No Intermissions in the Greek Tragedy

There are no intermissions in the Greek tragedy. After two years of increasingly harsh austerity policies, four out of ten voters in the June election gave their support to authoritarian parties. Some of those parties would not hesitate to end parliamentary democracy if they were able to seize power. The new prime minister, Mr. Samaras, had barely sat down in his new office before the EU and the ECB called and demanded that he implement yet another austerity package.

Now the parliament is getting ready to approve that package. The response from the general public is predictable. Reuters reports:

Thousands of Greeks marched at an annual fair in Greece’s second-biggest city on Saturday to protest against a new round of wage and pension cuts demanded by international lenders in exchange for aid to stave off bankruptcy. The demonstration by about 15,000 trade unionists and leftists was the first major protest against a nearly 12-billion-euro austerity package being readied by Prime Minister Antonis Samaras to appease EU and IMF inspectors who arrived in Athens on Friday to review Greece’s reform progress.

The austerity disaster in Europe is an extremely important lesson for us here in America. We can still save ourselves from it, and it is encouraging to hear that fewer and fewer people claim that there has been no austerity in Europe.

Reuters again:

Greece is struggling through its worst post-war economic crisis that has left nearly one in four jobless, pushed up poverty levels and shuttered thousands of businesses. In a break with tradition, Samaras made only a brief appearance to inaugurate the event and to defend the planned cuts instead of making the customary annual economic policy speech delivered by his predecessors. “We are trying to minimise the pain from the cuts as much as possible but we have to make the cuts, because there is no other way,” Samaras told politicians and local officials.

Actually, there are two other ways. While his point is metaphorical, it would have been more honest if he had made an attempt at explaining why the alternatives don’t work.

It is obvious that totalitarianism – one of the two alternatives – is a particularly bad idea. It will destroy what is left of the Greek economy, not to mention what it will do to individual freedom. But the other alternative, an orderly secession from the euro and an orderly dismantling of the welfare state, is never even mentioned. The reason is that the Greek people have grown so accustomed to having a sizable part of their lives cared for by government. Moreover, one of the largest authoritarian parties in the Greek parliament is vehemently opposed to any reduction in government whatsoever. That would be Syriza, mentioned only in passing in the Reuters story:

Opposition leader Alexis Tsipras, head of the radical leftist SYRIZA party that opposes Greece’s foreign bailout, criticised Samaras for the unusually low-key appearance at the event. “The prime minister came and left like a thief – perhaps he is ashamed,” said Tsipras, who took part in the rallies.

With 27 percent of the votes behind them, Syriza is within striking distance of real political power. This is a scary scenario, considering the fact that the radical leftist party is ideologically close to the Venezuelan semi-dictator Hugo Chavez.

Given what the Reuters story says about the Greek economy, it is not far-fetched to guess that a new election is just around the corner – which could easily catapult Syriza or some of the other authoritarian parties into power:

[Prime minister] Samaras and Finance Minister Yannis Stournaras, a respected economist, have won cautious praise from European counterparts for refusing to back down on the cuts but face growing hostility at home as Greece’s economic slump deepens. The government, which is hoping to win two more years to implement the cuts – which are slated for 2013 and 2014 – says Greece’s economy will contract by more than 7 percent this year.

A seven-percent decline in economic activity is nothing short of a macroeconomic free-fall. It is the gateway to a depression. The loss of economic activity in the Greek economy is in turn caused by unrelenting austerity policies, which combine higher taxes with less government spending. In its desperate attempt to stay alive, government is bleeding the private sector dry, taking more from it and giving less back. As the economy is choking, people get increasingly desperate.

Desperate people do desperate things, especially in elections.

The distance between Athens, Greece and Weimar, Germany is shrinking.