It seems as though Greece has not been far from the headlines since the financial crash in 2008. The resultant Eurozone Crisis following 2008 has seen Greece with a bull’s-eye on her head. Will there be a ‘Grexit’, (a clever portmanteau used in the media denoting Greece leaving the Eurozone), will they receive another bailout? Are they going to accept another bailout? The list of questions could go on and on.
The 25th January 2015 brought about a change of leadership and ideological narrative for Greece with the electoral victory of left-wing party SYRIZA. Only two seats short of an absolute majority, SYRIZA entered into a coalition with the right-wing anti-austerity party ANEL, thus giving SYRIZA and its leader, Alexis Tsipras, the majority needed to form the next Greek government. So how does a left wing, and right wing party form a coalition government together? By sharing an enemy, namely Brussels.
Calling Brussels their enemy may be a slight overstatement, considering the new government have not given any indication of a desire to leave the Eurozone, seeking instead to renegotiate the terms of the Greek bailout. The new finance minister, Yanis Varoufakis, said two days before the election, “the cost of a Grexit would be too heavy for Greece as well as Europe”. Indeed, on the 23rd February, the finance minister unveiled his outline summary of reforms required by Eurozone leaders, in order to secure an extension on their bailout. The draft plan, to secure a loan extension of 4 months, is subject to approval by international creditors on the 24th February. Measures suggested by the plan include: adjusting the Greek taxation system in a fairer manner, combating tax evasion (a measure our own government could take note of), tackling corruption, and trimming Greece’s civil service.
However, the draft plan has not been received warmly in Greece. SYRIZA campaigned upon a manifesto that pledged to reverse the austerity measures that have been imposed upon Greece for the last half decade. The proposed plan certainly does not reverse austerity, and so is being seen as a ‘climb-down’ by the new government. That is not to say that the coalition has done a complete 180 degree turn, for the plan also includes measures to combat what the new Prime Minister has called Greece’s ‘humanitarian crisis’, by spending almost €60 million on free electricity for the poor, and more than €750 million euros on a meal subsidies programme.
Greece has a total debt of €323 billion, of which 60% is owed directly to the Eurozone, 10% to the International Monetary Fund, 6% to the European Central Bank, and 5% to domestic banks, with the remaining 18% owed to other bonds and loans (Source: Open Europe). With this in mind, it is of no surprise that for the last 7 years both European and international leaders, alongside economic experts, have warned against a Grexit; Greece owes a lot of money, and it owes this money to a lot of different sources.
Furthermore, Greece has an overall unemployment rate of 25%, with youth unemployment standing at 50%, and, according to the Parliamentary Budget Office, “approximately 2.5 million Greeks are living below the poverty line, while 3.8 million are in direct danger of crossing the poverty line” (Source: Greek Reporter). One has to wonder at what point the austerity measures being dictated by Eurozone leaders are too heavy a burden for Greece. It may be my own ideological beliefs speaking here, but surely the purpose of the Greek economy is to benefit the Greek people, not to satisfy demands of Eurozone leaders at the expense of society? Nevertheless, fortunately I am not an economist, and so can safely cling to my own clichéd, and perhaps naïve, political principles.