Bank-imposed Greek economic collapse and austerity policies have resulted in social and political as well as economic impacts that may foreshadow what the rest of the so-called developed world can expect.
In August 2012, the unemployment rate in Greece was 23.1 percent, with over 1 million people out of work. Fifty-five percent of Greek youth aged 15-24 are out of work. Nikolaos Tsangos, an unemployed student in North Heraklion, says, "Every day is harder and the things the troika are doing are making it worse. People don't have money to buy food or anything, so businesses are out of jobs every day. In my family we've decreased the amount of our weekly supermarket shopping by about 50 percent."
"The first visual sign of the crisis is traffic. There are no cars in the streets. Big avenues and streets in Athens are empty, when two years ago traffic jams were a huge problem," relates Katia, a self-employed woman from Athens (who prefers her real name not be used).
Niki Kerameus, a lawyer in Athens, explains that as one strolls through Athens, "On the most commercial and expensive streets, one-fourth of the stores are closed down." You can sense the crisis on a social level as well; as Kerameus indicates, "People don't go out anymore." Kerameus adds: "Even in the richest neighborhoods, you see people going through garbage. Begging is very common, and it didn't used to be that way. A large section of the middle class with steady jobs and houses are now lining up at soup kitchens. Often you see people dressed for work in suits in line to receive food."
In late 2009, the people of Greece learned that their government had "falsified budget figures, concealing a swollen debt that was growing rapidly in the wake of the global economic meltdown." Its foreign lenders, the "troika," consisting of the European Commission, European Central Bank (ECB) and the International Monetary Fund (IMF), have supplied Greece with loans, ostensibly to help the country weather the crisis. However, the funds mostly cover only the interest on the country's massive debt. Meanwhile, the troika has provided the loans on condition that the country enforce harsh austerity measures. Greece is now on the verge of a humanitarian crisis and its people have been re-discovering community-oriented values and taking their frustrations to the streets.
The economic crisis in Greece is encouraging new values among the Greek people. Kerameus has started an NGO with friend called Desmos, which helps match donated goods with people who need them the most. Kerameus and her friends had studied and worked in the United States, where they became exposed to volunteering. They felt they had to help people weather the crisis in Greece. "The culture of volunteering is not so much in the generation of young people in their 20s to 40s in Greece right now," Kerameus explains. She was particularly impressed by an NGO in New York City, called City Harvest, which organizes trucks to pick up leftover food from restaurants and deliver it to shelters.
In addition to the value of volunteerism, Greeks are experimenting with taking control of their local economies through grassroots activism. Consider the "potato movement," for example. "The seminal event of the movement was a free distribution of more than ten tons of spuds in the center of Greece's northern metropolis, Thessaloniki," reported Al Jazeera's John Psaropoulos. The farmers involved in the distribution were "protesting against imports of Egyptian potatoes - while they had barns full of the Greek product - after a meeting between the agriculture minister and potato importers days earlier failed to yield any concessions."
Greek protests have become legendary. There is an entire Wikipedia page dedicated to the protests, which began on May 5 in 2010, against plans to cut public spending and raise taxes. Some of the protests have turned violent, with accusations of police brutality being reported by several international media and other organizations. The Greeks I spoke with mainly supported the protests, though they expressed concerns about violence.
Katia observes, "I never participated in protests because I always know the outcome. After a while, some people with masks or helmets come along with bats and stones, and general beating and burning of the Athens center will begin."
"This is something that happens since the mid 80s," said Katia. "So, most people, due to this, don't participate. In the last two years, though, there have been proof that these groups work with the police. Plenty of pictures with them and police task forces came on the Internet. We always had in the back of our minds that they had something to do with the government, because they always showed up at the most convenient moment for the government."
Tsangos, the out-of-work student, relates: "I went into the movement of aganaktismenoi (frustrated people) in Athens, though the movement did not fully express my ideology. I think politicians don't give a shit about if the people is hungry or protest in millions."
Of the protesters, he said: "I feel they are doing the right thing, but I don't think it's working. Because, as I say, politicians just don't care about the people. Especially the two big parties."
The phrase "two big parties" should resonate with Americans. Indeed, the situation in Greece parallels and intersects the economic and political situation in America.
At an Occupy San Francisco rally for solidarity with Greece on February 17, 2012, "a speaker from Greece, Maria, stood with a megaphone describing the economic tragedy that is unfolding for the Greek people," Beth Seligman reported on the Occupy SF web site.
"Children are fainting in schools due to lack of food," said Maria. "This austerity package sets up the country for privatization where the people will have to sell off their water, their sewage, their telecommunications and their natural resources which includes coal and oil. It will lead to the country's resources being pillaged."
John Perkins, author of "Confessions of an Economic Hit Man," explains on The Huffington Post:
Greece has been struck by economic hit men.... The Greek people were not the ones who agreed to accept these debts and for the most part they did not benefit from them; yet they will be burdened for years to come because they were hoodwinked by the international banking community and their own corrupt leaders.... In my books, I write about how world economics and politics today are controlled by a very few people - the corporatocracy. This is clearly demonstrated by the fact that whenever "debt restructuring" or "debt forgiveness" deals are struck they include privatizing parts of the economy that were previously considered public. Utilities, schools, prisons, even significant parts of the military are sold to multinational corps.
Consider the fact that Goldman Sachs helped the Greek government, according to a New York Times report, "quietly borrow billions of dollars" in a deal which was "hidden from public view because it was treated as a currency trade rather than a loan" and "helped Athens to meet Europe's deficit rules while continuing to spend beyond its means." And "in dozens of deals across the Continent, banks provided cash up-front in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come."
In the United States, the Federal Reserve has provided secret bailout funds to banks. As a result of a historic first audit of the privately owned Federal Reserve, conducted thanks to Sen. Bernie Sanders' (I-Vermont) amendment to the Wall Street reform law, "We now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."
In America, austerity is being applied through cuts to public services, such as libraries, schools and post offices; state and city employee layoffs; and increased taxes. According to Ben Polak and Peter K. Schott, economists at Yale University, the United States has seen "unprecedented austerity at the level of state and local governments, and this austerity has slowed the job recovery."
Charalambos Petrakis, a self-employed English tutor, says, "Pensions have been reduced dramatically, most drugstores are closed and small businesses are closing."
"Pharmaceutical companies are not delivering drugs, and many people are dying from cancer and diabetes. Tourism has decreased and young people are leaving. People can stay alive, but we don't have any prospects," said Petrakis. "Austerity aggravates the situation. Without economic development, we can't pay back the banks or establish an economic foundation. The same thing is happening in Portugal, Spain, Cyprus, and Italy."
Pete Petrou, a self-employed English teacher, warns: "Sooner or later, other countries will face the results of a political system who produced consumers for its own good and the final result will be a general collapse, a humanitarian crisis. I hope this will not lead the world to war like it has happened in the past in similar circumstances."