Greek Austerity Leading to Brain Drain with No Economic Recovery in Sight
Dimitri Lascaris says the latest unemployment figures in Greece show the indifference of the EU elite to the hardships of austerity and the democratic will of the European people
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore. And welcome to The Dimitri Lascaris Report. Dimitri is a class action secuitist[inaud] lawyer called to practice in the state of New York and the province of Ontario and he’s on the board of the Real News Network and he’s also our Greek Correspondent. Thanks so much for joining us.
DIMITRI LASCARIS: Glad to be back Sharmini.
PERIES: So Dimitri, I understand there’s some new economic data out on Greece and things aren’t looking good. What’s happening?
LASCARIS: Well, you know, after the current government, the [inaud] government adopted- agreed to implement and even harsher austerity program than the Greek people had reject in referendum last July, he began to say that 2016 was going to be the year of which the Greek people see a light at the end of the tunnel. And by the way this is language that was used by every prior administration that had participated in the implementation on the austerity program in Greece, which has been going on for about 6 years now. Of course the light at the end of the tunnel has never actually shone on the Greek people. So the early indications not at all surprisingly given the harshness of this austerity program even worse than the prior one, and specifically what has happened is that the unemployment rate for the first quarter of 2016 has been revealed. It has risen from 24, a nosebleed 24.4% to 24.9%, so it was a half percentage increase and it’s almost a 25%- this is of course a depression level of unemployment, which has persisted for years in Greece. And a very troubling statistic about the unemployment picture is that slightly nexus of 70% of the unemployed population are long term unemployed, which means they’ve been unemployed for more than 12 months. As anybody who’s been unemployed knows, the longer you’re out of the job market, the harder it is to get back into it at least in terms of finding stable employment that can sustain you. And it’s against this backdrop, remarkably, that the governor of the bank of Greece, Yanis Stournaras, recently came to Parliament and made some comments about the austerity program. Now Stournaras is the former finance minister under the conservative government of Antonis Samaras, who was defeated by Alexis Tsipras the Syriza leader in the election in January of last year. He was appointed to be the governor of the Central bank of Greece by Samaras to the disappointment of the left; he has remained in that post on the Syriza Government. So he presented an economic picture to Parliament in the last few days and in it- he urged that the dramatic debt relief – well, I’m qualifying it as dramatic but I think that’s a terrible characterization of what he said, he said that there should be debt relief for Greece but it should not result in losses to the creditors of Greece and this is a pure fantasy. It’s a fantasy that you could have debt relief for Greece that is going to have any prospect of rendering the debt sustainable which does not entail losses for the creditors. Even more remarkably perhaps he suggested that the primary budget surplus being demanded by the ECB and the EC, of 3.5%, which is a pipe dream and has been recognized by the IMF as being a pipe-dream should be relaxed however he’s suggesting it be relaxed to 2%. Why is that remarkable? It’s remarkable because the IMF itself, one of the creditors, has urged that the primary budget surplus be relaxed to less than that, 1.5% and has characterized even that target as being quite optimistic. Those were the words of the IMF. Why is the Greek- the Governor of the Central Bank of Greece, suggesting a form of debt relief, which is going to be ineffective, and which is less dramatic than what has been urged by the IMF. The IMF at least initially was saying that there had to be a write down of the data, a substantial reduction in the face amount of the debt…
PERIES: And has the IMF backed down on that?
LASCARIS: The IMF backed down on the write-down, but it didn’t back down well – it again switched and it was clear the German Government in particular and other European governments were not going to tolerate any kind of a write-down at all. And started talking about other forms of debt relief, which were substantial but probably at the end of the day were going to be inadequate including capping the interest rate, giving Greece a multi-decade debt holiday, extending the maturities and so forth. It would have been substantial debt relief, as I say probably inadequate because it didn’t involve a write-down of the debt. But here you have the government of the central bank of Greece saying something that is just fantasyland. That you can render Greece’s debt sustainable without occasional losses to the creditors. And why is the Governor of The Central Bank of Greece doing that? I think ultimately because he is adherent, as indicated by the fact that he was the finance minister under a conservative government of the EU’s neo-liberal policies. And his devotion is not primarily, it seems to me, to the interests of the Greek people, but rather to the ideology of the EU elite. And that’s reflected in what he’s recommending in Parliament.
PERIES: And what is the human dimension of all of this- this levels of unemployment?
LASCARIS: Well, one catastrophic aspect of this is a brain drain. I mean, when you’re looking at a 25% unemployment rate for a general population, over 70% of which is long term, and I didn’t mention it, but youth unemployment rate, in excess of 55%, more than one out of every two youths in Greece has no job. You know, what is going to happen? Those with any job prospects whatsoever outside of the disastrous economic circumstances of Greece are going to leave the country. And they’ve left en mass and they’ll continue to leave en mass and what you’re going to have left increasingly, is an aging population in a country that is extremely financially stressed, that is suffering a humanitarian crisis. And on top of all of that, is dealing with a massive influx of refugees, who are being effectively trapped in the country by boarder closures to the north. That paints a very dire picture for the future of Greece. And as I say – I’ve said this previously – and I hate to sound pessimistic, but it’s very difficult to see how the economy and the society of Greece will ever recover in these circumstances.
PERIES: Yeah, and not to mention, the rest of Europe. Where will they be going if there’s a brain drain because the rest of Europe, even you look at Spain and France, with all of it’s labor unrest and youth unemployment- we’ve been covering that – and also with the Brexit coming up. There’s those developments coming up in the UK as well, where would they be going?
LASCARIS: It’s an interesting question. To the extent that they are highly educated, they’re probably going to be able to find – I mean I wouldn’t say probably – but they’re going to have decent prospects of finding employment in the more stable economies of Europe. Where it becomes really problematic – you’re not highly educated, you don’t happen to have educational qualifications, which are demanded in those economies. You mentioned Brexit by the way, Sharmini, interestingly a poll came out today which showed that the leave camp has surged to a 6 point lead, one week in advance of the Brexit poll. And you know, I think there’s certainly has to be some relationship between what is happening in Greece and what is happening in the other countries of Europe, not just in terms of the economic hardships, but the austerity polices of the EU have occasion[inaud], but also in terms of the complete indifference of the EU elite to the democratic will of the peoples of the south. And I think that’s sending a very loud message to the people of England and Britain. And that message is that the EU doesn’t really care about your political choices. And it’s going to continue to adhere to an economic philosophy and ideology, which has proven to be disastrous in the face of a mountain of evidence that it’s disastrous, it’s persisting in these policies. And you know, one would think that there would be some relaxation of these economic polices and there would be some greater regard given to the Democratic choices of the European people. When the European elitists confronted by the departure of a major partner within the European Union. But there’s no sign whatsoever that there’s going to be a relaxation of those polices or regard is going to be give to the Democratic choices of Europeans.
PERIES: It doesn’t seem to make sense why the ruling parties of these countries like France and Greece, why they’re adhering to these polices when it just means- it’s leading to the demise of the European Union all together.
LASCARIS: Yes and leading to great social instability in France. You may recall, Yanis Varoufakis, he’s the former Finance Minister of Greece has said repeatedly that he was told by higher ups in the EU elite during the negations over the bailout last year, that the EU felt it couldn’t allow any relaxation of the policies in Greece because it needed to send a message to France. And that you know, relaxation of those policies would not be tolerated. And sure enough, here we are several months later, and there’s massive unrest in France, daily riots, tearing gassing of the population. There are constraints on the fuel supply because of strikes that are being held across the country. And it seems very much that what Yanis Varoufakis has predicted has come to pass, which is Greece is a precursor to what was intended to be done to the economy of France.
PERIES: All right Dimitri. I thank you so much for your report today. A lot to think about. And looking forward to having you back next week.
LASCARIS: Thank you, Sharmini.
PERIES: And thank you for joining us on The Real News Network.
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