Unhappy anniversary: 4 years of Memoranda in harsh numbers

Mr Papandreou for reasons known only to a select few, opted to travel to the remote island of Kastelorizo to give his address. Perhaps he hoped that the backdrop of a picturesque fishing village would act as a counterweight to the grave tidings, ameliorating his countrymen’s concern over handing a portion of Greece’s sovereignty to its ‘saviours’. Or perhaps he hoped that the image might boost tourism to the country when it needed it most. Or perhaps he just wanted to put as much distance as possible between himself and an enraged populace without actually leaving the country.

Whatever the case, the now iconic image of the grave and besuited Prime Minister -framed by a postcard background and looking as out of place as a tuna in a cowfield – is enough to send shivers down any Greek’s spine. And for good reason. One can only speculate as to what may have happened had the country opted for a different course, but there is no denying the fact that the past four austerity-filled years have been nothing short of a catastrophe for the Greek economy and have seriously frayed the country’s social fabric.

While the current Greek government and the lender’s representatives are keen to portray Greece as having turned the corner, finally reaping the benefits of Greece’s dramatic ‘fiscal adjustment’, accepted by all as being unprecedented in post-war Europe, the numbers tell a more sobering story.

It was perhaps no accident that Eurostat chose today to finally verify Greece’s primary budget surplus (1.5 billion euros) – achieved by slashing government spending and boosting revenue through an onslaught of taxes that have hit low and middle-income Greeks particularly hard (while many major tax avoiders have safely squirreled their money overseas).  It is indeed a significant achievement given that in 2010 Greece’s deficit was well over 10%. However it has come at a significant cost. Over the past four years unemployment in Greece has leapt from 11.8% to the eye-watering levels of 26.7%. For the young the situation is particularly dire with unemployment levels currently at 56.8%.

More concerning is the fact that while the total debt has shrunk, it has only been reduce by about 8 billion euros. And much of that debt reduction came from the ‘hair-cut’ which primarily hit Greek bondholders such as social security funds and Greek banks (the European banks which had been on a lending spree to Greece in the early 00s had quietly disentangled themselves from Greek debt prior to the haircut, thus protecting those fine and upstanding institutions from incurring something so ignominious as a loss). GDP on the other hand has shrunk by a full 18% meaning that Greek debt is now a 175.7% of GDP. Few now believe that Greek debt can be reduced to the ‘sustainable’ target of 120% of GDP by 2020, without some additional form of ‘debt relief’. Just don’t call it a default.

In short, regardless of how many economics degrees one might have, it is difficult to see how a workforce of 3,613,826 can both support a population of 4,704,346 unemployed and economically inactive individuals and pay off a debt of 321,470,000,000 euros.  By working rather hard, one would imagine.

Unsurprisingly, just as a rising tide lifts all boats, a swirling whirlpool of disaster can unravel even the strongest of social safety nets. While the seeds of the neo-fascist sympathies were already present, the rise of the neo-nazi lunatics of Golden Dawn was surely aided by the collapsing economy and associated national humiliation. The party which was a footnote in 2009 was recently polling as the third largest force in Greek politics, although its popularity has since subsided as evidence of its murderous behaviour increasingly sees the light.

Deaths are also on the rise, be it because the infirm are not afforded life-saving medicines by a troika-guided government that finds such a course of action just too damn pricey, or simply because increasing number of Greeks are pushed to the desperate measure of suicide. While suicides are chronically underreported in Greece in the past few years according to conservative estimates they have increased by at least 42%.

It has now become cliche to talk of the bitter pill of austerity being the only cure for the sickly Greek patient. However, four years on, the ‘good news’ regarding Greece remains restricted to carefully calibrated government spreadsheets and a ‘social dividend’ that amounts to little more than giving back to the poorest a sliver of the money which has been extracted from the economy through business-stifling taxes.

So perhaps a more fitting metaphor is a cancer patient being given a near lethal dose of radiation and chemotherapy while being sat upon by an elephant.

Happy anniversary!