The social situation in Greece

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The social situation in Greece
By Marcus Salzmann
25 February 2010

The European Union has dictated a rigid austerity course for Greece,
aimed at lowering the country’s existing budget deficit from its
current level of nearly 13 percent to less than 3 percent. Broad
layers of the Greek population reacted to the government’s announced
program of cuts by taking to the streets and participating in strike
action yesterday. For their part, the major trade union federations
are working closely with the social-democratic administration of
George Papandreou to channel these protests and strikes so they do not
threaten the government.

Prominent on yesterday’s strike were public service workers who will
be hit especially hard by government cuts. They were also joined on
the streets yesterday by many farmers protesting cuts to subsidies
that threaten to put them out of business.

In response to the protests European politicians, business and media
representatives have undertaken an offensive demanding that the
planned cuts be implemented ruthlessly, with some quarters even
criticizing the government’s program as too timid.

The head of the European Central bank, Jean-Claude Trichet, said
Greece must strengthen its endeavours in order to demonstrate the
viability of its austerity plans aimed at reducing the huge budget
deficit. The plans announced so far are inadequate in order for Greece
to maintain the Maastricht criteria in such a short period, according
to Trichet, who is pushing for a harder course. “All Greeks must
recognize that they must correct a course which has gone out of
control”, he said.

The head of the Munich-based Ifo Institute for Economic Research, Hans
Werner Sinn, called for measures “that really hurt”—while Rolf
Langhammer, vice-president of the Institute for World Economy in Kiel,
demanded a clear lowering of real wages in order to revive the
country’s competitiveness.

The German financial secretary of state, Jörg Asmussen, also declared,
“We are certainly of the opinion that additional measures are
necessary by Greece”. According to Asmussen, the country must be
measured against Ireland (which uses the euro as its currency) and
Latvia (which does not)—both countries having begun to implement
draconian cuts aimed at reducing their respective debt burdens.

These appeals have been echoed in the media. The Nürnberger
Nachrichten insists on huge attacks on the population: “No, there is
only the one way: use massive pressure to force the euro-partner onto
the path of virtue. In addition to cuts in the social and pension
systems, it is necessary to slash the army of state officials, make
real wage cuts, increase taxes and reduce expenditure”.

Cynically, the media then claims the Greek population is responsible
for the debt crisis. Many interviews and comments conclude by
remarking that “Greeks have lived beyond their means” and now must
“adjust their belts accordingly”.

In terms of wages and social standards, Greece in fact ranks amongst
the worst-paid countries in Europe.

The social situation for a majority of the population has already
clearly deteriorated in past years. The official unemployment rate is
at present 18 percent, and according to official figures 20 percent of
Greeks live under the poverty line. An even higher level is recorded
by social welfare organizations.

Sixty percent of pensioners registered with the biggest state pension
funds must survive on less than €600 per month, and average salaries
in public service are around just €1,200.

In particular, youth unemployment has risen rapidly in recent years.
In 1998, 21 percent of all 15-to-24 year olds were out of work. In
2009, this figure had risen to over 27 percent. Those youth lucky
enough to get work are required to subsist on a salary averaging €700
per month.

Unemployment is a problem for many university graduates, and the
situation for doctors is particularly difficult. According to figures
from the World Health Organization, Greece has the highest level of
unemployment in this occupational group.

At the same time, the cost of living is comparable with a country like
Germany, with basic foodstuffs such as milk, cheese and eggs costing
up to twice as much. Telephone charges in Greece are amongst the
highest in Europe. The cost of living varies significantly according
to region, with prices higher on Greece’s many islands due to high
transport costs.

Rents have also increased considerably in the past few years, and in
the large cities they are also comparable with Germany. In the
countryside rents are lower, but there is often a shortage of
accommodation with many landlords giving priority to tourists.

In relation to the cost of living, wage levels in Greece are very low
compared to other Western European states—once again with pronounced
regional differences: In Thessaloniki workers earns a quarter less
than in Athens, in the rest of the country around 35 percent less.

Clerical employees receive on average just 40 percent of the salary
paid to their counterparts in Germany for a full-time job. Within the
Eurozone, incomes are only lower in Portugal. A part-time job—the only
way to earn a living for single parents—does not pay enough to cover
the cost of living.

The legal minimum wage is around €700, while the highest entry-level
wage is €1,000 per month, paid to workers in financial services. The
lowest contractually-agreed wage—around €680—is paid in mechanical
engineering and the electrical and electronic industries. An engineer
with up to three years professional experience earns at least €1,050
gross per month, a programmer an average €700, a secretary with
knowledge of foreign languages €710, an accountant €770, and a driver
€715.

Most pensions are less than the minimum wage. While pensions have
barely risen in past years, the governments have repeatedly increased
the retirement age. In the 1980s and 1990s public service workers in
Greece retired in their late 50s or at 60. Today the retirement age
lies at 65 years, with the Papandreou government intent on raising it
even further, to 67.

The government also plans to implement cuts to the country’s health
system, which is already in an appalling condition. A national health
service (ESY) was created in the 1980s, guaranteeing basic health care
for all and was aimed in particular at providing health care for
Greece’s rural regions.

In the 1990s both social-democratic and conservative governments
withdrew funding from the state-administered health insurance
companies, in part to participate in obscure stock exchange
transactions. As a result the health insurance system encountered
growing problems that were further exacerbated by the stagnation of
wages. There are currently claims totalling €5 billion on the health
insurance companies lodged by doctors, hospitals, pharmacies and
laboratories.

The catastrophic situation in the health service has lead to
widespread corruption. The combination of low wages and thousands of
permanent posts for doctors and maintenance personnel remaining
unfilled in state hospitals means that bribes are a part of everyday
life. Anyone seeking basic care or an earlier date for their operation
slips the doctor a “Fakelaki”—a small envelope containing cash.

Younger physicians, who speak out against such immoral practice or
reject such payments are likely to be pressurized by their colleagues
for threatening what is widely seen as a vital wage supplement. “The
birth of a child in a public hospital, for example, must be lubricated
with the sum of €1,000”, reported Ellen Katja Jaeckel, the head of the
Athens office of the Goethe Institute, in an interview over the
protests in Greece 2008.

Zachos Kamenidis made the same experience. He runs a plumbing company
close to Thessaloniki, the country’s second largest city. Like many
others he referred to growing social decline. “Most people have to get
by here with between €600 to €700 euros”, he said. He receives €250
per month from the state for his three small children. When his wife
was more pregnant with their last child, she had to pay a private
practice €140 for an ultrasound. In one of the state hospitals in
Thessaloniki, there is no ultrasound equipment.

At the same time, corruption is not limited to the health service. The
Greek professor of macroeconomics at the University of Leipzig, Spiros
Paraskewopoulos, estimates that a Greek average family must pay
approximately €1,600 per year in bribes.

http://wsws.org/articles/2010/feb2010/gre3-f25.shtml

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