European leaders meet Monday on Greece bailout; public tiring of austerity measures

ANGELOS TZORTZINIS/AFP/GETTY IMAGES - Police detain a protester during a demostration against new austerity measures in Athens on Sunday.

ATHENS — European leaders gather Monday to decide whether to give Greece a bailout to save it from bankruptcy, but they face a growing problem: a fed-up Greek public that is questioning the strings attached to the aid.

An April election may bring a chaotic mix of politicians to power, as Greeks flock to groups that have vowed to fight the terms of the $178 billion bailout or take the country out of the euro zone altogether. The shift — registered in opinion polls, mass defections in parliament and in street protests — raises doubts about Greece’s ability to implement the painful cuts on which European leaders are insisting.

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In short, analysts say, this bailout deal may not be much different from previous landmarks in Europe’s long debt crisis: public handshakes among European leaders, but private doubts about the future.

“Some politicians ignore that Greece is a democratic country,” said Loukas Tsoukalis, president of the Hellenic Foundation for European and Foreign Policy think tank, who said he hoped the spring elections would give political legitimacy to the bailout measures. “Greece’s creditors, they’re saying, ‘This is the moment when we can squeeze.’ But you can overdo it with very serious consequences.”

Sozita Goudouna, 33, an art curator and editor who lives in Athens, said the demands for even more austerity measures this year have caused a feeling of powerlessness over what might happen next.

It wasn’t always that way, Goudouna said. The first $145 billion bailout that came in May 2010 was like a shot of optimism, as many Greeks thought that Europe had come together to help one of its own.

“This was a salvation plan,” Goudouna said she thought at the time. “Because of a lack of information, a lot of people were in favor.”

What came afterward was a series of tax increases, cutbacks in public spending and investment, and upward ticks in the unemployment rate as Greece blew through one after another of Europe’s economic targets. Whole blocks of businesses went bust, leaving bright red “vacancy” signs on many of Athens’ once-bustling streets. More and more homeless people sheltered under the city’s trees. Men and women still dressed in the upscale clothing of their old middle-class lives showed up at soup kitchens.

Goudouna said she was grateful that she could still be flexible about her future.

‘Grim’ reality

“But my parents had savings and a secure life,” she said. “They were dependent on their pensions,” some of which have been cut, “and they had paid for them as well. . . . For me and my family, the facts are grim.”

New measures will make things worse, at least in the short-term, as European leaders have pushed for more cuts to ensure that the next installment of money they are giving Greece does not get swallowed up in a bankruptcy that they’re trying to avoid. ­Already, the government has cut the minimum wage by 22 percent, committed to further entitlement squeezes and promised to purge 150,000 public-sector jobs by 2015 in a bid for the second bailout, which needs to be approved within days if the country is to avoid default when a $19 billion debt payment comes due March 20.

A vote last week to institute the austerity measures set off riots that left dozens of buildings ablaze in Athens. The two ruling political parties kicked out 43 members who failed to support the legislation, making “unaligned, but against the cuts” the third-largest bloc in the 300-member parliament. Many of the hundreds of pages of measures that parliament approved hadn’t even been translated into Greek, since they came straight from the offices of the European bailout administrators onto the floor of the legislature.

Intentions questioned

Greeks are realizing that the measures “are sacrificing some of what has been fought for in these 35 years of democracy,” Goudouna said. “And we aren’t persuaded about the intentions of this help, given that we all know economically that the figures don’t work. In three months we’ll still have the same problems.”

Many of Greece’s politicians feel the same way. Antonis ­Samaras, who as head of the conservative New Democracy party is the frontrunner as the next prime minister, has said he would want to make “modifications” to the program — comments that are giving pause to Greece’s creditors. Some top European officials have demanded that the bailout money be put into a special account that would be usable only to pay Greece’s debts, a sign of their distrust for the country’s politicians.

“Countries are not banks, and banks are not countries,” said ­Spyros Kouvelis, a former deputy foreign minister who was a member of Greece’s Socialist party ­until he was expelled after the vote. He had believed in the first bailout, but this time around, he said, Greece’s creditors weren’t even trying to help the country restart its economic engine.

The biggest beneficiary of the political turmoil has been the Democratic Left party, which controls just four seats in Parliament but now has the second-largest amount of support in the country, according to many opinion polls.

Its leader, Fotis Kouvelis, is a veteran lawmaker who has worked for years at the margins of power. He said he was pleased by the support but cautious about it.

“Society is shifting on a number of levels,” Kouvelis said. “The middle class is slowly disappearing, and the middle class is what brings about a social balance.”

He said that Greece needed to do everything it could to stay in the euro zone. But he added that he would fight for policies to expand the economy, such as changing the tax system and taking measures to increase productivity.

He said that one of Greece’s best strategies might just be to wait for the rest of Europe to change its mind on austerity, pointing to the French presidential election campaign. Front-runner Francois ­Hollande of the opposition Socialists has said that the currency bloc’s approach to Greece has been too focused on cuts and not enough on economic growth.

“We’re likely to see a shift toward more liberal politics in Europe, from the conservatism we see now,” Kouvelis said.

Special correspondent Elinda Labropoulou contributed to this report.

 
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