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).
Photo of Thessaloniki's White Tower taken in March, before the protests, by the author
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