Armageddon in Greece

The New York Times reports on the latest draft budget from Greece:

The draft budget spells out about $10 billion in spending cuts and savings for 2013. About one-quarter of that would come through reductions in civil servants’ salaries and social welfare benefits, and about 15 percent through cuts in spending on health, defense and local authorities, the government said.

….The draft budget is expected to be revised significantly because it must be approved by the country’s troika of foreign lenders — the European Commission, the European Central Bank and the International Monetary Fund — before it can be submitted for a parliamentary vote. The troika is insisting on further cuts in the public sector — including laying off public servants, a political third rail in Greece and other European countries — while the coalition government has been pushing back.

….The negotiations are taking place against a backdrop of unrelenting, depression-level conditions in the Greek economy, which the draft budget predicted would contract by 6.5 percent this year and by 3.8 percent in 2013 — far more than the troika’s earlier estimates and about 25 percent below its peak before the crisis struck. The budget says unemployment is expected to rise to 24.7 percent from 23.5 percent this year.

Just for perspective, this is about a 10% cut in total government spending. The U.S. equivalent would be a cut of about $350 billion in federal spending and another $200-300 billion in state and local spending. All against the backdrop of an economic catastrophe that rivals the Great Depression in scope and will be made even worse by the proposed spending cuts.

If you happen to be wondering why Greeks are rioting in the streets, this is why. You might be too if this were happening to your economy.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate