Germany Seeks Austerity Advice from Greece

German Chancellor Angela Merkel is not welcome in Athens
German Chancellor Angela Merkel is not welcome in Athens

Even as German Chancellor Angela Merkel continues to pound for pay cuts tax hikes and slashed pensions as the answer to Greece’s economic problems, some German officials are planning to visit Athens to find out how the austerity she has backed is working.

Some 35 German Parliamentarians and other officials are scheduled to come to the capital to study the effects of austerity as Germany, the biggest lender to Greece through the European Union-International Monetary Fund-European Central Bank Troika bailouts, is starting to have problems with its economy, the biggest in Europe.

They’ll probably not meet the kind of vociferous protests as Merkel did when she came to meet Prime Minister Antonis Samaras last October, a visit which set off chaos in the streets with many Greeks blaming her for backing the measures that have pushed 20 percent of them into poverty.

Many Germans have ridiculed Greeks as lazy and for having spendthrift ways, but Greece has been under austerity for nearly three years, affecting most of the populace except for the rich, politicians and tax evaders.

What’s prompting the trip is that a debt crisis is burgeoning in Germany, the European Union’s biggest economy. Since 1990, Berlin’s debt has risen 500 percent, to $84 billion. Germany’s 15 other states contributed some $4.4 billion to the city in 2012 in an attempt to help it balance its budget.

While Greeks have protested, gone on strike and rioted, the austerity measures have had some significant effect, although they’ve also backfired in other ways, cutting Greek disposable income so much that spending has been slowed almost to a standstill. That has reduced expected tax revenues instead of increasing them and caused a record 26.8 percent unemployment.

Still, Greece’s deficit has fallen from 15.4 percent in 2009 to 8.2 percent of Gross Domestic Product. The German news magazine Der Spiegel said German officials want to learn more about how that was accomplished.

They may be in for a surprise when they visit Athens and see 25 percent of the stores boarded up on some major commercial streets, beggars and homeless and squatters and all the signs of a deep recession, the human costs beyond the numbers.