These reforms are wildly unpopular among Greek citizens. Anti-austerity demonstrators led a massive strike and took to the streets on Wednesday (February 20), calling for the government's resignation. These protestors believe they were given a bad deal. The conditions of the bailout have led to the Greek government cutting its spending, particularly in the public sector, and tax increases, enraging those affected and driving people to protest. The strike was called by Greece's two main unions (both in the private and public sector) in order to put pressure on Samaras's government. GSEE, one of the two major unions calling for the strike, was quoted saying the nationwide strike was:
"Our answer to the dead-end policies that have squeezed the life out of workers, impoverished society and plunged the economy into recession and crisis. Our struggle will continue for as long as these policies are implemented."
The surprise resignation of Borisov's government in Bulgaria may come as encouragement to protestors in Greece, who face an even higher unemployment rate (now 27% and 60% of young workers). The Greek government faces intense pressure from the population as well as its international creditors. The demonstrations today clearly highlight the complicated tug-of-war of the domestic and international demands on Samaras's government.
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ReplyDeleteThis post relates very well to our discussion in class about reactions to the "strings" tied to loan agreements. These loan agreements absolutely come with a price. This price often involves budget cuts and liberalization, at a time when the recipient country feels most vulnerable. In this situation, where there are massive budget cuts, those cuts are most often to welfare programs. Why is it in the EU, which has a common currency and a European Stability Mechanism (which "assists in preserving the financial stability of the European Union monetary union by providing temporary stability support to euro area Member States," do EU members continue to plunge into crises such as these? We must remember that Greece is not the only one. Spain, Ireland, and Portugal have also gone through intense recessions. Though the EU is quick to label Greece as the sick man dragging down the EU, perhaps there is more the EU can do to regulate the stability of it's Member States.
ReplyDeletehttp://ec.europa.eu/economy_finance/european_stabilisation_actions/esm/index_en.htm
I agree that Greece is not the only one that has fallen victim to the difficulties of being in the Eurozone but I also feel it is necessary to point out that the ERM (Exchange Rate Mechanism) and other mechanisms implemented in the 90's, to induct new members into the monetary union, are somewhat arbitrary and have not even been upheld by the most affluent members of the Eurozone. the Nederlands and Germany, for example, have both fallen below the percent of debt in relation to GDP which is acceptable amongst eurozone members. The fact that two of the economic engines of the Eurozone have fallen below this threshold further de-legitimizes it. There are many problems with the common currency and even more as euro members try to expand the common market.
DeleteI do not believe that the funds provided in the Treaty Establishing the European Stability mechanism are going to provide long term stability to the EU. They need to look at the inherent problems in a system of common markets and currencies.
With the implementation of austerity measures in Greece we also see the rise of the far right party Golden Dawn. Just recently it gained 18 parliamentary seats. With the continued economic decline of Greece, I believe that living standards will only continue to decrease for the general population. The article A Society Plunges into the a Abyss from the German newspaper Frankfurter Allgemeine has reported on the destruction of the middle class in Greece, decrease in wages, and lack of healthcare.
ReplyDeletehttp://www.faz.net/aktuell/feuilleton/debatten/krise-in-griechenland-eine-gesellschaft-stuerzt-ins-bodenlose-11992352.html#Drucken
With the implementation of austerity measures in Greece we also see the rise of the far right party Golden Dawn. Just recently it gained 18 parliamentary seats. With the continued economic decline of Greece, I believe that living standards will only continue to decrease for the general population. The article A Society Plunges into the a Abyss from the German newspaper Frankfurter Allgemeine has reported on the destruction of the middle class in Greece, decrease in wages, and lack of healthcare.
ReplyDeletehttp://www.faz.net/aktuell/feuilleton/debatten/krise-in-griechenland-eine-gesellschaft-stuerzt-ins-bodenlose-11992352.html#Drucken
Bringing in another post about immigration, I think it is important to bring up the effects of this economic recession in places like Portugal, Italy, Spain, and Greece but also Eastern Europe because with low unemployment and declining living standards, citizens are going to travel to other eurozone countries in search of work. This not only causes a brain drain of the younger population, but brings into question about what will have to happen in terms of european immigration policies and how many migrants they will allow to stay.
ReplyDeleteAre the austerity measures really out of line? Although Greece has plunged into a recession, the past levels of government spending was unsustainable. In a recent Economist article (http://www.economist.com/news/leaders/21571136-politicians-both-right-and-left-could-learn-nordic-countries-next-supermodel) the magazine advocates for nations to start looking at the Nordic countries for an example of stable government and sound economic policies. It's unfortunate that the Greek economic had to fall into such a deep recession but eventually something had to change.
ReplyDeleteI think that this is a really interesting article and I like how Bulgaria is brought in. Without being an EU country, Greece would likely have fallen further into a worse recession. Greece needs to look to countries like Poland as a model of economic prosperity because Poland has fared well through the global recession. It will be interesting to see how the situation with Greece's and Bulgaria's economies plays out.
ReplyDeleteI've always had difficulty wrapping my head around austerity protests. Austerity measures are not inflicted on borrowers, like Greece or Bulgaria, with malicious intent. Their purpose is to ensure the lender against default, a tactic used by banks around the globe. Money is never free, a fact lost on the protesters. Before deciding to accept a loan, a borrower must carefully weigh both the cost of accepting and the cost of refusing. Are austerity measures worse than a Greek default?
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