Anti-Austerity Government Celebrates Austerity Measures

Alexis Tsipras and his cabinet always find something to celebrate. From unfinished highways and under-equipped hospitals they inaugurate with aplomb worthy of banana republic dictators, to paltry handouts to pensioners after they had them drained with pension cuts. Oblivious to the damage the delay caused because it brought uncertainty in the market.

The SYRIZA-ANEL administration celebrated the fact that they achieved high primary surpluses when in fact they didn’t pay state debts to private suppliers and service providers. Like not paying your bills and boasting about having a few extra hundred in your wallet. In other words, they didn’t infuse any liquidity to the real economy, which is dying the slow death of recession. They celebrate that state coffers are filling with tax money after threatening debtors to the State with confiscation of their property. And this continuous bloodsucking not only kills the economy, it also generates social disgruntlement, turning more people against the State.

The party that won the elections riding the anti-austerity wagon, now sign for austerity measures… to end austerity, as they claim. More taxes, deep pension cuts, the tax-free threshold went down to 5,681 euros, and Tsipras and company celebrate because, as they claim, their brave negotiations prevented 42 times more fiscal measures(!) One wonders how Tsipras came up with this number. Probably with the same ease with which he said that he will abolish the single property tax and raise minimum wage to 751 euros (586 euros now).

What the Greek government neglects to say is that after a delay of six months what they truly managed was to bring new measures for 2019 and 2020, when the current bailout program ends in August 2018. So, essentially, they bring a fourth memorandum; another thing they so defiantly said they would abolish. One remembers the repeated pledge of SYRIZA officials that “no measures will be taken beyond the current bailout program.” This is phenomenal: politicians present their failures as successes. They claim that the 3.6 billion euros in austerity measures on the backs of Greek people are the product of great negotiating because creditors wanted more. And not one has the common decency to admit that no extra measures would be needed if the government had simply implemented the things they agreed to in July 2015.

The measures for 2019 and 2020 have something very Greek about them. The ease with which the government agreed to them shows the typical Greek thinking of “who knows if we will be alive tomorrow.” Maybe Tsipras wants to leave some austerity as heritage to the next government.

Furthermore, next week party MPs will vote for the new austerity measures without having any guarantee of what the medium-term debt relief measures will be. And debt relief in exchange of measures was Tsipras’ motto all along, to the point it became an annoying mantra.

As for the “countermeasures” they so proudly talk about, they defy logic. They say the measures they will take will have no impact on society because they will be counterbalanced by the countermeasures. How is it possible that cutting two months worth of pensions each year “has no impact on society”? Will the pensioner who loses two pensions be happy because some families will get rent subsidies? Or will a person who sees his hard-earned money go to exorbitant taxes so that more kids will get lunch at school? This is what the supposed countermeasures are: more welfare handouts. A look at the countermeasures shows a government that believes that giving the occasional handout helps society and buys some votes. Rent subsidies or childcare subsidies, or small property tax reductions do not exactly enhance growth; they are one-off handouts that give Greeks the idea that they live in a nation of poor people waiting for the State to give them the occasional free lunch and nothing more.

Also, they neglect to say that the countermeasures will only apply if they achieve high primary surpluses (3.5%). Analysts say that Greece cannot achieve such surpluses for years in a row. But then again, who knows if we will be alive tomorrow.