The Greek Tragedy : A Cautionary Tale for Europe and America

On Monday, the media reported that Greece faces another standoff over bailout funds because the Greek government has failed to impose reforms demanded by Eurozone finance ministers, who may thus refuse to release further funds. Only two of 15 changes that were conditions of the rescue package have been implemented. Klaus Regling, head of the European Stability Mechanism (ESM), said Greece should be able to secure short-term debt relief measures ‘very soon’ : “We have been working on these measures and they could be implemented very soon,” Klaus Regling told Greek newspaper Ta Nea, adding : “We hope the government implements remaining prior actions very soon.” So, Greece will face another bailout standoff with its creditors if there is no action on reforms and Eurozone countries refuse to release additional funds this month. EU officials told the German daily Handelsblatt that Greece has delayed privatizing state assets, adding to the frustrations of Eurozone finance ministers who will discuss progress on Friday. Further funds are due to be disbursed under the ESM, which will give Greece up to €86bn of financial assistance by 2018 in return for the German-led austerity reforms. After approving the first €7.5bn tranche of €10.3bn this spring, the 19 finance ministers should disburse the rest this month but might withhold payment for the rest of the year. A further finance ministers’ meeting is planned for 21 September. ~~~~~~ A year after the crisis was declared over, Greece is still on its downward spiral. Eight years into the country’s financial crisis, life has become harder for most Greeks. Unemployment is the highest in Europe -- survey in June found that extreme poverty had risen from 2.2% of the population in 2009 to 15% – a total of 1.6 million people – in 2015. Longer-term relief to help the country reduce its crippling debt of 176% of GDP will not start until after the end of the bailout, Regling said. However, the International Monetary Fund -- which is not participating in Greece’s third rescue program -- has insisted that long-term relief including debt forgiveness must happen sooner, if Greece is to have any chance of recovering. Greek finance minister Euclid Tsakalotos was quoted in Greek media as saying the Greek government faces a monumental task to push through the highly unpopular reforms and secure the last “desperately needed” €2.8bn of funding, followed by the start of long-promised debt restructuring talks by the end of the year. The restructuring talks would offset a hugely unpopular austerity package including spending cuts, tax hikes and pension reductions required by the bailout, the newspaper Kathimerini said. It added that rumors emanating from Brussels “speak volumes about Eurozone countries’ confidence levels” in the Greek government, while hampering the ability of the prime minister, Alexis Tsipras, to announce even modest measures to help people worst affected by Greece’s prolonged economic crisis. ~~~~~~ As Greek journalist Eleni Varvitsiotis wrote Tuesday in Ekaterimini, "clouds are gathering in Brussels for Athens." Her point is that expectations are running low ahead of Friday’s Eurogroup meeting on Greece, as Athens is particularly late in implementing the 15 prior actions it promised over the summer to secure the disbursement of the €2.8 billion tranche. Varvitsiotis says : "Friday’s meeting of Eurozone finance ministers is not expected to go beyond an update on the progress of the Greek program, which is seriously lagging. Meanwhile, a report in German newspaper Handelsblatt said that Greece should not expect any disbursements for now, even though the first review was completed in May, as the government has only implemented two of the 15 prior actions." She added that Greek Finance Ministry sources say that this Eurogroup was never going to approve a payment anyway as it is an informal gathering and that the delays in the prior actions will be the reason for the arrival of the creditors’ representatives in Athens on September 12. ~~~~~~ Greece, for its part, says everything is running “according to schedule." Brussels disagrees. Sources say the failure to implement all the prior actions will push the completion of the first review beyond September. One Eurozone official told Kathimerini : “I do not see the first review completed any time soon and as for the second, I do not see it being completed in the near future.” Greece's creditors are also reportedly growing more alarmed by Athens’s rhetoric and stance in asking for more independence from the bailout program, which they see as backtracking on reforms. EU officials monitoring the government’s moves have expressed opposition to the Education Ministry’s law banning teacher layoffs from private schools, as being counter to the spirit of the bailout program. And, the Greek Labor Ministry is going slow on the labor reforms to come from the second review, which is also causing concern, with Eurozone officials saying the Greek government is “doing more of the same." ~~~~~~ This seems to be at least partly true, but some say the cause includes the continuation of Greek citizens' laisse-faire attitude toward paying taxes. Ekatherimini's Prokopis Hatzinikolaou reported on Monday : "Expired debts to the state jumped by over €800 million in July to bring the total amount of money Greeks owe to tax authorities and social security funds to over €90 billion" -- over half of the country’s gross domestic product. Data from the Greek General Secretariat for Public Revenues showed on Monday that expired debts in July were more than twice what they were a year earlier, when they had stood at €388 million. But, Hatzinikolaou said the taxpayers are not to blame : "In the first seven months of the year, new debts to the state were 21% higher than in January-to-July 2015, to reach €7.6 billion. Hatzinikolaou sees this as evidence of the fact that the tax-paying capacity of Greeks and of local enterprises is growing continually smaller." He reported on the Greek government's ongoing effort to reduce the expansion of expired debts, leading the Secretariat in July to confiscate funds from 20,000 debtors’ bank accounts : "In total there are 4,128,962 state debtors, with compulsory collection measures imposed on 774,282 of them." But, a further increase in debts is expected by the end of the year because "Greeks will have to pay two income tax installments, four monthly tranches of the Single Property Tax (ENFIA), road tax, etc." Ekatherimini journalist Marta Katsounaki wrote last Friday : "Greek taxpayers must obtain a voice of their own and begin an efficient protest against unacceptably high taxation. The problem is not solely the fact that Greeks face exorbitant taxes. It is also the feeling that all the money paid goes into a black hole of bad management and waste. Citizens in other European countries also pay high taxes, but their countries provides services, ranging from garbage collection to public hospitals. In the case of Greece, a partisan mentality, unionism and inadequate management have destroyed several sectors. Greeks’ anger is justified because while they can’t make ends meet, the level of public benefits is collapsing." Katsounaki added : "Pensions have dropped by an alarming amount in this country and the impact of this on Greek people’s lives is becoming increasingly worrying. The problem is that the cost of living in Greece, for the most part, has not decreased, despite the ongoing unprecedented crisis. Middle-class Greeks now find it hard to keep up with their electricity bills. It appears that [retiree] pensions are bound to remain at low levels for years to come. In the meantime, however, something must change with respect to the pricing of goods and services in this country." ~~~~~~ And, if all that is not enough for Greeks to deal with, Greek media is reporting that the success of the far-right Alliance for Democracy (AfD) party in Sunday’s election for the state legislature in Mecklenburg-Vorpommern in east Germany is not good news for the Greek government. Chancellor Angela Merkel's defeat in her own constituency, seen as a reaction to her migration policy, will surely be felt in Athens. Media reports relating to Germany and other EU countries' sense of the ineffective Greek management of the migration crisis have already reached Greece and there might be more bad news on the way. But, Greece must be doing something right, because more than 2,000 sea rescue volunteers, who last year saved thousands trying to cross the Mediterranean to Europe, have won the annual Nansen prize, the UN refugee agency announced Tuesday. The Hellenic Rescue Team (HRT) will share the prestigious award with Efi Latsoudi, a human rights activist on Lesvos who helped provide a safe haven to thousands of refugees on the Greek island, the UN High Commissioner for Refugees said. More than 850,000 people -- most of them refugees from war zones in Syria, Iraq and Afghanistan -- arrived on the Greek islands last year. Around 500,000 landed on Lesvos, which at the height of the 2015 crisis had more than 10,000 arrivals per day. Volunteers with HRT last year carried out 1,035 rescues, saving 2,500 lives, and assisting more than 7,000 people to safety. On Lesvos, PIKPA village welcomed the most vulnerable refugees, including women who had lost their children during the crossing and people with physical disabilities. Latsoudi, a trained psychologist, was one of the volunteers who helped local authorities transform a former children's summer camp into a refugee haven. During the peak of the crisis, PIKPA, which had the capacity to take in 150 people, was hosting some 600 refugees daily and distributing more than 2,000 meals. Hundreds of migrants continue to arrive on the Aegean islands from Turkey, steadily increasing pressure on overcrowded reception centers. The issue is of increasing concern in Athens because of a recent increase in arrivals, which have risen to 100 to 200 daily, compared to virtually zero levels following a failed coup in Turkey in July. The influx is still far below arrivals this time last year when thousands of people were reaching the islands every day. ~~~~~~ How does this affect Greece's already-frayed relationship with Germany? German Interior Minister Thomas de Maiziere said on Sunday that he wants migrants to be returned from Germany to Greece, in accordance with the draft Dublin Regulation, under which refugees should apply for asylum in the first EU country they enter. And, Merkel’s third-place finish in Sunday’s election, behind the far-right, anti-migrant AfD, is expected to further harden the German stance in favor of returns to Greece. Tsipras is expected to broach the issue of refugees during a summit of Mediterranean leaders in Athens on Friday. Italian Premier Matteo Renzi is expected to attend along with French President Francois Hollande, although Spanish Premier Mariano Rajoy will be absent due to political upheaval in his country. The Greek government is planning to open new migrant camps on the mainland in order to move hundreds of refugees out of centers on the Aegean islands which are cramped and where tensions often spill over into scuffles or riots. Greek media reports that several migrants were hurt early on Tuesday when a brawl broke out at the Moria refugee center on the island of Lesvos. The rioting began following a dispute between migrants from Syria and Afghanistan, according to local reports, which said protesters broke doors and set fire to mattresses and other items. One day after de Maiziere suggested that Germany could send migrants back to Greece, the European Commission on Monday urged Greece to implement the so-called Dublin Regulation. The agreement, which is currently under review, stipulates that migrants who have traveled on to other nations in the bloc via Greece be returned to Greece. In an interview with Welt am Sonntag newspaper, de Maiziere said : “We have done a lot in Europe in order to improve the refugee situation in Greece. This must have consequences that will enable refugees to be sent back to Greece according to Dublin regulations.” Asked to comment on de Maiziere’s comments, European Commission spokeswoman Natasha Bertaud on Monday said that although the EU’s refugee system is set for a shake-up, Greece ought to implement existing provisions until these are reviewed. Because of deficiencies in Greece’s asylum processing system and the large number of migrants and refugees arriving in Greece, Germany has suspended deportations back to Greece since 2011. ~~~~~~ These disquieting news reports have not sat well with the Greek population. Ekatherimini reported on Tuesday that the latest University of Macedonia poll for Skai TV shows growing disillusionment over Greek government policies among Greek voters, with 81% of those surveyed saying that “things are moving in the wrong direction.” In addition, 85.5% said they were not satisfied with the government’s performance so far, while the results showed that the opposition New Democracy party is maintaining a steady double-digit lead over the Tsipras SYRIZA governing coalition -- 72.5% of ruling SYRIZA voters expressed dismay with the government’s stewardship, and confidence in Prime Minister Alexis Tsipras – once a major draw for the leftist party – is in decline. Of those questioned, 27.5% said they would vote for New Democracy in a general election, as opposed to 17.5% for ruling SYRIZA. Neofascist Golden Dawn was third with 7.5%, ahead of the Democratic Alignment (PASOK) with 5.5%. Junior SYRIZA coalition partner Independent Greeks and centrist Potami were below the 3% threshold to enter Parliament, at 2% and 1.5%, respectively. Importantly, the poll found that 66% of Greeks disagree with the government’s handling of the country’s refugee crisis. And, the Tsipras administration will have a tough time convincing Greeks of brighter days ahead, as 62% of those questioned expect their finances to deteriorate even further over the next 12 months. ~~~~~~ Greece has not seen any real recovery. Instead, its people are suffering more and more under the austerity imposed by the Eurozone, as well as by the government's incompetent handling of both the Eurozone and the everyday suffering of its citizens. This can be seen better by going to Greek media to read what Greek journalists and commentators are saying. Iota Sykka wrote an article for Ekatherimini on Monday that described downtown Athens as : "abandoned to its fate. There are some things that make you realize that what we’re experiencing in Greece right now is not a crisis; it’s complete decadence. The filthiness of the city and the way it just seems to keep spreading is one of those things. What is going on that we have allowed Athens to become so dirty? The center of the city is for the most part sad and messy, with piles of trash, overflowing garbage bins and neglected parks....The only exceptions -- and the only streets we enjoy looking at -- are the Dionysiou Areopagitou promenade and the rest of the area around the Acropolis Museum and the Herod Atticus Theater....The fact is that we have grown accustomed to the grubbiness....We are even experiencing the absolutely crazy phenomenon of dirt being elevated to ideology. Political slogans scrawled on walls have traditionally been associated with struggles for freedom against totalitarian regimes, but what we see here is not meaningful protest or artistic graffiti, but pointless, endless scrawls on top of other scrawls, on walls everywhere, even on traffic signs....and, alas, these are scenes that are not just restricted to downtown Athens."~~~~~~ Dear readers, the commentary that really touched my own fears came from Alexis Papachelas, who wrote on Saturday about the "Crumbling Establishment," lamenting the fact that while "every country has an establishment, future historians will write about how a group of young leftist activists managed to pull out the teeth of a large portion of Greece’s middle-class establishment. They had audacity and the support of a society which had reached its limits. But that’s not all. The Greek establishment proved to be small and weak and had been digging its own grave for a while. The gospel of extreme populism, of justifying every extreme act of protest and so on, was preached on a daily basis from its own TV channels. Today’s dominating political talk grew and was celebrated on private television. The excuse was simple : 'This is what sells and what people want.' You made your own bed so now you can lie in it, as they say. The so-called establishment rushed to make behind-the-scenes deals from 2012 onward. Everyone had their own reasons. There were those who didn’t want their dirty laundry aired in public. Others wanted to take revenge on Athenian high society after having felt like an outcast in the past....A portion of Greece’s establishment is already rotten. The crisis dealt it the final blow, but it was hanging by a thread well before that. Exaggeration, the lack of business management rules and a disrespect of institutions had led to a Greek version of the Wild West. The newcomers, however, found invaluable support in a portion of the bourgeois political world, which for its own reasons offered know-how for governing the tough state machine. They also played their part. Now the landscape’s changed, with the power and money being shared out all over again. Greece goes through similar phases every 30 to 40 years and a new round was unavoidable given the 2009 crisis. So will all of this bring about a healthier establishment? I’m afraid that even those now in power might one day miss the old one, the tested system of vested interests which at least was predictable and had a couple of its own rules. The nouveau-riche Wild West of 2000 could well turn into a real one. The group of leftist activists who brought down a part of the establishment and now wish to create their own will soon get a taste of it. The question is whatever happened to the country’s nongovernment-funded, dynamic, healthy establishment? Some have left, while others are lying low. But if they don’t play their part, the country will pass into the hands of pirates, zealous judicial officials with peculiar agendas, all kinds of gangs and the process of the country’s Ukrainization will begin very quickly. Bulwarks are needed, even within the leftist ranks, to avoid such a fatal eventuality." ~~ If the words and warnings of Papachelas don't send chills down the spine of European and Americans, then they are already past redemption. Europeans will say, 'we are not Greece.' But, Europe created Greece, yet cannot forgive its debt because the EU coffers are empty, dependant on German funding. And what if, as de Maiziere is now turning on Greece about refugees, Germany were to abandon the rest of the EU, telling it to support itself? What then? As for America, her national debt is $19 trillion. What if her creditors turned on her? To use Papachelas' words : "Bulwarks are needed, even within the leftist ranks, to avoid such a fatal eventuality." Perhaps the real reason President Obama downplayed the Chinese insults at the Beijing airport was that he didn't want to offend the country whose money he knows he needs to continue his leftist programs that buy today's votes at the expense of tomorrow's national solvency and survival. Donald Trump was, as so often, right. Obama should have left China, or strongly protested the Chinese treatment of his official party and himself as the leader of the United States. But, defending America's national pride must be based on reality. The reality is that today's America is rapidly becoming the US version of Greece's "Wild West." Do Americans have the will power to stop it? We will know on November 8.