The Great Leap Backward

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From top: Busking in Athens, Greece; Julien Mercille

The most vulnerable people in the European Union will bear the brunt of the failure of austerity.

For years to come.

From Greece, Dr Julien Mercille writes:

The inhumanity of austerity is made particularly clear through the pain it inflicts on children. This is especially true in Greece, where children have absorbed much of the negative effects of the troika’s assault on the country.

As I write this, in Athens, the Children’s Hospital Aglaia Kyriakou’s radiotherapy department for children with cancer is at risk of closing due to lack of funding. The centre is reportedly unique in Greece for the type of treatments it offers.

The troika should reflect on its responsibility in this state of affairs. And so should Enda Kenny, who has sided unashamedly with Brussels and Berlin in negotiations with Greece. This is why Yanis Varoufakis, the former Greek finance minister, described Ireland as one of Greece’s “most energetic enemies”.

Children will suffer the consequences of austerity for years to come, with their lives likely affected permanently. This is because living in households affected by unemployment or large drops in income means a deterioration of their diets; increased levels of stress; some humiliations in front of friends and classmates; difficulty in doing well at school; and so on.

Unsurprisingly, those impacts are not measured with any degree of urgency. The most recent data often goes back to 2012 and in some cases to 2013. Contrast this with the flood of economic and financial information released daily and monthly and you begin to understand what matters to those in power.

A Unicef report from last year based on official data paints a dark picture of children’s suffering in Greece and in other developed countries due to austerity.

Surveying 41 affluent countries, it states that since 2008, 2.6 million children have entered poverty on a net basis, for a total of about 76.5 million in all countries surveyed. It concludes that the Great Recession ‘had the greatest impact on the weakest, and possibly for the longest time… The progress made in education, health and social protection over the last 50 years is now at stake’.

Also, youth unemployment has skyrocketed. Compared to 2008, there are now 1 million extra young people not in education, employment or training in Europe, for a total of 7.5 million. This ‘epidemic of youth unemployment’ is a ‘pathology of austerity’.

Greece consistently ranks among the worst affected countries. Add to this the fact that the situation now is undoubtedly much worse because the report is based on data that is two or three years old, and the picture is even darker.

The report compared how various indicators changed between 2008 and 2012. Here are some key results.

Child poverty increase: Greece comes 40th out of 41 countries (i.e., almost the worst one). Greece’s child poverty rate zoomed from 23% to 40.5%. Countries that did better include Mexico, Chile, Estonia, Lithuania and Turkey, which would not be considered as developed or European as Greece. Ireland is ranked 37th with an increase of almost 11 percentage points, from 18% to 28.6%.

Youth unemployment increase: The youth unemployment rate (for 15-24 year olds) has gone up in Greece and currently stand at over 50%. Greece also ranks 40th in terms of its worsening rate of youth who are not in education, employment or training (NEET), which increased almost 9 percentage points, from 11.7% in 2008 to 20.6% in 2013.

[The unemployment rate of 50% is higher than the NEET rate because the latter divides the number of NEET youth by the total population in their age group, whereas the unemployment rate divides the number of unemployed youth by the number of youth who are part of the labor force, a smaller number than the total number of youth because those in education are not counted as part of the labor force].

Severe material deprivation increase: The rate doubled in Greece to reach over 20%, a worsening surpassed only by Hungary in Europe. Children are considered to be severely materially deprived when they live in households that cannot afford 4 of 9 determined items such as paying rent, keeping the house warm, eating meat or proteins regularly, etc.

For example, since 2008, the percentage of households with children not able to afford a meal with meat, fish, chicken or a vegetable equivalent has more than doubled, reaching 18% in 2012.

Four questions were asked to people in the 41 countries on the subject “how has your life changed between 2007 and 2013?” as follows:

(1) Do most children in your country have the opportunity to learn and grow every day, or not?

(2) Are there times in the last year that you have not had enough money to buy food for your family?

(3) Did you experience stress today?

(4) Overall satisfaction with life?

Overall, Greece ranked 41st, and the ranks per question were (1) 41st, (2) 39th, (3) 39th, (4) 41st. Ireland ranked 38th overall. Clearly, austerity is not a success.

In short, our political leaders like to take pictures with kids when they run for election. That makes them look gentle, generous and considerate. However, the facts speak for themselves. Children are not a priority, and the European establishment couldn’t care less about them.

Julien Mercille is a member of the Irish Greek Solidarity Committee. His new book, Deepening Neoliberalism, Austerity, and Crisis: Europe’s Treasure Ireland (Palgrave) is out this month. Follow him on twitter: @JulienMercille

67 thoughts on “The Great Leap Backward

  1. mauriac

    No mention of any possible Greek (or Irish ) culpability in their problems and the survey seems very subjective .Having said that the Euro has been a disaster for a lot of people.It should have been designed properly from the start and the entry rules should have been stricter and strictly enforced.

    1. ollie

      Nothing to do with the entry rules. We don’t have monetary union; we have a common currency zone. Monetary union requires political union that the countries of Europe have so far refused to cede… but that day is fast approaching. Left wing Greek goovernment held to ransom to try and force a collapse, an Ireland where wages have been driven through the floor, taxes are exhorbitant and living standards have collapsed for many.

      1. mauriac

        see,”designed properly”.
        I’ll just note that the founding fathers of Europe envisaged a process of ever closer union through crisis and that Hollande just called for a Eurozone government.

    2. ahjayzis

      He’s talking about kids suffering, very few were involved in regulation and budgetary matters.

    3. Mr. T.

      mauriac, if you still think that Austerity is simply a result of countries not being able to repay debts, then you need to read more widely about the debt industry and how governments have very little control over the financing of nations.

      Austerity is financial invasion and colonization. It’s very deliberate, very planned and is designed to move power from governments to international merchant banking and the usury industry.

      1. mauriac

        The Diana conspiracy falls flat at the mention of seatbelts.Likewise a country can stay out of the maw of ,”the debt industry” by a measure of fiscal prudence.

  2. jet

    Julien, as a supporter/apologist for Sinn Fein/IRA, can you tell BS how many children Sinn Fein/IRA murdered?

    1. Mr. T.

      Wow Jet. What a moronic statement to make. You sound like a Fine Gaeler, harping on about long since resolved war because you can’t debate the present issue at hand.

      Join the Peace Process and at least try to sound somewhat intelligent.

      1. jet

        Says Mr T, a mommy’s boy in chains, who tends to lead every argument with a “oooh you are a Fine Gaeler”. Don’t confuse terrorism with war, it may allow you lot sleep better at night, but it is a distortion of the truth.

  3. fluffybiscuits

    Austerity never has a human face on it, its mostly just numbers. Julien has his finger on the pulse. The most vunerable in society, children, are the ones whom are affected yet again. These are the people who are paying for the sins of the elite of society. Watching Merkel , the cold hearted cow that she is telling the young child why she will be deported despite the tears makes me think that Merkels humanity died an awfully long time ago. A corpse would have more empathy than she has, in fact Maggie Tatchers corpse would have more empathy

    1. Vote Rep #1

      Indeed, Merkel should have lied to the girl. Politicians that tell the truth are awful. Attitudes like yours is why we have politicians how refuse to answer any difficult question in this country. Why tell a difficult truth when you are just going to get slammed for it. Just answer in bland nothingness and then do it anyway.

        1. Rob_G

          Compassion doesnt cost a fortune but class war does…

          – there’s your bland nothingness, right there

          1. Rob_G

            Well, €230bn worth of compassion to date, if that’s not a fortune, I don’t know what is…

    2. ollie

      Merkel’s stasi training has stood her in good stead. All powerful within Europe, not critisied or questioned. Allowed to breach EU stability rules every year without sanction. History repeating itself.

  4. ollie

    The treatment of Greece by the troika has 2 aims:
    To discredit the left wing government and prevent political contagion.
    To introduce permanent austerity across the EU.

    The Greek debt won’t be repaid, neither will the Irish debt because it’s impossible for either Country to do so. This doesn’t matter once right wing politices prevail. In Ireland’s case it’s a perfect storm; an extreme right wing government led by the vilage idiot. A government who doesn’t understand simple economics; a government who’s happy to see it’s citizens homeless while those who brought the country to permanent economic ruin continue to amass wealth unabated.
    Our economy will continue to grow until the next economic slump which is closer than people like to think. When that happens the wounded Irish economy and it’s citizens won’t be able to cope.
    As for the euro, it doesn’t matter whether it survives or not once those in power remain in power.

      1. JT

        Austerity amounting to a reduction in government spending, from the purse of private finance, taxes, debt, inflation. Am so bored by the anti austerity, petulant adolescent school of economics. Inefficient spending is never addressed by self appointed economists, pourquoi? A spendthrift, inefficient gov will never create an asset and thus never balance the books. Am shrugging a shoulder and raising an eyebrow,mastering the art of the gallic gesture as I gear myself up for my next ahem “expert” outing.

    1. Mr. T.

      Ollie has it.

      It’s about financial slavery and wiping out a political alternative to unbridled capitalism. It’s a dead end for human society but the people pushing it don’t care about the time after their own lives.

    2. mauriac

      “permanent austerity” or balancing the books ? Europe can’t borrow forever.I agree that corporations and the super wealthy should be hit and not the poor.saw over the weekend that there are trillions salted away in (mostly British) tax havens .

      1. ollie

        Mauriac, permanant austerity is not imposed to pay debt. It would be easier to pay debt by investing in and growing your economy.

    3. Owen C

      “The Greek debt won’t be repaid, neither will the Irish debt because it’s impossible for either Country to do so.”

      It’s a shame this narrative is hindered by the fact that Ireland has already repaid most of its IMF debt and has brought debt/GDP levels down by around 15% in the last 18 months already, with this set to fall substantially more in the next few years.

  5. ahjayzis

    Isn’t the only measure of austerity the ‘health’ of public finances?

    I mean obviously it’s still a failure in Greece, but I don’t think these statistics about actual peoples’ lives enter into the minds of the people pushing this medicine on Europe.

  6. Jimmee

    “The inhumanity of austerity…”

    It’s inhumane to think that the gravy is going to keep flowing forever.

    1. ahjayzis

      They’re kids he’s talking about. The people who got the gravy keep the gravy. They’re swimming in f*cking gravy. There’s more gravy for them now than there was before the crash,

  7. Paolo

    Doctor (ahem) Julien clearly doesn’t understand the difference between correlation and causation. For someone who is constantly writing columns that appear to be somewhat related to economics, he also seems to forget the concept that resources are finite. While it would be great to provide everyone in Europe with good employment and a stress-free work life balance, it is not possible and the only reason the radiotherapy department he refers to above is still open is due to money that Greece’s neighbours have provided.

    1. ollie

      Agina Paolo this isn;t about money. It’s about control of sovereign nations by the anonymous.

    2. Lorcan Nagle

      Do you doubt Mercille’s credentials, or do you just think that people who disagree with you don’t deserve their earned title?

  8. Owen C

    Merceille would have us believe, essentially, that “austerity has caused almost all of these problems in Greece”. I think thats a fair summation of his views.

    Here’s the problem – Greece has only enacted serious austerity, ie spending much less relative to its taxation, in the last year or two, well after most of these problems started occuring. As example, Greece’s youth unemployment progression:

    2009 29%
    2010 38%
    2011 51%
    2012 58%
    2013 57%
    2014 51%

    And Greece’s fiscal deficits:

    2009 -15.7%
    2010 -10.9%
    2011 -9.6%
    2012 -6.4%
    2013 -3.2%
    2014 -3.1%

    As we can see, the worst years for Greece’s youth unemployment was between 2009-2012. This is a period when Greece ran cumulative deficits of 42.6% of GDP over these four years. Only someone truly ignorant of actual economics rather than populist slogans could claim that Greece was enacting actual (as opposed to relative) austerity in these years, but yet austerity and the Troika are somehow to blame.

    The reality is that Greece, long before the Euro or the financial crisis, was conducting fiscal incompetence at a systemic level, with enormous economic imbalances present within the economy and built up over decades. It has not run a budget surplus in almost fifty years, and the lowest its deficit has been since 1990 was around 3.3%, in 1999, this only as part of its efforts to gain entry into the Eurozone. Its deficit averaged 7.5% between 1990 and 2007, and yet in the 10 years between 1998-2007 its unemployment rate barely budged and averaged around 10%. It misspent, stole or badly invested all of this debt, giving boom-level wages and pensions that were underwritten not even by temporary boom-level receipts (as Ireland and Spain did), but by temporary access to boom-level financing. The simple facts are that this expenditure and level of national income (GDP) cannot be sustained and some form of resetting these to a lower level is required to reboot these (and so references to “2008 GDP” are ridiculous). The “unsustainable wealth” in Greece is principally in the hands of two sectors of the economy – the very very wealthy (politically easy but wealth is mobile), and the public sector employees via both their wages but particularly their pensions (politically difficult but wealth is sticky). Choose which of those you think you can actually take a lot of money out of. Otherwise (or perhaps “additionally”) a significant reduction in standards of living (and so lower quality of health, education, social services) is required to get Greece’s fiscal situation back to a sustainable level.

    1. JT

      …and the ueber wealthy protected by the Greek constitution, no taxes on international earnings brought into country. Greek Schuld.

      1. Owen C

        did u see the part where i suggested taxing them and see what happens? I think u try and tax them, but be aware the money can easily move offshore, and there is certainly no pot of gold hanging around there to be found.

    2. ElZilcho

      I think all we’ve learned from the select set of statistics you’ve set out is that the more Greece decreases its deficit, the more rapidly its youth unemployment rate rises, save for one year.

  9. Daragh

    Not mentioned – any policy decisions taken by Greek governments over the past 30 years. It’s all the result of some evil foreign plot apparently.

    And Jet is right – if you’re going to shill for Sinn Fein, you don’t get to pose as a humanitarian.

    1. Kieran NYC

      And apparently all the political parties in each of the Eurozone countries have had this super secret memo, and followed it to the letter, whether they be left or right-wing, communist or fascist, for decades.

      For… reasons.Or something.

  10. J

    “Let no one untrained in geometry enter.” I wish Mercille would follow Plato’s train of thought…

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