A Greek Tragedy

By Akrita Reyar | Last Updated: Tuesday, June 29, 2010 - 11:27
 
Akrita Reyar  

Listening to our guide at the famed Epidaurus Theatre in Greece, I was not just struck by the richness of the country’s history, but the penetrating truths that their forbears spoke.

A tragedy, they said, was the most important and pervasive experience of human kind. That is why they had just a comedy or two, but over ten tragedies that were enacted in the theatre, which afforded one of the finest aural experiences of the world. Each one in the audience could relate with some part of the tragedy as a part of their lives, they reasoned.

Greece understands the veracity of these words of wisdom better than ever before, with the nearly bankrupt country hurting like it has few times in history.

A casual walk through the streets and one comes face to face with the rage simmering in people. Angry slogans and abusive graffiti adorn every street wall and protests spill the television screens.

Chat about the state of the nation with someone in a restaurant, or a taxi driver or just some friendly stranger, and the first reaction you get is a hapless shrug and a hopeless huff. Things are bad and not getting better, they all say.

Economic disparities and class clashes are not a new phenomenon in Greece. There have been frequent patches in its timelines, including in the 20th century, which indicate intense struggle between the bourgeoisie and the proletariat over the right to a piece of the prosperity pie.

The problem this time around has been of fiscal mismanagement and ballooning budget deficit, which stands at nearly 13 percent, way over the 3 percent limit set for EU countries. Its public debt is 113 percent of the GDP.

There are two not so simple ways to get the ratio under control. Either Greece brings down its debt or it boosts its GDP. With recession-hit economies still tottering worldwide, robust growth seems like a bleak option. The only way would be to cut spending and slash welfare schemes. The other even more unpopular way would be to increase taxes.

As of now, the government is doing everything that would put it out of favour. It has frozen pensions, increased sales tax by 2 percent to 21 percent, hiked taxes on fuel, cigarettes, alcohol, and luxury goods, cut pays in public sector and chopped holiday allowances. These measures will help it save a crucial Euros 4.8 billion.

But lesser money in pockets of the people is only worsening the economic situation and the government is scratching its head to find ways to boost production, exports and employment.

The fact is that despite the prickly budgetary measures, Greece still needs a lot more money. Twenty billion Euros were needed to be raised in April and May alone to refinance debt that was maturing. With lenders wary of loading a sinking ship, loans are harder to come by. Any fresh funds would obviously come at a higher interest rate.

Greece looked at being bailed out by other European Union nations, like Germany, as the next most convenient thing.

The question that arises is: why would another European nation want to stick its neck out? That’s simply because the Euro would collapse otherwise. Greece would take it along on its way down.

It goes without saying Germany had little choice when it agreed to a Euro 22.4 billion rescue package for Greece. But they didn’t do it without a thorny reprove. Two German MPs argued that there could be no free lunches and called on Greece to sell off some of its islands, historical buildings and artifacts in lieu of the bailout money!

As is apparent, Greece is caught in a Catch 22 situation. It has to deal with diametrically opposite economic requirements of cutting costs and boosting growth at the same time. But both of these require an opposing action course. Therein lies the catch.

Unless it is able to push through difficult measures far enough without letting public sentiment boil over, and alongside come up with creative measures to pump up the economy, Greece will have yet another tragedy to write about and pass down generations.



First Published: Tuesday, June 29, 2010 - 11:27
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