Easter is over, but the government is still tottering under the burden of a cross formed by the scandals that it must handle, the economy’s death spiral and the fact that it has a one-seat majority in Parliament. But even as the nation – both audience and protagonist in this sad act – is consumed by the spectacle, the dark clouds gathering above its head are a far more serious threat than Costas Karamanlis’s Calvary.
The clouds come in the form of numbers – merciless economic data from which there can be no escape, where faith in resurrection will not suffice. The country is in very serious trouble. On Wednesday alone, a host of economic figures showed how deep a hole we have dug ourselves into. Eurostat, the EU’s statistical service, confirmed that Greece’s 2008 budget deficit was 5 percent, way above the government’s figure of 3.7 percent – which was already above the eurozone’s 3-percent excessive deficit threshold. Also, the International Monetary Fund announced that it expects Greece’s gross domestic product (GDP) to shrink by 0.2 percent this year and a further 0.6 percent in 2010; unemployment is expected to rise from 7.6 percent in 2008 and 9 percent in 2009, to 10.5 percent 2010 – which means 143,000 more people unemployed. At the same time, the Bank of Greece announced that receipts from tourism in the first two months of the year were down 20.2 percent from the previous year. These are the most official figures we have had so far, with tourism sector officials estimating that visits and revenues may drop between 10 and 20 percent this year. Also, receipts from shipping fell by 25 percent in January-February. As tourism accounts for about 18 percent of GDP and employs one in five workers, we can imagine what a 10-20 percent drop means. At the same time, the government’s loan-servicing expenditures rocketed from 33.1 million euros last year to 527.2 million in January and February.
As a measure of how big these figures are, the government’s desperate one-off extra tax levied on people earning more than 60,000 euros annually and the freeze on civil service salaries is expected to net under 300 million euros. So the question is very simple: With our deficits and debt greater than expected, with our loan requirements and expenses growing, with fewer people in our work force and with fewer revenues from tourism, shipping and taxes, how on earth are we going to meet our financial obligations as a country?
This is not a philosophical question; it’s a matter of simple math. Thinking that we can carry on as we have so far – with strikes shutting down our ancient sites and museums, with youths burning the city center as a rite of passage, with various closed-shop professions feeding off the efforts of others – will only drive tourists away and lead to a brain drain, cutting our productivity and revenues even further. Thinking that we can just ride out this storm is a mass delusion of national proportions.
Milestones&Footnotes comment in AthensPlus, 24 April, 2009