Greece in the Eye of the Storm

NOVEMBER 5, 2012: Note 1 of 6 – An economic crisis of enormous proportions has erupted in a first world country in the Global North. The scale of the economic crisis in Greece has few modern equivalents, and is at the root of a massive social and political upheaval. Navigating that crisis poses difficult challenges for the social movements in Greece, and has important lessons for activists around the world. The notes that follow are an attempt to provide information that can assist those, unfamiliar with the situation in Greece, in navigating this situation.

Notes on Greece 1: Economic crisis

The economic crisis in Greece rivals that which broke out in Yugoslavia in the late 1980s. There have been two “bailouts” of the Greek economy, orchestrated by key European and international institutions. Panos Garganos is editor of the Athens-based Workers Solidarity, and a leading member of The Front of the Greek Anti-Capitalist Left (known by its Greek initials as ANTARSYA, a pun on the Greek word for “mutiny”). In March, 2012, Garganas wrote: “We are now in the middle of the second bailout and it is imposing worse conditions than in 2010 when the IMF first came to Greece. Wages have been cut by 22 percent, pensions by 15 to 25 percent, and there has been a whole wave of destruction in social services, in terms of access to hospitals, doctors and childcare. For working class families survival is a real, real struggle” (Garganas 2012a, 9).

The 21st century began with steady growth for the Greek economy, but with quite stunning speed, that economy went from growth to slump in 2007. It has stayed mired there ever since, something that Chart 1 clearly demonstrates [double-click to see in full]. Annual growth rates for Gross Domestic Product (GDP) were usually close to, or just under 3% from the first quarter of 2001 until the third quarter of 2007. On several occasions, GDP growth came in at above 6%; once, in the second quarter of 2006, at almost 7.5%. But in the last quarter of 2007, growth slumped to near zero, stayed just above zero for two more quarters, and then turned negative. GDP has shrunk every quarter since, except for a brief moment in the first quarter of 2010. From the fourth quarter of 2010 on, this slide has been exceptionally steep, often hitting 7%, and on one occasion coming close to 9%. By the first quarter of 2012, GDP sat at €40.6 billion, a level not seen since the first quarter of 2001. To put this another way – absolutely all of the growth experienced in the first years of this century in Greece has been wiped out by five years of slump.

This economic contraction has led to a jobs crisis, outlined in Chart 2. Just five years ago, in 2007, overall unemployment was at 8.5% and falling, dropping to 7.8% n 2008. But it has risen steadily since then to 16.2% in 2011 and a truly shattering 22.5% in the 2nd quarter of 2012. For young people, aged 15-24, it is far worse. From 22.9% in 2007, unemployment has risen to 51.15%. More than half of young people in Greece, who wish to have a job, can’t find one.

This unemployment is not restricted to the young – for whom high levels of unemployment have become a chronic condition in many countries. For those 45-54, unemployment is now at 17.2%; for those 35-44, 19.2%; and for those 25-34 it is almost at 30%. These figures are the statistical profile of social calamity. And it may get even worse. “Given the fact that the jobless rate is a lagging indicator of broader economic activity, unemployment may not have reached its peak yet,” said Platon Monokroussos, an economist at EFG Eurobank (Reuters 2012b).

A terribly revealing and sobering statistic, is the one to do with suicides. According to James Meadway, “Greece used to have the lowest suicide rate in Europe.” But in the wake of the economic crisis, “[s]uicides have increased by 40% in the last year” (Meadway 2012). The individual stories are heart-rending. Antonis Perris was a young man who, in 2012, had been unemployed for two years. “Perris wrote in an online forum late one night that he had run out of money to buy food and cursed those responsible for the economic crisis in Greece. ‘I have no solution in front of me,’ he typed. The next morning, Perris took the hand of his ailing 90-year-old mother. They climbed to the roof of their apartment building and leapt to their death” (Cha 2012).

Next in the series:
Notes on Greece 2: Political Upheaval

© 2012 Paul Kellogg

Publishing history

This note is one of six. The six notes have been published together as  “Greece in the eye of the storm (the Greek left, SYRIZA and the limits of the concept of ‘left reformism’)” Links, November 18.

References

Cha, Ariana Eunjung. 2012. “‘Economic Suicides’ Shake Europe as Financial Crisis Takes Toll.” Associated Press, August 14.

ELSTAT. 2012a. Quarterly GDP - Expenditure Approach (Constant Prices) (1st Quarter 2000 - 1st Quarter 2012). Quarterly National Accounts. Athens: Hellenic Statistical Authority.

———. 2012b. Labour Force Survey: April 2012. Athens: Hellenic Statistical Authority.

Garganas, Panos. 2012. “Greece: The Struggle Radicalises.” International Socialism 134 (Spring) (March 27): 9–19.

Meadway, James. 2012. “Greek Austerity: The End of the Line.” The New Economics Foundation.

Reuters. 2012. “Record Jobless Rate Marks Greek Woes.” The Star (South Africa), July 13, p. 21.