Related:Greece’s near bankruptcy won’t scuttle Canada-EU trade talks: minister | New austerity measures essential, says Greek PM | Greek debt crisis: Europe feels shockwaves as bailout falters | Standard & Poor’s downgrade Greek credit rating to junk status | Greek bailout not limited to ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬45bn, Flaherty warns | IMF to move quickly on Greek request for loan | Greek PM calls for EU bailout loans | Greek civil servants strike, challenge EU/IMF talks | Soros warns Europe of disintegration | Investors rush to sell Greek bonds | IMF struggles to conceal glee at Greek deal | Greece secures joint IMF/Eurozone bailout program | Greek PM threatens to go to IMF if no EU bailout | General strike cripples Greece as protesters clash with police | Athens erupts as Greek austerity plan passes | Greece unveils radical austerity package | Athen’s coffers to run dry in two weeks, more cracks appear in Eurozone | Man who broke the Bank of England, George Soros, ‘at centre of hedge funds plot to cash in on fall of the euro’ | Goldman role in Greek crisis probed | Greek workers stage general strike | How EU Countries Cooked Books Using Derivatives | Goldman Sachs Helped Greece Obscure Debt Through Currency Swaps | Collapse of the euro is ‘inevitable’: Bailing out the Greek economy futile, says French banking chief | Euro currency union shows strains | Stimulating our way into debt crises | EU leaders reach secret Greek bailout deal | Will Greece set off ‘global debt bomb’? | EU cautions Greece about its deficit | Could Greece drag down Europe? | ‘Significant chance’ of second financial crisis, warns World Economic Forum | A world awash in debt
Matthew Campbell, The Sunday Times
May 2, 2010
Anger is intensifying over cuts to be made as part of the EU deal to save the economy
MAY DAY protests in Greece turned violent yesterday as youths in gas masks and hoods set fire to vehicles, smashed shop fronts and threw molotov cocktails and rocks at police in an explosion of fury over austerity measures they claim will hurt only the poor.
Tourists were cut off from their hotels as thousands of communists, civil servants and private-sector workers converged on a main square in Athens to vent their rage at the European Union and the International Monetary Fund (IMF).
“No to the IMF’s junta,” they chanted as a youth in a black hood produced a hammer to try to smash windows of the luxury Grande Bretagne hotel.
Another painted anti-capitalist slogans on the facade, and demonstrators intervened to prevent him from spraying an Australian woman with paint as she tried to get back into the hotel. Japanese tourists stood taking photographs of the mayhem with mobile phones before being forced to retreat, coughing and sneezing, under a cloud of tear gas.
The violence came as negotiations were concluding between the socialist government of George Papandreou, the IMF and the EU over a multi-billion-euro rescue package for Greece.
Anger has grown against the EU for insisting on tough austerity measures in return for a bailout worth an estimated ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬45 billion (Ãƒâ€šÃ‚Â£39 billion) this year alone, and up to ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬120 billion (Ãƒâ€šÃ‚Â£104 billion) over three years.
Some young Greeks prefer to blame their elders for the mountain of debt that has resulted in Greece, like a wayward child, being placed under the tutelage of the men from the IMF.
“I cannot help but blame my parents a little for what’s happened,” said Achilles Zacharoulis, a 36-year-old cardiologist. “They were here all that time,” he added, referring to the past three decades of mismanagement and fiscal insanity. “But what did they do to stop it?”
Vaggelis Gettos, 24, is just as alarmed at the burden being heaped on the young by austerity measures expected to be announced today, and has pledged to resist them in more protests this week against what he sees as a plot to impoverish Greece.
“We will live much worse than our parents,” he said. “Why should we be made to pay for their mistakes?”
The question of who was to blame and who should pay for the greatest crisis to afflict the single currency was a subject of heated debate, particularly after a leading credit rating agency put the cradle of civilisation in the same category as Azerbaijan by reducing its government bonds to “junk” status.
Economists regard the bloated civil service with its jobs for life and generous pensions as a cancer consuming the country’s resources. The older generation, the experts grimly concur, turned the state into a giant cash machine to be plundered at will.
Today the party is over, however, and that makes some experts optimistic: Greece now has no choice but to implement much-needed reforms that will bring swift results. “It’s like a dentist putting a child in braces,” said one observer. “It’s not nice, but necessary for growth in the right direction.”
Even before it was announced, the rescue package had provoked angry outbursts. On Thursday, Gettos and friends tried to break through a police cordon outside the finance ministry only to be forced back by tear gas.
They were in the thick of things again yesterday when police used tear gas to prevent protesters from marching on the American embassy.
Even greater social unrest is expected as resentment simmers among poorer families at being told to tighten their belts when wealthy Greeks can protect their fortunes by moving their money abroad, some of it into property bargains in London.
“It’s always the poor people who pay,” complained Katerina Ioannou, 20, in the cafeteria of the Athens University law faculty, a hotbed of student activism. “If I get a job as a trainee lawyer I’ll only earn ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬300 [Ãƒâ€šÃ‚Â£260] a month,” said Thanos Petrou, 21. “How can anyone survive on that?”
Some are already referring to a “lost generation” who will never find jobs or security, but the students, proud of their university’s reputation for being at the forefront of the uprising against the military dictatorship in 1973, are not the only ones planning resistance.
Mikis Theodorakis, the 84-year-old musician who composed the score for the film Zorba the Greek, calls for revolt against what he sees as an American plot to turn Greece into a “protectorate”. Bureaucrats will raise their fists at the barricades in a general strike and protests on Wednesday to protect their considerable perks from the IMF.
They and other public sector workers are virtually unsackable, can retire as early as 45 and get bonuses for using a computer, speaking a foreign language and arriving at work on time.
Some of them get as many as four extra months’ salary a year, compared with the 14 months that are paid to other Greek workers. One of the most generous bonuses is paid to unmarried daughters of dead employees in state-controlled banks: they can inherit their parents’ pensions.
Stefanos, 49, seems to embody the Greek good life. He retired as an army captain last year on a full pension and says he is quite happy planting his garden. He worries, though, about how to protect his savings from the crisis. “What about banks in Germany?” he asked friends around a dinner table in Athens.
“There’s an awful lot of fat to cut from the system,” says Yannis Stournaras, a former government financial adviser, in what sounded like understatement. He is considered one of the architects of Greece’s entry into the euro zone in 2001 but dismisses as “utter nonsense” allegations that Greece fudged its figures in order to be admitted.
Today the country’s budget deficit is 13.6% of GDP and the overall debt stands at ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬300 billion (Ãƒâ€šÃ‚Â£260 billion). Unemployment among 16- to 24-year-olds has risen to 30%, according to government figures. Crime, too, is increasing in Athens.
“I feel like a prisoner here,” says Ilias Iliopoulos, head of the powerful civil servants’ union, gesturing to new bars on his windows after two recent burglaries of his office.
“People are stealing so they can live, so they can eat,” he said. “And it will only get worse. These [IMF] measures will drag hundreds of thousands of Greek citizens into a life of poverty.”
Resentment among Greeks at being singled out as lazy and corrupt has hardened into outrage at Germany, whose leaders complain that the Mediterranean country should never have been allowed into Europe. Greeks were particularly hurt by German suggestions that they sell their islands to pay off the debt.
Yannis Criticos, who works for an international ferry operator, said that one of his secretaries had written an angry letter to a German tour operator client to complain about “bloody Germans” being jealous of Greece’s sun-drenched Mediterranean lifestyle.
“He was very upset about it,” said Criticos, who was attending the launch of a tourism fair in Athens last week. “It took a while for him to calm down.”
Vitriol is also being heaped on Angela Merkel, the German chancellor, by Giorgos Trangas, a popular radio talk show host.
“She looks like an apple strudel that’s been squashed by a Wehrmacht lorry,” he said on his programme.
In an evocation of Greece’s wartime suffering, Trangas has taken to introducing the show with a rendition of Deutschland Uber Alles and the sound of goose-stepping soldiers. This is to highlight what he describes as “another German occupation”.
As if in the path of an advancing army, Greeks are hiding their money. In the end, Stefanos, the retired captain, opted like his friends for a safety deposit box. The super rich, for their part, have shifted an estimated ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬11 billion to Cyprus and other havens since the start of the year, according to Konstantinos Michalos, president of the Athens chamber of commerce.
“I try to be optimistic,” he sighed. But things had got to “a tragic level”.
There was hope, he believed, if the government lifted numerous restrictions on business. It costs more to transport a sack of potatoes from northern Greece to Athens than from Athens to Dusseldorf, because haulage, like many other sectors of the Greek economy, is an impenetrable cartel.
When Michalos started a commodities trading business in London in the 1980s, the paperwork took him 48 hours, he said. In Greece’s “Soviet-style” economy he had to go through 117 bureaucratic procedures to get the right government permits. A wealthy friend of his had taken 10 years to win permission to put up a hotel.
“It would have taken him another 10 years or a large payment under the table if he wasn’t a friend of very important politicians,” said Michalos. Stournaras, an Oxford-educated economist, who believes that lifting these restrictions and trimming fat from the public sector will have an extraordinary effect on the Greek economy.
“I’m sorry because poor people will suffer, but this could get us back on our feet within three to five years,” he predicted.
Others believe the country is in for a much longer haul.
Zacharoulis, the cardiologist, is far from being alone in thinking that it may be time to leave in search of a more secure future, perhaps in America or Britain. Gettos, the radical, would also like to get out.
“I’ve always wanted to see the world,” he said. “But you need money for that and I don’t have any.”
That is likely to become a Greek chorus.
Source | Alternate Coverage 1 2 | See also under Economics: European Central Bank chief: Bank of International Settlements to Rule the Global Economy | Greece’s near bankruptcy won’t scuttle Canada-EU trade talks: minister | New austerity measures essential, says Greek PM | Harper calls for global economic governance, lauds G20 as ruling forum | HST begins taxing Ontario on Saturday | Canada offers Michigan $550M loan for NASCO link bridge | Goldman execs squirm in face of angry U.S. Senators | Greek debt crisis: Europe feels shockwaves as bailout falters | Standard & Poor’s downgrade Greek credit rating to junk status | Canadian housing market downturn a possibility, says report | Goldman’s Fabrice Tourre: Emails reveal he thought borrowers ‘won’t last long’ | Police State Canada 2010 and the G20 Summit | Big stakes in Canada-Europe trade talks, but little attention | Protesters and police get ready to square off at G20 summit | US prepares to push for global capital rules | World Bank gets $3.5-billion boost, revamps voting structure to make China number 3 | Greek bailout not limited to ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬45bn, Flaherty warns | In revealed e-mails, Goldman chief says we ‘made more than we lost’ by betting against market | Flaherty wins delay in decision on global bank tax at interim G20 meeting | IMF to move quickly on Greek request for loan | Greek PM calls for EU bailout loans | Unconstitutional? Ontario government slips another new energy tax in under the radar | Bankers Prepare To Assault Americans With VAT, Transaction Taxes | International World Bank ‘Farm-aid’ plan gets a modest start | The Obama Banking Regulation: Big Banks Are Too Politically Connected to Fail | Obama scolds Wall Street for fighting reform, pushes new regulation package | Greek civil servants strike, challenge EU/IMF talks | German bank severs Goldman ties | Goldman Sachs Eats Its Young | Foreigners continue to buy Canada | Flaherty stands firm against new bank tax | Canada’s brewing debt storm | Goldman Sachs charged with $1bn fraud over toxic sub-prime securities | Flaherty’s credit-debit code tougher than expected | Electricity rates surge in Ontario | China sells petrol to Iran while talking at UN about sanctions | Is Japan hurtling toward a debt crisis? | Do you take cash? In UK bills being supplanted by debit, RFID credit as retail revolution grows | Leveraged ETFs Are Under SEC Scrutiny | Oil sands deal gives China crucial voting bloc in bitumen export issue | Soros warns Europe of disintegration | Tucker: Bilderberg To Meet in Spain, Prolong Global Financial Recession For Another Year | Goldman fights accusations of greed | Roadblocks cleared for Windsor continental supercorridor link | Ontario unveils $8B in renewable energy projects | Investors rush to sell Greek bonds | Canada ‘enthusiastic rebound’ best in G7, OECD says | Small army to protect Toronto during G20 summit | Ontario launches U.S. bond | Paul Volcker: VAT, Carbon taxes may be necessary | Canadian dollar finds a solid resting place at parity | GM dealers sue law firm for conflict — Cassels also had government contract during restructuring | Nova Scotia budget hikes HST rate | J.P. Morgan rolls into Calgary | Auto industry rebound limited: experts | Toronto braces for G20 logistics crunch | Thousands protest Quebec budget | Wall Street: Looting Main Street | Manipulation of Gold Market by Financial Giants Exposed at CFTC Hearing | Britain pushes for new climate talks; IMF and global taxes to figure into wealth redistribution scheme | Obama sets sights on Arctic oil and gas exploration | The prison spending boom | G20 sounds warning over lack of progress on global regulation | EU ‘Free Trade’ and CETA: Advancing the Transatlantic Agenda | CETA worse than ACTA — EU Trade Negotiators Demand Canada Completely Overhaul Its Intellectual Property Laws | IMF struggles to conceal glee at Greek deal | Greece secures joint IMF/Eurozone bailout program | Facing years of deficits, Ontario freezes wages | Impact of $47B stimulus minimal: Fraser Institute | Canada’s GDP growth to top G7 in 2010 | Obama urges Senate to hand total oversight of financial sector to Federal Reserve, eliminate ‘Reserve’ part | Banking reforms urgent, Harper says at G20 sherpas’ meeting | RCMP needs 5,500 rooms during G20 summit | Greek PM threatens to go to IMF if no EU bailout | More stimulus spending coming | G20 ’sherpas’ meet with IMF, World Bank on Ottawa | Loonie passes 99 cents US | UK: Carbon capture storage lauded, will ‘generate 100,000 jobs and Ãƒâ€šÃ‚Â£6.5bn a year’ | Subsidized solar power projects approved in Ontario | Chinese facing debt time bomb | Pacific North American Regional Integration and Control | JPMorgan, Citigroup Helped Doom Lehman, Report Says | Is China actually bankrupt? | General strike cripples Greece as protesters clash with police | China rejects Barack Obama’s call to change yuan policy | Ontario tax collectors get $45K severance, keep jobs in HST federalization deal | Federal budget watchdog disputes Flaherty’s forecasts | MEPs vote overwhelmingly for an EU Tobin Tax | Green energy bubbles threaten to pop at both Federal and Municipal levels | Failed Banks May Get State Pension-Fund Backing as FDIC Seeks Cash | IMF chief calls for quota-based global warming slush fund | McGuinty eyes selling shares in LCBO, Hydro One | Frustrated Icelanders vent rage by voting no in referendum | Icelanders to vote no on debt deal | Ontario in no rush to sell Crown assets, minister says | Athens erupts as Greek austerity plan passes | Hope keeps Flaherty’s balanced budget afloat | Britain grapples with debt of Greek proportions | Greece unveils radical austerity package | Downtown Toronto to become a fortress for G20 summit | Athen’s coffers to run dry in two weeks, more cracks appear in Eurozone | IMF chief proposes new reserve currency | Man who broke the Bank of England, George Soros, ‘at centre of hedge funds plot to cash in on fall of the euro’ | Goldman role in Greek crisis probed | Bernanke Pushes to Keep Regulation Power as Some Senators Waver | Iceland stares into Icesave abyss | Leaked UN Documents Reveal Plan For “Green World Order” By 2012 | Citibank Controversy Puts Dubious FDIC Guarantee Back In The Spotlight | 702 U.S. banks in danger: FDIC | EU executive recommends fast-track membership for Iceland | Greek workers stage general strike | Tories hand out $75 billion worth of ’spending restraint’ | How EU Countries Cooked Books Using Derivatives | Inuit group blasts Cannon over summit | Toronto braces for G20 disruption, Ottawa to pick up security tab | Precedent setting meeting called as Canada’s premiers attend Governors Association in Washington DC | Convention centre confirmed as location for Toronto G20 summit | U.S. initial jobless claims rise unexpectedly | Goldman Sachs Helped Greece Obscure Debt Through Currency Swaps | Obama hails stimulus plan, warns of layoffs | Canadian household debt hits record high | Collapse of the euro is ‘inevitable’: Bailing out the Greek economy futile, says French banking chief | Euro currency union shows strain | B.C., 3 US states sign accord for ‘Pacific North America’ hours before Olympic kickoff | G20 security could strangle downtown | Shaw Cable moves for acquisition of controlling share in Canwest Global | Gordon Brown’s plan for global bank tax ‘a step closer’ | Stimulating our way into debt crises | EU leaders reach secret Greek bailout deal | GM to add second Oshawa shift early | Indigenous groups left out of Arctic leaders’ summit | G20’s Metro Convention Centre location to bump baseball, pride activities | Greek workers ‘give their reply’ to proposed austerity plan with national strike | Will Greece set off ‘global debt bomb’? | G7 brings competing visions to the Arctic | The Federal Reserve as Giant Counterfeiter | The US budget: Barack Obama’s $3.8 trillion red ink blueprint | EU cautions Greece about its deficit | Global Bank Insurance Levy Wins Support over Transaction Tax at Davos | Consumer debt loads are the new concern | No solution in dispute over Iceland deposits | Bloomberg: Secret Banking Cabal Emerges From AIG Shadows | Davos 2010: George Soros warns gold is now the ‘ultimate bubble’, calls for IMF to handle climate fund | Harper urges G20 to follow economic accords | Davos: Global climate fund threatens aid to developing world, campaigner warns | Obama Likely to Rebrand Climate Bill as Jobs Bill | Bankers unite against Barack Obama and Gordon Brown in call for world regulation | Geithner Told To Quit After E Mails Reveal Involvement In AIG Cover-up | IMF warns against retreat from stimulus spending | Why Did the ‘Stimulus’ Fail to Help the US Economy? | One quarter of US grain crops fed to cars — not people, new figures show | Terence Corcoran: Ontario puts $10B in the wind | Banks find gaping loophole in Obama financial reforms | Ontario Premiere McGuinty heralds Samsung ‘green energy’ deal | Obama talking tough with banks | High dollar to slow recovery, central bank says | EU Embargoes Canada’s GMO-sabotaged Flax Industry | Could Greece drag down Europe | EU urged to adopt bank supertax | Record surge in UK inflation | Iceland sets date for Icesave vote | ‘Green jobs’ are key to U.S., Canadian recovery: US Ambassador | Flaherty to use February G7 in Iqaluit (or Ottawa?) to push for global changes to financial system | ‘Significant chance’ of second financial crisis, warns World Economic Forum | Iceland says IMF aid likely delayed | Wall Street’s leading bankers admit: we made mistakes | The next big scam: Fraud endemic to carbon market | Flaherty’s economic plan blasted as leading to taxation or cuts | Idle job market hurting recovery, Flaherty warns | No new stimulus, economy ’stabilized’: Harper | Obama ponders bank transaction levy to recoup bailout shortfalls |TSX trades above 12,000 before retreating | Explosive Leaked Emails Expose Treasury Secretary Geithner’s Deception in ‘Backdoor Bailout’ | America slides deeper into depression as Wall Street revels | Tipping point at CanWest | Sarkozy says world currency disorder unacceptable | UK: Interest rates and quantitative easing on hold | Iceland blocks central bank debt repayment deal | Bernanke defends Fed’s actions, forecasts interest hikes | For more see The Memory Hole — Economics