Greece’s former finance minister, Yanis Varoufakis, writes: After last summer, when the clash between Greece’s Syriza government and the insolvent state’s creditors ended, the world’s media moved on. Greece’s rebellion against the austerity measures imposed on it was snuffed out in July 2015 when Prime Minister Alexis Tsipras folded.
Greece’s disappearance from the financial headlines since then has been seen as a sign that its economy has stabilized. Sadly, it has not.
Lest we forget, Greece had by 2015 already endured years of austerity. By 2013, more than a third of Greeks were living below the poverty line. By 2014, government wages and pensions had been cut 12 times in four years.
In comparative terms, by the proportion of national income diverted to reducing budget deficits, Greece had absorbed austerity measures almost nine times the magnitude of those imposed in Italy and about three times Portugal’s. The result? Between 2009 and 2014, Italy’s economy grew by a paltry 2 percent and Portugal’s contracted by 1 percent; in the same period, Greece’s national income dwindled by a catastrophic 26.6 percent — about the same as for America in the depths of the Great Depression. The result was a humanitarian disaster only a 21st-century John Steinbeck could adequately describe. [Continue reading…]