The Default Line: THE INSIDE STORY OF PEOPLE, BANKS AND ENTIRE NATIONS ON THE EDGE Read Online Free Page B

that are not being done. At the same time you have a complete inability to solve problems.’
    Greece had a big enough problem even contemplating the size of its debts. But it was not simply a matter of raising taxes and cutting spending in order to fill a fiscal black hole. There was an even more fundamental problem. The standard-issue IMF template for dealing with financial crises among the developing countries, its more usual clients, required two other factors: devaluation and default. In the single-currency Eurozone, however, devaluation was not an option. That meant the internal adjustment, the so-called ‘internal devaluation’ required of Greece, would be even more brutal.

A nation on the edge
    There was a certain irony in the way that, in the run-up to the 2012 Olympic Games in London, the Olympic flame was borne across the mainland of Greece with such grace, calm and efficiency. For, at the very moment that this quadrennial showcase of ancient Greek civilisation was being celebrated around the world, modern Greece was at the point of breaking with the rest of Europe.
    The previous two Olympic relays had also marked significant milestones in Greece’s decline. Eight years before, the Greek capital itself had hosted the Games amid an orgy of debt-fuelled spending on stadiums and other infrastructure. In 2008, ahead of the Beijing Games, the relay ran through Greece just as fourteen years of growth was coming to a halt. And by the time the flame was heading towards London in 2012, Greece had experienced four years of recession, unemployment, austerity and misery. Greece had become a nation on the edge.
    The Helliniko Olympic complex in Athens stands as a monument to this hubris, a decaying white elephant that costs £65 million a year just to maintain. Nearby lies one of a handful of new clinics run to cope with Greece’s modern reality: a surge in poverty. Dr Giorgos Vihas, a cardiologist, cannot believe the ailments that he and the other volunteer doctors are treating. ‘We never expected to see people looking through the rubbish bins to find something to eat. We never expected that the patients here would bring children as young as five or six months old, who would be underweight because the parents can’t afford to provide them with enough milk.’
    Dr Vihas blames this unprecedented situation on the ‘violent change’ in living standards. He also deplores the ‘systematic destruction of the health system’ after the government signed an austerity deal with the EU. Only the charity of wealthy Greeks, he says, is keeping the clinic going. He also offers a political diagnosis. ‘The EU medication is worsening the situation,’ he says. ‘The medical prescription of the bailout leads to a certain death. The madness is that everyone knows this. The Greek patient has realised what this medicine does, and very soon will follow a different prescription.’
    This is what an ‘internal devaluation’ looks like in practice. In times gone by, Greece would have defaulted on its loans – as it has done quite often – and its currency would have hit the floor, making its exporters more competitive. ‘Internal devaluation’ is a euphemism for genuinely savage cuts to public spending, higher taxes and collapsing living standards. This type of adjustment is the only route available to a country seeking to stay in the euro. One of the patients at Dr Vihas’s clinic, a Mr Karagiannis, appears to have undergone his own personal internal devaluation. ‘I am poor now, I was rich before,’ he tells me. Three years ago he was a high-flying businessman. Now he stays with his 80-year-old mother and lives off her pension. ‘I’m here today simply because I’m very poor and I cannot buy my medicines. There is no future.’ He says he feels like ‘killing the political architecture’, and praises Britain for dodging the single currency. Germany, he says, wants to reduce Greece to Bulgarian levels of poverty.
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