Socialist Worker

Greek myths and realities: Economic crisis and resistance

by Matthew Cookson & Viv Smith
Issue No. 2202

Greek workers are at the forefront of resistance to the world’s rulers’ plans to make ordinary people suffer for capitalism’s crisis. The country’s government is pushing through vicious austerity measures at the behest of the European Union and the International Monetary Fund.

Ministers want to cut the budget deficit from over 13 percent to below 3 percent in the next three years.

This means a devastating attack on working people’s living standards. Politicians and the media claim that the Greek people have artificially high standards of living that must be brought down.

But the figures Socialist Worker highlights here expose these lies. Working people across Europe cannot afford to be divided by myths and distortions.

We need united resistance to defeat our governments, and force the rich and the bankers to pay for the economic crisis that they created.

The Greek working class is leading the way and was launching its fifth general strike this year on Thursday of this week.

Its power has repeatedly paralysed the country as hundreds of thousands strike.

“Opposition to pension reform is at the centre of this week’s strike,” Panos Garganas, editor of the Workers Solidarity newspaper in Greece, told Socialist Worker.

“The government is pushing ahead with a bill despite huge opposition. It will raise the retirement age, merge a number of pension funds and reduce the level of pensions. It is a levelling downwards.

“The anger against the government, and European and world leaders, is continuing to grow.”

The general strike will not be the end of the Greek resistance.

“Power workers have said that they will strike for 48 hour periods from Tuesday of next week over pensions,” said Panos.

“And local authority workers are discussing going all-out when the plans to make major cuts in their sector are discussed in parliament.

“Things will only escalate here.”


Public sector

  • In Greece public expenditure is equal to 40 percent of gross domestic product. In Britain it accounts for 45 percent. There is no “bloated public sector”.


1 in 5

  • Around one in five Greeks live on or below the poverty line which is 6,648 euros per year for one person households (£106 per week) and £224 a week for households with two adults and two dependent children.
  • The average annual income is £10,928 per year.
  • 14 percent of full time workers take home less than £106 a week.


Unemployment

  • Unemployment stands at around 11 percent – over 500,000 people – having risen nearly 100,000 since 2008.
  • Youth unemployment is 30 percent, compared with an average of 20 percent across the eurozone.


Inequality

  • Greece has the fifth highest level of income inequality across all 27 EU member states – the top 20 percent of the population earn six times more the bottom 20 population.


Pay and prices

  • A survey by the Greek Consumer Protection Centre found that the average shopping basket of food costs 66 percent more than in Germany.
  • Teachers in Greece start on just £906 per month. A newly qualified teacher in Britain starts on around £1,370 per month.
  • The Greek government wants to introduce a new, lower, minimum wage for young workers and the unemployed.
  • VAT is to rise by 4 percent to 23 percent. That will cost the average family £12 a week.


Pensions

  • The government says it wants to increase the average retirement age by 14 years.
  • Pensions are as low as £368 a month.


Benefits

  • Benefits decrease the longer you are out of work. After six months of unemployment only 17 percent get benefits.


Health

  • About 400,000 people say they have not been able to afford to visit a doctor.


As expensive as Britain

The cost of living in Greece is one of the highest in Europe. Compare the price of basic foods in a Greek supermarket to those in Britain

productGreeceBritain
Butter (500g)£2.45£2.40
Milk (1 litre)£1.10£0.76
Bread (small)£0.99£0.79
Yoghurt (1 kilo)£1.95£1.80


Helen Skiada, works for a telecoms firm

‘We have nothing to look forward to. We have no choice but to come out here and fight’


Super-rich are still living it up

Greece’s rich are among the world’s wealthiest

  • Spiros Latsis – shipping – £2.3 billion
  • Kannelopoulos family – cement – £521 million
  • Vardis Vardinogiannis – petrol – £480 million
  • Nikos & Evangelos Stasinopoulos – metals – £350 million


Kiki Papiliadis, 61 year old pensioner

‘It’s terrible not being able to plan your life. You don’t know what will happen tomorrow’


Cutting public sector pay by 40 percent

The government’s plans include three hammer blows against public sector workers wages

  1. Public sector pay freeze until 2014. This will mean a cut of around 5 to 10 percent in wages depending on the rate of inflation.
  2. Abolishing the Christmas, Easter and summer holiday “bonuses” in the public sector, also known as 13th and 14th salaries, for some public sector workers and capping others.

    The press presents these payments as luxury top-ups but they are crucial for workers’ survival.

    Their abolition would mean a 15 percent cuts for some workers.

  3. Public sector allowances to be cut by 20 percent. These account for a significant part of public sector workers’ overall income.

Together these could mean a 40 percent cut for some workers. Living standards have already dropped by 20 percent so far this year.


Timeline of the crisis

  • December 2009

    Financial markets panic about Greece’s high public debt, and credit rating agencies downgrade its credit rating.

    Prime minister George Papandreou announces cuts to public spending and workers’ allowances in a failed attempt to calm the markets. Public sector workers strike on 17 December.

  • January 2010

    The government sets out three-year plan to reduce the deficit, including wage freezes and an increase in the retirement age.

  • February 2010

    Huge public sector strikes against the measures.

    A general strike of all workers takes place on 24 February, paralysing the country. Tens of thousands of people march in Athens.

  • March 2010

    Two general strikes rock the country. Sacked Olympic Airlines workers occupy part of the finance ministry in Athens.

  • April 2010

    Eurozone countries and the IMF commit to provide up to 45 billion euros in loans to Greece. Despite this, unemployment increases to 11.3 percent and its credit rating is downgraded to junk.

  • May 2010

    The European Union and IMF approve a 110 billion euro deal with even harsher measures.

    These include a three-year wages freeze, the loss of bonuses and an increase in VAT. Workers respond with two general strikes. A group of teachers occupied a TV studio (including Dimitra Roupa, pictured left).


Austerity across Europe

The International Monetary Fund (IMF) will police the cuts in Greece.

It has already rolled out its austerity programme in other European countries:

Hungary

  • Scrapping workers’ yearly bonuses – the equivalent to a month’s wage.
  • Raising the retirement age by three years.
  • Increasing VAT by 5 percent.
  • Unemployment at 11 percent.

Latvia

  • 25 percent cut in public sector wages since 2008.
  • 30 percent drop in private sector wages.
  • Unemployment at 23 percent – the highest in the European Union.

Romania

  • Public sector wages, including the minimum wage, cut by 25 percent.
  • Pensions cut 15 percent.
  • Unemployment benefits slashed by 15 percent.
  • The average wage is now around £214 a month.


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Article information

Features
Tue 18 May 2010, 17:44 BST
Issue No. 2202
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