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11 June 2010

Any hope in sight for Greece?

Greeks have been enraged not just by their country’s economic collapse, but also by a huge exposé un

By Simon Reid-Henry

On a late-morning train travelling into the city centre from Acharnes, an outlying suburb of Athens, Andreas Bakellas reflects on the difficulties confronting both his country and his career. A final-year university student, he hopes to become an actuary, a useful profession in a country where the financial numbers have gone so awry. But like many young Greeks, he fears he will not find any sort of job at all.

His concerns are not misplaced. One in four Greeks now lives below the poverty line, and – according to the Organisation for Economic Co-operation and Development – youth unemployment could reach 28 per cent by the end of this year. Many Greeks, Bakellas included, feel that the emergency loan agreed by the EU and the IMF on 12 April will only make the situation in the debt-stricken country worse. To secure the €110bn (£91bn) package, Prime Minister George Papandreou has committed to severe government spending cuts and hefty increases in VAT, as well as public-sector wage cuts and a major pensions overhaul.

The protests over the economic burdens that ordinary Greeks are being asked to accept have been angry and prolonged: in each of Greece’s major cities, tens of thousands have turned out. But while some protesters have railed against the EU and the IMF, many others have condemned the “bordello” of Greek political corruption. The demonstrations signify more than just resistance to reform: there is a profound crisis of confidence in the country’s entire social and political system. The momentum is new, but the origins of the problem are decades old.

The violence of recent weeks was not the work of activist groups alone, explains Rannia Baggio, a member of the Trotskyite Greek Workers Revolutionary Party. “Older people, pensioners, too, are wearing masks and throwing stones at shop windows.”

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The question nearly everyone is asking is, “What are we going to do?” For Ilias Gidas, an unemployed Athenian, the problem is Greece’s distorted jobs market. “Look in a newspaper,” he says, “and all the jobs you see there are the same ones as last week.”

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Employment contracts, he explains, often last for only six months. In the public sector, most workers who are still in employment after a year are guaranteed jobs for life. The practice was introduced to stem corruption, so that when a new government comes to power, it cannot simply replace civil servants appointed by its predecessor with its own supporters. The temptation for employers to replace staff regularly is therefore very great, as is the temptation for employees, if they do obtain a permanent position, to take advantage of their job security and do little work. Meanwhile, private-sector employment has become even more unstable.

The ruling left-wing Pasok party and the opposition New Democracy have been blaming the mess on each other as well as on the EU and the financial markets. But they have also begun to talk openly for the first time about Greece’s systematic corruption.

“Both main parties have been putting their own people into government jobs for years,” New Democracy’s Thanasis Nakos tells me. It’s a statement few politicians would have made just months ago. Now even the prime minister acknowledges that “bureaucracy and corruption have been the basic obstacles to investment in our country”.

Future fair for all

This new-found openness may just be blame-shifting rhetoric. Nakos says Greece’s corruption began with Andreas Papandreou, a former prime minister and the father of the country’s current leader. Or it may herald a broader change in Greece’s approach to its finances. According to Costas Cartalis, a Pasok member of parliament, the government has three immediate plans to ensure that Greece receives its next tranche of EU-IMF funding: to restructure the pension system, to open closed markets, and to encourage investment through a new economic development law.

Cartalis is sanguine about the likely impact of these measures on the government’s popularity. “The people have a constitutional right to strike, but at some point they have to accept there is no alternative to what we are doing,” he says. He concedes that meeting the EU’s targets without leaving the Greek people feeling that their country is being sold out from under them will be difficult. But he believes that it will take “a complete change in mentality” for Greece to overcome the crisis.

Citizens such as Gidas need to believe their future will be fairer. For now, however, he is not confident. “People will just find new ways to fiddle,” he says. But there have been developments. A list of 3,700 organisations and in­dividuals, each owing at least €1m, has been submitted to the minister of finance, George Papaconstantinou, by the Greek National Statistical Service. This list, and a second one, comprising 11,000 names owing more than €100,000, have together attracted much comment about the extent of abuses permitted; questions, too, as to how all these names suddenly became known.

But if the government is able to hold those listed to account, it will have taken an important step towards restoring public belief that there can be greater economic and social justice in Greece. Then, it might just be able to convince its citizens to plunge into the unknown – a trusting relationship with the government.