Effects of austerity on Greece

31 October, 2013
Source: 
PSI, PSIRU
A briefing paper in three parts prepared by PSI's research unit (PSIRU) on the effects of austerity on Greece. These background papers were commissioned by PSI for the PSI/EPSU CAN held in Greece, 4-8 November 2013.

Part one: General Overview focusing on public sector and privatisation, rising inequalities, unemployment and effects on youth

This briefing paper provides an overview of how austerity programmes are affecting:
•    The public sector
•    The privatisation of public enterprises, infrastructure and assets;
•    Unemployment;
•    Young people;
•    Inequalities.

Part two: Financing of government debt and Troika intervention

In 2001, Greece entered the Economic and Monetary Union (EMU).  Part of the conditions of entry required adhering to the 1997 Stability and Growth Pact, which set limits on government spending and debt of not more than 3% GDP.  EU Member States who joined this Pact effectively forfeited their financial independence.  This immediate impact of this loss of independence was not obvious until the 2008/9 global financial crisis, when global banks were in crisis and national governments had to bail them out. Greek banks lacked capital and faced liquidity problems.   By 2010, Greece was unable to repay or re-finance its government debt without help.

Part three: Health and social services

This briefing paper sets out the impact of austerity policies on health and social services.  The entry of Greece into the European Union supported the development of a public healthcare sector.  Similarly the creation of a formal social services sector has only taken place in the last 15 years.  Until then it was the responsibility of the family or the Church. Several programmes have started to create social care services for older people, people with disability and children and were co-financed by the European Social Fund under the Community Support Frameworks for Greece.  The increase in unemployment, poverty and social exclusion have placed great pressure on these emerging services.

 

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