Greek legislators have recently passed a bill that will implement spending cuts, tax increases, and the sale of government assets, all measures that were required to be enforced before Greece is allowed to receive its next series of foreign bailout money. Since Greece is in the euro zone, they lack certain resources to help restart their dying economy, like devaluing their currency and changing their national interest rate. Since the European Central Bank controls those functions, Greece is forced to turn to other means in order to make up ground on it extraordinary debt, currently at 150% of their GDP.
Another reason certain lawmakers thought these austerity measures were so necessary (the bill was barely passed) was because Greece’s economy is primarily centered around tourism and the service industry, which is currently faltering due to a struggling international economy. Without running a trade surplus, increasing taxes, cutting spending, and selling national assets like the Ports of Thessaloniki and Athens, the national postal service, the national telephone company, and even certain holiday property. Spending cuts will freeze the salaries of certain government employees as of July 1st, cut jobs for even more civil servants, reduce pensions and increase taxes on motor vehicle licenses, soft drinks, natural gas and more.
This new law may be the biggest step Greece has taken towards privatization in years, but it was for mainly by the ruling Socialist party. Most of the conservative party opposed the bill on the grounds that it would not help Greece return to growth; however, it looks as if this was the only way Greece could secure the bailout funds from other euro zone nations to pay a portion of its debts by their August due dates.
Tuesday and Wednesday in Central Athens was characterized by shopkeeper protests and riots, where citizens were throwing fire bombs and rocks through shop windows and police had to use tear gas. Thank to some great home security NJ, many of the homes were protected. The new bill is clearly not popular with Greek citizens, as is will drastically reduce common standard of living for most. With a large portion of the (previously) population employed by the government, the salary cuts really mean a lot, in addition to the sale of Greek assets, which leave the jobs of those currently employed by those national entities uncertain. The climate in Greece is anxious and volatile, but at the same time there is a certain sense of “the calm after the storm”. As Greece moves forward with no plan or idea on how to grow their economy, and only using austerity measures to avoid a default due to uncertainty surrounding the status of credit swaps holdings, we are left to wonder what will be left of this famous culture in a few years.
