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Is Neoliberalism responsible for Greece financial breakdown?

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Dispatch from Athens

These scenes are not from Africa or Asia rather it is heart of Europe. Remember this is not Eastern Europe—This is also not a scene of any World War II file or old newspaper. This is Greece today. Hunger is increasing with every passing hour.

Greece  is facing its sixth year of recession, is experiencing record high unemployment rates and people  have been forced to endure wage and pension cuts to satisfy European Union and International Monetary Fund demands. 23% Value Added Tax on agriculture has played havoc and people can not buy vegetables and  fruits due to ever increasing prices of commodities. Strikes continue to take place in various sectors, as workers protest the government’s austerity plan.

People line up for fruits and vegetables freely distributed by farmers during a protest against high production costs outside the Agriculture Ministry in Athens

Greece has been sunken in a financial crisis since year 2009. This crisis, according to experts is unprecedented in its modern history. Greece implemented structural adjustment policies of cutting social expenditures and raising taxes. During the last 10 years, it followed economic system in the image of neoliberalism through liberalization and deregulation measures and followed the policy of massive privatization plan of many state-owned companies and private sector was placed at Top of economy and production means, services and even social services were handed over to private sector.
Heavy taxation was outcome of neoliberalism policy and the country was left virtually on the mercy of European Union (EU) and International Monetary Fund (IMF)— two partners that started injecting money to protect neoliberalism and this support was called Bailout.
This bailout now has become a death role for Greeks. Debt was granted to Greece by supporters of neoliberalism and then the time came when paybacks of loans started, resulting virtual crash the of whole economy.
Golden years of Greece have gone when everything seemed to be going Greece’s way during first decade of 21th century. During 1994-2001, the deficit fell sharply, inflation declined, and real incomes and investment increased. Greece was struggling to make the numbers for inclusion in the European common currency. Next came the euro in 2002, the 2004 Olympic celebration — and then eventual disaster as Greece had to pay its debts.
Neoliberalism always provides superficial economy boost and high living standards and people start enjoying themselves beyond their real financial means. After living so far beyond their means, the Greeks are getting what they deserve today?
The country seems almost like a debtor’s prison, with angry creditors jeering at its demise. The norms of middle-class life that people here took for granted are beginning to come unstuck.
Now country is facing where middle class is becoming beggars and thieves. Burglary is said to be on the rise. Local firms are shrinking therefore jobs are laid off. Private sector is looking out of the country and departing to other Lands of opportunities and there is no public sector that can provide help to society as well as economy because massive privatisation has erased public sector as it is always in any neoliberalism economy system adopted by any country.
Construction companies are concentrating on overseas jobs and laying off domestic workers. The tourist industry has suffered this summer as vacationers cancelled plans because of fears of disruption and unrest if Greece abandoned the euro.
“With less money to spend, many Greeks are delaying paying their bills or simply defaulting. And because everyone is angry with the government, Greece’s already egregious problem of tax evasion is getting worse”, experts commented.
Even the off-books “black economy” is in trouble. With so little work, the illegal immigrants who once rushed to Greece are going home. The traffic is all outward bound, including money.
“Selfish interest prevailed. Business groups attempted to capture specific markets. Public-sector trade unions fought for preserving privileges. Tax discipline was further weakened. The welfare state was transformed into a system of endemic waste.” As the economy went haywire, support for the two major political parties collapsed.

Asad Haroon
A netpreneur, blogger and above all; A Human 🙂 Asad tweets from @aghaasadharoon and can also be approached on Google+

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