Debt crisis takes its toll on Greeks

Stephen Beard Mar 9, 2010

Debt crisis takes its toll on Greeks

Stephen Beard Mar 9, 2010


Kai Ryssdal: Greek Prime Minister George Papandreou sure got around in Washington today. He met with Secretary of State Hillary Clinton, Treasury Secretary Timothy Geithner as well, and then their boss at the White House. Press secretary Robert Gibbs firmly sidestepped speculation that Mr. Papandreou is here hat in hand. Gibbs said Greece and its debt worries are problems for the European Union to deal with.

The danger of Athens defaulting on that debt, though, does seem to be receding. The government has announced $6.5 billion in austerity budget cuts. Not without some protests. Our European bureau chief Stephen Beard has more now from Athens.

STEPHEN BEARD: The plan to cut Greece’s deficit has cheered investors, but Greek workers are not pleased. Hundreds of thousands have marched in protest, and walked out on strike.

Christos Panagiotopoulos is a trash collector in Athens. He and his workmates bitterly oppose the cutbacks.

CHRISTOS PANAGIOTOPOULOS: It will mean pay cuts and later retirement for us. I will lose $160 a month. Almost 10 percent of my pay. And I’ll have to work until I’m 63 before I can retire. This is not acceptable!

Many protesters feel they’re suffering because the Greeks have been picked on by speculators and then bullied into deficit cutting by fellow Europeans.

Liana Kanelli is a Communist Member of Parliament. She says by adopting the euro almost a decade ago, Greece laid itself open to outside intervention.

LIANA KANELLI: If you get in this eurozone you abolish a very severe amount of your national sovereignty. So you see, we are not free!

But that’s still a minority view. Shoppers in this fruit and vegetable market in Athens still seem happy with the euro.

Though Greece no longer has the ability to devalue its currency to stimulate its own economy, no one here seems to be hankering for the days of the drachma.

Nor should they, says economist, Professor Gikas Hardouvelis. Greece has been much better off with the euro.

GIKAS HARDOUVELIS: For about 10 years now, Greeks enjoy very low interest rates, very low inflation, because of membership in the euro area. That’s a big plus.

And a massive improvement on the double-digit inflation, high interest rates and chaos that frequently occurred when Greece managed its own currency.

The present crisis is Greece’s fault, says analyst John Psaropoulos: The euro is not to blame.

JOHN PSAROPOULOS: We rested too heavily on its stability and borrowed too heavily against future incomes. We took for granted that the good times would continue to roll.

The crisis is now taking its toll. Tavernas seem rather less busy than before. And something else, Greece’s laid-back relations with fellow eurozone members have been rudely shaken, especially with Germany. Many Greeks were furious at the flinty refusal of Europe’s biggest economy to consider any financial aid for Athens. And so Greece has now broken the unspoken rule of European politics: don’t mention the war.

Over the past week or so the Greek airwaves have been awash with archive newsreel footage of Germany’s least popular export.

News shows have reminded viewers of Hitler’s occupation of Greece. Communist Member of Parliament Liana Kanelli regards German domination of the eurozone as another from of conquest.

KANELLI: You don’t have to send a Messerschmidt. You don’t have to send an army. You just send your big companies. That’s why sometimes I and a lot of other people speak about an economic neo-Nazism that’s going against European people.

Greece’s deputy prime minister has joined the fray, raising questions about the gold which the Nazis allegedly stole from the Greek Central Bank. How’s all this going down in Germany? Tomorrow I report from Berlin.

In Athens, this is Stephen Beard for Marketplace.

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