Greece inside or outside eurozone?
My TV news editor pulled out a long piece of paper from a small metallic stand on his desk where he was keeping his urgent office notes and his house bills. He pushed it across the table to me and told me in a sigh of desperation: “This is what I get paid for 12 hours a day. And they are going to cut it more.” There was only a small difference between his wage and mine as a Greek correspondent in Turkey so I did not dare to take the matter further. My hope for a salary increase seemed so out of touch with the Greek reality that I felt bad for even having allowed it to go through my mind.
But even that incident, which took place only a few days ago and showed the severe impact from merciless taxation on the income of a large section of Greek society, is already an old story as an avalanche of new developments has pushed Greece into a further spin of instability. I left my boss’s office in Athens to return to my base in Istanbul.
Previously, in a move meant to show its determination to serve its commitments for further austerity measures and hence satisfy its creditors in the EU, IMF and EB, the Greek government announced a new package of tough taxation on property from which very few could escape. It was preceded by a circular sent from the Ministry of Economy to over a hundred public organizations – among which the Greek Public Broadcasting company and the state news agency – to place 10 percent of their staff on a “reserve status” and on compulsory leave for several months and a reduced salary “in case an alternative position was to be found for them in the public sector”; as for the rest of the personnel they would have to be evaluated by independent auditors and retain their position only if necessary.
As these pronouncements placed thousands of public employees in a position which could be best described as “one stage before dismissal,” Prime Minister George Papandreou found it very hard to persuade his audience during his major policy speech from Thessalonica that he would be able to “build a new problem-free Greece.” The news from the heart of Europe was confusing and conflicting. Do eurozone countries – who find it impossible to agree on common policies – wish to keep the small country of Greece in the zone or out? What do the paymasters of the eurozone – the Germans – really want? Do they want Greece in the zone or out? Can anybody in the EU afford a default of a eurozone member state, albeit a small one? Or even, are Germans going to continue pay for the problems of the eurozone or will they themselves leave the group?
The recent package of austerity measures decided by the Greek Cabinet was announced days before a crucial summit of the eurozone in Poland last Friday when the eurozone leaders were supposed to release the next 8 billion euros for Greece as part of a huge package of a further 109 billion euros provided by the eurozone and IMF. This installment was to help pay for salaries and pensions and generally for the central government expenses before the results of the measures would start bear fruit, if ever.
Far from wishing to be a “worst case scenario” supporter, but I think the disagreement among eurozone leaders over releasing the latest installment for Greece – they were eventually persuaded by the credibility of the Greek government’s pronouncements – may be the start of a tormented period for Greece that looks as if it could include a change of government.
Indicative that we are now entering a new phase of the Greek crisis was the decision of the Greek Prime Minister to cancel his trip to the U.S. And some voices coming from the European Parliament were already predicting a Greek default by the end of the week “whether inside or outside the eurozone.”