Just weeks ago, five university students attempted to heat their home using an open stove. They had been forced to rely on crude heating by the excessive oil prices, which have tripled over the last two years. Hours later, two of them were found dead from carbon monoxide poisoning, and the others who were comatose were rushed to intensive care. Predictably, the tragic event shocked the Greek public, but also reminded us that the “sovereign debt crisis” and particularly the memoranda of austerity that have been chosen as the answer to economic crisis do have traumatic effects in unlikely places. Not only has the contraction of the Greek economy exceeded 20 percent in last five years, while unemployment in a constant upswing has surpassed the 26.5 percent mark (among the youth more than 55 percent) but modest predictions for 2013 set the unemployment rate at a minimum of 30 percent.
In fact, the list of the social and political consequences of the crisis is almost too long to be described in a short article. Far too many pieces make up the sociopolitical canvas of the crisis and as such cannot be portrayed so briefly. Furthermore, the crisis also seems to embrace not just a certain section of the population but the whole of the society, as the aggressive austerity policies applied lead to internal depreciation. Thus, it is not just laborers and low income earners but also small and medium sized enterprises, the once high income professionals as well as the farming community, that are experiencing dramatic challenges to their reproduction and even to their survival.
A society in decay
As the crisis deepens, it has begun to strike almost all segments of society. Obviously, individual experience varies by region, by previous economic status or the particular characteristics of each household. It can be approached at the micro level by magnifying the individual cases. However, this would result in a rather fragmented picture. This is exactly what that the mainstream media do in Greece, and they too often lead the public to conclude that all these cases are incidental and therefore easily corrected through individual “responsible” initiatives or by a kind of fatalistic acceptance of decaying social conditions.
A more complete picture of the social consequences of the crisis has to be painted through selective macro references. The road to current social conditions was initiated just after the Stability Pact with drastic cuts in the wages of the public sector. These cuts have reached 38 percent. Clearly this was a move to respond to Greek public opinion, to its hostility towards the malfunctioning public service and was somehow understood as a measure to counter the poor fiscal conditions of the country. However, in the renewed memorandum signed in February of last year, wage cuts were introduced in the private sector. These cuts were accompanied by an institutional bypassing of existing collective agreements. This has led to the complete deregulation of labor relations, which in turn has led to the drastic reduction of the minimum wage (22 percent lower than it used to be, down to 586 euros – and whistleblowers indicate that the plan is for further reductions to as low as 300 euros). 10 percent of the active population in the private sector had their wages cut more than 30 percent in 2012.
The side effects of these policies were not only the subsequent reduction of unemployment insurance and other payments including pensions; they also resulted in a sharp reduction in demand (30 percent). The latter contributed to the bankruptcy of another 120,000 small and medium sized businesses and a further loss of 100,000 jobs. It is the dynamics of these conditions, in combination with direct and especially indirect taxes like the Value Added Tax (which has also increased significantly), which have set the stage for an unprecedented social calamity.
The end of Greek democracy
The social consequences described above provide very strong indications that Greek society is decaying before our eyes. UNICEF’s last report states the 439,000 infants and school children are malnourished. Reported suicides from 2009 to 2011 have increased by 37 percent. The number of people who live near or under the poverty line has increased by 50 percent and now exceeds the 30 percent mark. The number of homeless people in Athens has been estimated to exceed 30,000. In 2012, emigration, primarily by well-educated young people, increased by 78 percent. 3000 medical doctors have already emigrated to Germany alone since 2009. Public health services have worsened. Shortages of drugs, medical equipment, and personnel are putting the population’s health in danger, particularly with regard to cancer patients. Dismal conditions have developed in the education system as amalgamations and extensive staff shortages have structurally undermined not only the overall quality but also the simple provision of effective teaching.
As these signs of social uncertainty, crisis and decay proliferate, they cast doubt on whether Greek society can be reproduced by maintaining the democratic structures for extracting consent. No democracy can survive intact under these circumstances. In fact, there is daily evidence that democratic institutions and civil rights have been severely curtailed in the country. A systematic undermining of the Constitution, constant bypassing of parliamentary procedures, preventative arrests, and police brutality in combination with the toleration (if not the indirect promotion) of the increasingly influential neo-Nazi Golden Dawn party highlight the political void that has opened up in Greece. Although these phenomena require further analysis, the Greek drama reveals how the collapse of the economic system has undermined the foundations of democratic rule.