Greece: Massive depression and numbers that remind Argentina

27 October 2011 by Moisis Litsis

Nowadays, there is hardly any home in Greece without at least one unemployed, recently dismissed or underpaid. An entire society lives in massive depression.

"Have you heard that he has been fired and that he is out of job for almost a year?” “We haven’t been paid for the past 1 or 2 months”. “The store is about to close”. These are just few of the common conversations that someone could hear in Greece everyday.

Two years after the debt crisis and the successive austerity measures, the Greek economy-society sinks in bankruptcy, which only typically has not yet been proclaimed. The Greek government announced only a few days ago, under the pressure from Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

, a new package of measures, such as of the layoff 30.000 employees in the public sector this year and 120.000 more until 2014, 20% cut for the pensions that are more than 1.200 euros per month and 40% for the pensioners that are under the age of 55(mostly women) and a new series of taxes which affect even people that live in the official level of poverty and earn about 350 euros per month(!).

Every Greek is obliged to pay for ever (!) a new poll tax- a new property tax according to the region that their house, apartment or shop belongs and a new tax on revenue taxes already paid (!)

The crisis hits equally young and older people, especially between the ages of 35 and 50.People who have worked for their whole life, are about to be left in the streets without any alternative options.

The unemployment is officially up to 16% and the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
foresees a further increase to 18, 5% in 2012 with negative growth -2%(-5% this year). The number of homeless has increased at about 20-25% during the past two years. In the private sector hundreds of businesses are closing, the salaries are continuously decreasing, while many companies delay the salary payments for many months.

The collective agreements are de facto abolished in most sectors and the workers are forced to sign a private agreement, with the minimum basic salary of 751 euros-20% lower for the young people under the age of 25.Hundreds of employees are working overtime without being paid while others work for 5 or 6 hours with wages of 200-300 euros.

The industrial production is decreased at about 2,8% (July 2011), in the wholesale sector the turnover 10, 8% and the sales of cars 31,2% During the past three years the uninsured cars are increased for about 50%.

One out of two Greeks no longer have a bank account. According to a research that has been conducted by the research company Focus Bari in March 2011, only the 57% of the Greeks have bank deposits. According to the Bank of Greece, the deposits of the Greeks have been decreased in May to 159, 3 billions from 196, 8 billions euros in December 2009 (-19%).

Seven out of ten working differences have to do with accrued payment, the delayed mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral.
loans have been increased to 10,7% while the uncovered cheques are expected to reach 2 billions euros this year-till July they were up to 1,4 billion euros.

These numbers are even more tragic when someone think that even before the crisis more than 20% of Greeks lived under the limit of poverty. Moreover, Greeks spend huge sums in “frontistiria”- private learning institutes for foreign languages or in order to pass the entry exams to universities and huge sums in private doctors because of the inadequate public health system.

The only businesses that flourish nowadays in Greece are the growing stores which buy gold (jewelry, coins etc). The turnover of the pawnshops is estimated to have risen up to 30%.

Greeks, young and older ones, seek their fortune again in Australia, one of the countries which had absorbed the waves of hundreds of Greek immigrants during the 50’s and 60’s, when their homeland was trying to recover from the consequences of the World War Two and the Civil War which succeeded it.

In addition to all that, the fear that the country would default and may be forced to exit from euro and new and bigger financial and social consequences would occur, forces many people to hide their few savings in euros into their houses, in safe boxes or in a bank account abroad.

The financial and social crisis hurts even more the hundreds of legal or illegal immigrants especially those who come from African or Asian countries, which are stuck in a sort of ghetto in Athens’ centre, creating another unresolved social problem.

Despite the unprecedented ruin of the living standard that reminds Argentina in 2001, not only cannot Greek people distinguish a light at the end of the tunnel but every time that Troika(EU-IMF) is about to give a new payment from the bailout agreement, the government announces new series of hard economic measures. And despite all these hard austerity measures, the public debt will achieve in 2012, 189% of GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
, according the latest IMF’s report, from172% that the international organization foresaw in June.

If the situation continues like that, a social explosion will be inevitable and bigger than the recent mass demonstrations in Syntagma square.

Moisis Litsis is a financial journalist in the daily Greek newspaper “Elefterotipia”.

Moisis Litsis

is a journalist in Greece, former trade unionist and member of the Greek Committee against debt. (
He worked for many years in the daily newspaper Elefterotypia, where he was member of the workers’ committee, now works for the financial daily Naftemporiki.
He participated also in the Truth Committee about Greek Debt of the Greek Parliament.



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