Ben Chu: Athens needs time, not cuts, if it is to end the people's pain

Many Greeks are angry at their European neighbours for demanding that Greece adopts cutbacks

Share
Related Topics

Just how severe is the austerity in Greece? Extremely so. Since 2010, the Greek government has pushed through the largest fiscal consolidation of any nation in the eurozone. The deficit has been slashed by a whopping 6.5 percentage points – from 15.4 per cent of GDP to 9 per cent. To put that into context, our own government has cut the UK deficit over the same period by 2.8 percentage points.

And this reduction in government borrowing has unquestionably translated into real economic pain for the Greek people. Public sector wages were slashed by 15 per cent in 2010, while public sector employment fell by 10 per cent. And this is only the beginning. Greece has been told to reduce its deficit to 1 per cent by 2015, bringing more savage cuts into incomes and pensions.

Many Greeks are angry at their European neighbours for demanding Greece adopts these cuts as the price of its bailout by the rest of the eurozone and the International Monetary Fund. The expected surge in support for anti-European parties in elections on Sunday is a political consequence. To some extent this anger is misplaced. Had Greece not been in the eurozone, the country would have gone bankrupt. Then it would have been forced to close its budget deficit much more quickly and inflict much more pain on its people.

But in another sense, the resentment at the direction of the fiscal policy being implemented is justified since that economic medicine is plainly hurting the economy. In 2010, the European Commission forecast that Greece would grow by 1.1 per cent in 2012 because all the cuts would unleash a flood of confidence and investment. That has proved nonsense.

Greece was a badly-run economy before the crisis and the pain for its population was inevitable. Cuts alone are not the answer – it needs more time and help to adjust. Otherwise the risk of the Greek people deciding they are better off outside the euro will only grow.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Solutions Architect - Permanent - London - £70k DOE

£60000 - £70000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

General Cover Teacher

£110 - £130 per day: Randstad Education Reading: Great opportunities for Cover...

Maths Teacher

£110 - £130 per day: Randstad Education Reading: QTS Maths Teachers needed for...

Maths Teacher

£110 - £130 per day: Randstad Education Reading: QTS Maths Teachers needed for...

Day In a Page

Read Next
The bustling Accident & Emergency ward at Milton Keynes Hospital  

The NHS needs the courage to adapt and survive

Nigel Edwards
 

Letter from the Sub-Editor: Canada is seen as a peaceful nation, but violent crime isn’t as rare as you might think

Jeffrey Simpson
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?