The Greeks Know Anger: The Causes and Consequences of the Continuing Crisis of Capitalism in the Eurozone South
David L. Elliott
They did not invent it, but the Greeks have known anger for over three millennia, since the collapse of Bronze Age Hellenic Civilization, through the Peloponnesian wars, and down to four centuries of Ottoman rule that ended in the 19th century with its overthrow by the Greeks. In the 20th century, Greece was occupied by the Axis powers during World War II, which devolved into a civil war, and at the present time, Greece’s economy is held hostage to the Eurozone powers led by Germany. Greeks have a right to be angry (you should be, too) and here is why.
Historically, and today as well, Greek anger was often rooted in the political: power plays among the ancient gods and the Greek city-states, loss of national self-determination in the Ottoman years, Nazi occupation, British meddling in Greek affairs as World War II ended, and now enormous pressure from the troika—European Central Bank (ECB), the International Monetary Fund (IMF), and the European Commission—to effect internal political and other changes. Germany wields enormous de facto power that is often realized through the ECB and especially the European Commission of the European Union. Today, Greeks are offended and angered by what they see as external meddling in their own internal political and socioeconomic affairs, by Germany, in particular.
Greece now finds itself in a severe financial bind, partly of its own doing. Due to the power wielded through the European Union (EU) and the Eurozone,1 Greeks are angry because the effect of austerity measures forced by the troika and Germany include massive unemployment, reductions in pensions, undermining of the health care system, business losses and failures, near collapse of the banking system and loss of access to international markets, and numerous other economic issues. As a result, Greek fury sometimes erupts into violence and destruction of property that rivals what we have seen in American inner cities during the same period. While the causes of African American anger in the inner cities and of Greek anger in Athens are not exactly the same, they are both palpable and are both rooted in a sense of economic, social, and political injustice.
Finally, overlaying the anger Greeks feel for the troika and Germany are serious ideological, intergenerational, and cross-cultural misunderstandings that have initiated episodes of interpersonal anger on the part of both Greeks and key players in Germany and the European Commission. This, alone, has made resolution of this crisis nearly intractable. The resolution is likely to require, first, interpersonal reconciliation to reduce the anger on all sides and begin to establish a degree of trust. Second, political action needs take place to correct some significant inconsistencies and inequalities across the governments of the EU. Once a foundation of trust and social justice has been laid, the economic solution will be so obvious as to almost resolve itself. At the present time, hammering away at the economics with heightened calls for austerity in Greece simply fuels the existing flames of anger and a profound sense of injustice.
Background: Before the Metapolitefsi, 1974
Let us examine the larger historical context to understand today’s anger-causing difficulties and challenges. Following six years of war for independence from four centuries of Ottoman Turkish rule, in 1827 the Treaty of London ended Turkish rule and established an independent Greece. The war-torn Greece that emerged was still locked into a premodern and violent political environment characterized by a still largely agrarian and seafaring economy. The process of recovery from Ottoman rule and metamorphosis of both polity and economy would occupy the next century and half of Greek history. During this period, and even into the 21st century, lands and islands neighboring Greece, most notably Cyprus, all with ethnic Greek communities, were the sources of regular international conflict, with Greece and Turkey often at the center.
The development process from 1827 through the 1970s was characterized by struggles of four major Greek forces: the military, a constitutional monarchy, advocates for a rightist republic, and socialists/communists. Each had its own successes and Greek self-rule vacillated among the monarchy, Hellenic Republics of right and left, military dictatorship, and various combinations. The one major interregnum from Greek self-rule was the devastating occupation by Germany (1940–1944) that saw fierce resistance by the Greek Communist Party–supported ELAS-EAM (National Liberation Front–National Popular Liberation Army) and the smaller British-supported, rightist EDES (Greek Democratic National Army).
The Nazi occupation was marked by mass executions and massacres of Greek partisans and civilians by the Germans, famine, heavy taxation by Germany, and massive murder and deportation of Greek Jews to Auschwitz. Moreover, the Nazi occupiers left the Greek economy in a shambles: The Germans “borrowed” money from the Greek government that was never repaid; the currency became worthless and the Greeks resorted to using gold coins from another age to conduct any transactions of consequence (Delivanis, 1950). The fury the Greeks felt toward Nazi Germany played into existing political divisions within the Greek opposition and as World War II approached its conclusion with the defeat of the Nazis, ideological anger erupted as ELAS and EDES turned on each other and in December 1944, communist-backed ELAS defeated the EDES in battle.
From independence onward, and even into World War II, if Greece had a “friend” in the world of global politics, it was Britain. World War II ended with Britain occupying Athens and returning Georgios Papandreou from exile in Egypt to Athens as Prime Minister. This British action, including support for the Greek right while firing on and killing members of ELAS, as well as the re-installation of King George II, set into motion an angry civil war between ELAS and the British-installed puppet government. This was a serious violation of Greece’s right to national self-determination and the political dynamic established by the British has reverberated through the last 70 years of Greek history, until 2015.
As the British began rebuilding their own island and backed away from the right-wing monarchist regime they had installed in Greece, the United States, in the angry, anticommunist hysteria of the day, moved to take Britain’s place in opposition to the ELAS. The deadly and devastating civil war continued until 1949, when the communists conceded defeat by signing a ceasefire that finally ended a decade of modern Greek tragedy largely imposed upon Greece by Nazi Germany, Britain, and finally the United States.
Post–civil war rebuilding of the shattered Greek economy was sponsored by the United States effectively by default. All the while in the 1950s, Greece struggled to re-establish a viable economy, with significant financial aid from Britain and the United States. Germany also began to rebuild and it did so much more successfully for two important reasons. First, even after the war, Germany was and remained a major industrial nation. German engineering and production are well-noted for their quality and German goods were in high demand across Europe as it rebuilt. Indeed, West Germany began to run surpluses in its balance of trade with other countries in Western Europe (Dernburg, 1954). Second, the United States pumped billions of dollars into Western Europe—including Germany—as the Cold War heightened and the US increasingly feared the Soviet Union’s emergence as a nuclear power to match the US nuclear might. Also in this period, the early 1950s, an accounting of debts began to take place and this accounting made clear that Germany’s unpaid debts from World War I and World War II, including reparations to peoples and nations that were destroyed by German military power, were unlikely to be repaid, notwithstanding Germany’s robust economic growth. In 1951, Germany began discussions in London with its major creditors—Britain, France, and the United States—to find a way to resolve its own debt crisis. There were many other creditor nations with claims on Germany; Greece was one of the smaller ones. In 1952, the Tripartite Commission on German Debts (“Tripartite commission on German debts,” 1952) met and worked out arrangements that varied across creditor countries but that constituted a massive reduction in German debt—a “haircut” in today’s terms.
Despite long-standing cultural affinities with some members of the Soviet bloc, and a lingering, though severely weakened leftist sentiment, Greece aligned itself on the global political scene with the United States. Greece’s vote in the United Nations, and after 1952 its membership in NATO, made Greece a strategic geopolitical ally of the United States and it was rewarded with military and financial support over the subsequent two decades as part of the U.S. strategy to support European countries bordering on the Soviet bloc.2 Despite its emergence on the international scene as a dependable U.S. ally, and the continuation of the monarchy installed by the British, Greek politics remained still sharply, often angrily, divided, though the anger manifested itself increasingly between the monarchy and the military.
In 1967, the Greek military launched a successful coup, initiating violent suppression of dissidents and sending the king and many politicians into exile, which angered much of the Greek population. The military was probably more unloved than the monarchy it had exiled. In 1973, the military brutally suppressed student pro-democracy protests. Subsequently, in 1974, the military regime collapsed in the face of its support of a coup by angry Greek Cypriots in that nation (shared with a Turkish-Cypriot minority) that had led to the invasion of Cyprus by Turkey. The fall of the military and the reinstallation of civilian rule in that year is known as the metapolitefsi. With the return from exile of Konstantinos Karamanlis, who became Prime Minister following elections that brought to power his center-right New Democracy Party, and support from a national referendum, the exiled monarchy was abolished for the last time and the Third Hellenic Republic was established. In the same year, as a result of fellow NATO member Turkey’s invasion of Cyprus, Greece withdrew from the military arm of NATO. The metapolitefsi was a dangerous and challenging period but Karamanlis was able to avoid war with Turkey and move the nation away from military dictatorship and more into alignment with other European democracies (“Metapolitefsi,” n.d.).
According to Nikos Konstandaras, managing editor and a columnist of the Greek daily newspaper Kathimerini and long-time contributor to the New York Times newspaper, the events of 1974:
set Greece on course for the greatest uninterrupted period of stability and prosperity in our history, but it also consolidated many problems that still plague us: deep mistrust of authority, resistance to reform, unbridled populism in politics and the media, a state-dominated economy that favors specific groups, and a political system that values expedience over efficiency and puts self-interest above the common good. (Konstandaras, July 27, 2014)
The following year, 1975, saw a further move away from military influence, legalization of the Communist Party, and the establishment of a republican government with a new constitution. Though not without the intrigue that has characterized Greek politics in the modern era, the second half of the 1970s set the political stage for the subsequent prosperity that Konstandaras cites. Cyprus, however, remained a key element in Greek politics, reflecting both an international dimension and a nationalist affinity for the Greek Cypriots who share that island with Turkish Cypriots. The Greeks had not forgotten the Ottomans and maintained the sense, xeniteia (Angelos, 2015), that Greek nationality transcends actual citizenship. Perhaps the best analogy is between Greek and Jewish or Irish diasporas: three ancient civilizations whose peoples over the centuries have migrated across the globe but who still feel a strong affinity to the “home” country (Greece, Israel, or Ireland) irrespective an individual’s actual birthplace or residence.
Meanwhile, in Europe, the U.S.–USSR Cold War was far from the only concern as Europe continued a lengthy recovery from the devastation of World War II. The original European Economic Community (EEC) was established in 1957 by France, West Germany, Italy, Belgium, the Netherlands, and Luxemburg. The EEC found itself facing both internal political issues, as France maneuvered to dominate the Community, and external western European economic competition with the European Free Trade Association consisting of Austria, Denmark, Norway, Sweden, Switzerland, and the UK. By 1973, the UK, Ireland, and Denmark had joined the original six-member EEC; in 1979 the European Monetary System was established to stabilize exchange rates. In 1981, Greece was admitted to (by then) the European Community (EC).
In that same year, 1981, the political locus of power in Greece shifted toward the left-center as the people voted in the Panhellenic Socialist Movement to assume state power. A series of important and long-delayed reforms then began to take place in Greece. For the next decade, Greek economic development remained a struggle and Greek politics were relatively stable compared with the past, though scandals and near-war with Turkey were ever-present. Greece became an increasingly active member of the EC, which itself had grown over the decade of the 1980s. But the growth of the EC in those years has never been fully integrated—neither politically nor economically.
While the Soviet Union did not collapse until 1991, for the EC the 1980s era effectively ended in 1989 when the Berlin Wall fell. This event, and the reintegration of Germany, set into motion massive changes within the EC as Germany was suddenly a much larger political-economic force. Nonetheless, by 1993, the EC had established an economic plan to aid the still struggling Greece and by the end of that year, as the Maastricht Treaty went into effect, the EC became the European Union (EU), and the Eurozone was established. The Maastricht Treaty and its subsequent amendments guiding EU economic policy stipulated that government debt in the EU should never exceed 60% of a nation’s gross domestic product (GDP). Between 2001 and 2012, France, Germany, the UK, Ireland, Spain, Cyprus, Greece, Italy, and Portugal each exceeded this limit on at least one occasion, usually for years at a time.3
By the time the EU was formed and made operative, and the Eurozone was in place, the reunification of Germany had set into motion massive economic and political shifts that reverberated through the EU and the Eurozone, ultimately setting the stage for the current round of Greek economic austerity and resultant anger. The political-economic foundation upon which the Eurozone was built as of 1993 was unstable—perhaps terminally so. The key factor undermining the Eurozone is that euro policy is governed by the European Central Bank (ECB) that reports to the European Commission, a weak international political apparatus that is made up of all the sovereign states belonging to the EU. Some of these states, such as Britain, do not even use the euro as their currency. Under these circumstances, the ECB can operate relatively autonomously vis-à-vis smaller, less powerful members of the Eurozone (like Greece) locating its source of power in the larger political context of the most powerful members of the European Commission (primarily Germany, Britain, and France) each operating in its own national interests. Coupled with the International Monetary Fund (IMF), the troika of ECB, IMF, and European Commission wields enormous economic power over Greece. The Eurozone remains unstable today with the effects of its instability reverberating from the troika to some of the more peripheral nations that faced the harshest consequences of the 2008 crisis originating in the United States (Birnbaum, 2010a, 2010b; Broome, 2010, 2011; Brown, 2009; Erlanger, Audi, & Calin, 2009; Goldstein & Hillard, 2009; Harvey, 2010; Kaminski, 2010; Krugman, 2009; McDonough, Riech, & Kotz, 2010; Orenstein, 2009; Perry & Hertzberg, 2009; Popov, 2010; Rapley, 2004; Stiglitz, 2010a, 2010b). These peripheral nations included Greece, Cyprus, Italy, Spain, Portugal, and Ireland.
The economic sources of the instability also included vast macroeconomic imbalances with a united Germany, the UK, and France at the power center of the EU where they exercised neoliberal (right-wing, monetarist) economic policies over the Eurozone (Goolsbee, 2012; Habermas, 2012; Harvey, 2011; Laskos & Tsakalotos, 2013; Lazzaro, 2011; McBride & Teeple, 2011; Müller, 2012; Orwall, Enrich, Sonne, & Kowsmann, 2012; Palley, 2011; Peck & Brenner, 2012; Reddy, 2011; Reddy & Granitsas, 2012; Rose, 2011; Thomas, 2012; Weisbrot, 2011; Wolf, 2012). At the periphery we find countries that had been subject to the lingering effects of post-World War II rightist rule or quasi-post-colonial domination by Germany, Britain, or France: most particularly Ireland, Greece, and Cyprus, but also Spain and Portugal. Political forces of instability rest in the fact that each member of the EC has retained its own sovereignty but authority over a number of matters, related especially to trade and travel or population movement, has been increasingly ceded to the European Parliament largely dominated by the UK, Germany, France, and the Benelux countries (Belgium, Netherlands, and Luxembourg). Ironically—especially for Greece—the international political ideology of realism, that advocates for the supremacy of national interest in foreign policy matters, remains in force throughout the European Community; the foundation of realism dates to Thucydides’s history of the Peloponnesian War, centered in what is today’s Greece (Thucydides, 432 BCE). With realism as a crucial element of nationalism of the more powerful members such that they can influence EC policy for their own ends, Greece and other less powerful members have effectively become pawns in this continuing power play.
The Global Crisis Strikes Iceland and Far Beyond, 2008: From Fear to Anger to Resolve
On October 9, 2008, bank failures and nationalizations in far-away Iceland signaled the first in a series of crisis events that reverberated throughout North America, the European Union, the Eurozone, and with continuing shockwaves, especially in Greece, even as these words are written. The Great Recession, as the crisis came to be known, had its epicenter in the United States, where deregulation had allowed major corporations, such as banks and insurance companies, to operate largely without oversight and with no regard to risk of failure. In this neoliberal environment that led up the crisis, many such companies offered increasingly tenuous financial products. This financialization (McDonough, Reich, & Kotz, 2010) of the global economy saw profits realized through rent-seeking financial manipulation as opposed to productive operation in the unevenly deregulated, but neoliberal global economy. Small countries such as Iceland could and did purchase financial products from the United States with the expectation of high profits, using money invested by both its own trade unions and their retirement funds, as well as investors (large and small, public and private) from England and the Eurozone, seeking high returns. In fact, the international financial networks were so intertwined that one of Iceland’s three large banks, Kaupthing, actually owned a British-registered bank, Kaupthing Singer & Friedlander. This environment allowed for quick profits—and quick losses, as well—as both capitalists and fearful, angry middle-class home-owners would learn as the crisis spread throughout the United States and much of Europe, including Greece.
For Iceland, this is where it got sticky: Although, ultimately, the Bank of England backed up the assets of British-owned banks and the Icelandic Central Bank backed up Iceland’s three banks (bloated with toxic U.S. assets), the Bank of England refused to support British-registered Kaupthing Singer & Friedlander (owned by Iceland’s Kaupthing bank) as it struggled desperately with angry British depositors, private and municipalities, that were trying to withdraw their funds while the toxic American assets that Kaupthing Singer & Friedlander had invested in were increasingly worthless. Given the politics of realism, the British government, and the Germans as well, placed intense pressure on Iceland to honor the deposits made by British and German nationals and presaged the current pressures on Greece. The demand took place despite the fact that the root problems that caused the crisis were to be found in the United States and other advanced capitalist countries that followed the neoliberal economic ideology of deregulation and financialization. Deregulation and financialization opened the capitalist economy for fraudulent and other corrupt practices that precipitated the crisis. With crisis bearing down on Iceland (Broome, 2011; Capell, 2008; Loftsdóttir, 2010; Thorhallsson, 2010; Villa, 2010), its entire economy was on the brink of collapse. Iceland, small and effectively peripheral to the global economy, was unable to resist Britain’s and Germany’s demands to make good on their subjects’ investments but equally unable to force Americans to make good on their nation’s toxic assets.
Icelanders were crushed. From a strongly independent-minded country that had survived 11 centuries with its national self-identity intact (though with some long periods of Danish rule) as well as a strong, active labor movement that had benefitted significantly from Iceland’s overindulgence in global financialization, Icelanders were suddenly rendered fearful and angry, but resolved to rebuild a devastated economy. Ultimately, Icelanders paid the unhappy price with loss of values in pensions and unemployment peaking at more than 13% in 2010 (Elliot, 2014), while the Icelandic Consumer Price Index soared from 88.75 in October 2008 to 117.40 as of March 2015 (Federal Reserve Bank of St. Louis, 2015).
Greece and other members of the Eurozone—especially Ireland, Italy, Spain, Portugal, and Cyprus—have also experienced severe consequences of the crisis (Blackstone, Karnitschnig, & Thomson, 2012; Bofinger, Habermas, & Nida-Rümelin, 2012; Bragues, 2012; de Graaf-Zijl & Nolan, 2011; Higgens, & Alderman, 2013; Hill, 2012; Jones, Clark, & Cameron, 2010; Roy, Denzau, & Willett, 2007; Shonfield, 1975; Smith, Fairless, & Perez, 2012; Weisbrot, 2011). Although the causes, especially for Greece, were different from those of Iceland, the effects were much the same. Iceland initiated its entrance into neoliberalism after its banks were privatized in 2000; Greece was initiated into neoliberalism by its membership in the Eurozone. Iceland, despite advice to the contrary from a Nobel Laureate in economics (Stiglitz, 2001), bought hook, line, and sinker into the corrupt neoliberal world of American financialization; Greece (and Cyprus) went along for the Eurozone ride—a rollercoaster ride into a tunnel of greed, with many Greeks still seeing only dark at the end that tunnel.
Before the current economic crisis troubles appeared, Greece saw important economic improvement and a renaissance of sorts in the second half of the 1990s and early 2000s. The new millennium dawned with Greece preparing to host the 2004 Olympics. Although the build-up to the Olympics provided a boost for the Greek economy and reinforced its national self-image, the robustness of the Olympic-charged economic advance was short-lived. Nonetheless, the overall economic impact of the metapolitefsi should be acknowledged.
Greece had long been a country more dependent upon agriculture than most other members of the EU and despite American-supplied mechanical equipment from the Cold War period, Greece agriculture remained more characterized by small holders in contrast to other EU nations of the north, especially Germany. By 2008, self-employment in Greek agriculture was 84.6% compared with less than 50% in Germany, Italy, and the UK. Moreover, Greek self-employment, 34.8% overall, was three times that of Germany (Laskos & Tsakalotos, 2013, Table 2.3). Although Greece’s GDP is relatively low compared with other members of the EU, GDP per capita has grown markedly since the end of the Civil War: standardized on the 15 member states of the EU, Greece’s GDP per capital has grown from just over 40 in 1950 to about 75 in 2007 (Laskos & Tsakalotos, 2013, Figure 2.2). Almost all of this growth took place from 1950–1971 and from 1994–2007. Real GDP growth in Greece outpaced the EU 15 for all periods since 1950 to 2008 except for the 1981–1995 time period (Laskos & Tsakalotos, 2013, Figure 2.1). Finally, with respect to the security of the Greek people, public sector employment was comparable to many EU members, but by 2008, income inequality was among the highest in the EU (Laskos & Tsakalotos, 2013).
Greece’s unique political environment since the end of the Civil War, coupled with some problematical economic issues, including a neoliberal environment driving Eurozone monetary policy, has led to practices on the part of the troika that have effectively hamstrung the Greek economy since 2008. First, and Konstandaras alluded to this in his remark quoted previously, Greece never developed a legal-economic apparatus that would foster the kind of social democratic capitalism as realized in most members of the EU. As Laskos and Tsakalotos put it:
Greece has been overburdened by laws since the nineteenth century, which simply add to the existing legislation without any attempt to simplify the legal minefield thus created. In this light, most modernizing administrations tried to bypass the public administration altogether, creating a parallel system of political advisors, policy experts and consultants. But instead of providing a breeding ground for new values and more transparent bureaucratic practices, the parallel system was all too easily incorporated into the standard practices of clientelistic politics. (Laskos & Tsakalotos, 2013, p. 53)
Greek clientism, therefore, perpetuated oligarchic political rule; the politicians’ names changed but regardless of the regime (the military excepted)—left, right, or center—the dynamic of power rested upon having sufficient clients to support one’s political aspirations. But there was a price to be paid for this support and that price was often paid through public sector employment. The world today sees this as corruption and it is easy enough for an outsider to identify it as such. No nation is without its own flavor of corruption; 2008 proved that. But nations, and certainly the troika and its national clients, view corruption each from their own perspective. The corrupt practices of Wall Street that precipitated the crisis could go by with scarcely a word, and certainly no penalties levied by the ECB or the IMF. In the 1990s, Germany went through its own corruption scandal with arms trader Karlheinz Schreiber sentenced to jail for his role in the illegal campaign donations to the Christian Democratic Union (CDU), headed by Chancellor Helmut Kohl, who lost his position as a result. Angela Merkel was to succeed Kohl as party chief, and is at this writing Germany’s Chancellor, edging out Kohl’s heir apparent Wolfgang Schäuble, who later is reported to have admitted conveying DM 100,000 of Schreiber’s corrupt donations to the CDU (“Germany: The scandal that rocked the government of Helmut Kohl,” 2010, January 18; Paterson, 1999). Schäuble is at this writing Chancellor Merkel’s Finance Minister.
But Greece: The shrill, scolding rhetoric coming from Germany and Britain with ever increasing demands for crippling austerity to address its debt and scandal past, six decades after Germany had destroyed Greece’s economy and Britain had re-imposed a dysfunctional and unwanted political apparatus, the demands by the troika placed upon Greece for austerity finally pushed the Greek people to their limits of tolerance. Austerity is a contemporary neoliberal economic approach toward correcting debt and other economic issues in a country. This is associated with the monetarist approach advocated by Milton Friedman, who advised the Pinochet regime in Chile. Monetarists believe that market forces self-correct when the economy bears down on consumers and workers to allow the capitalist class to accumulate capital, reinvest, and begin to rebuild the economy. The other conventional approach derives from the classic liberal theory advocated by John Maynard Keynes. Keynes argued just the opposite: deficit spending stimulates consumption, which in turn stimulates production and employment sufficient to then (theoretically) repay the original debt and that caused by the deficit spending. How do these alternate economic theories relate to anger? When a population is forced into austerity—high unemployment, diminished services, high taxes, and lower wages—they get angry. And it is not just the Greeks.
Armin Schfäer and Wolfgang Streeck of Germany’s famed Max Planck Institute for the Study of Societies examined the impact of austerity and reached some insights that apply beyond Grecian anger. They argue that “new tensions between the social rights associated with citizenship and the commercial rights deriving from private ownership of financial assets evolve not just within national polities but also and increasingly at the international level” (Streeck & Schäfer, 2013, p. 20). This is certainly one of the factors that exacerbates the situation facing Greece, as well as other countries in the south of Europe, such as Spain, that has remained out of the shadow of negative publicity but remains impecunious by the crisis (Schäuble, 2015).
Wolfgang Schäuble would likely disagree. His advocacy for the benefits of austerity in a New York Times opinion piece (Schäuble, 2015) cites the post–World War II German experience of rebuilding an industrial economy. German economic recovery was unprecedented. And it could not have taken place without severe austerity in a country thoroughly defeated militarily, economically, politically, emotionally, and demographically. Today, Germany has the largest economy in the EU and this was no small feat. But there is more to the story of German austerity than Schäuble tells. An opinion article is necessarily short, and it is an opinion on matters beyond German austerity, so perhaps Schäuble can be forgiven for a less-than-nuanced account of German austerity. But when austerity is being forced upon the Greeks and Germany is being set as an example, we need to set the record straight. Cruel measures of austerity appeared across industrial Europe in its recovery from the devastations of World War II, not just Germany. Moreover, austerity did not appear evenly. Immigrant workers, often Muslims from former European colonies in Central and East Asia, Africa, and the Caribbean, as well as Turkey, suffered oppressive working conditions, low wages, often squalid living conditions, persecution and discrimination, and diminished civil rights. In all fairness, we need to acknowledge that some native-born, ethnic Europeans of working-class origins also suffered from the cruelties of austerity. In Germany, the Turkish and other gastarbeiters contributed to the German economy from the 1960s onward and when reunification took place, East German workers traded their Stazi oppressors for West German capitalists. Ironically, today, the working-class Greek diaspora now reaches into Germany (Angelos, 2015), where austerity lingers on for the non-German population, in particular.
The Crisis Inflamed: Greek Anger Grows
Why is Greece being punished? Among the charges levied against Greece, especially in the aftermath of the onset of the crisis, were budget deficits, corruption (in many forms), and the provision of too much economic security for its population—security that the troika argued Greece could not afford. Greece or Germany; Iceland, Ireland, England, or the United States—oligarchs in each country played the rules for their own personal benefit in a deregulated neoliberal economic environment. With respect to economic security for the population, Greece followed in its own clientist version of the social democratic path established by the former West Germany, The Netherlands, Sweden, and other advanced states in the European north.
When economic crisis materializes, turmoil is set into motion. Typically, we see a cycle of reduced demand for goods coupled with a reduced demand for labor. As this cycle continues, the reduced demand for labor means layoffs and a consequent further reduced demand for goods until such time as the existing stock is exhausted and production begins to return along with employment. Governments usually play some role and, depending upon the prevailing ideology, this role may include significant support for the unemployed. In this crisis, many governments, particularly the United States, ran budget deficits. Deficits are not intended to be handouts to the poor though some unemployment benefits did improve the situation of the workers. Budget deficits have demonstrated a theoretical foundation in Keynesian economics: They constitute counter-cyclical pressure in a crisis period intended to reduce the macroeconomic severity and return the economy to a growth mode sooner. Neoliberal, monetarist policy assumes that market forces will self-adjust and there should be little reason for governmental involvement. For example, the libertarian Cato Institute argues that Greece lacked the competitive structure and open markets needed to realize lasting economic growth (Mitsopoulos & Pelagidis, 2009). As part of the Eurozone, Greece’s (and Spain’s and Portugal’s) competitiveness was eroded by the larger, more industrial economies of the north—Britain, France, Belgium, The Netherlands, and especially a reunited Germany. In fact, Costas Lapavitas and colleagues demonstrate the deleterious economic effects upon Greece in the run-up to, and in the aftermath of, the huge crisis that visited the global capitalist system (Lapavitsas & Kouvélakis, 2012). Eight years after the height of the crisis, Greece is still waiting for the market forces to arrive.
A Crippling Blow: The Troika Strikes Greece, 2010
The market forces have not taken effect in no small part because the medicine prescribed by the troika through the ECB and at the constant urging of German Chancellor Angela Merkel and her Finance Minister Wolfgang Schäuble, in particular, sees the continuing crisis in Greece not as systemic in origin within the global capitalist economy, but as a fault of the Greeks, themselves. The medicine is austerity: Reduce government spending by whatever means necessary without regard to the human consequences for the Greek people.
By 2010, the austerity demanded by the troika was being felt all across an ever-angrier Greece. The Greek Reporter announced that medical supplies had become unavailable at the affordable prices found in other Eurozone countries, causing surgery postponements (Theophanides, June 14, 2010). The medical crisis continued into 2011 with doctors attempting to occupy the Ministry of Health (Kourti, 2011) as they were unable to provide suitable care for their patients. Also in 2010, as economic troubles continued to impact the population, in a theme that the neo-Nazi Golden Dawn Party would advocate five years later, the center-right New Democracy challenged the ruling center-left, socialist PASOK party on its plans to make Greek citizenship available to immigrants (Makris, June 30, 2010) following the drowning deaths of 11 men and women believed to be illegal immigrants (Theophanides, June 30, 2010). Six months later, Human Rights Watch urged Greece to provide better conditions for detained illegal immigrants, especially children (Makris, December 6, 2010). Two months later, detained immigrants initiated a hunger strike (Brousou, 2011) thus fueling Golden Dawn political activists. As the ultra-right gained more followers, nominal though some may have been (Theodossopoulos, 2013b), the progressive leftist party, Syriza, also grew from the depleting support for the two left- and right-centrist parties.
At this point, it bears noting that contemporary media reporting on Greek politics rarely mentions the Golden Dawn Party, and for good reason: It is a marginal, ultra-right organization that gains what little publicity it has from disruptive behavior and outlandish claims. Like such far-right organizations, it does gain some following when conditions are at the worst. It is no more a viable political force in Greece today than is the Nazi Party in Germany. On the other hand, international media repeatedly refer to Syriza as a “far left” party. It is not. It represents the progressive left—not the center-left, a legacy of British meddling in Greek politics six decades ago; it is a coalition that does include some “far left” elements but as the deadline for this chapter rapidly approaches, under the leadership of Alexis Tsipres, Syriza is revealing itself as a much more pragmatic organization than is usually acknowledged.
The Crisis Unfolds: Greece Strikes Back, 2015
The austerity measures demanded by the troika resulted in massive unemployment, cuts in pensions, higher and higher taxes, and cuts in services, and they continued year after year without regard to the devastating impact upon the Greek people. Unemployed residents of Athens returned to their families in the hinterland. Each round of further austerity actions resulted in some incremental partial “bail-out” money to assist the Greek government in meeting its debts that sometimes came due on a weekly basis. Governments fell. In anger and desperation, Greeks protested repeatedly, sometimes with violent outbursts. Finally, in January 2015, the political landscape of Greece shifted in a direction that had not been seen since the Nazi occupiers were driven out in 1944.
The January 2015 election transcended the legacy of Greek clientism and resulted in a political widening of the electorate: the middle-ground center-right, center-left dynamic that had characterized Greek politics in the post-metapolitefsi period gave way to the extreme right and progressive left of, respectively the Golden Dawn and Syriza parties. Syriza was able to form a progressive leftist government committed to both ending austerity but remaining in the Eurozone. But this was not the image of Syriza as seen by Germany and the troika, nor the media. The following month a leftist newspaper published satire picturing Schäuble as a Nazi. This banal attempt at humor fed into Greek anger about long-standing grievances against the Third Reich and the claims that Germany still owes Greece significant sums of money. Moreover, Greece’s flamboyant new Finance Minister, economist Yanis Varoufakis, by his own account (Lambert, 2015), was unable to successfully negotiate with Schäuble and other finance ministers largely, I would argue, due to the ideological, cross-cultural, and intergenerational misunderstandings that have continued to fuel interpersonal anger and its counter-productive effects.
In July 2015, Greek Prime Minister Alexis Tsipres called for a referendum by the Greek people on austerity measures demanded by the troika. The Greek people voted overwhelming against more austerity and with this mandate Tsipres returned to the negotiation EU table facing even tougher terms of austerity but agreeing to them, shedding some of the leftist elements in the party as well as his Finance Minister. In so doing, Tsipres demonstrated two things: He remains in control and he is a pragmatist. Few expect the Greeks to succeed under the conditions of austerity they face at this writing. But Tsipres may have opened the door to ultimate success.
The long Cold War has left its imprint upon the minds and hearts of many people. For those on the right who advocate for neoliberal solutions to the continuing crisis of capitalism, the “left” is always “far left,” the bugaboo and cause of the problems faced in the economy. Having “won” the Cold War, the right feels pride at its accomplishment and vindicated with respect to any responsibility for the crisis. But the Cold War was more than an economic struggle; more deeply, it was a fear-laden emotional experience for several generations of people who were raised in the shadow of the mushroom cloud of possible nuclear annihilation. We understand that and we also understand how some folks may have trouble distancing themselves from that fear, having replaced it with anger and accusations of culpability against the “far left.” But the world needs to move beyond this.
The Angry Crisis in Greece: Toward a Resolution
To analyze the “anger” that seems to have characterized the Greek populace since 2008, we ask: Is this anger embedded in Greek culture following five centuries of foreign domination and interference? Or is there another explanation for a Greek reaction to the crisis that makes the responses by Iceland, Ireland, Italy, Spain, Portugal, and Cyprus seem tame by comparison?
The easy answer, the answer that seems to resonate with many Greeks as well as the power structure of the European Union, is that the Greeks are corrupt and too lazy to work—they want handouts from the EU. Konstandaras said it more nicely (above) but this is a blame game that cuts in more ways than one. The Greeks, and others, would argue further that the real problem is the troika, Wolfgang Schäuble, and Angela Merkel. Good arguments could be made in both directions and this is what fuels that anger.
One answer captures some sentiments of each. Theodossopoulos argues that we must look into anger at the community level. Here, anger may have a useful purpose in directing attention away from the peripheral trajectory toward “a sense of discursive empowerment against their perceived peripheralization” (2013a, p. 200). In an entirely different context but one that may have important implications for this case, T. H. Hall argues that diplomacy anger (that we interpret here as the Schäuble/Merkel/troika tirades against Greece) “combines a punitive response with demands against further provocations” (Hall, 2011, p. 554). Perhaps the Greeks and the troika should set aside the sense of past wrongs and get on with the business of building an economy that meets the needs of all parties.
Perhaps it is time for the pragmatists in Germany to reach out to Greece, as Tsipres has done. Varoufakis is gone; maybe Schäuble’s time has come, as well. A Merkel-Tsipres dialogue that begins to build trust and break down the tall barriers of ideology, anger, and out-sized personalities could lead to an economic solution to the Greek debt crisis. It would not solve the structural political issues that plague the EU and Eurozone. And it certainly will not resolve the contradictions of capitalism.4 But Nicos Christodoulakis (2014) argues that the Nazi “loans” forced upon the Bank of Greece during World War II can, and should be, repaid. The current value of that debt, Christodoulakis claims, is approximately what Greece now owes Germany for bailout loans—about €15 billion. It will not fully meet any party’s expectations, but it is a compromise; it would help settle Germany’s burden from its hideous Nazi history, and it may position Greece with some breathing space to build an economy for the 21st century.
Afterword
Since this chapter was first written, a sea change has overtaken Europe (and the United States) driving the Greek crisis from the limelight of public attention into the shadows. The monetarist Euro economy remains stagnant and a fearful and angry Britain has voted to leave the EU. The refugees from fighting in Syria and Africa that Greece once faced seemingly alone—Turkey and Italy also faced them—have swept across Europe from south and east to north and west to an increasingly unsettled and angry Europe. Coupled with repeated Islamist-inspired terrorist attacks, the latest European crisis has fueled the appeal of rightist, angry xenophobic parties in Britain, Europe, and the United States. Compounding this situation is now the exit from the EU of Britain and the pending decision on the admission of Turkey to the EC. Turkey’s President Recep Tayyip Erdogan has become more autocratic, navigating the troubled waters of fighting in neighboring Syria, a flood of refugees making its way through Turkey to Europe, angry internal dissent, and finally, in a distraction from the memory of the Third Reich’s more recent and more enormous atrocities, Angela Merkel feeds into Europe’s growing Islamophobia with a reminder of the Armenian Genocide carried out by the Ottoman Turks one hundred years ago.
But for Greece, little has changed.
Notes
1. The Eurozone that emerged in 1993 is composed of countries that use the euro as their common national currency. Greece gave up the drachma to become a member of the Eurozone.
2. This writer vividly recalls observing in 1971 the striking difference between the rural economies of southern Yugoslavia, where peasants still cleared rocks from the land by hand, and northern Greece, where farmers were equipped with new Ford tractors.
3. See Figure 6.3. Select European and Icelandic government debt as a percent of GDP, 2001–2102 (Elliott, 2014).
4. I have argued elsewhere that capitalism represents the root cause of this and many other crises (Elliott, 2014).
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