May Day tomorrow - A prediction

May Day tomorrow , originally uploaded by Teacher Dude's BBQ.

The Greek government is the process of negotiating an austerity package with the EU and the IMF. The details of which will be announced on Sunday. The choice of day is not a random detail but rather reflects the likely effect of the cuts in public services, wages and jobs on public opinion that are almost certainly part of the deal.

As tomorrow is first of May the country will be holding a series of marches to mark the event. Usually it is marked peacefully and more with a sense of ceremony that any burning revolutionary drive, a secular holiday, especially for those on the Left.

However, tomorrow promises to be different as popular anger over the massive cuts in income and living standards that are likely to be seen in the next few years is looking for an outlet,

Trade unions, public sector workers, members of oppoisition parties plus any number of ordinary citizens will be in the streets on Saturday outraged by the fact that the present political system has brought the country to this impasse

As well as sense of palable rage the government has also added to this explosive mix by giving free rein to the security forces in maintaining of public order. Acutely aware of the fact that the eyes of the financial world are focused on Greece at the moment they are going to try everything in their power to prevent a repeat of the events of December 2008 when the killing of a 15 year old by a police officer sparked off a wave of riots and protests that engulfed Athens and other Greek cities for a month.

On the other hand the riot police, known as the MAT in Greek, are notorious for their lack of discipline and indiscriminate use of both the baton and tear gas, a fact that is likely to inflame matters producing the kinds of images prime minister, Giorgos Papandreou so dearly wishes to avoid.

Greece: The morning after

Much of the current media coverage over Greece's debt crisis is focused on how the country is going to raise the funds necessary to cover the $400 plus billion it owes creditors. Scenarios concerning the role of Germany and/or France in bailing out Athens are discussed constantly on national TV and in the newspapers and what will need to be done in order to convince Greece's European partners to cover cost of lending the billions needed just to keep the country afloat.

However, whatever happens in the coming months the question of what Greece does next in a world in which its financial choices are closely scrutinised by whatever monetary institution steps into the breach to save the country from bankcruptcy has not been addressed. The prospect that an elected socialist government will be obliged to implement a conservative fiscal policy controlled by unelected officials raises all kinds of political dilemmas which Giorgos Papandreou's PASOK administration will have to deal with in the immediate future.

Papandreaou will be forced to challenge directly exactly those public sector trade unions which have put him and PASOK in power. In addition he will be forced to cut areas of spending which have been used by successive government to ensure political support.

The prospect of a place in the Greek civil service has long been the source of political power for parties on the right and left of the political spectrum. This combined by the promise of public sector contracts to economic elites in the private sector form the basis of the country's feudal political structure and in no small measure contributed to its present woeful economic situation.

Instead of land and power being swopped for military service the present Greek version of feudalism sees votes and political support flowing up the system in return for public funds and the influence it garners flowing downwards. It is a structure of patron-client relations which links the heads of the major parties to the humblest villager and is the lifeblood of modern Greek politics.

The ebb and flow of such influence and the complicated web of personal, familial and political relations that it engenders helps explain much of the apparent confusion and chaos of modern life in Athens and other major cities. Much of the country's infrastructure is divided into a patchwork of competing fiefdoms that have formed as a result of the present political setup. Each participant owes their position and continued economic well-being to maintaining the right connections with those above and below them in the hierarchy. In such a system qualifications, skills, effectiveness and ability play second fiddle to being able to curry favour with those who are in a position to advance your career.

Another by - product is chronic inefficiency and confusion as its duty of every fiefdom to ensure that it gets the maximum amount of resources in order to guarantee its survival. Co-operation and cost cutting mean giving up exactly those resources one needs to make sure that money and influence continues to flow to those whose support you need.

The effects of this system also affect the private sectors as the companies competing for contracts with the public sector, a huge player in the Greek economy, do so on the basis of political, personal and family connections. In some cases this takes the form of outright bribery but many others there is the mutual understanding that favours given must at some point be returned. It is no coincidence that many of the country's richest men have media wings attached to their business conglomerations which can be used to promote or attack parties and politicians .

The upshot of this unholy alliance is that crony capitalism and "licence Raj's" dominate the economy stifling innovation and competition. There is little incentive to cut the cost of your product or improve the quality of your service in such a system. As a result Greek companies which dominant nationally rarely have the expertise to break into developed markets where transparency means that methods used at home cannot be employed.

Whilst foreign observers often point the finger of blame at Greece's powerful public sector unions for lack of competitiveness and low productivity the reality is that pay in the private sector has remained stagnant for years and that much critised worker protection laws that supposedly coddle unsuitable employees are rarely applied to non - public sector businesses. Despite a pool of cheap, educated labour which can be hired and fired at will the private sector has done little to prepare for the demands of a modern globalised economy and instead reaped the benefits of low wages while raising prices far beyond the rate of inflation.

It is difficult to see how an economic and political system run on such principles can reform itself in the kind of time scale being proposed by Europe and controlled by exactly those people who helped run the country into the ground in the first place. The obvious answer is that Greece will not be able to implement the kinds of reforms being demanded and that in trying to square the circle the country will tear itself apart as different social and economic groups turn on each other to preserve a semblance of their priviledges and power.

Already there has been a growing wave of political violence with terrorist attacks now forming a staple of the daily news. That combined with a burgeoning crime rate form the background to a society that appears to be gradually coming apart at the seams.

http://my.nowpublic.com/world/greece-morning-after

Poverty in Greece

Poverty in Greece, originally uploaded by Teacher Dude's BBQ.

To listen to some international accounts of the current debt crisis you might be forgiven for thinking that the 300 billion euros Greece owes has been used to fund some kind of Balkan version of a Scandanavian welfare state. That the money has been spent on funding an unsustainably generous social safety net.

However, even a brief visit to the country's decrepit hospitals and threadbare schools is enough to disabuse even the most casual observer that that the huge mountain of debt accumulated has been used to improve the lives of the poorest Greeks.

While in theory Greece has a welfare state that compares with other EU members the reality is that much of this provision is of low quality or non-existent. As a result of such systematic deficiencies people are forced to pay for services that other Europeans take for granted. Few, if any student entering the countries universities have got there without massive investment of time and money by parents in the form of expensive extra tuition.

Similarly, medical treatment in the country's supposedly free health care system costs billions in terms private charges and bribes.

Instead most of the money has simply evaporated in a miasma of corruption and incompetence which sees that any public service contract almost invariably goes over cost and requires double ot triple the time originally alloted.

Case in point is the underground system being built in the northern port city of Thessaloniki which started 45 months ago and already is 32 months behind schedule. That number is set to rise as the Itallian construction company which won the countract has announced that it will fire 80% of its employees in March if it does not receive extra funding.

On the other hand the country Greece's bloated public sector can still afford to pay some of its better connnected employees 16 salaries per year. Those luckily to be employed by parliament are paid for 16 months work annually. At the other end of the spectrum tens of thousands often wait months or years to be paid wages owed.

Giorgos Papandreou has been working hard over the last week at the Davos World Economic Forum to try and persuade fellow Europeans and international economic markets that the his newly elected socialist government can reign in spending and raise more revenue. However, how much influence a system that his party has been instrumental in setting up and maintaining over the last 30 years is open to doubt.

For the last four decades both left and right have used the public sector as a way of gaining and maintaining voter loyalty by handing out jobs and contracts in return for political support. As a result the country's infrastructure has been manned not by the brightest or the best but the most faithful.

Entry and progress depend not on competence but on maintaining the myriad of personal, family and political connections that form the basis on any succesful career in Greece.

With unemployment predicted to hit one million in 2010 conflict and clashes between social groups unwilling to make sacrifices and a government unable to pay seem unavoidable. Already farmers have blockaded much of the country's transport network in order to demand one billion euros in funding and sweeping changes in agricutural policy.

Demotix

The economic downturn bites even deeper

"As many as 51 million jobs worldwide could be lost this year because of the global economic crisis, says the International Labour Organization(ILO).

The UN agency says that would push up the world's unemployment rate to 7.1% by the end of 2009, compared with 6.0% in 2008 and 5.7% in 2007.

The ILO's most optimistic forecast is for 18 million more unemployed, giving a global jobless rate of 6.1%"

Click here to read the rest of the BBC article.