The meltdown in Greece of last April exposed not just the economic weakness of this particular south European state; uncertainty about public finances was suddenly abound throughout the European Union. A multibillion euro rescue plan necessitated unprecedented efforts to guarantee the stability of the common currency. German chancellor Angela Merkel even warned that the very future of the euro was at stake.
In exchange for the €750 billion stabilization package — a joint effort of the European Commission, individual eurozone members and the International Monetary Fund — Greece had to pledge austerity measures, including cutbacks on public spending and the country’s pervasive welfare state; freezing the loans of government workers and raising the retirement age. Civil servants took to the streets immediately to wreck havoc and protest against the likely shortening on their entitlements.
Just how bad do thing look for the average Greek citizen? For one thing, Greek workers, especially those on the government’s payroll, are used to receiving fourteen months in pay for one year’s work. They are upset that during the years ahead, not only will their salaries not rise on par with those in the private sector; their precious thirteenth and fourteenth months of fictional work will wholly disappear.
It’s all the more depressing for public servants facing retirement. A few years back, they were expecting a thirteenth and fourteenth months in pension payments as well. Evidently, no one was worrying about Greece having one of the lowest fertility rates in Europe — 1.3 children per couple — meaning its grand retirements schemes were financially unsustainable. Now, pensioners will also have to surrender two out of fourteen months in benefits. Thousands of Greeks think that’s outrageous but what they don’t seem to know is that on average, they retire years ahead of most fellow Europeans. In several eurozone countries, the retirement age is even anticipated to be raised from 65 to 67 years of age. In Greece, people often find ways to retire before they even turn 60.
The recent history of Greece is a classic tale of failing government interventionism. Government spending equaled 44 percent of GDP in 2009 while corruption is still prevailing. Labor laws are restrictive. The non-salary costs of employing a worker are high while regulations on work hours remain rigid. Unsurprisingly, the country’s unemployment rate has been hovering around 10 percent for several years and is expected to rise as the government will be forced to lay off many more workers.
Decades of government caretaking have induced an entitlement mentality into the Greek people which, coupled with corruption and financial instability, was a disaster waiting to happen. Now that their bubble has burst, Greeks are taking to the streets and crying for something to be done. They will have to learn the hard way though that in the end, they are responsible for their own lives. They can no longer count on their government to serve their every whim for the state is broke and they will be footing the bill.