24th Nov 2020

Brussels tells Athens to take the pain as unrest rumbles

Brussels has acknowledged for the first time that austerity measures imposed on Greece are provoking civil unrest, but said that despite the growing social turbulence, the structural adjustment is a necessary "investment in the future" and that coming generations will benefit from the bitter pill that citizens are swallowing today.

"We are aware of the social tensions that exist. This impact from these important reforms is certain, we will not play with words with that," commission spokesman Amadeu Altafaj told reporters after the EU executive endorsed a review of the country's programme of cuts on Thursday (19 August).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • One of this year's multiple general strikes that have hit Greece in response to the austerity measures (Photo: George Laoutaris)

"However, this is an investment for the future, for future generations, for jobs and growth on a more sustainable path," he added.

"Greece was a country that was living beyond its means for too long and there were too many imbalances in the economy that represented a mortgage for future generations ... Yes, there is an impact in terms of growth, jobs, social unrest, pensions that have been cut, but we are in a recovery path in all these areas."

Greece has seen a series of one-day general strikes since the beginning of the year in opposition to the multiple austerity programmes.

In the spring, three bank workers were killed when a contingent of protesters set fire to a bank during one of the general strikes. Small-scale terrorist attacks blamed on previously unknown left-wing groups have also returned to haunt the country, echoing the "urban guerilla" violence of the 1970s. Some 13 incidents, including bombings of political party offices, MPs' homes, a bank, the Athens Stock Exchange and government buildings, have taken place.

As austerity measures slash public sector salaries by up to 20 percent, gut retirement benefits and hike up taxes, spending by average Greeks is drying up, exacerbating the crisis.

The country's GDP has begun to head south much faster than predicted, falling by 3.5 percent in the second quarter compared to last year. some 17 percent of shops in the capital have filed for bankruptcy, according to the National Confederation of Hellenic Commerce.

The official unemployment rate in May (the latest month for which statistics are available) jumped to 12 percent compared to 8.5 percent in May 2009.

For young people, the situation is even harder, with official unemployment for 15- to 24-year-olds now standing at 32.5 percent.

In some districts, unemployment has reached up to 70 percent. The University of Piraeus estimates that in the shipbuilding region of Perama, joblessness has soared to between 60 and 70 percent.

Greece is bracing itself for a hot autumn. After the summer holiday high season, which brings in much of the country's earnings, a wave of mass layoffs is expected.

Trade unions and left-wing activists have promised a fresh bout of demonstrations and strikes after the break in response. Even within the governing Pasok party, papers are reporting that dissent is growing as some senior members worry the prime minister is provoking a "social explosion."

In terms of the bail-out, the commission on Thursday signed off on an August assessment by a team of inspectors from the "troika" - the commission, the European Central Bank and the International Monetary Fund, which put together the €110 billion rescue deal.

Other EU states must now also give the assessment the nod in order for the second tranche of bail-out cash to be released. The next tranche is worth €9 billion, with €6.5 billion from eurozone countries and €2.5 billion from the IMF.

Economy commissioner Ollie Rehn said the greek economy still faced dangers despite the positive report and must "press ahead" with structural adjustment.

"Greece has managed impressive budgetary consolidation," he said in a statement. "[But] despite the significant progress made, challenges and risks remain," he added, warning Athens to look to the liquidity of its banking sector and to hitting its budgetary target.

Greek government revenues are nowhere near what Athens and Brussels had expected them to be by now, with extra tax income increasing by just 5.9 percent - "well below the annual target of a 15.6 percent increase," Mr Rehn said.

Germany asks capitals to give a little in EU budget impasse

European Parliament negotiators are demanding €39bn in new funding for EU programmes such as Horizon research and Erasmus, in talks with the German EU presidency on the budget. Meanwhile, rule-of-law enforcement negotiations have only just begun.

EU budget talks suspended in fight for new funds

MEPs are requesting additional, new funding of €39bn for 15 EU programs. The German presidency argues that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change without a new leaders' meeting.

EU countries stuck on rule of law-budget link

Divisions among EU governments remain between those who want to suspend EU funds if rule of law is not respected, and those who want to narrow down conditionality.

MEPs warn of 'significant gaps' in budget talks

The budget committee chair said the European Parliament expects tangible improvements to the package in its talks with member states - while the German minister argued that the EU leaders' deal was difficult enough.

Top EU officials urge MEPs give quick budget-deal approval

MEPs criticised the EU deal on the budget and recovery package clinched by leaders after five days of gruelling talks, saying it is not enough "future-oriented", and cuts too deeply into EU policies, including health, innovation, defence and humanitarian aid

Budget deal struck, with Hungary threat still hanging

Ultimately, the European Parliament managed to squeeze an extra €16bn in total - which will be financed with competition fines the EU Commission hands out over the next seven years, plus reallocations within the budget.

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!
  2. UNESDAMaking healthier diets the easy choice
  3. Nordic Council of MinistersUN Secretary General to meet with Nordic Council on COVID-19
  4. UNESDAWell-designed Deposit Return Schemes can help reach Single-Use Plastics Directive targets
  5. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  6. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector

Latest News

  1. There is 'no Russia-Turkey alliance'
  2. EU air quality improves, but pollution levels still high
  3. 'Golden Passports': Malta takes 67 days to respond to EU
  4. Covid-19: Romania's rural kids hit hardest by pandemic
  5. 'We call on the EU to appoint a Horn of Africa envoy'
  6. Berlin Foreign Policy Forum 2020
  7. EU stands by anti-Covid drug, despite WHO doubts
  8. Russia is 'pre-eminent naval power' in Mediterranean

Join EUobserver

Support quality EU news

Join us