OPPOSING AUSTERITY. Protesters continue to voice out sentiments against austerity measures being adopted by the Greek government. Photo from mysanantonio.com

SINCE THE economic crisis started to seriously manifest in Europe, Greece has taken different measures to improve its situation. As protest after protest takes place in Athens, ways to address the concerns of the majority have been formulated.

As these steps take effect, how the Greeks are coping up with turmoil remains a relevant question.

Bail or no bail

In 2010, Greece received €110 billion from the eurozone. However, this decision has led to protests from trade unions. Value added tax has increased and new tax provisions have been implemented.

In 2011, Greece accepted another major bailout of €109 billion from the European Financial Stability Program, increasing the country’s debt and placing its ability to repay in question.

Early this year, new bailout strategies were set. The country decided to pursue a “debt swap” with the private sector, which entails that the former would pay the debts of the latter and vice versa.

This action eased half of the private sectors’ problems, much to their favor.

Hopes from pro-austerity party

Fears that Greece would have to leave the European Union arose, but these died down as the results of the recent national elections favored a pro-austerity party, the New Democracy.

European Studies Program Instructor Manuel Enverga III viewed the party’s election positively. “By the standards of Greece’s main creditors in the European Union, which are France and Germany, the election of the pro-austerity party is seen as beneficial,” he said.

Enverga further commented, “The austerity measures would contribute greatly to controlling the Greek government’s expenditures, and the installation of a pro-austerity party shows lending countries that Greece is serious about improving its economic situation.”

European Studies Program Director Marissa Paderon, PhD, shared the same opinion. “[The party] might be better able to get support from the EU’s institutions and co-EU states plus having more access to the EU markets,” she said.

Despite this, however, Enverga highlighted uncertainties in the party’s plans.

“Whether or not the new coalition government will succeed in implementing its policies is another matter entirely. There are political factors at play, and it is very likely that the new pro-austerity coalition will encounter resistance to the measures that it intends to implement,” he said.

Paderon also said that there is a possibility of seeing a strong backlash from anti-EU groups, which include major political parties.

Roots and remedies

The Association for European Studies Students President Oliver Felisilda is also positive about Greece’s future.  “As long as countries understand that helping the Greeks would still be in line with their own national interest, hope is not lost,” he said.

This ideal outcome, however, is still subject to the underlying internal issues in the Greek government.

Paderon stressed the prominent irregularities in the country’s systems. “Greece is known for its corrupt system, inefficient regulatory system, [and] lack of financial transparency.” With this, she mentioned the need for political and economic reforms, coupled with good, structured governance and tax reforms.

She added that Greece should “put the money where it should be” to enforce strict budgeting.

Enverga also looked at the matter as an aftermath of Greece affiliating with the euro. “The Greek debt crisis was brought about by high government spending soon after the country became part of the [eurozone], combined with decreases in tax collections due to evasion and other demographic factors.”

“It would have to control its spending and find ways to raise more money,” he said.

Both European Studies Program faculty members said that Greece spent more than it earned after adopting the euro. The surge of public sector wages exemplified this—being among the highest in the eurozone—with rates reaching 50%.

Furthermore, the country’s financial institutions faced downgrades from ratings agencies as its debt amounted to 113% of its GDP, exceeding the eurozone limit of 60%.

It is hoped that an eventual resolution of the crisis will arise from the efforts being pursued at present. While Greece’s economic future remains vague, though, it remains dependent on how seriously the government will work towards the country’s improvement.