The moment the people of Lamia realised things had really hit rock bottom was when the firemen started turning up on their doorsteps.
They went from house to house through the small, sleepy town about 200km north of Athens, knocking on doors and asking for contributions. The brigade’s funding has fallen so far that they now have little option but to go begging for cash.
Some households gave them a few pennies. Some donated odds and ends from their homes. Some even gave them new tyres for their trucks, which had been worn down to destruction. The police have been doing something similar for some time.
It is fitting that we use a Greek word, paradox, to describe when moments seem oddly contradictory and self-defeating.
Everywhere you look in Greece today, there are paradoxes aplenty: the country’s bailout lenders urge Athens to crack down on corruption and combat the black market but their austerity only serves to push firefighters and police into seeking under-the-counter payments. The creditors want the country to raise the pension age; but over the past five years the average retirement age has actually fallen, as unemployment rose and laid-off workers took up their pensions rather than seeking more work.
But in the end it mostly comes back down to growth. Greece is facing a depression worse than anything ever recorded in a developed economy. The total income generated by the country and its people has fallen by a quarter. Rather than expressing itself through a fall in the exchange rate, as might happen in the UK, the whole brunt of deflation has had to be absorbed by the people here.
That’s what fixed exchange rate systems do to you. And why unemployment is still so high, why wages have collapsed, and why the government has had to impose so many cuts.
It is hard to get a sense of the scale until you look deep into the numbers. Consider the budget for hospitals across the country. In the first four months of last year, they received funding of €670m. In the first four months of this year they received €43m. That’s right: a 94% cut, which makes any austerity you’ve seen elsewhere around the world look piddling.
There’s further evidence to be found if you head north out of Athens, up on that road to Lamia. The further you get into the countryside, the more of them you see: great, unfinished roads and bridges. A few years ago central government provided the Lamia area with €65m a year to get these roads built. Last year that had fallen to €12m. So far this year they have received essentially nothing.
Except it’s worse than that, because every region of the country has been ordered by Athens to send back any spare cash to the central bank, all to help them try to repay their loans. So the workers on those roads simply aren’t paid. Right now the companies are finishing a few bridges before they are washed away in the winter, leaving the unasphalted roads as they are and hoping the government will eventually be able to pay their bills.
I’ve been in developing countries facing fiscal and capital market crises. But I’ve never been in a developed economy like this as it literally runs out of money. I’ve never been to a hospital where the director says he is essentially having to treat patients with no money, where people are not able to get treatments because they, and the hospital, can’t afford them.
It is an unsettling experience — made more so by the fact that even those in authority seem next-to-clueless about what is really happening. Usually when you’re covering economics or politics you assume that someone, somewhere knows what’s going on and has a plan. Here, with the best will in the world, I simply don’t think there is one.
Yesterday, Greece asked the International Monetary Fund to delay a €300m debt repayment due today until the end of the month. And yet a few hours before that was announced, I asked George Stathakis, the economy minister, if the payment would be made. He said he was “certain” that it would. Perhaps he misspoke. Perhaps he was out of the loop. Perhaps things changed.
I suppose it’s to be expected that the IMF itself was left in the dark until the very last minute. But it’s almost impossible to get a handle on what’s happening in a country when even the senior-most ministers inside the government seem not to know.
I spent some time hanging out in the Finance Ministry, where there is a rather surreal air. In one corner of the building you can find finance minister Yanis Varoufakis entertaining a constant stream of visitors. But step out of his office and round the corner and things get eerily quiet. I expected the rooms to be thronged full of officials, desperately beavering away at debt restructuring schemes and new proposals to throw at the country’s creditors. Instead, the place was almost deserted: empty room after empty room with desks and chairs gathering dust.
Was everyone in Brussels? Out for lunch? Or were they all victims of the country’s austerity programme too? It leaves you wondering. This fight to secure the livelihoods of the firefighters, the police, the doctors and teachers of Greece: where is it happening, how is it being waged and what will the outcome be?
I wish I could say that after a week in Greece I was any the wiser. I’m afraid I will come away from the place even more confused.
