By Constantine Passaris, professor of economics, University of New Brunswick
The negotiations between Greece and its international creditors were expected to be concluded by the middle of this month. It turns out this was an overly optimistic timeline.
The creditors are adamant the austerity measures must be verifiable. Understandably, there is resistance on the Greek side.
There is another snag. First, there were three international creditors: the European Commission, the European Central Bank and the International Monetary Fund. Now, the International Monetary Fund has pulled out of negotiations.
The Greek public mood is clearly sombre. People are very anxious about what the future will bring. There is a lot of uncertainty about their personal economic prospects. They are tired of the toll that the economic recession, which is in its sixth year, has taken on them and their families.
People are edgy, uncomfortable and irritated with the new measures and austerity policies. The bank closures, the imposition of capital controls and the operational difficulties faced by businesses are accelerating the economic downturn.
People are taking extra precautions because they expect the future to be even worse than the present. They are hoarding non-perishable and canned food in the event the food distribution chain is adversely affected.
Consumers are in a thrifty mood.
They are spending hours waiting for their turn to withdraw money from the ATM machines. They are withdrawing as much money as possible and keeping it at home. It is clearly obvious that it is not business as usual or life on the easy lane.
The poorer, most vulnerable and marginalized persons in society have been the hardest hit by the recession.
Seniors have seen the cost of their medication soar to unprecedented heights. Pensioners are having a very hard time making ends meet. They have seen their incomes reduced and their pensions cut by one-third. The social programs that both seniors and pensioners relied on to supplement their pensions have been eliminated.
Out-of-business signs and barricaded stores betray a significant increase in bankruptcies among store owners and small businesses. Greek entrepreneurs and investors are postponing plans for new investments because of the environment of uncertainty.
The middle class, which is the backbone and lifeblood of the economy and consumer spending, is gradually shrinking as a result of rising unemployment, salary reductions and higher taxes.
Young people are experiencing unemployment rates of more than 60 per cent and are voting with their feet by emigrating to Canada, Australia and the U.S.
There have been numerous layoffs in the public service, unfilled job vacancies and drastic reductions in civil service salaries.
Last year was a particularly cold winter in Greece. I have heard of families turning off their central heating and spending evenings in bed with extra blankets to save money on heating fuel.
The ravages of the six-year economic crisis have not spared a single individual or family. The human face of this economic catastrophe can be found in the increase of homeless people, the loss of livelihood as a result of massive unemployment and the personal suffering. The real tragedy is that the economic situation shows no sign of improving in the foreseeable future.
The European Union has developed a secret plan to provide humanitarian assistance to the Greek people if needed. It is worth noting that humanitarian aid is usually provided to countries that are ravaged by war, civil strife or environmental disasters. This would be the first time that a developed country in the western world has received humanitarian aid.
Walking down one of the narrow cobbled side streets of Rhodes I noticed a shop sign that read: “we sell hope”. I have never seen anything like it anywhere in the world. I walked in to find out what exactly they sold.
They sold lottery tickets. I thought to myself how unfortunate that, in the midst of economic chaos, the only hope left for the Greek people was to win the proceeds of a lottery ticket.
University of New Brunswick economics professor Dr. Constantine Passaris is in Greece as a visiting professor at the International Writers Center in Rhodes (Greece).
© 2015 Distributed by Troy Media
