Tuesday, 7 July 2015

Another burned generation for Greece?

This article was published by the Washington Post under the title: "The deep divides in Greek society that explain Sunday's austerity vote."

ATHENS -- Until this weekend, Despoina Fragioudaki was doing her small part to get Greece back on track. The accountant helped her clients sign up for a government-sponsored instalment plan to pay back taxes. The deal allows Greeks to pay their 2013 income tax in up to 100 monthly instalments. Late penalties are waived as a reward.

All that came to a halt when Prime Minister Alexis Tsipras walked out of talks with Greece's creditors and declared a referendum on the latest package of proposed austerity measures.

"No one has paid any attention to their taxes," Fragioudaki says. "No one has paid in their instalment … and people are not filing their 2014 tax declarations. Even those who’ve asked me to prepare their papers called me this week to say, 'don't do anything, let’s wait until we find out what’s going to happen.'"

Afraid of a national bankruptcy, she says, her clients are holding onto their money. They might need it to survive.

Until Sunday’s referendum, Greeks were bombarded with threats from their European creditors that a No vote would lead them directly out of the Eurozone. The closure of banks made that prospect seem very real, and many felt browbeaten into voting Yes.

Those creditors – the European Commission and European Central Bank, plus the International Monetary Fund - have threatened to cut the assistance Greece has relied on for five years to keep its banks and public finances going. On Sunday, Greeks overwhelmingly – by 61 percent - voted to reject the latest austerity package.  

The vote reveals the deep divide in Greece. 'Yes' voters were mostly urban, middle-class professionals and the elderly and retired, afraid of worse cuts to their pensions after bankruptcy than under the tutelage of austerity. The 'No' camp consisted mostly of the young and unemployed, and that 40 percent of Greek society that now finds itself under the 2008 poverty level of 8,767 euros a year.

 “We’d like to dream of working in what we’re trained for, buying a house, getting married, having children. None of that is feasible at the moment,” says Angeliki, a student at the Athens University of Economics and Business, who joined a protest for the No vote.

 These divides are long-standing. "It reminds me of the Civil War," says dance critic Mirka, who lived through the communists' unsuccessful postwar bid for power.

Communists had formed the backbone of the resistance against the Nazi occupation, and were the most heavily armed group when the Nazis departed in 1944. Had it not been for British military and financial aid, they might have seized power in Athens upon their first attempt in December 1944.

The communists made a second attempt in the summer of 1946, this time with a strategy of taking the countryside first and attempting to march upon Athens. The Truman Doctrine, and the Marshall Plan, which formed part of its execution, were largely inspired by an American policy of preventing Greece and Turkey from being absorbed behind the Iron Curtain that stretched all around them. It was American arms that kept the communists at bay in the north until they were finally defeated in 1949.

"I remember the siege communists laid to a police station in our neighbourhood of Patision,” Mirka says remembering the 1944 putsch attempt. "They told the policemen that if they surrendered their lives would be spared. And they took them up to Mount Ymittos and cut their throats with tin cans. They were just kids."

People of Mirka’s generation, who built the postwar economy, lament that their generation did not push Greece past those ideological divisions. It seems to have fallen onto their children’s shoulders both to rebuild the economy and to mend division. 

It's the kids that Sophia is thinking of too. The shopkeeper voted Yes in Sunday’s referendum, and says she is looking out for her 13-year-old son. "Our generation is burned," says 35 year-old Sophia, the kiosk owner, as she ponders the future of her 13 year-old son. "I don’t want that to happen to his."

She is Angry with Tsipras for walking out on talks and wants him to go. "You can fix the economy," she said. But "you cannot mend division. It is a sly thing that keeps coming back."

Everything is now at stake for Greece. If it doesn’t manage to strike a deal early this week, its banks will fail. The treasury is empty, meaning taxes cannot abate; and without bank credit or tax breaks, many companies will disintegrate.

Despite the forbidding warnings from creditors and the divisiveness of the referendum, its strong result has brought a sense of progress, and even optimism.

For one thing, the referendum has ended on a note of unity. Tsipras has spent Monday in conference with all other party leaders, pro- and anti-austerity, in an effort to form a national front towards creditors. That is a unique event during this crisis, in which traditional power brokers, the socialists and conservatives, effectively destroyed each other by using the crisis to play party politics. The strong No, and a unified Greek position, ought to go a long way towards securing a better deal.

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