Riots tore through the Greek
as Parliament voted on harsh new austerity measures today. Though
Prime Minister Lucas Papademos acknowledged the bill - which would
sharply lower the minimum wage, cut pensions and force one-fifth of
all civil servants into early
- will cause suffering among the Greek people, he asserted that not
passing the bill would lead to default, disaster and expulsion from
"The social costs that come with these measures are contained in
comparison to the economic and social catastrophe that will follow
if we don't adopt them," he said in a public interview, according
Even the Greek government, however, couldn't seem to form a unified
front on the austerity issue. The ruling coalition of Socialists
and right-wing New Democrats threw 43 lawmakers out of their
respective groups after they dissented against the bill, reported
Greece's problems remain intractable. The Mediterranean nation's
government owes far more to banks, mostly in Germany, France and
the U.K., than it can possibly hope to repay on its own. In
to get a $170 billion "rescue package" to pay the
coming due next month, the International Monetary Fund and a
coalition of European states have required the country to sharply
cut government spending.
If Greece didn't get the money and defaulted on its bonds, it would
effectively be kicked out of the euro. No one knows exactly how
that scenario would play out, though massive capital flight would
be likely - whatever
regime the country created in the wake of default would be worth
far less than the common currency, instantly impoverishing the
Greeks even further.
The protesters know they're in a tough spot no matter what happens.
"The message to the Greek government is they should leave the
country, right now," Dimitris Fokos, an unemployed protester, told
Bloomberg. "They don't represent the people anymore."
Part of the reason that Greeks are so angry about the
crisis is the fact that it came as something of a surprise. Shoddy
government bookkeeping and fraud concealed the extent of the
problem, and it was only during a change of government that the
totality of the mismanagement came to light. Set against the
backdrop of the financial crisis, which radiated out from the
world's centers of finance capital in
and London, the pain appears to many Greeks to be inflicted on them
from the outside.
This sense of injustice explains why as many as 15,000 Athenians
rioted in front of Parliament, setting 10 buildings alight and
hurling marble and fire-bombs at the police guarding the
Perhaps worst of all, it's not clear that austerity is very
effective at achieving its stated goals. Though it will cut down on
government balance sheets, other countries that have tried
austerity have seen little positive impact. Ireland and the U.K.
still face significant fiscal challenges, and their people grow
ever more restless.
Indeed, the only sure impacts of austerity are the temporary
assuagement of international financiers and the permanent
provocation of the nation's people.