Greece Starts Its Fire Sale of State Assets
The deal to raise the US debt ceiling will reduce spending and slash budgets to programs. The austerity measures Greek Parliament (Vouli) voted on are far more draconian, as Greece is in a far more desperate situation.
Greeks face job loss, pension cuts and tax increases at the end of June: 20 percent of public sectors will lose their jobs in the next four years and those who still have a job face a 30 percent reduction in their salary. But that’s not the only way the country is seeking to pay its 350 billion euros of debt (about $498 billion), which is 150 percent of its GDP. With the country now “dependent on international handouts to pay public wages and pensions,” Prime Minister George Papandreou is charged with taking apart a “bloated public sector” created by his father, Andreas, in the 1980s. Greece has started a “fire sale of state assets” including the post office, the ports of Athens and Thessaloniki and utilities companies; if it is not able to privatize some of these properties, the country will not qualify for another trance of aid from the euro zone and the International Monetary Fund. The country hopes to raise 50 billion euros by 2015.
Finance minister Evangelos Venizelos 1.7 billion euros by the end of September and 5 billion euros by the end of the year, quite a bit to raise in such a short time (it is the second of August). The fear is that many properties will end up in the hands of those few able to buy them quickly, says the Guardian:
The appearance of For Sale and For Rent signs on everything from former Olympic venues to island locales, casinos, marinas and airports, has been met with unexpected acceptance by Greeks long weaned on state largesse. A growing majority appears to agree it is the only way of arresting soaring unemployment by attracting foreign investment. Experts estimate Athens could own around 300 billion euros worth of state property, almost as much as the total Greek debt.
“There has definitely been a shift in mood,” said Stefanos Manos, a former national economy minister in a centre-right government. “But that could easily change. It is very clear that the government is only doing this under great duress from [our] international creditors,” he said.
“With timetables being so pressing, I worry that the whole process is very ill-prepared. If it there is not enough transparency we may end up like Russia, where only a cast of oligarchs end up benefiting.”
Many Greeks are withdrawing their savings from banks and stowing them away elsewhere (overseas or under the mattress).
With the government running on emergency loans and taking orders from the IMF and European finance ministers about how to run its economy, things in Athens are looking more as they did in Buenos Aires in previous decades. In the Guardian, Christos Papatheodorou at the Democritus University of Thrace in the north, says that Greece, one of the poorest and most unequal societies in Europe, is now going to look more like a developing country:
That message has not been lost on workers either: one of the new nouns used by trade union members and others who oppose the cuts is kinezopeisi, or China-isation. The claim is that such large drops in wages will lead to a workforce paid barely more than their counterparts in Shenzhen.
Unemployment is 16 percent in Greece, and all-time high; it’s even higher for those in their twenties.
Distrust of the political class has only grown in Greece. The Guardian reports that people are refusing to pay road tolls, bus tickets and extra charges at the doctors. Organizers of the “We Won’t Pay” movement argue that “breaking the law by not paying small tolls or bus fares is far less serious than corrupt politicians and cartels which … ran Greece for decades with impunity,” according to civil engineer Nikos Noulas in Thessaloniki, Greece’s second-largest city:
The road-toll protest movement began more than two years ago outside Athens to counter what is seen as an extortionate and corrupt road toll system, with drivers expected to pay for stretches of road that have yet to be built. Some residents face paying more than 1,500/euros a year in tolls to get around their own neighbourhoods.
By the start of this year, the movement was flourishing and included refusals to pay for Athens metro tickets, with protesters covering ticket machines with plastic bags, as well as a long-running bus fare boycott in Thessaloniki after price rises by state-subsidised private firms. Others refuse to pay their TV licences.
Leftwing parties became involved, boosting the campaign’s visibility. By March, more than half of the Greek population supported the “We Won’t Pay” notion. The government heaped criticism on what it deemed an irresponsible “freeloader” mentality, warning that the non-payers would bring the country into disrepute and were starving the state of vital revenue from transport services. New laws were brought in on ticket evasion and police cracked down.
Other “Indignants” have continued to protest at the White Tower, a symbol of Thessaloniki, on its waterfront; the tower is surrounded by protest tents and draped in banners that say “For Sale,” in reference to the government’s plans to sell state assets. The “We Won’t Pay Movement” is a way for people who are understandably fed up to make their voices heard and reveals a deep division in Greek society. In a country that for years imported BMWs and exported tomatos, the debt crisis suggests that there’s a greater societal crisis already underway and changes need to be made at all levels.
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Photo of Thessaloniki's White Tower taken in March, before the protests, by the author