N.Y. Times Says Greece Drank Hemlock

In a scorching editorial, the New York Times has declared that the new $17.45 billion spending cut and tax hike plan narrowly approved by the Greek Parliament was a bow to international lenders who demanded austerity the newspaper said was a disaster that will fail.
Noting the deep cuts in social services, pensions, salaries, benefits and tax hikes imposed on workers, pensioners and the poor on the orders of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) in return for bailouts – and how a second rescue package of $173 billion was being held over Greece’s head until it complied – the Times wrote the Parliament had no choice but that the measures wouldn’t work.
The editorial, under the headline Greece Drinks the Hemlock, noted that, “No responsible Greek lawmaker could have ignored the terrible consequences of voting no. But no one can dismiss the threat to social stability from these cuts. Even Prime Minister Antonis Samaras, who fought hard to push the package through Parliament, characterized the cuts it imposed as “unfair.’”
But then the piece delivered a killing blow, stating that: “The fact is, just about everything in this austerity package has been tried before and failed disastrously. These unpalatable steps will do nothing to make Greece’s debts more payable, bring its budgets closer to balance or help make the structural reforms Greece needs to revive its economy. Instead they will almost certainly further shrink an economy that has already shrunk by an astounding 25 percent over the past few years, making fiscal improvement nearly impossible.”
Austerity was supposed to reduce Greece ratio of debt to gross domestic product (GDP) but it has gotten worse and the new austerity package is expected to further shrink the economy as much as 9 percent, as unemployment has hit 25.1 percent – 58 percent for those under 25.
Worse, the additional pay cuts and tax hikes will further shut down consumer demand on top of a burden so unbearable that Greeks have been unable to pay $13 billion in taxes this year – including doubled income and property taxes. More than 68,000 businesses have closed and scores of thousands more are expected to fail as Greeks stop spending.
The package also eliminated what’s left of holiday bonuses – five weeks before Christmas, the last hope for many retailers to save their businesses. “Greece cannot pay off its debts when it is shutting down its economy. It has to put people back to work. The only way forward is through more debt write-offs and more low-interest European loans, as well as by opening up restricted job markets,” the Times noted, adding that: “Imposing new fuel taxes and health care charges will hurt ordinary people and make a tax system that is scandalously unfair even more so.”
The editorial pointed out that Greeks have lost confidence in their political leaders and a system “they feel has failed to protect them from economic ruin. Greek lawmakers know this but feel compelled to do as their European creditors ask. And, we suspect, many of those creditors also know that more austerity is not the answer.”
It said the villain was, as many Greeks have already blamed, German Chancellor Angela Merkel for insisting on unrelenting austerity in return for the support of her country, the biggest contributor to the bailouts and who the paper said “continues to believe that only economic punishment will push Greeks to reform. It may be a winning political formula in Germany, where Ms. Merkel stands for re-election next year. But it is a profound, and profoundly unnecessary, tragedy for Greece. “