The EU/IMF/ECB troika wants Greece to accept more austerity, including cutting 150,000 public sector jobs by 2015 and cutting minimum wages in the private sector by 22 per cent. The IMF sees the Greek economy contracting by 4 to 5 per cent this year.
Union of Hotel Workers members demonstrating in Heraklion, Crete against the Greek government’s austerity measures. The banner reads 'Hands Off Our Wages'.
In Greece, more than a fifth of workers are unemployed, and nearly half all people under 25 are out of work. The Greek private sector has shed 500,000 jobs in the last three years. Tax revenues are down 7 per cent over the last year.
Greek Economic Development Minister Michalis Chrysochoidis argues that EU subsidies have contributed to Greece’s economic downturn. He claimed, “•over two decades, we have eroded our manufacturing basis, our industry and thereby our export capabilities • While we were taking EU money with one hand, we were allowed to borrow money for low interest rates, which we have also done excessively.”
Hedge funds used credit default swaps (CDSs) to short-sell Greek bonds, placing both the Greek government and the euro under stress.
Meanwhile Jacques Santer, the head of the European Commission when it was forced to resign en masse over a corruption scandal, is to head a Special Purpose Investment Vehicle, with the apt acronym SPIV, as part of the eurozone bailout fund.
And Greece is likely to face even more agony. On 24 February, Jean-Claude Juncker, the Luxembourg politician who heads the “Euro Group” negotiating with the country, said he could not rule out the need for a third bailout. ■