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As Debt Deal Looms, Greeks Dream Big



As Greek leaders work around the clock to negotiate a new bailout deal with their creditors, ordinary Greeks remain anxious about what lies ahead.

The Huffington Post spoke to two Greek citizens with very different political views and very different hopes and expectations about a forthcoming deal. While both are deeply concerned about the outcome of the deal, they have dreams for a brighter future for Greece that go far beyond the events of the coming weeks.

Parina Stiakaki, 66, is a translator living in Athens. Stiakaki used to translate Greek business and stock market materials into English, but in the past few years, all of her work has dried up. Her only source of income now is the residential properties that she owns. Because many of her renters can no longer pay their rent, and she refuses to throw them out, Stiakaki still operates at a loss. She estimates that she has to withdraw 5,000 euros a year from her life savings in order to pay her bills. Despite her negative income, Stiakaki says she's still paying income taxes, because the government now counts the value of her house and car as income.

Stiakaki has applied for her state pension, but she's not expecting to receive it anytime soon. “If I get one at all, it won’t be for another year and a half,” she said. There is currently a backlog of 400,000 pension applications, according to Greek government estimates.

Still, Stiakaki considers herself lucky. She has two grown sons who support themselves and their families without her help. And she knows many people who have not been so fortunate.

“I have friends who cannot pay their taxes anymore and are worried about having their houses repossessed,” she said. “People are skimping on food, even.”

There used to be a 70-year-old man living down the road from Stiakaki. He was a civil engineer, she remembers. He shot and killed himself as the recession was beginning. Stiakaki believes that the man had debts he couldn't pay, and that the suicide was at least partly a response to his economic distress.

Stiakaki voted for Greece's Syriza party in January because she wanted relief from economic austerity.

Now she says that any deal that asks Greeks to endure even higher taxes and smaller government benefits must include debt relief as well — or it is not worth taking at all. She would prefer a “Grexit,” or Greek exit from the euro, to a deal that puts the country in such a position.

“It is inevitable that after six months or a year, Greece will leave the euro,” she said. “This is a useless exercise. It will mean more pain and suffering and no problem will be fixed.”

Polling shows that Stiakaki’s support for a Grexit puts her in the minority among Greeks — and even among Syriza supporters. But Stiakaki, who has a bachelor’s degree in economics from the London School of Economics and who maintains a blog on Greek politics, believes that restoring Greece’s control of its currency is the best of many bad options.

“The choice is between a slow, lingering death,” Stiakaki said, referring to additional budget tightening, “and a jolt that will be hard and bring a change in the economic outlook.”

“In my personal opinion, it would be very tough for a few months and maybe a year,” she explained. “But after that, the economy would get growing. We would go back to the drachma and devalue our currency.”

This isn't the prevailing view among economists, although some — including the Nobel laureate Paul Krugman — share the same outlook as Stiakaki, arguing that a cheaper currency could allow Greece to recover economically.

And Stiakaki is ready to vote against Syriza to make a Grexit happen.

“If Syriza would run as the party it is today, then I would still vote for them,” she said. “If it splits, I would side with the party in favor of leaving the euro.”

As HuffPost has reported, the scenario Stiakaki describes — in which a deal freighted with concessions prompts Syriza’s more radical factions to revolt against Prime Minister Alexis Tsipras — is not unlikely.

Like Stiakaki, Yannis Koutsomitis, 50, a television and film producer living in Crete, saw his livelihood destroyed by the 2008 financial crisis and the prolonged recession since then. Koutsomitis had enjoyed success and recognition for his production of TV primetime dramas. In 2008, he won the Greek equivalent of an Emmy for producer of the year for his work on the popular Greek series “Matomena Homata.”

Koutsomitis’ award-winning work was also his last in the industry to date.

“The TV sector has suffered a devastating crisis,” Koutsomitis said. “There is almost no primetime drama produced in Greece anymore.”

Koutsomitis' partner is a lawyer, and when Koutsomitis stopped getting work after the economic downturn, the two of them were able to rely on her income for a while. In 2010, Koutsomitis started blogging about post-crisis Greek politics and economics, and he now earns some money as a political analyst for Germany’s NTV and BBC Radio. Koutsomitis and his partner support a son from one of the partner’s previous relationships. Koutsomitis’ parents are financially independent, living off combined pension benefits of 1,500 euros a month.

Koutsomitis and Stiakaki are both educated professionals whose careers were disrupted by Greece’s economic turmoil. But they've drawn very different conclusions from the crisis.

A centrist on the Greek political spectrum, Koutsomitis is angry with Syriza for spending five months negotiating with Greece’s creditors only to run out the clock in the final weeks over differences on pensions and a value-added tax increase that were known to be the main sticking points all along.

Koutsomitis does not share Stiakaki's hostility toward the country’s European creditors. Actually, he's of the view that they saved the Greek economy after its banks teetered on the brink of collapse, and he doesn't wholly blame the country's persistent economic malaise on the budget tightening the creditors have imposed. In fact, Koutsomitis thinks that structural problems like clientelism and a culture of social immobility will prevent unemployment from falling below 15 percent even after private sector demand recovers.

As a result, Koutsomitis believes the reforms demanded by creditors provide an opportunity to make Greece more economically competitive. He said he'd like to see a deal that institutes “very thorough reform” of the pension system. He'd also like to see defense cuts and other government spending cuts in exchange for debt relief.

The Greek government, as led by Syriza, has put up greater resistance to the idea of pension cuts than to any of the creditors’ other demands. Tsipras has claimed that additional cuts to the already reduced benefits will “only cause a further worsening of the already dramatic social situation.” Tsipras and others point to the pension system’s role as an all-purpose, multigenerational safety net at a time of high unemployment.

But Koutsomitis argues that current proposals would shield the poorest pensioners by guaranteeing a minimum pension.

And despite some measures limiting early retirement, he says that the pension system is still overly generous toward people who do not need the help.

“The problem is that there are many, many people on pensions of 1,000 euros or more in their 50s,” he said — the implication being that people of that age ought to be working or at least looking for work.

As for taxes, Koutsomitis said he does not mind raising rates on wealthy individuals. But he objects to Syriza’s proposed corporate tax hike, which he said could cause struggling Greek companies to collapse or move overseas.

Still, unlike Stiakaki, Koutsomitis considers leaving the euro a nonstarter. To his mind, a deal that lacks any of the components he prefers would still be better than no deal and a Grexit.

Nonetheless, Koutsomitis shares Stiakaki’s dream of a Greece that one day has more control over its destiny.

He hopes that five years from now, the country will have recovered enough economically to begin having a conversation about what kind of society it wants to be.

“Some people want socialism and some want free-market economy,” he said. Currently, he argues, Greece has neither model, but instead has a “very odd mixture of clientelism and a state-run economy.”

“It has to be an open debate in the society,” he said.

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