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Stephen  Bevan

Beware Greeks bearing bricks

Authors: Stephen Bevan Stephen Bevan

29 October 2012

A 500-page document known as El Ladrillo or ‘The Brick’ has a special and painful significance for many people in Chile. It was, in 1973, the basis for what became a twenty year economic experiment. Guided by the free-market philosophy of Milton Friedman and colleagues at the University of Chicago, the so-called ‘Chicago Boys’ in the post-coup government of General Pinochet used it to shape the deregulated and privatised future of Chile’s economy. Today, of course, it’s hard to imagine that a whole economy could be run as a live experiment. It was no less than an audacious large-scale test of a political and economic ideology.

Having spent last week in Athens, however, the parallel with Chile – though easily overstated – is striking and may go some way towards explaining why so many Greeks are feeling unjustly punished, exhausted, resigned, exasperated. Indeed, as a senior government official told be informally, it’s hard to escape the conclusion that Greece is essentially a laboratory rat in a large, but ultimately futile, austerity experiment being run by the ‘Frankfurt Boys’ of the Troika.

My main focus last week has been on the impact of the financial crisis on the health of the Greek workforce as part of a large European study I and some colleagues are conducting. The decline in some aspects of public health in Greece has been a striking feature of the crisis. With unemployment close to 25 per cent – and youth unemployment at almost 55 per cent – it’s not hard to see why the physical and mental health of Greek workers and their families might be under strain. Stories like that of Antonis Perris are appearing more frequently in the Greek media. Perris, 60, and his 90 year old mother held hands in May this year and jumped off a balcony in central Athens. His suicide note said:

 "I have been taking care of my mother for 20 years now…we do not have enough food to feed ourselves. I live a drama with no end. Lately, I am also suffering health problems. I see no solution. Does anybody else have a solution for me? World leaders, you who brought this financial crisis, you all need hanging!''

Before the financial crisis Greece had the lowest suicide rate in Europe at 2.8 per 100,000 inhabitants. The first four months of this year saw a surge in the number of suicides among the poor and those over 65. In fact it has risen by more than 33 per cent in the last year, with over 700 people taking their lives since January. Indeed, the feeling of helplessness is a real feature of the way people in Athens describe the crisis here. Having spoken at length last week to business leaders, academics, third-sector workers, doctors, civil servants and politicians, a number of common themes have emerged which I think reinforce the ‘laboratory rat’ mentality.

The first is contrition. Everyone I have spoken to openly recognises that Greece made many mistakes and that these mistakes have consequences. My assessment is that this contrition is both genuine and pragmatic. There is no hang-wringing. Rather a sense that it’s time to learn the lessons and get on with re-building the economy. The second is genuine confusion. Why, when the doctrine of pure austerity has so clearly failed to deliver economic growth, is the Troika – and Mrs Merkel – so insistent that Greece should continue to take its medicine? As the Greek government accedes to demands for further cuts to wages and employment rights for those workers still with a job, Greeks are asking where demand will come from if job insecurity is so high and disposable income is so low.

The third is resentment. In the main this is driven by the inescapable feeling that austerity probably won’t work and is actually a humiliating punishment which – in the eyes of most Northern Europeans - is nothing more than the feckless Greeks deserve. The fact that Greeks have longer working hours than most other countries in the EU – including the UK – is, they feel, an indicator of their true work ethic which is conveniently ignored. Fourth is the sense that irreparable damage is being done which will have deep and painful scars. This manifests itself most starkly in the youth unemployment figures which now show that most Greeks under 25 are out of work. It also shows up in the brain drain of highly qualified Greeks – including many medical specialists - who are taking their skills to the UK, Canada and Australia and who are contributing to what many business leaders fear will be a ‘hollowing-out’ of the Greek talent pool which will make the long-awaited recovery more difficult to sustain.

Yet recovery remains a distant hope. Even if there is no ‘το?βλο’ or Brick which is eerily guiding the invisible hand of the Troika’s strategy to get Greece’s house in order, my sense is that - at the very least - we owe the Greek people a more cogent and plausible explanation of why they have prescribed the unpleasant and probably ineffective medicine of austerity.