Greece says no to austerity, and so should we...
In 2007-08, two European nations stood on the brink of insolvency – Greece and Iceland. The proposed remedy for both was a bank bail-out, a central bank loan and austerity. While Greece’s political élite embraced austerity, Iceland rejected it. A glance at the outcomes explains this week’s election of an anti-austerity, socialist government in Greece.
In 2012 the Greek government accepted a $133-billion loan from the International Monetary Fund (IMF) and the European Central Bank (and the Austerity measures attached) in order to bail out its banks and stay in the Euro.
- The economy of Greece has shrunk every year since.
- The Austerity Programme has turned a financial crisis into a humanitarian crisis.
- By 2013, 11 per cent of the population were living in ‘Extreme Material Deprivation’ without heating, electricity, or enough to eat.
- Unemployment is now over 27 per cent and continues to rise each month, while youth unemployment is now over 59 per cent.
- Unsurprisingly, crime has soared – with burglaries rising by 125 per cent in 2011.
Such impoverished conditions, coupled with the political scapegoating of immigrants and the poor, laid the ground for a resurgent fascism.
In 2013, Greek police launched Operation Xenios Zeus as part of a crackdown on immigration. This operation, named after the Greek God of Hospitality, delivers anything but that to anyone on Greece’s streets who ‘doesn’t look Greek’. In the first 7 months of the Operation, Greek police arrested more than 85,000 foreigners – yet only 6 per cent were arrested for unlawful entry. While 94 per cent of those arrested were lawful residents of Greece, in many cases they suffered violent assault by the police in the process. The operation became nothing more than a means to vilify and bully ‘foreign-looking’ people.
Tourists to Greece have also been caught up in these arbitrary arrests. In January 2014, a Korean backpacker was seized by Greek police as an illegal immigrant, despite the fact that he showed them his passport and itinerary. When he asked for proof of identity of the police officer arresting him, he was punched in the face.
In the same month, Christian Ukwuorji, an African American travelling on a US passport, was walking through Athens on his holiday when he was seized by police. When he showed police his US passport, they confiscated it and beat him so severely he was hospitalized.
Greece has previously enjoyed a low prevalence of HIV, but since the economic crisis new infections have sky rocketed; in 2010, the new infection rates shot up by 57 per cent. These rises were entirely attributable to the austerity crisis. In 2010, heroin use grew by 20 per cent. In areas where the state-funded needle-swap programmes were closed, HIV infections among drug users shot up 1,450 per cent. As the social-security and healthcare systems failed after 40 per cent budget cuts, some desperate Greek addicts deliberately infected themselves with HIV in order to access just $890 of financial support each month and admittance to a drug rehabilitation centre.
But instead of addressing austerity, authorities blamed sex workers for the rise in HIV cases. Greek police began raiding brothels and forcing sex workers to undergo HIV tests. In February 2013, the police published the names and photographs of 17 sex workers arrested and tested positive for HIV, branding them a ‘danger to public health’. One of the sex workers committed suicide as a result, unable to face her family.
Later came legislation making it legal for police to arrest and detain all suspected illegal sex workers and test them for HIV without their consent. Embracing austerity has been a disaster for Greece. So how did Iceland fair, having rejected it?
Iceland refused to use tax-payer cash to honour debts run up by the private sector, jailed the bankers responsible, kicked out the prime minister and put him on trial for his part in the crisis, and invited its citizens to write a new constitution.
- Iceland’s economy has enjoyed seven straight quarters of growth, averaging 2.5 per cent a year.
- Iceland now has an unemployment rate below of just 4.3 per cent, around half that of Britain and on a downward trend.
- Pensioners receive back around 96.5 per cent of their average net income as pension.
- Wages have continued to climb since 2011 and are now at an all-time high.
There is an alternative to Austerity, and it has proven far more successful. In fact, there is no case in history where Austerity caused growth in a time of economic crisis. Greek voters are joining Iceland and much of Scandinavia in opting out of neoliberalism, in favour of social democracy – and if they are equally successful in the implementation of such policies, it will be yet another nail in the coffin of this morally and literally bankrupt ideology. It is time for the British electorate to follow suit.
Kerry-anne Mendoza is the author of Austerity: The Demolition of the Welfare State and the Rise of the Zombie Economy, published by New Internationalist.