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Tuesday, Oct 2, 2012, 6:45 pm

Greek Leaders Ratchet Up Austerity, Sparking Protests

By Amy Armstrong

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After five years of recession and unemployment that has now reached 23.5 percent, Greece will see a sixth year of recession in 2013, according to government projections. In response, the government has decided to double down on its strategy of austerity measures.

Last Thursday, after weeks of haggling over spending cuts, Greek Prime Minister Antonis Samaras and the leaders in his coalition government reached a “basic agreement” on a two-year, €13.5 billion ($17.4 billion) budget. The deal should secure the next €31 billion loan installment from the "troika" (the International Monetary Fund, European Union and European Central Bank) necessary to recapitalize Greek banks and keep the country from defaulting on its debt. The budget predicts a deficit decrease to 4.2 percent of GDP, or €11.6 billion, in 2013, down from the 6.5 percent, or €15.4 billion, in 2012. 

A draft of the budget submitted to Parliament on October 1 calls for more spending cuts, despite the fact Greece's GDP continues to shrink—by 6.5 percent in 2012 and by a projected 3.8 percent next year.

Parliament will debate and vote on the budget in mid-December, and experts believe it will pass, despite rumors of defection from deputies in the co-ruling parties. The other members of the coalition government, the Democratic Left's Fotis Kouvelis and Pasok leader Evangelos Venizelos, resisted further pension cuts and job layoffs. Andreas Papadopoulos, spokesman for Democratic Left party, said, "We are trying to rescue whatever we can even at the eleventh hour."

The deal sparked even less agreement in the citizens of Athens. On September 26, during the first general strike since Prime Minister Samaras’ election in June, a crowd as large as 70,000 marched to the Greek Parliament to demand the government reject the budget cuts that include €3.8 billion in pension, €1.1 billion in state salaries, and further reductions in healthcare, education and defense. (The retirement age would also be raised to 67 from 65.) The strike itself, which involved 350,000 workers, was called by the two unions that represent half the country’s workforce. Despoina Spanou, of the ADEDY labor group, told NBC News, "We call on everyone to take part in the strike and resist the austerity measures that hurt Greek people and the economy. This strike is only the beginning in our fight." With unemployment expected to reach nearly 25 percent next year, Nikos Kioutsoukis, general secretary of the largest private-sector union GSEE, says “We don't have any other option. We can't just sit around doing nothing."

In a recent poll by the MRB polling agency, more than 90 percent of Greeks said they believe “the planned cuts are unfair and burden the poor,” and a majority expected further spending cuts—despite the past failures of austerity to improve the economy. "We won't submit to the troika!" and "EU, IMF out!", "People, fight, they're drinking your blood," protesters chanted.

Centered around Syntagma Square, the protests drew from a wide swath of the Greek population. In response, riot police threw tear gas canisters and clashed with demonstrators carrying sticks and wearing helmets and gas masks. It ended with at least 21 arrests and 8 police officers injured.

As Finance Minister Yannis Stournaras met the “troika,” 30 members of small right-wing Independent Greeks party, protested outside the finance ministry. “Bastards, the gallows are coming,” they chanted.

Another right-wing party, the “neo-fascist” Golden Dawn, has surged in the polls recently after winning 18 seats in parliament in the last election. The Golden Dawn “do[es] their propaganda through deeds,” inciting anti-immigration campaigns and providing police and social services where the state has essentially ceased to function. One Greek newspaper kiosk owner, Kaiti Lazarou, told the New York Times, “I myself have gotten food and potatoes from them in Syntagma Square. I would not be surprised if they become the government one day, and why shouldn’t they? They protect the Greeks, while Samaras and the government are out of touch with the people.”

Playing off fears, Golden Dawn’s hatred could become an increasingly popular option as the austerity policies grind on. That possibility has been lost on—or simply disregarded by—the troika, which believes the Greek government hasn't been austere enough. It is still objecting to parts of the new budget, calling for clarification and expressing doubts that Greece will deliver on its promises.

That doing so might further deliver Greece into the hands of neo-fascists appears to be a cost the troika is all too willing to accept.

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