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Sweeping changes in Greece


Sweeping changes in Greece

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For more than a year, cleaning women in Greece have been the symbol of the injustices of austerity. They started to protest after they lost their jobs due to budget cuts deemed necessary by the Finance Ministry to meet the conditions for the 240 billion euro EU-IMF bailout plan.

For months they camped outside the finance ministry’s office demanding their jobs back.
And then they voted for Syriza, the party which promised to re-hire them. It was a promise to right the wrongs that one cleaning woman, Sophia Tsagaropoulou, feels many Greeks have endured: “For five years, people have paid for a crisis they were not responsible for. During this crisis people who were earning lots of money continued earning lots of money, and even earned more. But the middle and lower class were not to blame for everything, but they are paying for it all. We were plunged from paradise into a living hell.”

But working out how to clean up the “living hell” produced by austerity measures will be a tall order. However one man says he has a plan: Alexis Tsipras. His so-called radical left Syriza party swept into power on a promise of erasing the misery which many blame on the EU-IMF bailout conditions.

Alexis Tsipras has made his views very clear: “The verdict of the Greek people, your verdict, cancels today in an indisputable way the bailout agreements of austerity and disaster.”

Since his election victory last month, Europe’s political and economic eyes have been on Tsipras and his new government, asking the inevitable: how is he going to do it? How is he going to find the money to erase a debt which is 176% of GDP? How is he going to change things in a country where more than a quarter of people are unemployed?

In Greece, the economy had shrunk by 25% over the past five years, leaving the economy in the worst recession since the 1930’s Great Depression. One way Tsipras has vowed to clean up or erase this “austerity injustice” is to crack down on tax evasion – an evasion the OECD claims costs Greece an estimated 20 billion euros in lost tax revenue each year.

But how to collect taxes in a country where tax evasion has even been called a “national sport”?

Harry Theoharis used to head the Greek tax collection agency. Today he is an MP for the Potami party. Although he is proud of progress such as computerising antiquated tax records, he resigned last June. He denies it was because of death threats. He says the real danger was politics: “I decided that because the priorities of the government were more populist, this would make my job increasingly hard. So to give you an example, before elections governments ask the tax office to soften our responses to people who owe tax. Instead of forcing them to pay, by taking measures which are socially harder to swallow, they ask us to be more lenient.”

While Harry Theoharis believes that the new PM, Tsipras, is honest and determined, he also thinks the country’s new leader under-estimates the complexities ahead: “Syriza has the potential to be different. The ties are not the same, they haven’t been in power for long. But I think they will have a hard time totally cleaning up the slate and getting free of all ties.”

Greece’s shipping industry has long been a key economic lifeblood of the country. And it still accounts for 8% of the country’s GDP and half a million jobs, either directly or indirectly connected to the industry. And there have been no salary cuts during the crisis. But the word shipping also conjures up images of shipping oligarchs taking their fortunes out of Greece and getting generous tax breaks.

Not so for Michael Bodouroglou, the president of Paragon Shipping Inc., a shipping company based in Athens. He says the government needs to go after the public sector before chasing up shipping: “There are no tax breaks for shipowners. We pay taxes in the same way as our colleagues pay them all over the world. And frankly, if we did receive tax breaks in this country then many of our European colleagues would have relocating here in order to enjoy the same benefits. But we have not seen this. The big problem, the reason the country amassed a huge deficit that was no longer manageable, is that we ended up with a very expensive public sector; over-staffed, expensive, inefficient and hostile to businesses. They were not serving the purpose for which they were set up.

But hindsight is a luxury that neither Greece nor the EU can afford. When full force of the eurozone crisis hit the country, the only way out for Greece was seen to be the EU-IMF bailout, made conditional on reforms. But many Greeks now say that the reforms spiralled out of control, involving huge salary and pension cuts coupled with new taxes. And the result is anger at Europe, Germany, and especially the Troika, for placing conditions on a bailout debt that Greece just can’t pay back.

Elena Panaritis is an economist, and the founder of “Thought for Action”. She now advises the Syriza government. She supported the first bailout but says that the crisis does not represent the insolvency of Greece but of Europe – a Europe that has had 0% GDP growth since 2008: “We had created a wonderful experiment which worked as long as we had surpluses, called the euro or the European Union. When the cows were fat and the milk was out there, we were all happy. But now that the cows are thin and the milk is dry, we still haven’t found our bearings. And the little canary, Greece, is dying alone because there is no oxygen and instead of saying ‘oh guys, we need to get out of this coal mine, and let some oxygen in, we are closing the tap even further.”

But members of the Troika argue that Greece was given oxygen – over 240 billion euros of it – especially when in 2012 a second bailout package stopped Greece from defaulting and exiting the euro. But with Tsipras warning that the current Greek debt is unsustainable, the word “grexit” has re-appeared in the eurozone dictionary.

Jens Bastian, is a former member of the EU Greek task force: “What we have seen in recent weeks is part of the hysteria surrounding all this grexit discussion. I refrain from any speculation in that area but I would argue that it is not a good idea to test the proposition that the Eurozone is better prepared for a grexit. I doubt that this is the case. You may have a new architecture regarding rescue, you may have new financial resources but you have a society and a democratic process here.”

Dimitra Mandikou is part of that democratic process. A mother of three, she says she lost everything because of the crisis and the bailout; her business, her health, her marriage and soon maybe even her home. She blames the banks and she blames the government for bailing out the banks and not the people. Today she is surviving on 300 euros a month. She says she voted for Syriza because she has nothing left to lose: “I wasn’t someone living on other people or not paying my bills. I wasn’t shying away from my responsibilities, but life was getting so hard that I couldn’t sleep. Two years ago, they found I had cancer and the doctors said it was caused by stress. Finally I followed my friends’ advice, they were all doing it, and I stopped paying because I didn’t have the money. We just feel, well you brought us to this: we can’t pay for anything, do whatever you want, we don’t care, put us in jail. End of story.”

For the people who voted for Syriza and its anti-bailout stance, their viewpoint is that the bailout operation has failed. As cleaning woman Sophia Tsagaropoulou, said: “They did an experiment on us. They tried in this way to reduce deficits and all of that with this experiment but it failed. The patient died.”

While both the Greek government and Europe are working on how to revive the patient, these women, like many Greeks, are waiting. Waiting not only to go back to work, but to get their dignity back. A dignity Syriza has vowed to restore at almost any cost.


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