In Athens in mid-January, two weeks before the election that would make 40-year-old engineer Alexis Tsipras Greece’s new prime minister, a bunch of cleaning ladies explained to me why they planned to vote for his party, the Coalition of the Radical Left (Syriza, for its Greek acronym). We met where they had lived, at least part of the time, for the past 16 months: among tents on the sidewalk in front of the economics ministry in downtown Athens. The 595 Agonizomenes Katharistries, as they call themselves, had been laid off from the nearby finance ministry in September 2013 as part of a plan devised by the so-called Troika of multinational institutions to help Greece clear its mountain of debt—which now stands at $350 billion, almost twice the country’s GDP.
The Troika consists of the European Central Bank, the European Commission, and the International Monetary Fund. All of them see the kind of high-paying, low-skilled government job the ladies had lost as an example of mid-twentieth-century clientelism that will put any country on the road to poverty, and risks Greece’s newly won spot in the club of developed countries. The cleaning ladies, in turn, believe this is so much pseudo-economic baloney. They were victims of a heartless, pointless, counter-productive cutting-for-cutting’s-sake that, as they see it, has shrunk the Greek economy by a quarter, handed over good jobs to illegal immigrants willing to work for a euro an hour, humiliated a proud country, and undermined Greek democracy to benefit rich people.
But now the ladies are on their way back to work. Syriza has taken power at the head of a two-party coalition, sweeping away the country’s carefully built austerity program and its four-decade-old party system. The whole of Europe may be shaken to its core. It is not certain that is a bad thing.
Greece’s problems are formidable. A quarter of workers are unemployed, with all the human toll that implies. One meets journalists at top national dailies who have not been paid since last summer, and clerical workers in their 40s who have returned home to live with their parents. The country produces almost nothing of export value besides tourism and olive oil.
Corruption is as endemic as people say. Greece has been in default for half the years since its independence in 1832. Nor did it ever really establish a properly functioning democracy after the end of military rule in 1974. Since 1981, two parties, the Panhellenic Socialists (Pasok) of the Papandreou family and the New Democracy (ND) of the Karamanlis family, have alternated in power. Pasok has received interest-free loans from the government; ND added 150,000 government employees in its last five-year stint before the crisis. The Oxford professor of law Pavlos Eleftheriades has written about other rackets. Until recently a lawyers-and-judges pension fund was entitled to collect a 1.3 percent tax on all property transactions. Doctors got a 6.5 percent take of the drugs they prescribe. Unionized utility workers had similar deals. The arbitrariness of such exactions does not escape the notice of those meant to pay them. Tax avoidance has been rife.
State finances built this way are rickety. Greece’s did not survive the rattling they got from the U.S. subprime crisis of 2008. In May 2010, Greece ran out of money, and in 2012, the Troika wrote its stringent recovery plan—the Memorandum of Understanding. In some ways the Memorandum is making matters worse. Authorities relied on a new property levy, called Enfia, which overnight took the country from among the lowest property taxes in Europe to among the highest. The middle class took it on the chin. The tax was progressive, hard to evade, and broad-based, since Greeks had high rates of home-ownership. Soon people were selling off homes their families had owned for centuries—and family homes had been the backbone of an informal Greek welfare system. Syriza campaigned on changing the tax. Once the party looked likely to win, people stopped paying it altogether. Revenue is down 70 percent since last January, according to one outgoing ND official.
The new taxes were meant to backstop a program of free-market reforms. The cleaning ladies were not the only state employees fired. Wages were cut. Rights to unionize were stripped. There was something arbitrary about these policy recommendations. Taxi services were liberalized, but Athens was already aswarm with taxi drivers. It even has Uber. And it is hard to see why requiring Sunday shopping in a relatively pious country should be the business of foreigners. “No employers’ association asked for it,” a Pasok aide complained to me of a plan to deregulate other professions. “No other country has it.”