Greece. According to
Countryaah, socialist Prime Minister Kostas Simitis continued
his efforts in 1997 to wash away Greece's stamp as a spoiled
extractor in the EU and to get the country into EMU.
Economic tightening sparked protests during the winter and
spring. Teachers and other groups that traditionally support
the socialists strike while peasants blocked roads in
protest of, among other things. reduced subsidies. Simitis
made no significant departure from his plans and was hailed
by many judges as a responsible and mature politician.
Greece also had a pragmatic attitude on the international
level. The country improved its relationship with both
Albania and Macedonia, the latter a country Greece long claimed
did not exist. Against Turkey, there was also an icing in
the spring, when Foreign Minister Theodoros Pangalos
surprised the outside world by saying that Turkey's desire
to join the EU is legitimate. But the tension increased
again in October, when G. and Cyprus held a joint military
exercise in Cyprus. When Defense Minister Akis
Tsohatzopoulos flew to and from Cyprus, his plane was chased
by Turkish F16 aircraft.
The Conservative Party New Democracy (Nea Demokratia, ND)
changed party leader in March after losing many of its
constituents in the Greek corporate sphere to the All-Greek
Socialist Movement (Panellinion Socialistikon Kinima, PASOK)
in the 1996 election. Miltiades Evert was succeeded by
Kostas Karamanlis, whose Uncle Konstantinos Karamanlis was
both President and Prime Minister.
2010 Collapse of public finances
The October 2009 parliamentary election was a stinging
defeat to the incumbent Conservative government, falling
8.4% to 33.5% of the vote. The Social Democracy, Pasok went
5.8% to 43.9%. Pasok's leader, George Papandreou could
subsequently take over the post of prime minister. He
inherited some enormous financial problems, which brought
the country to its knees in the spring of 2010. The departed
Conservative government had for several years swindled with
the statistics it provided to Eurostat. At the same time, it
had for many years paid Goldman Sachs hundreds of millions
of euros to carry out financial transactions that obscured
the volume of public debt. Therefore, how serious it was was
only discovered when Pasok came to power. It turned out that
the country's budget deficit was up 12.7% of GDP - four
times more than the EU allows - and government debt reached
$ 410 billion. US $ equivalent to 125% of GDP. Unemployment
passed 10% and youth unemployment exceeded 30%. The global
economic crisis caused this bubble to explode as revenue
from both tourism and shipping fell by 15% in 2009.
Through the spring of 2010, governments implemented a
series of tough cuts to public budgets:
- The government will save 30 billion € in 2010-12
- It sells out of state companies
- The public sector must be slimmed down by up to 30%
over a number of years and contract staff will not be
- Wages within the public sector are frozen until 2014
- Public employees lose their holiday bonus, which
equals two monthly salaries. Others get their holiday
- Private companies are given the opportunity to fire
4% of their employees against 2% today
- The retirement age is raised in line with the rise
in the average life expectancy. To receive full pension,
the Greek worker must have worked 40 years against 37
- In March, VAT was raised from 19 to 21% and in May
from 21 to 23%
- Tobacco, alcohol and gasoline taxes were increased
The government's assault on the work population triggered
each time strikes culminating in the general strike in May.
The strikes were led by the militant labor front PAME.
At this time in spring 2010, the EU had to intervene
because the Greek crisis threatened to pull the euro down.
At the beginning of May, it became clear that Greece would
not be able to pay down the interest and interest on its
loans at the end of the month. The EU therefore put together
an aid package that immediately gave Greece EUR 45 billion.
€ in loans in 2010, followed by another € 65bn. € in the
following years. The loans were heavily debated in the other
EU countries, which had difficulty understanding why they
should help Greece. This was especially true of Germany. At
the same time, the crisis revealed profound structural
problems at EU EMU. It could work during times of upturn,
but the entire EMU project had difficulty managing crises.
The consequence was that the euro was pulled down in global
currency markets because of global capitalism speculators
lost confidence in the Euro project.
It was not the first time the EU had to resort to relief
packages. In 2009, the Baltic states - Estonia, Latvia and
Lithaun - received tens of billions. € in loans to prevent
them from going bankrupt. But with Greece it was the first
time one of the major countries was falling.
During the early summer, the Greek crisis spread to Spain
and Italy, which also had major financial problems. The
United Kingdom also had a budget deficit of the same
magnitude as Spain, and the Irish were even bigger.
Greek truck owners and drivers went on strike in late
July 2010 against the government's decision to liberalize
the transport sector - a demand from the EU and the IMF. The
consequence was rapid gasoline shortages in most of the
country and incipient food shortages. The government
intervened hard on the strikers. They were sought by police
who threatened prison for up to 5 years, the military
deployed and the government then implemented an exception
law to force owners and drivers to resume work. Greece is
otherwise a member of the ILO and has ratified the
International Labor Organization Convention on Striking Law.