Greek officials made it known this weekend that the country will not be able to make its scheduled loan payment to the IMF in June unless a deal is made with creditors, a prospect that is appearing increasingly unlikely by the day. The Syriza government says it is willing to negotiate on almost everything, but will not back off on two issues: it won’t reduce even further the already tiny pension payments it makes to retirees and it won’t lay off even more government employees. Eurozone officials, meanwhile, insist that these steps be taken or there will be no further aid.
I have heard and read mixed information about the issue of public employee layoffs—some say they have already gone too far, while others say that most “layoffs” have been done by attrition with few people having actually lost their jobs. So I can’t really comment on that. But I do know, from my mother-in-law’s experience, that the pensions that the elderly receive here were tiny to begin with and have already been substantially cut. My mother-in-law is fortunate enough to have other resources to fall back on, but I pity the old folks out there who have to try to survive on the pittance that a Greek government pension provides. And the Eurozone technocrats say that the Greek government should simply make those old folks tighten their belts another few notches– bread and water diet anyone?
The profile of Finance Minister Yanis Varoufakis in yesterday’s New York Times (the most fair and objective portrayal of Varoufakis I have seen in the non-Greek media) made it clearer to me than ever how impossible the Syriza government’s situation is. Regardless of what you may think of their style of negotiation, it is undeniable that they are trying to preserve some measure of dignity and autonomy for the Greek people and to defend to at least a small extent the principles they were elected on. But their Eurozone partners are refusing to budge an inch on their demands for even more crushing austerity.
For the first time, it is looking to me like a “Grexit” may well become a reality, the consequences of which are completely unpredictable, but which could only be disastrous for the Greek people in the short- to medium-term. Let’s hope we don’t see it come to that.