A Thin Veil for Greece in 2014



Greek EU Presidency

As if Greece didn’t have enough trouble as Jan. 1 loomed – the seventh consecutive year of a deep recession – Prime Minister Antonis Samaras’ uneasy coalition of his New Democracy Conservatives and the PASOK Socialists, who are clinging to a three-vote majority, now are saddled with the symbolic, powerless, rotating six-month European Union Presidency, a venture that will cost the strapped country 50 million euros ($68.9 million) to host events of insignificance.

Samaras finished the year 2013 with buckled knees but a brave face, insisting that 2014 will be the beginning of the end of an economic crisis that has been worsened by 3 1/2 years of harsh austerity measures insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) whose twin-bailouts totaling $325 billion will run out.

The lenders demands for big pay cuts, tax hikes and slashed pensions created record unemployment and deep poverty so bad that a recent survey found more than half of Greeks – to go along with an earlier survey that said seven in 10 of those under 25 – would like to flee their homeland in search of either a job or better life, or both, in some other country.

Samaras and his Finance Minister Yannis Stournaras, said what will make this year different from the past few is that for the first time in a decade the country will hit a primary surplus – not counting interest on debt, city and town budgets, municipal and state enterprises, social security and some military expenditures – which otherwise would show a big deficit.

But still, a primary surplus means Greece can technically ask the Troika for debt relief, a code phrase which means the government doesn’t want to pay back all that it owes as many analysts say there’s not enough revenues coming in to do that anyway.

A previous administration led by PASOK, whose current leader Evangelos Venizelos served as finance minister, stiffed investors for 74 percent losses and the IMF and German Chancellor Angela Merkel, whose country is putting up much of the loan money, say they’ll have none of that, thank you, and won’t allow it.

Venizelos is now Deputy Premier/Foreign Minister in Samaras’ coalition, a reward for supporting austerity and agreeing to lift a ban on foreclosures that PASOK put in place two years ago to help people who couldn’t pay their mortgages because austerity has taken away nearly half their disposable income.

Critics say that Samaras and Stournaras are masters of disguise and wearing prosopeia, the masks worn in ancient Greek theater, although it may seem more like a thinly-veiled hope they can demonstrate things aren’t as bad as they seem – or that they are but spinning hope instead of Jimmy Carter-like malaise will somehow lift Greece out of its morass by sheer will.

The math is still against Greece, as one of the doomsayers, economic blogger Mish Shedlock wrote. Noting that 41 of New Democracy’s 126 Members of Parliament put up some feeble and quickly-crushed resistance when they asked Samaras to lower the heating oil tax so people wouldn’t freeze, Shedlock wrote, “The mutiny of the conservatives is just the penultimate chapter of an intestine, economic, but with clear political implications, the result of six years of recession and unfathomable weariness of citizenship to the endless cuts crisis.

  • 27.4% unemployment (nearly 52% among those under 24 years)
  • 3.8 million Greeks living in poverty or social exclusion in 2012 (400,000 more than the previous year)
  • 350,000 households without electricity for non-payment bills
  • 30% of the population have no access to public health care
  • Virtual paralysis of the universities, which since September run almost unattended by the dismissal of officials
  • Three killed by asphyxiation because of home fires for warmth
  • Four out of five blocks of flats facing the winter without heating due to inability to afford it
  • 21 continuous quarters recession
  • 34.6% of the Greek population at risk of poverty or social exclusion

Beyond the numbers though, Samaras and Stournaras are pinning their hopes on holding down social unrest and hoping that the decision to lift the foreclosure ban won’t wind up tossing people on the streets to join the growing queue of homeless and that Venizelos can keep his seat and squash talk of a challenger as party loyalists are upset he has taken them to new depths of only 5 percent standing the polls.

Beyond the economy, there’s politics for the ruling parties to worry about as well. Major opposition Coalition of the Radical Left (SYRIZA) leader Alexis Tspiras noted the irony that the European Parliament elections will be held during Greece’s EU Presidency tenure, in May, and that he believes they will be repudiated and his party will come to power.

If so, that could be even more problematic as Tsipiras’ plan is to stiff the Troika and not pay back the loans, although that would also leave Greece locked out of the markets and without access to borrowing money from anyone and without enough revenues to run the government.

Despite that, even if Greece is broke, Tsipras promised to restore salaries and pensions, lower taxes and hire back everyone that’s going to be fired. He didn’t explain where the money would come from, but his critics said he’d leave Greece holding the bag and bankrupt to boot.

Samaras insists his government will last its term and the next elections will be as scheduled in 2016, but a lot of that will depend on whether the center can hold and the extremists can’t; if the economy recovers or stays stagnant or freefalls; if he brings jobs or more false promises.

And, of course, there is the constant specter of the neo-Nazi Golden Dawn party, whose leaders have been locked up pending trial on charges of operating a criminal gang. The extremists are the third most popular party and after falling in the wake of the murder of an anti-fascist hip-hop artist for which a member was blamed, they are on a bit of a rebound.

If Samaras fails to dismantle the Golden Dawners, it could provoke further political unrest and leave him with eggs on his face, and all over that thin veil.