When she returned to her homeland this summer, Makedonia Koutsoumpeli saw firsthand what happens when middle-class expectations shatter overnight, and outlines why New Brunswick should see itself in the Greek crisis.
Her face is pushed against the shield of a burly armed officer. A chain of riot police officers keeps the crowd away from Parliament and back to Syntagma Square. She is a young Greek with thick brown hair, a thin body and thinning dreams.
“Don’t push me,” she shouts, her rage crying out over other angry voices on a warm early September night.
It’s just past midnight. A few blocks away, tourists hold ice creams and stroll on the stone walks below the Acropolis.
Outside Parliament, eight middle-aged people hold a Greek flag. The police push them back. They refuse to move. A clash follows. The flag is torn. Someone yells “Traitors!”
A woman shouts, “We won’t leave. We will fall here tonight.”
They lift the flag above their head and sing the national anthem: The Hymn to Liberty, written in the sparks of the Greek Revolution of 1821 against the Ottoman Empire.
Two centuries later, Greeks feel like they face another occupation. As Odysseus Giakoumakis says, “There is a war going on here, an economic and social war.”
It is easy for Canadians to think of Greece’s economic problems as a world away. Canadians probably think we would never get in debt the way the Greeks did, we would we never get that angry and blame others, we would take responsibility. Besides, our banks are strong.
Who knows? But what Greeks have learned is that expectations of a middle class life can change overnight.
And with the world economy continuing to teeter on the edge of severe recession or depression, maybe Canadians should look into the Greek mirror and ask: what if this happened to Canada? To our province? To us?
My parents have phoned me every Sunday morning for the two years I’ve been in Canada.
In one of those first calls, I recall them bragging about life being good.
Both came from poor families, growing up in the aftermath of the Second World War.
My father, Christos, grew up in a village of 600 in the mountains of the Arcadia region, the fifth child of a one-income family, his father a tailor. He only ate meat every Christmas and Easter.
My mother, Maria, lived on the top floor of a railway station where her father worked.
They both studied medicine. In the 1960s, a medical degree was a ticket out of poverty into the growing middle-class.
After 35 years of service, they retired in 2009, each with a monthly pension of $4,600. They raised three children and they built a three-storey house with their savings and a summer house with a mortgage they could afford. They had financial worries no longer.
Now, all they talk about is how their expectations have changed. Every month or two the Greek government announces new austerity measures: a slash by 30 per cent in pensions, a new property tax, a sales tax hike to 23 per cent, an increased power bill, another drop in pension income.
Their latest cheque showed their pensions drop to $3,000 a month. They fear the next austerity package will shrink it to $2,000.
It is a jagged pill for my mother to swallow: “We worked and paid that money towards our pensions. How can they cut something we paid for?”
So, my parens have cut back on restaurant meals, they plan a strict long-term family budget spending instead of summer trips and they watch the news every night, worried what will come next.
“If it gets worse, we will go back to the village. We will grow a garden, make our own food to eat, and live like our parents,” says my father before hanging up the phone.
It’s a feeling every family in Greece lives with every day.
But the hardships of the Greek people are only a small piece of the puzzle. Debt is spreading across Europe, as is widespread insecurity about what comes next.
The sirens are calling and the world economy is foundering towards the rocks.
Eric Helleiner told a STU audience last week that the economic crisis of 2008 could be repeated if policy makers don’t react immediately.
“The developments in the last few weeks are pretty dramatic and might intensify,” the political economist and chair of the Centre for International Governance Innovation said.
And though, in Helleiner’s words, Canadians have been somewhat “blasé” because they were not hit hard in 2008, the scenario may be different this time.
The U.S. banks are exposed, holding $500 billion to southern European government debts. This means that a Greek default might reach Canadian ground, affecting banks and investors through their dependence on American banks, Helleiner said.
But even if the Canadian banking system remains resilient, a mishandling of the European crisis might trigger an economic downturn, possibly a depression, depending on how government and consumers react.
In the 2008 crisis, Canada was shielded with a strong set of banking regulations. But that was not the only reason Canadians felt only the tail of the recession.
Shaun Narine, acting chair of STU’s political science department, said Canada had a “free-ride” look at the U.S. economy and the time to act with a stimulus package.
“The game in the economy is to keep people assured so they will keep spending.”
But as the crisis in Greece is showing, drastic austerity measures coupled with a shrinking private-sector economy, is like the old doctor’s joke about the operation being successful but the patient died.
“The worst time to decide to cut spending is during a crisis,” Narine said. “You can still create economic activity and pay the debt. That is a much more activist approach.”
The growing protests worldwide reflect middle-class concerns that the economy is no longer working for them. And Canadians shouldn’t be too smug. Inequality is growing here too, Narine says.
No democracy or liberal economy can afford losing the support of its middle class.
New Brunswick might never have to face a crisis like Greece has, but it has many of the same warning signs.
Its debt is increasing ($9.48 billion for the 2010-11 fiscal year); it’s struggling with attempts to control its deficit (estimated at $514 million this year), even as the government plans to downsize public spending and increase public revenues.
“Part of the problem is that we believe this province is doing better than it actually is,” said Tom Bateman, a political scientist professor at STU. “That is because 40 per cent of our revenues come from federal government transfers.”
And although New Brunswick will not default because of the safety net in Ottawa, federal support is not guaranteed at current levels in the event of worldwide depression and an austerity agenda. “Have provinces” may not feel generous in a time of deep crisis.
“These problems will not affect us today, or tomorrow, but they need to be addressed and solved,” Bateman said.
There’s the sound of something shattering before a cloud of thick smoke spreads above the crowd in the square. The police throw squibs to hold back angry protesters from breaking the chain and entering the Parliament building.
Odysseus Giakoumakis, a 52-year-old graphic designer and arts teacher, leaves his two children at home in the evenings and joins the protests. His anger is directed towards the European Union, the International Monetary Fund and the Greek government.
He points his finger to the Parliament.
“We have a government of quislings who perpetuate our state, a debt regime that enslave us and the whole of Europe in a state of debt-ocracy.”
Two years ago, Odysseus worked 12 hours a day and earned 30,000 euros annually ($42,000), what he describes as a decent living for an average middle-class family.
This year so far, he earned 4,500 euros ($6,300).
This is why Greeks demonstrate daily and go on general strikes at least once a month. Students, public servants, workers, small business owners, all unite under the burden of a debt shared by 10 million people.
Are Canadians so sure they wouldn’t do the same if faced with what Odysseus describes as the anger of a vanishing middle class, of becoming “newly-poor”? How big might those Occupy Wall Street protests become?
The Greeks have been on the streets now for more than 530 days, fighting against a depression that’s not only financial but also emotional. One out of four shops is shutting down and 510 people have taken their lives because they were unable to pay their personal debt.
At the end of the day, Greeks go back home, knowing things won’t be any better the next day.
Like my parents, they’re coming to understand that no matter how hard they have worked or how angry they have become, they may have to go back to where they came from.
Makedonia Koutsoumpeli is a third-year journalism student at St. Thomas University.
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