The Trial and Death of Austerity

On Sunday, for the second week running, protesters gathered in the main squares of major cities across Europe to voice their opposition to the wave of austerity that is sweeping the European Union. Nowhere was the call to protest answered with greater enthusiasm than in Greece.

In Athens, people swarmed into the city center for the 12th consecutive day. Some were packed into Syntagma Square, in front of the Greek Parliament, listening attentively to speakers chosen at random from the crowd. This modern-day agora has taken place every night. The rest, more than 100,000 according to estimates, overflowed into the surrounding streets. Strangers were conversing animatedly about the country's serious problems, many waving Greek flags but none sporting party or union banners. Vendors who have set up improvised stands in the area in the last couple of weeks provided them with everything from from souvlaki and corn cobs to beer. It was a cross between a political demonstration and a street party.

Modeled on the Spanish movement of the 15th of May, the protests of the Greek Indignados are unusual by Greek standards in two essential ways. Firstly, they are determinedly unaffiliated to any party or union. This is a welcome change in a political system long dominated by the collusion of government ministers and public sector unions at the expense of the common good.

Secondly -- and this, too, is a major deviation from common practice -- they are almost exclusively peaceful. People yell angry slogans at Greece's beleaguered parliamentarians, calling them thieves and traitors, they bang their pots and pans but, so far at least, there has been little confrontation (a widely publicized incident in which members of Parliament had to escape the building with flashlights through the adjoining National Gardens because a mob was blocking the main exit was an exception, and the people involved were not necessarily related to the Indignados). Compared to the exchange of teargas and molotov cocktails that usually characterizes Greek demonstrations, the sight of protesters sitting next to and even engaging in dialogue with the riot police was truly extraordinary.

Despite these refreshing departures from protest protocol, though, the growing influence of the movement in Greece is a source of great anxiety, not only for those who care about the future of the country within the European family, but for the euro itself.

It is no accident that the movement of the Indignados has been strongest in Spain and Greece. The two Mediterranean countries lead the eurozone in unemployment (a staggering 20.7 percent in Spain and 15.9 percent in Greece, according to March figures) and in both, it is the young who are especially hard-hit. Fully 45 percent of Spaniards under the age of 24 are without a job. In Greece, the number is 40 percent.

In both, the Socialist governments in power are struggling to balance the demands of fiscal retrenchment and structural reform, particularly of sclerotic labor markets, with the needs of increasingly hard-pressed populations, in the context of political systems suffering a real crisis of legitimacy.

Although the protests began in Spain - where signs taunted "Quiet, we mustn't waken the Greeks" - it is in Greece were they are likely to have the most immediate impact. Despite the heterogeneous nature of the crowds in Syntagma Square, including far-right elements, the protesters seem to be converging on a common theme: a rejection of the austerity policies imposed by the EU and the International Monetary Fund and the embrace, however inchoately, of a policy of unilateral default on the country's huge public debt.

Last week the Greek government, after painstaking negotiations, came to an agreement with the troika of its lenders (the European Commission, the European Central Bank and the IMF) on a new program of wrenching austerity, privatizations, and deep structural reforms that will last until 2015. This program is a central condition for the release of the fifth tranche of the original 110 billion euro loan to Greece, without which the country will be forced into default by late July, followed by a probable exit from the euro. It is also necessary for the agreement with the troika for a new, massive loan, which could reportedly reach 100 billion euros, to cover Greece's lending needs through 2014, since the markets are likely to remain ill-disposed to pitch in.

Prime Minister George Papandreou aims to bring the program to a vote in parliament around June 20. Between now and then, it is certain that the Indignados will continue to pile on the pressure for a rejection of the law. There will also be a general strike, called by the unions on the 15. Already more than a dozen of the governing party's deputies are openly expressing their reservations about the new measures, while the main opposition party adamantly refuses to lend its support. Will the government hold its nerve? The future of the euro may well hang in the balance.

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