Cuts take Greece to the edge of anarchy as people cry for change

Anti-austerity protests that began a year ago still rage in the Greek capital, amid pleas to modernise the economy and tackle tax evasion. Roxane McMeeken reports from Athens

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Anastasiou, 42, says the financial crisis and fear of disturbances in Syntagma have cut customer numbers by 50 per cent. His café can take only six more months of these trading conditions before it will have to close, he says. "I am worried for my business but, worse than that, I feel this country is in a hospital and ready to die."
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But Kostas Panagopoulos, the co-head of Greek polling agency Alco, says the demonstrations must be seen in the context of a well-established tradition of protesting and entrenched mistrust of the state ever since the popular uprising that overthrew the military dictatorship of 1967-74. "There have been big strikes and rallies in Greece every year for the past 10 years, so what we see now is not unusual."
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The lenders' view

Economists applaud austerity measures

The Greek economy is responding reasonably well to the austerity measures, with the headline success being a reduction of the budget deficit from 15.4 per cent in 2009 to 9.4 per cent last year, but more action is likely to be needed.

In mid February, Greece's three lenders, the International Monetary Fund, European Central Bank and European Union, which send regular delegations to examine the economy, said in a joint statement that the deficit reduction was "an impressive achievement". The delegation, known in Greece as the "troika", said more progress was required, however, in the areas of revenue collection and spending controls.

It applauded new Greek legislation covering aspects of the labour market, the liberalisation of closed professions, healthcare reform, licensing and the competition authority, which has been passed or is pending, but stressed that "focus must now be on implementing these laws". Unions and others protesting against austerity measures have already voiced opposition to this legislation.

Economist Jan-Egbert Sturm, the director of the KOF Swiss Economic Institute and European Economic Advisory Group, recommends increasing value-added tax. "Greece is going in the right direction but it must do more, particularly to encourage growth." 

http://www.independent.co.uk/news/business/analysis-and-features/cuts-take-greece-to-the-edge-of-anarchy-as-people-cry-for-change-2233450.html