Greek Public Debt Crisis Global Capitalism and The
consequences to the welfare
state
•Truths and Lies
•The consequences to the welfare state
•The challenges for the trade movement and the
social work profession
•Optimism: The rise of the Greek left
Dr Pentaraki Maria–
Oslo – Welfare Campaign Conference- May 21-22 2012
Senior Lecturer of Social Work-Liverpool Hope University, email:pentarm@hope.ac.uk
Contents
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Introduction- Global context – historical continuity
Austerity Plan and SAP
Consequences: A social disaster
Greek Welfare State
Dispelling the Myths
Structural Causes of the Debt
Research
Summary of Findings
Conclusions
Greek “Public Debt Crisis” and the
imposed SAP
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Global capitalism- the larger and longer
transformation of the world system, including the
change in the regime of accumulation of the capital
(Harvey, 2005, 2007).
Part of the neoliberal global agenda.
Historical continuity of global
neoliberal restructuring
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First imposed by dictatorships in countries
such as Chile (Pinochet)
Then imposed by IMF and WB in countries in
Africa, Latin America, South East Asia,
former Soviet Union/Eastern block
Now imposed by IMF and EU and ECB in
Greece, Ireland, Portugal in the countries of
the periphery of the EU
Transferring of wealth from the
working class people to the capital
Conditionalities of Loans / Structural
Adjustment Program- SAP
- A savage austerity program
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Austerity plan-conditionality of two loans “bailouts” (110 billion –
2010 and 130 billion- 2012)
The loan given by IMF, ECB, EU
Not a bailout but a sold out.
The bailout is not to Greece but to the German and French
banks.
According to official estimates of SAP outcomes, by 2015, the
amount of public money allocated to servicing the debt will
be higher than the amount of public money allocated to
social protection and healthcare (MTFS, 2011)
Reflects entrenchment of neoliberal policies to the Greek
society.
Neo-liberal Policies
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20% to 62% social spending cuts
Deregulation of labor relations
Massive job losses
Decrease of pensions and salaries- from 20% to
40%.
–
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EU representatives announced that the goal is to get
Bulgarian wages of 150 euros
Privatization of public infrastructure/ utilities
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Privitization Fund run by Treuhand (sold off E.Germany)
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Containment of democratic rights
Social disaster and political disaster
Humanitarian crisis: Approx 20.000
homeless in Athens 25% rise since 2
years ago. Poor-hungry-no access to
health care.250.000 a day eat with
hand outs ef
Political Disaster- Annulment of
Democracy
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Non elected prime minister- representative of
the global ruling elite- TRILATERAL
COMMISSION- from November 2011 to May 2012.
During demonstrations
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Illegal chemical warfare -health problems
Immense violence –hospitalizations- chronic
health consequences
Consequences- Human Development
Index (UN Human Development Progress Report
2011)
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Greece’s ranking fell from the 22nd to the
29th position (7 ranking places lost).
.
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Norway is 1st.
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Life expectancy, schooling, gross national income, etc
Consequences
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2.500 schools closed, no heating, no
maintenance
Hospitals merging, less beds, less staff
Households with no water and electricity,
back to candles and coals
People in Greece among the lowest income
earners in EU
Before the economic crisis 1/5 of the
population lived under poverty line.
Consequences- Unemployment rate
(Eurostat, 2012)
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Highest increases in EU between January 2011 and
January 2012 were registered in:
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Greece from 14.7 % to 21.7 % (7% rise)
Spain from 20.8 % to 24.1 %
Cyprus 6.9 % to 10.0 %.
EU27 unemployment rate from 9.4% (March 2011) to
10.2% (March 2012)
EU 27 youth unemployment rate 22.1% (2011)
Greek youth unemployment rate 49.3%
Health consequences
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Suicide rate rose by 22% from 2009 to 2011. (Dimitris
Christoulias, a 76 year old pensioner)
Children hospitalizations due to pain aches increased by
10-15%
Increase in HIV infections rose by 52% since 2010 due to
shared needles among drug users and then in increase of prostitution. 1/3 of street
programs were closed
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Compared with 2007—ie, before the crisis—2009 saw a
significant increase in people reporting that they did not go to
a doctor or dentist despite feeling that it was necessary ,
mostly due to long waiting lists because of undefunding and
understaffing (Kentikelenis, 2011 et al)
Children with uninsured parents do not get vaccinationsprediction for the rise of preventable diseases
Children faint at school due to hunger and
(Source: Press release of the 28th Greek National Medical Conference, 14th-16th of May 2012; Pentaraki, 2012; Kentikelenis A.,
M.Karanikolos,I. Papanicolas, S. Basu, M. McKee, D. Stuckler (2011)
)
Greek Welfare State
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Delayed development.
Never reached maturity.
Unmet needs, 20% poverty rate.
Ineffective social transfers to reduce poverty.
Greek Welfare State
1. A fragmented and corporatist income
maintenance system.
 2. A partial universal health care system.
 3. A low degree of state penetration in the welfare
area and a mix between public and non-public actors
and institutions
 4. The persistence of clientelism and-in some casesthe formation of fairly elaborate patronage systems
before the selective distribution of cash subsidies.
(Ferrera, 1996)
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Basic features of the austerity plan are
along neoliberal economic restructuring
undermining welfare rights
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1. reduction of current and future pension incomes
and social assistance benefits,
2. significant cuts in social services, from 20% to
62%
3. introduction of a flat, so-called “ticket payment” for
health services,
4. promotion of private provision within the National
Health Care System.
Additional, undermining collective bargaining
agreements, privatization of public assets etc.
Myths
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Highest Number of Public Employees
Most Generous Welfare State
Greek state is the most wasteful in European Union
Most Lazy people
Myth: Highest Number of Public EmployeesRanking public employment shares in the EU17, US
and Japan
Country Publ. Empl. Share in 2002
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1. Sweden 30.0
2. Denmark 29.0
3. Finland 22.4
4. France 21.2
5. United Kingdom 17.8
6. Portugal 17.0
7. Belgium 16.8
8. Luxembourg 14.9
9. Czech Republic 14.8
10. United States 14.7
(Source:
2005)
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11. Italy 14.4
12. Spain 13.0
13. Austria 12.2
14. Poland 12.1
15. Greece 11.4
16. Ireland 11.0
17. Netherlands 10.7
18. Germany 10.2
19. Japan 8.1
OECD, 2003 cited in Handler, et al
Myth: Greece has one of the most
generous welfare states
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As far as social spending on benifits in kind
per head in PPS Greece ranks third from
the bottom of the hierachy of the EU15
countries (Petmesidou,2006a :325).
While as the percentage of the total social
budget, welfare expediture decreased
reaching 2.1 percent in 2003
(Petmesidou,2006a:329).
Chart below ranks countries following the impact of social
transfers on the at-risk-of-poverty rate before social transfers,
in percentage of the latter.
Myth: Greek state is the most wasteful
in European Union
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Greek state is the most wasteful in European
Union whereas its operating costs
correspond to 17,3% of the Greek GNP, as
against 19,9% for Germany, 24% for France,
and 23,7% for Great Britain, and a European
average of 21,8% (Vergopoulos, 2010 cited
in Sakellaropoulos, 2010:323)
Myth: Greek state is the most wasteful
in European Union.
Country
Operating costs in relation to the
GNP
Greece
Germany
17,3%
19,9%
France
UK
24%
23,7%
European Average
21,8%
Source: (Vergopoulos, 2010 cited in Sakellaropoulos, 2010:323)
Myth: Greek people are lazy
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Greece has the longest working hours as
well as the highest number of working
days per week among Europe 15 and
among 32 European countries Greece is
among the three most hard working
countries, along with Turkey and Romania
(European Foundation of the Improvement
of Living and Working Conditions, 2005:18).
Other myths and role of myths
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Greek people are corrupted
Greek culture is at fault
PIIGS and so on
Myths serve to relocate the blame from
the structural causes to the individual
Structural Causes/ Contributing
factors to the public debt
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Military spending: One of the 20 countries with the
largest military budget, 3,6% of its GPA, (Russia3,5%) (USA spends-4,3%) (SIPRI 2010).
Bank Bailouts: 28 billions, 2008. 78 billions out of
the 110 b for the support of the banking system.
Unfair System of Taxation: Corporate taxation from
45% 1981 to 24% 2010, to 18% in 2012. Among
the lowest in EU.
Business Highest Profit Margin: 40%, EU from
10% to 35%.
Highest Gini Co-efficiency- Highest Level of
Inequality
2nd sold out 130 billion 100 to debt s
sing and bond holders.
162 billion owned by Germany (108-5
1st SOLD OUT of 110
billion….Some simple math…..
Low corporate taxation rate –if
95 billion euros
EU aver-in a decade Greek state would have
Cost of hosting
Olympic Games in
11.2 billion euros
2004
Banking Bailout of 2009
28 billion euros
+++++ TOTAL =
144 billion euros
+ highest military spending,
+ multinational corporations bribes
(ie,Siemens)
+ no taxes of Greek orthodox church and
ship magnates
Capitalism for the poor Socialism for
the rich
A bad deficit made worse for political
purposes by the Greek government/
Eurostat/ IMF
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Apart from these lies, there is another attempt to build consent,
suggested by allegations that the Hellenic Statistical Authority
(ELSAT), along with Eurostat, made a bad deficit worse for
political purposes. These allegations are under investigation by
a Greek prosecutor as crimes committed against the national
economy (Giamali, 2011). It is interesting to add that the director
of ELSAT is a former IMF senior officer. Additionally, to ensure that
the Greek government implements the program, they institutionalized a
non-elected prime minister in Greece, Papademos, who has been a
member of the trilateral commission; same is the case with Mondy,
the imposed prime minister in Italy. Both are managers of financial
capital. Their imposition presents a big democratic deficit and an
undermining of democracy. The trilateral commission reflects the
agenda of the new right and of global capital and is actively attempting
to promote the interests of the market thoughout the world (Jones and
Novack, 1999: 135137)
Research
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In depth interviews to public sector social
workers from Sept 2010 to Sep 2011.
Findings
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Chronic under funding and understaffing worsen
under the ESAP social spending budget cuts.
Difficulties to fulfilling even the most basic activities
of supporting people in dire need.
Office bound practice.
Increased dependence on informal networks of
support.
Emergence of ethical issues.
Drastic increase of the case load due to the rising
numbers of unemployed/uninsured people that seek
support as well as due to colleagues retiring and the
freezing imposed on hiring staff.
Conclusions
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Policies incompatible with human needs.
The myth of social europe is shattered but the fight
for a social europe is on.
Necessity to revisit the radical legacy of social work
profession.
Resist Cuts –Demand a Human needs based
budget.
SW associations join forces and make alliances
with trade unions and other social justice
organizations both locally and globally.
Conclusions
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It is evident that there is a class war going on. The
social work definition adopted by IFSW and IASSW
reflects a profession equipped to work towards goals
of social justice. Now that we recognize the interconnections of local and global process (Dominelli
2010) is more than evident the need to build
coalitions both across local/national and international
lines (Ferguson and Lavalette 2006∙ Ife, 2008) in
order to overturn the neo-liberal global agenda since
it cannot be combined with issues of social and
economic justice. This is the only way that we can
restore the welfare state in Greece by linking it to
struggles across the world.
Conclusion :Another world is possible;
a world fighting for..
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A big responsibility to win this class war lies with the
trade union movement in coalition building with all
the progressive forces across our common needs.
This coalition building needs to happen in local , in
national, in European, and in global levels. This is
the way to unity people’s power across borders We
need a Social Europe, we need a world centered
around human needs. This means that we need a
redistribution of the wealth in order to overthrow
class inequalities. We can make that happen
because we know another world is possible, and this
is a world worth fighting for.
Conclusions
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The rise of the Greek left during last elections brings
optimism. The people have spoken loud and clear.
We are not accepting the austerity measures that
transfer huge resources from the working class
people to the capital. We are not accepting the rise
of inequalities. We are not accepting the
commodification of the public services, such as
health care. We are not accepting the cuts of our
pensions. We are not accepting job losses. We are
not accepting a society of insecurity, of
unemployment, of poverty. We are not accepting a
society of sexism, of racism, of homophobia or any
other form inequalities. Another world is possible!
Bibliography
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Dominelli, L. (2010). Globalization, contemporary challenges
and social work practice. International Social Work, 53 (5) 599612
European Foundation of the Improvement of Living and
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http://www.eurofound.europa.eu/docs/ewco/4EWCS/ef0698/ch
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http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/
Living_conditions_statistics Accessed March 30 2011
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Petmesidou, M. (2006a). ‘Social Care Services: ‘Catching Up’ Amidst
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People of Europe UNITED to fight for a
SOCIAL EUROPE
Enough is Enough! A new world is
possible!