No Greek salvation despite five years of sacrifices

Five years of austerity cuts may have saved Greece from financial collapse, but the life of ordinary Greeks took a decided turn for the worse.

Savagely slashing spending managed to reduce the state budget deficit and the public debt dynamic improved, but at the cost of soaring unemployment and poverty.

"Such a major adjustment in such a short space of time was madness," said Panagiotis Petrakis, professor of economics at the National University of Athens.

"But a slower adjustment would have required an even bigger bailout for Greece," he told AFP.

Between 2009 and 2014 Greece lost a quarter of its output.

Salaries and pensions fell from 26 billion euros ($29.3 billion) in 2010 to 18.5 billion euros in 2014, Petrakis noted.

The austerity recipe succeeded in balancing Greece's bloated budget and made repayment of its massive state debt of over 300 billion euros, most of it now held by the European rescue mechanism, more sustainable.
But it led to what the new radical left government has called a "humanitarian disaster."

In the public sector alone, around 200,000 civil servants were dismissed or took early retirement, while some 130,000 businesses shut down.

The unemployment rate more than doubled -- from 10.3 percent in 2009 to 25.6 percent this year -- and the sudden drop in contributions starved the Greek social insurance system of badly-needed funds.

- 'They're telling us to leave' -

"They cut and cut and cut, we can't live any longer," said Stelios Vitzileos, an 82-year-old pensioner who took part in an anti-austerity rally in Athens on Wednesday.

"We love Europe, we want to stay in Europe, but the way in which they push us, it's as if they're telling us to leave," he said.
Today, nearly half of Greek households make ends meet thanks to pensioners in the family, according to a 2014 study by artisan guild GSEVEE.

"Pensions are the last refuge for entire families who have one or no working members," Prime Minister Alexis Tsipras wrote in an opinion piece in German daily Tagesspiegel this week.

He added that between 2010 and 2014 pensions and benefits were cut by about 50 percent.

And according to the government, 60 percent of pensioners receive a net pension of under 700 euros a month, placing them below or close to the European poverty line.
Greece's EU-IMF creditors say the country would have seen its economy recover must faster, for the benefit of all, if successive governments had been serious about tackling endemic corruption, tax evasion and market protectionism.

Tsipras's government is now under pressure to further streamline the state budget to clinch a default-saving deal that Athens has been trying to broker for the past five months.

The 40-year-old premier insists that any savings must not come from new salary and pension cuts.

Instead, his administration has pledged to raise the minimum wage to 751 euros next year, from the current 511 euros.

The leftists have also pledged to raise pensions primarily for the poor.