Greece sells bonds, workers suffer more
If workers in the Ukraine want to see what joining the EU and borrowing from the “troika” — the European Central Bank, the International Monetary Fund and the European Commission — might mean for them, they should look at Greece, Portugal or countries like Spain, which is the same size as Ukraine.
Portugal’s unemployment rate is currently at 15.3 percent after three years of contraction. The IMF forecasts that it will go to 15.8 percent, even though Portugal’s economy will grow a little over 1 percent.
In Spain, whose current unemployment rate exceeds 26 percent — over 50 percent for youth under 25 — wages have been falling over the last four years and the economy has been contracting for the last three years. The IMF forecasts that it will be at least a decade before Spain’s unemployment rate improves. (Economist, April 12)
Both Portugal and Spain have had austerity imposed as a condition for loans from the IMF and ECB, which were aimed at bailing out the banks that loaned money to those countries. This austerity has devastated the working class in both countries. Poverty, homelessness and hunger, which the U.N. calls “food insecurity,” have been on a rampage.
Greece, on the other hand, is the austerity poster child, a glaring example of what troika diktats bring. Greece made the front-page of the New York Times April 10 when it succeeded in issuing 3 billion euros (around $4.2 billion) worth of bonds yielding slightly less than 5 percent, an interest rate almost three times that of Germany.
Between the new debt Greece just acquired and the interest on its old debt, the ratio of Greece’s indebtedness to its gross domestic product will be 175 percent this fall. According to the IMF, this ratio is totally unsupportable. In the past four years the output of goods and services in the Greek economy has shrunk by a quarter, which means Greece’s economy is spiraling downward.
What this so-called “financial success” means to Greek workers is more misery. Already, the unemployment rate is 27 percent, and nearly 6 out of 10 Greek youths under 25 don’t have a job.
According to the Greek nongovernmental organization Life Line, 56 percent of all Greeks receiving a pension are starving, that is, experiencing moderate to severe hunger. The government, under the lash of the troika-imposed austerity, has slashed pensions so much that a third of all pensioners receive less than 500 euros ($700) a month, which means they can’t pay all of their rent, heating and food bills. Life Line asserts that supermarkets in Greece are the most expensive in Europe. (keeptalkinggreece.com, Feb. 4)
Pensioners in Greece not only include seniors, but also widows and people who can’t work because of physical conditions.
Health care in Greece has been cut and cut again since the troika limited Greek government spending on health care to 6 percent of the GDP, which has been declining for the past four years. Hospitals and clinics have been closed abruptly when spending reaches the cap, and the 800,000 Greeks who have lost their unemployment benefits have also lost health care.
Hundreds of thousand of Greeks — the number is large but mostly uncounted — who still have a job get paid late or in goods instead of money. In December 2013, the major Greek daily newspaper Kathimerini quoted the union confederation GSEE’s estimate that more than 1 million salaried employees were unpaid.
Some big supermarkets are paying in kind. That caused their employees to wonder aloud if it would be possible to pay their taxes with flour and sugar.
Ukraine’s economy is far weaker than Greece’s, which means the austerity the troika would impose would be even more devastating.