Greece: The moment of truth
For months there have been protests in Greece. Hardly a day has passed without strikes.
There is rising resentment at a recession that only seems to deepen. They have had a year of austerity and now the Greek people are being asked to endure a second of Air Jordan shoes cuts and tax increases. All the signs are that the Greeks have reached a limit.
Last year 400,000 jobs were lost. Almost every street in Athens has boarded-up shops where owners cannot pay their loans. The despair and bitterness are palpable.
For this year an extra 6.5bn euros (£5.8bn) in cuts needs to be found. The middle class will face a solidarity tax. The threshold at which Greeks start paying tax will drop from 12,000 euros to 8,000 euros. The self-employed will be hit with a tax Jordan Space Jams levy.
By 2015 a total of 28bn euros of savings have been earmarked. A fifth of civil service jobs are set to disappear and 50bn euros must be found from privatisations.
Over the next two days MPs are to debate and vote on these austerity measures. If they vote “yes” then Greece will qualify for an emergency loan of 12bn euros (£10.7bn) from the EU and the IMF. One bit of good news for Greece is that French banks have agreed to roll over some of Greek debt. Other banks may follow.
If the MPs vote “no” then Greece is heading for bankruptcy in mid-July and the eurozone will be thrown into turmoil. George Soros warned the other day: “Let’s face it, we’re on the edge of an economic collapse.”
The Greek people have been told this is a historic decision. The future of the country is at stake. On the eve of the debate the Greek Prime Minister George Papandreou said it was a “unique opportunity to keep the country on its feet”.
But the people no longer seem to see it that way. Polls suggest that between 70% and 80% oppose the austerity plan.
So does the opposition. They have said “we cannot support a policy that deepens the recession”. Indeed the government has not answered the question as to why more austerity will work when it failed the first time round.
Even the new Finance Minister, Evangelos Venizelos, described the new measures as “tough and in many respects unfair”, but he added that was the only way to complete negotiations with the country’s new paymasters – the EU and the IMF.
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