Why Greeks Are Protesting Bailouts Designed To Help Them

It might seem crazy to protest a bailout meant to help your country out of its self-imposed mess, but, for many Greeks, there's more than just money at stake


A student is visible through a hole in a banner during a protest in Athens last Wednesday / AP

To critics, Greece is the petulant child of the European Union. After joining the European Monetary Union in 2001 mostly by fudging its budget numbers to appear to have a sustainable economy, as financial journalist Michael Lewis writes in his new book, Boomerang, Greece then completely failed to keep government budget deficits below 3 percent of GDP, as was required. In fact, Lewis argues, the government wasn't even making much of an effort to keep track of how much money it was handing out. Government expenditures and income were nowhere close to matching up. Ordinary Greek citizens gladly took the extra government cash -- expensive social services, early retirements, overpaying public sector jobs -- while baldly lying about their incomes at tax-time.

Now, European politicians like German Chancellor Angela Merkel are risking their own careers at home to bail Greece out and avoid a default, which could ripple across the already-fragile eurozone. In response, Athenians have taken to the streets, outraged at the austerity measures tied to the bailout. Some protesters have portrayed Merkel dancing with Hitler. Meanwhile, trying to pressure the Greek government into rejecting further cuts, Athens' trash collectors have gone on strike, leaving garbage to rot in the streets.

Is the country as a whole really this immature? It depends whom you ask. The Greek perspective looks a bit different.

First, as Lewis notes, and as those close to the Greek government are even quicker to point out, the current government led by Prime Minister George Papandreou really isn't at fault. In fact, officials in the new government, which assumed office in late 2009, were the ones who discovered the mess left by predecessors and decided to come clean.

Papandreou's whole platform during his campaign was "vigorous reform of the public sector," Richard Parker, personal adviser to the prime minister on economics, told me. "He [Papandreou] was basically blindsided by the size of the government deficits, but I think actually thought in some sense it was a blessing in disguised because it would help drive forward the reform agenda."

Parker argued that the Greek government has been "aggressive" in addressing financial problems. "They knocked down their deficit-to-GDP ratio by six percentage points of GDP in 2010," he said. "No other country in the midst of this recession has gotten that sized reduction out of government," and "they're not getting many points on the board for it." Parker acknowledged, however, that he's pretty close to the government's process.

It may be the very dynamism of the government's response, though, that is driving Greek society to such anger.

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Heather Horn is a former senior associate editor at The Atlantic.

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