Along with all that, and a barrage of new taxes on the already buckling shoulders of employees and pensioners who cannot evade taxes, add the customarily sadistic and destructive extortions accompanying every installment of the "loan package" Greece has been receiving from the troika: demands for lowering or abolishing the minimum wage (it's ~8400 Euros/year net, theoretically, around 7000 Euros for youth entering the work force, and less than that for all the tens of thousands now forced into part-time jobs, usually with full-time schedules, and no overtime, and those who are months behind in salaries probably never to be received) and canceling the 13th and 14th monthly salaries (misrepresented as bonuses when they are part of a workers' yearly compensation, cut into 14 installments for historical and practical reasons) - and that's for the private sector. Public sector workers having had their (mostly) meager salaries slashed by anything from 30 to 60% over the past two years, and having been fired at random for months now, are planned to be drastically reduced in number (they were no more than 14% of the workforce to begin with note, near the OECD average) while most teachers, and quite a few doctors etc will be among the working poor.

Note that there is still one area in which Greek public spending outperforms most of the healthier economies of the world: defence spending. This is apparently, actively encouraged by both Merkel and Sarkozy.

Is it just a Greek thing?


The disaster that has befallen Greece, according to the various fiscal occupation authorities, is entirely of its own making, the reasons the IMF's predictions have failed is because of insufficient political support or not enough reforms. But is that  true? How successful have the policies of uber-hooverism been in less rowdy patients? Although fellow Eurotribers have recorded the myriad ways in which things go wrong in the peripheral countries they live in, let's just include recent headlines



Ireland:  Troika warns of future welfare cuts

The Coalition will have difficulty in keeping to its promise not to  adjust tax bands and credits in Government and will also need to rely on cuts in social protection to provide the "bulk of savings", troika officials monitoring Ireland's bailout programme have determined.

Two separate analyses by the EU Commission and the International Monetary Fund published before Christmas have disclosed details of proposed measures for the 2013 budget, which is unprecedented for Ireland. A  total of €3.5 billion in savings are planned; €1.25 billion in new taxes and €2.25 billion in cuts.



The analysis has also criticized aspects of Government policy, including its decision to make larger than expected reductions in the capital budget as well as the lack of punitive sanctions for unemployed people
who refuse to seek work.

...All of which lead to the obvious question: Ireland has done what the IMF wanted, but where is the reward?

Despite 'exceptional' efforts to meet IMF targets, Ireland has a rising deficit, sustained emigration and 15% unemployment... The fiscal adjustment, according to economist Karl Whelan, is the equivalent of "€4,600 per person... the largest budgetary adjustments seen in the advanced economic world in recent times". With annual "adjustments" of €3-4bn flagged until 2015, the euphemism of "purposeful austerity" cannot long camouflage the concerted assault on the - already minimalist - social contract...

...Costas Douzinas recently documented how the IMF blames the failure of its growth predictions, and austerity measures, on the impact of Greek public resistance. Yet in well-behaved not-Greece, the same bad medicine has resulted in a rising deficit, stagnant growth, sustained emigration, and unemployment at about 15%. In its latest quarterly report, the IMF praised Ireland's "exceptional" efforts to meet its targets,  but this praise comes at a time when the fiction of a reward for good behaviour is falling apart.

Portugal: Income inequality EU15 champion, is heading towards even greater income disparity, as are apparently all the already highly unequal "restructured" peripheral countries - this being of course not a side effect but an aim of the IMF / ECB/ EU programmes. Meanwhile, this year's logistic trick that reined in the Portuguese deficit can't be repeated next year:

The government had set a goal to trim the deficit from 9.8 percent of GDP in 2010 to 5.9 percent in 2011 and to 4.5 percent next year. The 2012 budget includes a plan to eliminate the summer and Christmas salary payments for state workers earning more than 1,100 euros ($1,443) a month. Tax deductions will be reduced and the government plans to increase the value-added tax rate on some goods.

Or as the IIF has put it:

Portugal, which has "experienced serious fiscal slippages," is trying to meet a deficit target of 4.5% of GDP. Doing so would require a fiscal contraction valued at 6.1% of GDP, in a year in  which growth is expected to drop by 3%. "This represents a very demanding objective and lack of progress could heighten market concern."

Spain: The new conservative government has already reneged on its promises as a result of troika pressure and missed targets:

Spain's new government said on Friday that this year's budget deficit would be much larger than expected and announced a slew of surprise tax hikes and wage freezes that could drag the country back to the centre of the euro zone debt crisis.
In its first decrees since sweeping to victory in November, the centre-right government said the public deficit for 2011 would come in at 8 percent of gross domestic product, well above an official target of 6 percent.
It announced initial public spending cuts of 8.9 billion euros ($11.5 billion) and tax hikes aimed at bringing in an additional 6 billion euros a year to tackle the shortfall.

And things look bleak for the foreseeable future:

Rajoy's government is taking quick action so as to meet a promise to slash the annual public deficit to 4.4 per cent of gross domestic product in 2012, come what may.

The government has acknowledged Spain will miss its goal of reducing the public deficit to 6.0 per cent of GDP in 2011 from 9.3 per cent the year before. The 2011 deficit may even top 8.0 per cent, ministers say.

The Popular Party government says the deficit slippage in 2011 could force it to implement another 20 billion euros in austerity measures for 2012, on top of the  originally estimated savings target of 16.5 billion euros.

The government also announced that the social security fund's accounts are worse than had been feared, with a 2011 deficit of 668 million euros.
The previous Socialist government had forecast a social security surplus

But it isn't just the unclean PIGS, who are in trouble, austerity (certainly the open-ended, turbo-austerity we're witnessing being implemented around the world) hasn't worked because it never worked in the interests of the societies subjected to it:

Indeed, austerity economics has not worked in one single case in Europe in the last two years. When David Cameron's government imposed a first round of harsh spending cuts in 2010, it utterly failed to revive the British economy as promised. To the contrary, it probably cut a budding recovery short.
Unemployment and the deficit as a percent of GDP remained high. Some pro-Conservative observers I met at the time assured me that the Cameron team, led by George Osborne, the Chancellor of the Exchequer, was pragmatic and would reverse course on austerity if it wasn't working. Yet when growth basically ground to a halt in late 2011, the Cameron team only doubled down, making further cuts. We need more of the same medicine, they told their citizens, a record number of whom are unemployed. Britain is a hair's breadth away from outright recession only two years after its last one.

So, no Mr. Thomsen, the IMF / ECB failure was not due to some Greek particularity. It is systemic and ubiquitous, part and parcel of what austerity is supposed to do. Indebted countries in the EU periphery can get an idea about where they will be next year socially, if these policies are not resisted, by looking at Greece now. We're a year ahead as far as social despair is concerned (possibly a couple more years from richer countries). And until a viable european movement is built that doesn't just undermine the dominant narrative but offers a concrete pan-european alternative, the TINA-peddlers might just continue destroying country after country.

Negating the nattering nabobs of neoliberalism

Browsing around the national dialogues regarding austerity in the afflicted countries, I ran repeatedly across the sorts of arguments for austerity one is inundated with here in Greece, across Europe: these apologias can be filed under a relatively few tags: "TINA", "it's the people's fault", "paying for past excesses", "defective national character", "see this as an opportunity to reform", "omnipotent markets sadly ate our economy", "people should have elected better politicians to office", "too lazy" - feel free to add more. [ An aside: It would be a great idea if we could somehow gather and disseminate articles towing the austerity line from all over the austerity afflicted countries (this presently will mean "the EU"), either through tags, keywords, or on a Wiki. This might be a useful tool in pointing out the similarities of supposedly nation-centric analyses and helping debunk such rhetoric...]

Most of these justifications of austerity are moral in nature, the economic "therapy" is not primarily seen as a means to fix economic woes but as an instrument to punish naughtiness, some sort of puritan S&M on a continental scale. It is rarely that an obvious fact is noticed:

"Austerity economics" never calls for austerity from those who have gotten rich by being irresponsible, only from those who didn't benefit from it at all

Most of the stereotypes being peddled at home and abroad are easily seen to be lies, yet few bother to fact-check them. Most of the recipes for recovery are failing each day, yet it is those that say that this neoliberal madness has got to stop, that are portrayed as unrealistic. In Greece, as more and more people are being pushed to the margins and to pauperisation, pundits and bankers threaten society in a shrill voice about the Hell that awaits should Greece leave the Euro, truly ignorant of the Hell that most Greeks live in right now, and not mentioning the kind of Hell that 10 years of an austeritarian viciousness will wreck on the country. The "technocrat" (but what is the techne that he possesses, really?) Prime Minister, refused to draw a "red line" on the minimum wage or private sector worker compensation, as his only red line is "to save the country from bankruptcy" (which in his mind is obviously something different from its citizens bankruptcy), as more and more households go bankrupt already and lives are being terminally destroyed ).

However there is a problem with this rhetoric that I believe will become apparent in more and more countries as the crisis rages on: when people are dealing with a real destruction of their lives and fear for their capacity to feed themselves and the ones they love, all propaganda becomes ineffective (the Internet helps a lot as well). There is no spinning homelessness, there is no spinning the fact that you can't afford to pay your electricity bill, or your kids classes. This is the quandary that the Greek ruling class is finding itself in. Despite the virtual elimination of most left of the socialists' voices on TV and despite the fact that there now is not a single large national daily that doesn't support the Papademos government, the left is rising to levels that make even an attempt at electoral legitimation of policies, via the two party system, problematic for them. The elections which were supposed to be held on February have been moved to early April and more and more elite voices are pushing for an even later date, after September if possible, or even in Autumn 2013. This ineffectiveness of mainstream propaganda is the reason that the Papademos government is losing legitimization faster than expected, and the reason that popular rage is about to explode. This however is not expected to be confined in Greece anymore.

[A previous and briefer version of this diary was posted in Histologion]