement, I don't remember any time in my life that the world has had so many problems in so many different places. Most of the attention is focused on the US, Europe, the Middle East and North Africa, but there are issues all over the globe that are under-reported based on the sheer volume of "crises" to be addressed. I am not a prophet but the stability and longevity of the planet have never seemed more fragile to me. Worst of all, mankind does not appear to have the answers or solutions to these myriad problems, advanced university degrees notwithstanding. In fact, it may be the degrees which have created the problems and are preventing the solutions. The world was never perfect but it seemed more rational and predictable when there were fewer highly educated elites in our societies.

  • WilliamJamesWard

    Once leftism is ingrained in the National character the economic problems are
    a given path to failure. Financial failure can change a persons thinking about
    themselves and how they came to be in dire straits but can and entire nation
    living on government handouts survive, I think not. We see what is happening
    in Greece and it will happen here if Obama has his way……………..William

  • Michael Shaw

    It goes like this: if I owe you ten thousand dollars that is my problem, if I owe you ten million dollars that is your problem. Greeks owe bond holders billions of dollars they cannot and will not pay. This is not Greece's problem but the bond holders problem.