Ives Smith reminds us in her current critique of Martin Wolf that the situation is deteriorating still in Greece and even the IMF says that austerity is the worst measure they could take now.
Wolf then proceeds to tell us that the Eurozone continues to be a resolute practitioner of austerity policies. Readers may recall that there was a huge kerfluffle in the economics-related media when the IMF admitted it was all wrong, that the fiscal multipliers in the Eurozone had turned out to be larger than one. In econ-speak that means you can’t starve your way back to health. Cutting fiscal deficits results in an even greater economic contraction, resulting in even worse debt to GDP ratios. But the rest of the European officialdom seems to be in shoot-the-messenger mode.
So bad that people are now metal scavenging industrial sites and even the infrastructure.
The thieves are accused of stealing industrial cable, power-line transformers and other metal objects – triggering blackouts and massive train delays. The profile of the metal thief is also changing, authorities say, from gypsies and immigrants living on the margins of society to mainstream Greeks who have fallen on hard times. A group of men were caught trying to take apart an entire bridge and droves of immigrants can be seen pushing shopping carts around Greek neighborhoods looking in recycling bins.
Athens’ nine-year-old light rail system has been a prime magnet for metal robbers, with at least five major disruptions reported in the past six months due to cable theft that forced passengers to hop on and off trains as diesel replacements were needed. The trend has had lethal consequences: In early January, the body of a 35-year-old man was found near Athens beside the tracks of a suburban rail system that services the capital΄s airport. He had been electrocuted while cutting live cables, police said.
Barter has become typical and medicine scare and hospitals reusing old sheets etc. As anyone who recalls their history knows, it was this kind economic situation that enabled Hitler to come to power. And now it has been helping Greece’s Golden Dawn Nazi party to rise in popularity as well.
But Golden Dawn is not just a gang of radical right-wing thugs. It is now the fourth-largest party in Greek politics. In elections this year, it won 18 of 300 seats in parliament on an explicitly anti-immigrant platform. Its growing constituency includes many ordinary Greeks who fear that waves of impoverished foreigners are draining the state’s dwindling resources and taking their jobs in a country where nearly a quarter of the population is unemployed. And as the country’s economy continues to collapse, Golden Dawn is becoming increasingly entrenched in the mainstream of Greek political life.
It is not inconceivable for them to win the next election or at least become a very important player. And why is this so ? Well can’t you guess ?
So why are the periphery countries suffering this level of unproductive pain? Because the countries aren’t making the decisions. It’s powerful local politicians who are selling out their countries, working in cahoots with Eurozone technocrats. And I can assure you none of them are sharing in the suffering of periphery country workers.
It’s strangely ironic that the one country pushing the hardest for austerity of the Eurozone countries is the one country that should be painfully aware of the consequences of this.