By Christoph Dreier:
The troika calls for further cuts in Greece
By Christoph Dreier
17 November 2012
“These will be the last cuts,” Greek Prime Minister Antonis Samaras recently declared. He was attempting to dampen the massive popular opposition to the austerity measures dictated by the European Union.
But just one day after the Greek parliament adopted an austerity budget for 2013, the troika (the European Union, the International Monetary Fund and the European Central Bank) demanded further cuts of at least 17.4 billion euros over the next three years.
The report presented November 12 by the troika admits that the Greek government has implemented “very ambitious” cuts, but then proceeds to paint a devastating picture of Greece’s economic prospects.
The report praises the government for overriding popular opposition to impose wage cuts and labor market “reforms”. Greece is once again becoming “competitive”, it declares.
In fact, the succession of austerity packages has led to an unemployment rate of 25.3 percent, rising to 58 percent for young people. According to the report, wages over the last three years have fallen by an average of about 15 percent, while consumer taxes have increased sharply.
The education and health sectors have been especially hard hit. The chairman of the Greek Association of Intensive Care Medicine warned Wednesday that cuts have led to a life-threatening situation in the country’s hospitals. Beds in intensive care units have been reduced by over 20 percent and are now far below the level necessary for the treatment of emergency cases. In addition, more and more Greeks lack any health insurance.
What the troika report describes as a “success” has led only to a worsening of the country’s debt crisis. The report notes that the recession in Greece is “deeper than expected”. The economy is expected to shrink by 6.0 percent this year and at least 4.2 percent next year. Despite all of the austerity measures introduced so far, the country’s primary deficit is expected to increase this year.
Greece’s debt burden is expected to swell to more than 190 percent of gross domestic product in 2013. Nevertheless, the troika is now insisting that further cuts of 17.4 billion euros be implemented by 2016. The consequences will be catastrophic for Greek workers.
- IMF, European Union Publicly Brawl On Conditions For Greek Aid, Sowing Uncertainty (ibtimes.com)
- Greek general strike today, tomorrow (dearkitty1.wordpress.com)
- Are Greece’s Ancient Treasures Under Threat? (history.com)
- Troika rifts and mistakes cost Greece (ekathimerini.com)