Who remembers that in 2010, in full financial panic of European banks, the European Union was preparing to cut the agonizing branch of its tree and prepared the “Grexit”? François Hollande still prides himself today to have “Save Greece”by playing the mediators with Brussels to maintain the Hellenes in the euro zone. The reality is a little different: the IMF has imposed, in coordination with the European Union, a cure of austerity which it has admitted since it had undoubtedly been too violent and still weighs today on the country.
At the time, Greek debt reached 130 % of GDP (against 112 % for France today), the country is almost in cessation of payments. On April 23, 2010, Prime Minister Giorgos Papandreou resolved to request international aid of emergency from the International Monetary Fund (IMF) and the European Union, speaking of “National need”. In exchange for nearly 300 billion euros of money, the country must put its social model into parts: drop in minimum wage, reduction in the duration of unemployment benefits, decrease in the legal retirement age, suppressions of whole parts of public services – schools, hospitals -, increase in VAT up to 24 %. The social consequences are reflected in major demonstrations, sometimes violent, in February 2010. Three bank employees die in the building where they work, burnt down by Molotov cocktails.
In the following years, the austerity plans follow one another, the tax administration is reformed to strengthen its efficiency and fight against corruption. Greece today presents a sanitized financial situation, but the horse treatment that she suffered has left traces. Households have seen their standard of living divided by three on average, thousands of companies have closed and, more worrying for the future, more than 300,000 students have left the country to build their lives abroad. Those who have remained must manage with famelic public services. Admittedly, the country’s deficit went from 18 % of GDP in 2008 to 0.4 % today, but Greece remains under the weight of a colossal debt it remains to be reimbursed and which today requires that it be placed under surveillance of the European Union and the IMF and its “men in black”.
Greece and Portugal saw their economy unscrew in just a few months
More recently, Portugal to which the term “miracle” is happy to focus, also had to go through a severe austerity cure, under the surveillance of the IMF. Like Greece, it is the global financial crisis of 2010 that plunges the country into the abyss, a debt at 130 % of GDP and a current deficit of 11.4 % in 2010.
Lisbon’s “miracle”
In exchange for financial assistance of nearly 100 billion euros in the IMF and the European Union, the country initiates sacrificial reforms: decrease in wages and retirement pensions, decreases in public aid, capacity allowances capped and postponement of retirement age beyond 66 years. The public service is put to the dry diet: frozen wages and one in two departure is not replaced. A heavy treatment which has been extended over several years, at the cost of social and political crises, but which ended up paying. Unemployment fell from 16.5 % to 6.1 % in ten years, large groups invest again in a country where the workforce is better market than in its European neighbors.
Lisbon is better, but it is not Byzantium, however, a quarter of the Portuguese lives with the minimum wage of 820 euros per month, and 2 million are on the poverty line. The return to economic prosperity is undoubtedly real, but the “miracle” is far from so spectacular, looking closely. And the country remains subject to a public debt which still represents 127 % of GDP today.
By plunging back into the recent history of these two countries, the points of comparison with the current situation of France still seem to those of a bankruptcy. However, both of these countries have seen their economy unscrew in a few months, in a context of global crisis, which makes the great voices of the economy say that it would be wrong to believe that what happened to others will not happen with us.
