With 36.3% of the vote, and two seats short of an overall majority in Greece’s 300-member legislature, the Leftist Syriza party, previously – and still formally – a loose coalition of radical leftists and green movements, has taken power in the country.
Although governing with a relatively tiny centre-right party – which is also anti-austerity – the elevation of what used to be a far-left party on the fringes, to Government office within the space of six years, in one of the Eurozone’s worst-suffering members, has sent shockwaves across Europe.
It was obvious to see that many of the established governments of Europe welcomed Syriza’s elevation to office through gritted teeth. In particular, in Germany, where they dismiss the call of the now-governing party of Greece to write down some of the country’s hugely unsustainable levels of debt – over 170% of the country’s GDP – and ending the program of crippling austerity that has caused much suffering in Greece.
I hope to tackle some misconceptions about Greece; it gets very tiring to have to hear about how “all” Greek tax-dodge, or how the previous Greek governments didn’t impose austerity in the country properly.
Yes, it is correct that tax-evasion is a huge problem in the country – however, it is mainly a problem within the upper echelons of Greek society, and a problem that Syriza is determined to tackle, appointing a minister whose sole task is to tackle this widespread tax evasion and corruption. Neither of the previous recession-era governments Greece had dared to even touch the problem.
However, they did not mind imposing harsh austerity measures – and no, this is not at all hyperbolic. Public spending is now 20% lower than it used to be – and was cut even further than the Troika-mandated programme insisted on.
The effects are clear to see – the Troika (consisting of the EU, the ECB and the IMF) originally thought that unemployment levels would rise from 9.4 per cent in 2009 to almost 15 per cent in 2012, falling back down quickly afterward as the country’s recession ends in 2011.
Now, even if that projection was correct, that would have been bad enough. In fact, it was a lot worse than that – unemployment levels reached 28% by 2014, and the recession worsened from 2011.
Like in Ireland, there is a slight recovery, but due to the country’s stagnation, few ordinary people would feel it’s effects. Also like Ireland, the people most responsible for the crisis – incompetent Greek Governments who “cooked the books”, financial speculators, etc. – got off relatively light, while ordinary people, who arguably had little to do with causing the mess, was burdened with the full cost of the incompetence of the political/financial elite.
So, could you really blame the people of Greece, if warnings of “Economic Disaster” by electing Syriza ring a little hollow to them?
You might then ask how countries like Ireland and Germany had managed to impose “austerity policies”, and yet still attain economic growth. Mainly because, when Germany did it in the early 2000’s, there was a worldwide boom, which offered much opportunities for Germany’s now famous exporting-machine of industry, and that offset the domestic contractions that took place.
Similarly, in Ireland – thanks to a disproportional amount of Multinational corporations – we are also a hugely export-driven economy. Since the majority of our trade is still with the UK and the US, which are doing relatively better that the Eurozone economically at the minute, our overall economy can still grow as our government imposes fiscal austerity.
However, despite the huge numbers employed by Multinationals, many of us simply don’t observe much improvement, because Multinational companies only cluster in relatively few areas across the country. That is why our “recovery“ is notable. It’s two-tiered – unless you work in, or piggyback of from, a Multinational, the recovery doesn’t really apply to you.
Greece, on the other hand, has neither a history of Industrial development akin to Germany, nor can it really afford to do what Ireland does in order to attract Multinational companies. It’s main “export” is tourism, and since the rest of the world is relatively stagnant economically, it can’t really “export” it’s way back to growth, as Germany or Ireland could.
As a result of their election, Europe is now at a crossroads. It could crush the new Greek government into the conformity of counter-productive austerity policies or, it could engage constructively with Syriza, and sponsor policies that directly benefit ordinary people, workers, and small businesses across Europe.
By Tomás M. Creamer
Images courtesy of Google.