Investors Comb Greece's Finances To Check On Bailout

Sep 8, 2012

Transcript

SCOTT SIMON, HOST:

Envoys from what they call the Troika, the International Monetary Fund, the European Commission and the European Central Bank, are back in Greece today and will resume combing through the country's finances to determine if Greece ought to keep receiving bailout loans. They're also expected to push for more austerity measures in exchange for those loans.

Without the money, Greece will default and likely exit the eurozone. More than two years after the bailout, a big question remains. Is austerity the wrong medicine? Joanna Kakissis reports from Athens.

JOANNA KAKISSIS, BYLINE: On a recent morning, on the island of Evia, about 100 pensioners soak in the hot springs in the town of Edipsos. Just three years ago, the government paid for retirees to vacation here. Now, the pensioners foot the bill.

UNIDENTIFIED WOMAN #1: (Foreign language spoken)

KAKISSIS: Which is just fine by Genovefa Iakovidou, a retired school teacher from the northern city of Varia. A 71-year-old widow says the government used to spend way too much money. Now, she says, it's got to stop its budget-cutting. Her pension has been slashed by 30 percent and more austerity could cut it again. And that's a problem because she spends at least half of the $1,000 she receives every month to her unemployed nieces and nephews.

GENOVEFA IAKOVIDOU: (Through Translator) I have to because I can't stand seeing them like this. One of my nieces lost her job and has to support three children. The family took out a loan to buy their house and they don't have the money to pay it back.

KAKISSIS: It's like a microcosm of what's happening in the country. The recession is now in its fifth year and unemployment just hit a record high of 24.4 percent. On Friday, Prime Minister Antonis Samaras told European Council President Herman Van Rompuy that the Greek economy is so crippled, it's struggling to pay back its loans.

PRIME MINISTER ANTONIS SAMARAS: (Through Translator) For the efforts that have already been made to actually matter, it's crucial that the Greek economy develops because Greeks have reached their limits and their sacrifices have to bear fruit.

KAKISSIS: Von Rompuy is the latest eurozone leader to support Greece, but only if the government follows through on reforms. Samaras is pushing through what he says are the last austerity measures, more than $14 billion in pension and wage cuts and health care spending. Opposition leader Alexis Tsipras, who leads the leftist Syriza Party, told government leaders this week that Greece would be better off defaulting on its debts like Argentina did in 2001.

ALEXIS TSIPRAS: (Through Translator) Argentina passed some very tough times, but they managed to stand on their feet with dignity. Unfortunately, you're steering us to another road, a terrible one. We will lose all of our national sovereignty. We will lose all of our dignity.

KAKISSIS: Syriza, which opposes the bailout, is leading in at least one public opinion poll while support for the three pro-bailout parties governing Greece has dropped.

(SOUNDBITE OF CROWD CHANTING)

KAKISSIS: In a troubling time, reminiscent of Weimar Germany before World War II, the violent far right Golden Dawn Party, known as Chrysi Avgi, is also gaining ground. Here supporters chant at a rally in Thermopolis. To keep Greece from imploding, the government must show that the current course will help both the country and the euro, says former finance minister George Papaconstantinou.

GEORGE PAPACONSTANTINOU: We have a very narrow window to prove that all this is not for nothing, that actually this leads somewhere and it's a better place and that an alternative road leads to absolute and unmitigated disaster. It is a narrow window, narrow in terms of time and in terms of patience and in terms of the middle class, that they are seeing the floor go under their feet.

KAKISSIS: Back in the hot springs of Edipsos, Genovefa Iakovidou, the retired schoolteacher, says she worked her way into the middle class after growing up in a poor farming family.

IAKOVIDOU: (Foreign language spoken)

KAKISSIS: I just wanted to go on a little vacation once a year or see a play once in a while 'cause these are supposed to be my golden years, she says. She's going to cut her vacation. She expects to help more relatives next year and there's only so much money to go around. For NPR news, I'm Joanna Kakissis in Athens. Transcript provided by NPR, Copyright NPR.