Pessimism and optimism in Greece after the latest bailout deal

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Aaron Schachter: I’m Aaron Schachter in for Marco Werman and your turned to The World a co production of the BBC World Service, PRI, and WGBH in Boston. So You have no doubt heard a deal’s been reached between Greece and Europe and all is right with the world. Right? Not so much. But do,do you get what just happened? I don’t. Just a few weeks ago Greece’s Prime Minister was urging his fellow Greeks to vote no on a European bailout that came with punishing terms. And they did, big fat Greek oxi, no. But now the Prime Minister has accepted a deal that seems even harsher than the one that Greeks rejected and he’s got to sell it to his country. Well, here more about the deal in a few minutes but first reporter Lilah Raptopoulos has been out and about in Greece’s second city, Thessaloniki, and I asked her how she would characterize the mood overall.


Lilah Raptopoulos: I would call it definitely palpable relief. As of all of the,I don't know 50 or more people I’ve spoken with over the past week an a half, they all agreed that a grexit and return to the Drachma would be a total catastrophe. So they know now that they are least safe from that. But no one is really celebrating in the streets. I talked to a teacher today (Evvy Yanati), the school systems are intensely pinched for resources and staff but she's lucky to have a stable job. Her husband is a taxi driver, and his work is less reliable and many of her friends have become unemployed over the past five years of austerity. So for them,She put it to me like: ‘We see no light. There’s no real visible end to this difficult time. And they’ll all just keep being hard.’ So that really makes me sad for them.


Schachter: So she's pretty pessimistic.


Raptopoulos: She's pretty pessimistic yeah, my interviews with her, with a lot of people. I keep trying to end them on a positive note, but it's really not that easy.


Schachter: Anyone? Anyone looking forward to the coming few years?


Raptopoulos: I got a little bit of positive response from a,from a lawyer today that I talked too, (Patrick Veleavesee) He’s in his late thirties, his wife is an orthodontist, they have two young children and for the past few months they’ve been putting feelers out about possibly moving out of Greece to Brussels or London, just to get some stability. But as of today, they’ve put that on hold. So they’re relieved in that sense. And he's also hoping Greece will implement the changes and there will be more room for adjustments that didn't happen during Austerity last time, so,He compared it actually to chemotherapy like “Chemo can save your life, but in order for it to work it has to kill the bad cells, and the last austerity measures were killing the healthy cells.” So he did sort of have a positive perspective. You know…he…actually this was good, he said ‘Even though this is a bad agreement,’ he said ‘maybe the worst agreement we could have, it’s a basis we can reform from. So if they start getting results maybe they can ask for reforms that will focus less on imposing taxes and more on increasing productivity and,and improving their lives.’


Schachter: Now you’ve been speaking over the past few days with a variety of business owner. Can you give us a sense of how the crisis is continuing to put a damper on the economy for small business owners?


Raptopoulos: Yeah, I spoke the other day with a glassware import owner, his name is (Dimitri Constantinu). They sell glasses and plates et cetera to retail shops and supermarkets, and they’re really stuck because they have about nearly 900,000 euros worth of goods held up at customs that they cant clear because they cant pay for them. So starting today his employees are working one week on, one week off and he says if this goes on for another month or so, it likely won’t, but if it does his business may not survive. So a lot of people are still holding their breathe.


Schachter: So 900,000 euros worth of stuff you said?


Raptopoulous: Yeah.


Schachter: So like a million dollars or maybe more than a million dollars…


Raptopoulous: Right.


Schachter: And the issue is what? The Greek banks can’t transfer the money? Or the supplier requires him to pay in cash? What’s the problem?


Raptopoulous: Yeah, a lot of the suppliers don't now offer the credit that they used to, too Greek companies because they don't trust the Greek banks, so he's been trying to clear as much as he can by getting paid by his customers in cash and then using that cash to then pay his suppliers and get some of that over, but if he can’t use cash then he can’t clear it. So he really is just…just has to wait till the banks open.


Schachter: That’s reporter Lilah Raptopoulous in Thessaloniki, in Northern Greece. Let’s take a closer look now at what the deal actually includes. Spyros Economides, teaches international relations and European politics at the London School of Economics and he says the Greek government has a lot of work to do before Greece gets any financial relief.


Spyros Economides: Well the broad terms of this deal is that the Greek government has to make a vast number of reforms in a vast number of areas, before the European Union and the Eurozone is willing to release any funds as part of this third bailout agreement. So for the most part we have issues relating to pensions, we have issues relating to VAT and other tax revenues, we have reforms of public administrations that are called for. And so on and so forth, it’s a really long range of issues that this agreement addresses and the Greek government has to tackle over the next 48 hours so the funds can be released.


Schachter: This is where i’m confused, you say Greece has to tackle over the next 48 hours. They have to change all these things or they just have to pledge to change all these things?


Economides: No in the next 48 hours, the agreement is that the Greek Government will have to pass a large number of active legislation through parliament as a first show of good faith and trust. After that the Eurozone will go back to negotiating table in a sense and sign off on what is agreed over the weekend in Brussels and in the next week or so a large number of other legislative acts will have to be passed through parliament to enable the government to carry out the reforms in the foreseeable future. So theres an issue of trust, theres an issue of passing legislation to ensure that trust and then theres a release of money after the legislation has been put into place and when the reforms start taking place. So it’s a long process, but its one which is more than simply a symbolic act, there is something of substance that has to happen before funds are released.


Schachter: So what this deal does in return for the changes that you mention is give Greece another infusion of cash, its hard to see how after not being able to pay back the money its been loaned over the past five years, it's going to pay back this money.


Economides: Well I don’t think the issue right now is paying back any money. The issue right now is stabilizing the Greek economic and political system and making some kind of deal that retains Greece as a member of the eurozone. and that the Greeks can somehow accept that they're may in the future be a better deal on the table. I think the key here is that in the future in the very short-term future, by the end of the year, the European partners of Greece should come back and say ‘you’ve acted in good faith, you’ve signed an agreement, you’ve put a lot of the legislative acts in place and attempted to reform. You’ve made austerity measures work and in return now we will consider restructuring your debt. Making your debt more sustainable and then allowing it to become a case that Greece could start paying back what it owes. Unless that happens, I don’t see that there is a long term plan for sustaining Greece as members of Eurozone.


Schachter: Coming from me it seems like a stereotype but, you did mention this sort of culture of corruption and so on. Do you think that the stark reality of whats happening now can help change that culture?


Economides: Well I think this is one of the most important issues that a stake. I understand that

the people in Greece, on the street, are foremost worried about their next paycheck.They’re foremost worried about whether they’ll be able to access their accounts in the bank. They’re foremost interested in surviving. And I think that this is the best instinct that they have to cope with the problem thats going on now, and this is for them a financial issue as well as an issue of survival. But if Greece is going to prosper in the medium to long term, then what really needs to change is the mentality by which Greeks, and I include myself in that, treat the state and how Greeks view the state, and how they actually behave as citizens within the state — rather than abusing the state in a way which has led us in the long term to the situation we are in now.


Schachter: Spyros Economides teaches international relations and European politics at the London School of Economics. Thank you sir for speaking with us.


Economides: Thank you very much.