Government and how Greece got into trouble
I’m 38 years old now and I have lived the largest part of what we call “metapolitifsi” in Greece. It’s actually a term to describe the years after the fall of the Greek junta, in 1974, and the new political environment that was established.
The 70’s was more or less a transitional period; during which the country was trying to get on its “feet”. After the disastrous 7 years that the junta ruled the country; that led to the Turkish invasion in Cyprus and the occupation of half the island by our neighbor country. During the last three decades, we saw Greece become a modern West-European country. As well as life standards which kept improving year by year for the majority of Greeks. The domestic economy was progressing and major construction works were made with E.U. co-funding. Since Greece became a member of the E.U. in 1981.
Everything was really great for Greeks during those 30 years
There were plenty of jobs, the unemployment was really low and people had enough money to live a rather comfortable life, and spend cash to buy goods and services. Even if we did not have the money at that time, banks were really generous. They could approve a building loan, a business loan or even a consumer loan within minutes.
In fact, they even called and offered you such loans; even if you didn’t have what was really needed to repay them. Another thing that had a major impact later on; was the increase of loans between the Greek government and foreign banks. For at least 20 years, the Greek government loaned more and more money; with high interest rates to keep the economy going. Up to a point things were going well. But the fact was that budgets were negative every single year. And more money was needed.
Coming closer to a disaster
At that point ordinary people like me didn’t feel something bad was going to happen. Our life was gradually improving actually, there was cash going around and everybody was pretty sure things would be even better in the future. Of course politicians told us that there was really nothing to worry about and the national economy was rarely an issue to discuss in the parliament.
Meanwhile besides the high interest rates; at which the country was constantly borrowing, huge amounts were spent on major constructions like roads, airports, bridges etc and for military weapons. Of course a lot of that money didn’t really end up where it should. Initial budgets were almost always doubled or tripled before the end of the works. Several scandals were later revealed but that was really after the crisis.
The final hit was organizing the Athens 2004 Olympic Games. The cost was enormous for a small country like Greece. Final budgets again were much larger than expected initially. Again Greek government still didn’t seem to care much about the economic situation. We were all extremely happy that the Olympic Games; would once again be held in Greece after more than 100 years. We were told that it would be great for business and tourism and that Greece would be promoted around the world.
These were not lies of course. Everybody skipped to mention what impact this would really have to the finances of the country. Public debt was at this point enormous.
In addition, Greek government during the last two decades had been giving false statistical data to the E.U. and other international organizations; hiding the real situation this way. These were later called “Greek Statistics”. These “Greek Statistics” were also responsible for allowing the country to get into the Eurozone. There were of course certain conditions to be accepted as a Euro currency member. According to the “Greek Statistics”, they were not a problem for Greece.
The beginning of the crisis
About 5 years after the Olympic Games of 2004 things were getting really tight for Greece; the situation could not stay hidden anymore. The country was in the brink of bankruptcy and it was then announced by the prime minister that Greece would have to seek help from the E.U. and the I.M.F. in order to stay alive. Of course we would get the help; only if certain reforms are made in the following years; and under strict supervision.
This event caused a great deal of austerity measures, led thousands of businesses to close down; and millions of people to lose their jobs. Over taxation is apparently not helping the economy get on its feet. The danger of bankruptcy still remains open. Under these situations old political parties lost most of their influence and SYRIZA, the party that once was getting under 3% of votes in national elections; ended up gradually improving its influence. It’s eventually becoming the government in Greece at present.