Greece : one more year and nothing new

“So far so good…”

This article is the second 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 :

Unemployment in Greece :

Year Troïka Forecast in September 2010 : Reality :
2010 11,80% 14,40%
2011 14,60% 21,20%
2012 14,80% 26,10%

Economic growth in Greece (GDP) :

Year Troïka Forecast in September 2010 : Reality :
2010 -4,00% -4,90%
2011 -2,60% -7,10%
2012 +1,10% -6,40%


It’s been almost a year since the first episodes of the “Chronicles of a European Winter” were recorded in Athens. That was December 2011.

Though a lot has happened, in essence nothing has really changed and Greece has simply been in economic and social free fall ever since.

The people I interviewed in December of last year told me that, for them, the tipping point was the summer of 2011, when suddenly everything was in flux and society really began to unravel.

I have not been back to Athens since then, but I have kept in contact with enough people to know that the situation today is far worse. We’re not talking about 17% but 25% unemployed, and by the end of 2012, GDP will have dropped by over 20%. This is worse than Argentina’s bankruptcy in 2001 and more or less on a par with the Great Depression in the US and Germany in the 1930s.

Racism and violence have escalated. Physical attacks on immigrants are on the increase. Present government has been organizing so-called “sweep” operations in Athens city centre to round up legal and illegal migrants for “sorting” (6000 people were detained in one weekend, on August 6, 2012, and 1400 of these were classed as illegal). ”Economic” or “political” suicides have become so frequent they no longer make the headlines. Poverty is spreading fast and people are hoarding firewood for the winter before a run on stocks makes it as expensive as heating oil. Maybe it’s true that a person can get used to any situation, if given enough time.

And yet so much has happened in just one year. For one, the famous “haircut deal” agreed with the banks in February 2012 to reduce the debt. The saga dragged on for weeks while the media extolled the kindness of the private creditors who finally agreed to write off 70% of their loans to Greece. How very generous of them.

Just before that, in December 2011, Greece’s debt- to-GDP ratio was 170%. Why then, after this generous concession that was given so much attention by the media, did the Greek government announce in November 2012 that the debt-to-GDP ratio was expected to reach 189% in 2013? The mind boggles. Could this deal be more “subtle” that what was announced? Check for more information at :

Then there was the highlight of the year : general elections were held to replace the unelected interim government of Lucas Papademos. These elections were meant to take place in February 2012 but were postponed several times until the date was finally set for May 6, 2012. The Greeks, who felt robbed of their democratic rights under the Papademos government, threw themselves heart and soul into these elections. For the first time since the crisis began, they would be able to express themselves as a democratic nation.

The saga dragged on for yet another two months. A second election had to be called on June 17th, as the first one ended in deadlock with none of the parties in parliament able to form a coalition government. The political battle was fought out between the conservative New Democracy (ND) party, in favour of austerity measures, and the Union of the Radical Left, SYRIZA,who were calling for a renegotiation of the conditions of the bail-out package. The key issue in this election campaign was, of course, the economy, but it was also marked by a violent and poisonous obsession with the problems surrounding Greece’s illegal immigrants.

SYRIZA’s radical proposal to renegotiate all the terms of the Memorandum of Understanding for the European bail-out deal may or may not have been realistic, but it was a symbolic attempt to call into question current European policies and to tackle head-on the debate on austerity in Europe. The ND party played on people’s anxieties and the fear of Armageddon if Greece dared to stand up to its creditors. After a very close campaign with half the polls showing SYRIZA in the lead, ND won by a narrow margin (29.66%, compared to 26.89% for SYRIZA).

One thing that had quite an impact during the campaign was the statement by Francois Hollande, speaking to Greece’s main private TV channel just three days before the June elections. In an interview broadcast on prime time TV and reported widely in the press, he called on the Greek people to vote responsibly for the party that would honor its commitments to the Troika. He implicitly called on the Greeks to vote for the right-wing ND party and against the left-wing SYRIZA. Knowing the respect many Greeks feel for French politicians, it is more than likely that some people were influenced by what he said. This is the first case of outside political interference in elections since the end of the dictatorship in 1974.

After the ND victory, the summer went by in silent resignation. The new government promised that it would try and stand up to the Troika in the new round of fiscal negotiations. But in October 2012 a whole new set of austerity measures was added to those already in place, in preparation for the 2013 budget. Strangely enough, there has been a change of tone in the last few months in the official statements from Troika representatives: compassion, understanding, and sometimes even admission of error. But in practice, there have been no changes in policies in Greece or elsewhere in Europe. Wages and benefits have been slashed again, working hours have increased, the age for retirement has been raised. The acceptation on this new austerity package will be difficult. People have had enough, they have been pushed to the limit, psychologically and physically. If Europe doesn’t sit up and take notice, there is no knowing how the Greek “guinea-pig” will react.

Finally, just a few more precisions about the reminder of the aims of the Troika*, presented at the beginning of this article. The table below shows the actual trends in terms of employment and growth in Greece and compares them with the forecasts made by the IMF when it presented its first progress report in Greece in September 2010. These projections were used as a working basis by the Troika when drawing up their austerity programs. It is astonishing that such a huge margin of error after two years of austerity did not raise doubts as to the effectiveness of these measures. In spite of these disastrous results, the experiment has continued and austerity has become the medicine dished out to the majority of European countries: Portugal, Ireland, Spain, Italy, France…

*(International Monetary Fund, European Central Bank and European Commission)

Unemployment :

Year Troïka Forecast in September 2010 : Reality :
2010 11,80% 14,40%
2011 14,60% 21,20%
2012 14,80% 26,10%

Economic growth (GDP) :

Year Troïka Forecast in September 2010 : Reality :
2010 -4,00% -4,90%
2011 -2,60% -7,10%
2012 +1,10% -6,40%

Data : IMF Country Report No. 10/286 , Septembre 2010 “Greece: First Review Under the Stand-By Arrangement” ; Eurostat.

Chronicles of a European Winter, a documentary series about austerity in Europe.
Watch on :
November, 2012

To go to the next article : click here.

To go back to the summary, click here.


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