Greece in Debt, Eurozone in Crisis

The Greek verb agorevo means “I speak in public.” But agora also is the market. The market was an area of politics. When you try to separate the two, as neoliberalism does, trying to create a purely economic market place, then there is no democratic control.   —George Papandreou, Interview with Open Democracy, 2004

Are we the prodigal children of a neat global economy and an all-successful Europe? Or was the system ailing since its youth?   —from  Debtocracy, a Greek documentary

Athens—When he was elected prime minister in 2009 at the head of Greece’s Panhellenic Socialist Movement (PaSoK), George Papandreou was going to wipe out corruption, open up politics, rejuvenate the country’s sclerotic economy. “There is money,” he said then, although he must have known there wasn’t any in the public coffers. Less than two years later, he has allowed the “troika” of the European Commission, the European Central Bank (ECB) and the International Monetary Fund to bind him on the horns of an impossible dilemma: either the Greek government implements a second round of austerity measures more savage than any yet endured by a developed country, with deeper cuts and tax hikes and a wholesale, cut-price sell-off of its public assets, or Greece faces default on its sovereign debt and imminent bankruptcy.

Meanwhile, since the end of May, Syntagma Square has overflowed with Greece’s aganaktismenoi (cousins of the indignados who filled Spanish squares this spring), here to refuse the troika’s blackmail and demand their democracy back. On the street in front of Parliament, protesters are banging drums, chanting and waving, singing. The crowd is huge, politically diverse and overwhelmingly peaceful. There are people here from all walks of Greek society; at times the rhetoric is that of a national resistance. A neat elderly couple on their first demonstration push through the crush because their pensions have been slashed, prices are rising and they just can’t make ends meet. Vassilis Papadopoulos, a 50-year-old unemployed truck driver living on loans from his mother, has come all the way from Corinth wrapped in a giant Greek flag, with a look of despair in his eyes and saucepans to bang together. This is a movement, he says, against the political system: “They’ve all cheated us. They destroyed the banks, our pension funds. They invested our social security money in bonds for their own benefit.” Farther down, in the square itself, something entirely new seems to be taking shape. A tent village has sprung up, a liberated zone in which an open conversation has been going on for weeks. University professors, passers-by, unemployed laborers, all get their three minutes with the microphone. There’s a medical tent, a “time bank,” a “team to promote calm.” When riot police cleared the square with clubs on the night of June 15, these protesters didn’t fight. They simply walked right back, picked up the rubbish and repaired their neighborhood.

The Greek debt crisis is said to threaten the survival of the eurozone and a global financial meltdown worse than the one set off by the collapse of Lehman Brothers in 2008; each new prediction of default sends frissons of panic and flurries of speculation through the markets. In June the ratings agencies said that German Chancellor Angela Merkel’s plan to persuade Greece’s private creditors to roll over the debt into longer-maturing bonds would be deemed a “credit event”—finance-speak for a default that triggers debt insurance policies, in which American as well as European banks are heavily implicated. That, Merkel told the German Parliament, could have “uncontrollable consequences” for financial markets. At the eleventh hour, an EU summit agreed in principle to a new rescue package of up to 120 billion euros, but demanded further cuts and tax hikes to close a 5.5 billion euro “black hole” in the existing plan. The markets rebounded. But Papandreou now has to push the new, augmented austerity package through a resistant Parliament before Greece can get the final tranche of last year’s 110 billion euro loan. Without it, the country will be broke by mid-July. The vote is due to take place on Wednesday; Greece's trade unions have scheduled a two-day general strike, and rallies are planned in sixty-five different towns. The Syntagma protesters intend to encircle Parliament.

Already parts of Athens look like New York City circa 1980, with shut-up shops, derelict buildings and graffitied walls. The effects of the game of chicken being played out by bankers and politicians are visible in the way Athenians walk now, head down and defended, through once-safe neighborhoods; in the irritable, shamed anxiety you see on people’s faces. Depression is endemic; suicide rates have soared. For Greeks, this is much more than an economic crisis. It is a social and political convulsion unlike anything seen here at least since the fall of the colonels’ dictatorship in 1974.

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Source: The Nation