A Greek Tragedy

Published June 20, 2012
By Patricia Taft
The Failed States Index

Continuing its downward spiral in the 2012 Failed States Index, Greece, the cradle of democracy, continued to fall into chaos. For a second year running, the country worsened across almost every indicator score with the political and economic indicators experiencing the deepest decline. In 2011, the Greek economy continued to backslide as the unemployment rate hovered around 20% for the year, with an estimated 50% of young Greeks unemployed. As in 2010, political crises ensued, and the perceived legitimacy of the Greek government plunged as more and more Greek citizens questioned the ability of elected officials to drag their country out of the morass. Indeed, throughout 2011, the general worsening of the indicators which measure economic, political and social pressures evidenced that the financial crisis that had gripped the country for two years was quickly spreading across multiple sectors. Public rage was palpable with tens of thousands of Greeks taking to the streets in June to protest proposed austerity measures that included significant tax hikes.

Adding to the mayhem and impacting the economic and political trends, the catastrophe that was occurring in Greece brought into question the viability of such lofty ideals as pan-European prosperity and social and economic equality as the country dragged down its European Union brethren. Greece, which joined the Eurozone in 2001 after failing to meet the criteria in 1999, has long been the red-headed stepchild of the monetary union. By mid-2011, after only ten years of membership, it had racked up a debt load on par with 150% of its GDP, unheard of elsewhere in the union. Meanwhile, other E.U. countries were beginning to show similar strains. Ireland, Italy and Portugal continued to worsen in 2011, with the economic and political indicators taking the hardest hits. Spain, although holding steady throughout most of the year, began to show signs of steady decline by the end of the year.

The continued unraveling of Greece in 2011, and the slow decline of other notable Eurozone members, stood in stark contrast to other E.U. countries, mainly Germany and France, which continued to improve. Throughout 2011, Germany led the charge to protect the financial and political integrity of the Eurozone, helping to push through an agreement that resulted in a 50% write off of Greek debt in October. Forgiveness did not come without repercussions, however. By late in the year, both the Germans and the European Central Bank were once again leaning heavily on Greece to implement further austerity measures. Caught between an enraged population and a bullying Germany, Prime Minister George Papandreou stepped down in November after multiple attempts to pass a more severe austerity package failed. In his place, the former head of the Bank of Greece, Lucas Papademos, stepped in to try to solve the Greek financial meltdown although this appeared to do little to assuage the general anxiety gripping the country.

Greece’s economic woes also gave rise to another worrying trend that was reflected in the worsening social scores in the Index; namely, xenophobia. During the year, reports surfaced that immigrants were increasingly being targeted for attack. Frustrated by the combined austerity measures and lack of employment opportunities, a rising number of young Greeks turned their support to the far-right party, Chrysi Avgi. Throughout 2011, the party held large anti-immigrant rallies that often precipitated attacks on the country’s growing population of Afghan, Pakistani, and Iraqi immigrants. In several instances, homes and shops owned by foreign nationals were bunt to the ground or looted and the owners were physically attacked. Hate-speech and racist rhetoric, labeling various immigrant groups as “dogs” and “vermin,” were ugly punctuation marks at political rallies.

And the anger did not stop with immigrants. Germany, which took the lead in negotiating the Greek bailout and simultaneously strong-arming the government to make more severe cuts to salaries and social services, also came under attack. Harkening back to the Second World War when Germany occupied the country, images appeared in the press depicting German Chancellor Angela Merkel as Adolph Hitler and other German politicians as Nazis. The appearance of these images, and the sentiments that they stirred, were quickly monopolized by Greek political figures from both sides of the spectrum. As the economic crisis continued to boil, and Papandreou tried to balance the demands of Greece’s paymasters with the very real needs of his country, he came under attack from all sides for bowing to the Europeans. Although there was a temporary lull in protests and attacks following his resignation, by the close of the year it had become apparent that the dual economic and political crises gripping the country were not amenable to quick fixes.

The tragedy of Greece, and the slow swan dive of other E.U. countries in the Index, calls into question the overall viability of the great European experiment. Critics of the economic union have long warned that the euro was only as strong as its weakest link. If 2011 was any indication, trying to impose a monetary union among 17 countries with widely disparate political and social cultures can quickly come apart at the seams. If Greece can fracture and have to drop out of the euro, others can too. Thus, an economic union meant to bring stability, peace and affluence to all its members while detoxifying the poisonous history of the continent may go the way of many tragedies, with the hero falling on his own sword.

A version of this article also appears online at Foreign Policy, www.foreignpolicy.com.