How the greek “special case” became a template for the rest of Europe.
This article is the last 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
When I returned from Athens, I tried to keep in touch with the people who had agreed to tell us their story for the documentary. Six months later, all of them without exception were worse off, both financially and emotionally. Of the twelve or so voices heard in the documentary, at least five have now emigrated. But the question of emigration is a race against time. In order to leave Greece, you need money to pay for your trip as well as some savings to live on once you are abroad. Those people brave enough not to leave Greece right away see their savings dwindle along with their hopes of ever getting away. The longer they hesitate the greater the chances that they won’t make it at all.
But almost a year has passed since my trip to Greece and I’m no longer able to fully appreciate what it feels like to live there right now. Words can only convey a vague notion of what it means to see your life turned upside down as your country collapses. I realized this during the three weeks I spent there last year. It has to be experienced to be truly understood. One year after the trip, it all became again a bit abstract to me. I am aware of the latest developments but can still only have a vague sense of what is happening as I try to recall how it felt. Only the Greeks really know what it feels like.
On the other hand, people in Spain or Portugal may probably understand what it means, as austerity there too continues to take its toll1. Over the past months I’ve spoken to people who have family in these countries and I’ve had some feedback on the situation there. I’ve heard reports of the growing number of friends or relatives who have almost hit rock bottom. People feel a sense of doom, are on the verge of despair, and fear the next package of measures could have devastating consequences….
What we are seeing, with a delay of about twelve months, is a repetition of the same familiar pattern. The vicious circle of “austerity->lower consumption->higher unemployment->lower state revenue->higher debts->even more austerity” is there too fully operational.
The powers of destruction of this mechanism have now been proved by a whole series of examples: in just a year, unemployment has risen from 13.7% to 16.3% in Portugal, from 22.7% to 26.2% in Spain and from 8,8% to 11,1% in Italy. Growth is collapsing and the debt is soaring. The Troika and Merkel’s government denounce the bail-out countries for their half-hearted attempts to implement austerity measures. But what could be more tangible proof that the measures are being applied than the dramatic rise in the rate of unemployment?
The individual life stories we heard in Greece last winter are being played out today in an infinite number of variations; in Spain and Portugal but even in Italy or France.
In the last two and a half years, we have gathered sufficient evidence to know that the governing system in Europe, under the influence of neo-liberal doctrine, has lost all sense of how dangerous its economic program is. The neo-liberal ideology deliberately and conscientiously neglects the social factor, not by omission but for reasons of theoretic principle. The problem is that any analysis based on economic theory alone forgets that this theory is directly linked to other factors, not least the lives of millions of human beings.
It would be fair to say, then, that the present political system is simply not aware of the actual consequences of its actions. If this doesn’t change, there can be no hope of current policies being called into question.
We still haven’t talked about the European Central Bank (ECB). This institution has absolute powers in the euro zone. And yet it claims to be a “politically independent” and “technocratic” body, and thus refrained from doing anything to help countries with excessive debts when the crisis hit them. However, two decisions were taken in 2012 which proved beyond a doubt that the ECB really does have infinite powers and can use them at will. First of all, in January 2012, when the “markets” were again in grave danger as a result of the European crisis, the ECB issued 1000 billion Euros worth of long-term loans at very low interest rates in order to “support” the banking sector (LTRO or Long term refinancing operation). Then, in September, having refused to do so for two years, and thereby causing Greece to plunge further and further into crisis, along with Portugal, Ireland, Spain and Italy, it agreed to purchase, if necessary, unlimited quantities of sovereign bonds from these countries, thus avoiding, in theory, any speculation on their debt. This just clearly shows that, whatever its official position may be, the ECB is extremely powerful and is able to wield enormous political pressure by choosing to use its powers as and when it sees fit.
In the midst of this spiral of events, how can a documentary like “Chronicles of a European Winter” be useful? Initially, the idea was to explore the psychology of the crisis, country by country. But the conclusions of the first part in Greece are patently evident : we would no doubt find similar personal tragedies in Portugal and Spain. Is it really necessary to collect yet more tales of depression and despair?
So what’s next? Another thing the project set out to do was to look into positive initiatives that might emerge from this social upheaval. Unfortunately, people we met had very little to say about that. But if such initiatives do exist, and hopefully they do, maybe we should make more of an effort to find them. Then we could tell those stories too.
1: We are not forgetting Ireland, but it is something of a special case. After a tremendous shock in 2008/2009, austerity measures have taken their toll but the subsequent decline has been much slower. There are two factors which may explain this resilience. First of all, Ireland’s privileged partnership with the US, which has been in far less dire straits than Europe for the past two years, and, secondly, its notorious and controversial corporate tax law (a corporate tax rate of 12.5% as compared to the EU average of 25.7%) which gives Ireland a clear advantage in terms of minimizing the damage caused by austerity, by keeping a high level of corporate business at home.
Chronicles of a European Winter, a documentary series about austerity in Europe.
Watch on : eurowinter.wordpress.com
To go back to the summary, click here.