Perspectives: The Brussels Bubble

Social Cohesion and Inequalities

The dramatic responsibilities of the EU in the economic downturn and social inequalities

In the economy, fifteen (15) years is a long time. Greece has been a witness to this, from the American aid in 1949 to the “economic miracle” of 1964, from the Greece of “problems” in 1982 to the Greece of the stock market boom in 1997, and many more examples.

However, from 2009 when Greece entered the whirlwind of crisis until today, time has proven to be less generous. The 15 years that have elapsed from 2009 to 2024, when the European Elections will be held, have proven to be very few, contrary to the general rule in the economy where a lot can change in a decade and a half, and quite easily.


Examples abound:

Public debt has reached a new record, reaching €404 billion, surpassing the limit set by the management authorities, which is around €355-360 billion. As a percentage of GDP, it stands at 166%, when Greece defaulted with a debt smaller by 50 percentage points: 115%. The arrangements for servicing the debt not only have a defined time frame but – and this is the most important – do not negate the fact that Greece will pay €7.4 billion in 2024 for its management!

Private debt is also soaring. In just the first ten months of 2023, €5.7 billion was added, resulting in overdue debts to the tax office of private individuals (and we’re talking about 4 million taxpayers with debts!) reaching €106 billion. Economic distress is also evident in the inability of even those debtors who have arranged their debts to continue servicing them. In EFKA (National Social Security Fund), one in two is unable to do so!

Unemployment remains in double digits, despite the protests of large companies claiming they can’t find enough labor, while hiding their reluctance to increase wages and salaries. The function of price as an equilibrating mechanism when the quantities offered do not match the demanded ones is only for the textbooks. Not for real life.

The annual net earnings of an employee, in units of purchasing power, decreased by 12% in Greece from 2010 to 2022, according to Eurostat. In Bulgaria, on the contrary, they increased by 142%, in Romania by 122%, in Lithuania by 101%, in Latvia by 95%, etc. In no other EU country have wages decreased as they have in Greece.

Unmet medical needs due to cost in Greece reach 17%, when the EU average is 3.3%. Limited access to health care by citizens is the result of evening doctor visits, i.e., fee-based doctor visits, and the privatization even of primary health care, as the lack of available appointments pushes insured individuals to pay out of their pocket in case of an illness requiring immediate medical attention.

The list describing the worsening economic and social status of millions of citizens and the exacerbation of contradictions could be expanded to include dozens of examples: from pension cuts and tax bloodletting to the prohibition of determining the minimum wage amount through collective bargaining between workers and employers and the GDP level (224 billion euros in 2023) which still falls short of the pre-crisis level (242 billion in 2008).

It is a reality carefully, skillfully, and 24/7 covered by a media dictatorship, which will be a “case study” for decades regarding its function as the long arm of the government, in violation of all objectivity. A smokescreen, with the responsibility of the Greek oligarchs, starting from the upgrading of credit ratings to investment grade and reaching the 37% increase in the stock market index within 2023, sprinkled with all kinds of government-led allowances, shapes another, parallel but mainly embellished reality.

For all the above, there are clear political responsibilities shared by all Greek political parties that agreed to implement the Memoranda (New Democracy, PASOK, SYRIZA, LAOS, DIMAR), and outside Greece by the centers that pointed out the “rescue guidelines.” The European Union, through the European Central Bank and the European Commission, representing 2 of the 3 parts of the infamous Troika, bears the greatest responsibility for the lasting accident that occurred in Greece, due to the fiscal crisis. The memoranda acted like oil on fire, turning a cyclical fiscal and financial gap into a decade-long crisis, the depth of which even exceeded that of the US in 1930, which we once studied as a model of a universal crisis. Why didn’t Greece and the other countries subjected to memoranda (Ireland, Cyprus, Portugal, and Spain) open credit lines with fast-track procedures, as they are now doing for Ukraine?

The European Union used Greece’s fiscal crisis to deepen its reactionary character. It imposed, for example, stricter fiscal rules, through institutions like the European Semester, which, under penalty of funding suspension, forbid deficit creation. The recent “relaxation” of the rules, except for military expenditures, strengthens militarization and the war industry, not permanently deficit social policy. Why didn’t they exempt state investments in public health from the deficit?

The European Union imposed the provocative immunity of Greek banks. Their continuous recapitalizations have cost the Greek people 64 billion euros, while the taxes they owe to the Greek state, according to Bank of Greece data, amount to 13.4 billion euros. Draconian laws on EU state aid have also proven nonexistent in other cases, such as state guarantees for the securitization of non-performing loans, to facilitate their transfer from banks to servicers. Why didn’t we see similar tolerance in the case of OSE (Railway Organisation) or LARCO (Mining and Metallurgical Company SA) when the EU pressured for their privatization, wielding fines imposed due to state aid, which were supposed to violate the rules of free competition?

The funds from the Recovery and Resilience Fund will exacerbate the situation, despite their size. According to the state budget for 2024, they amounted to 2.8 billion euros in 2022, 2.1 billion in 2023, and 3.6 billion in 2024. However, the overwhelming majority of them are directed towards very large businesses, and they involve investments that create minimal new job positions, which is why unemployment remains at its high level despite the influx of millions. Why, just as conditions were set for green and digital investments, were no conditions set for creating new job positions per million investment or for allocating part of the investments to remote areas of Greece as a condition for the necessary decentralization and regional cohesion?


The result of the above classist, harsh neoliberal policies is the serious demographic problem faced by Greece, the tip of the iceberg of social inequalities. Within a decade, Greece’s population decreased by 300,000 people or 3.1%: from 10.8 million in 2011 to 10.5 million in 2021. The origins of the modern demographic problem are traced back to the memorandum era when births decreased and immigration of people in productive ages experienced post-war highs. The result of the demographic problem is the shrinking of the workforce, the worsening of the sustainability of the social security system, and the aging of society. Greece today has the oldest population in the European Union, and for this, the blame lies not only with the privatization of the population and modern lifestyles…

The leading role of the EU in exacerbating economic and social inequalities, functionally complemented and politically supported from the decorative to the nonexistent European Parliament, should not be forgotten in the run-up to the 2024 European elections.

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