This article is the first of a series of three, published in conclusion to the Chronicles of a European Winter, a series of documentaries about the situation in austerity hit Greece.
The documentaries can be watched or dowloaded for free on the website of the project : eurowinter.wordpress.com
Let’s imagine a country :
its economy is completely destabilized by an unprecedented financial crisis originating in Wall Street. In less than a year, the country plunges into recession. The slump in production is combined with a rise in unemployment from 9% to 14% of the working population. This seriously damages the country’s finances, which are already fragile because of a huge debt incurred in questionable circumstances. As the debt soars because of the economic crisis, the authorities begin to worry. They bring in a new government, headed by a bourgeois, conservative economist, a graduate from the London School of Economics.
This government has one priority: to reduce the national debt and kick-start the country’s economy. The solution appears to be simple to them : the State will have to make savings by cutting expenditure and increasing taxes. The suffering inflicted on the poorer classes is seen as a necessary evil in order to rebuild a “healthy” economy.
The political situation is very unstable and passing these measures through parliament is no easy task. Thanks to a series of special legislative decrees, four austerity packages are implemented successively over the next two years.
The list of austerity measures is endless: a 25 % reduction in public sector wages, cuts in social benefits and allowances (unemployment and social insurance, family allowance), hikes in income tax, VAT, and taxes on consumer goods such as cigarettes and alcohol.
This strict budgetary slimming regime has disastrous consequences: the economy collapses and unemployment escalates from 14% to 22% in one year, while economic output (GDP) drops by 7.7%. Society is in a state of shock and there is a tendency towards political polarization around the extreme left or the Nazi party, which suddenly enjoys a meteoric rise in popularity.
In spite of this, the government decides to increase austerity, convinced that its policies are only failing because the measures are insufficient. A new austerity package is passed by legislative decree at the moment where unemployment is at 22%. In an official statement, the government claims to be “less than 100m short of meeting its target”.
We all know what happened next : one year later, GDP shrank again by 7.5% and unemployment rocketed to 28%. But we are not talking about Greece. In the case we are describing, the population became more and more radical which led to the rise to power of the Nazi party and Adolf Hitler in 1933. They won by exploiting the social and economic disintegration of the country, using it to serve their own propagandist platform.
Here was a factual account of the last years of the Weimar Republic, from 1929 to 1933, the dark years that led to Nazism and World War II. This was the government of Chancellor Heinrich Brüning, appointed by federal President Paul von Hindenburg in 1930. His stubborn insistence on extreme austerity policies brought about the social and economic implosion of Germany in the space of just two years.
But at the end of the day, it seems that this experiment of austerity and its dramatic consequences didn’t left such a trauma. It takes a very thorough research through international archives of the last three years to find any references at all to this historic precedent of what we are seeing nowadays.
Under austerity measures the unemployment rate in Greece has increased from 9.5% in July 2009 to 12.5% in July 2010, 17.8% in July 2011 and 25.1% in July 2012.
Meanwhile, the percentage of votes for the Greek neo-Nazi party “Golden Dawn” increased from 0.46% in the European elections of 2009 to 5.3% in the Athens municipal elections of 2010 and 6.2% in the general elections of June 2012. In May 2012, 12% of respondents said they approved the party’s standpoint. This figure has risen to 22% in September 2012.
This accumulation of facts is by no means an attempt to predict the unlikely event of a neo-Nazi party coming to power in a country subjected to European austerity measures. The same causes do not necessarily have the same effects in a field as uncertain as human behaviour. However, these facts do demonstrate the similarities between the economic and social situation in Greece in the fall of 2012 and that of Germany in 1933.
It is then astonishing and worrying to see that the level of concern of European institutions and politicians never goes beyond sporadic expressions of sympathy, which are merely a cynical façade for yet more austerity and more privatizations.
At the end of 2010 there was concern about the possible economic risks of austerity measures.
At the end of 2011 the dramatic impact of these measures brought hopes for a change of policy.
At the end of 2012, when there is visible proof of the destructive potential of these policies and while political decision-makers bury their heads in the sand, there is little room left for optimism about the future.
The great trauma which dominates German and European economic policy today is the fear of inflation and monetary instability. However, the great hyperinflation crisis took place in Germany in 1922-23, ten years before the Great Depression and the rise of Nazism. In the collective conscience of the decision-makers, it seems that the total loss through inflation of all private fortunes in Germany has left a far deeper scar than the social and economic destruction wrought by austerity policies in 1930-1933.
What could possibly explain why the leading elite of that very same country are making the same glaringly tragic mistake 80 years later? With one significant difference – this time the mistake is being inflicted on another people, not their own …
Interestingly enough, the German word “Schuld” means “debt” but also “fault” or “guilt”. For the German-speaking conservative elite, the fact that countries running up excessive debts are considered “at fault” is no longer even an easy parallel. Linguistically, the concept is quite simply identical. It’s then not too hard to imagine that it is an excess of old-fashioned religious morality that leads the governing classes in Germany to tolerate the growing pain caused by austerity, unconsciously seeing it as a punishment on the “sinners”. ….
The question as to who should be held responsible for this tragedy will probably remain unanswered for some time to come. But something must be done very soon to save the country from ruin.
Chronicles of a European Winter, a documentary series about austerity in Europe.
Watch on : eurowinter.wordpress.com
To go the next article : click here.
To go back to the summary, click here.
And at last, taken from our selection of links, a great novel telling more about the story in this article :
Little man, what now ? , novel by Hans Fallada (original title : Kleiner Mann, was nun ?)
This wonderful novel published in 1932 in Germany relates the beautiful love story of a young couple getting taken into the stream of the early 30′s economical depression in Germany. The everyday life described here is not so much different from the stories heared today in Greece. The similarities of those situations should be a reason to get worried about what is happening.
A classic of german litterature, a must read.