Austerity Deal Spurs Backlash In Greece

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Melissa Block speaks with economist Elena Panaritis — a member of the Greek parliament and an economic adviser to Prime Minister Loukas Papademos — about her vote for the Greek austerity deal and the vehement backlash against it.

MELISSA BLOCK, HOST:

To Greece now, where there's widespread anger over government cuts. The smell of tear gas lingered in the air in Athens today in the aftermath of yesterday's riots. Police say rioters destroyed or damaged more than 100 buildings in the Greek capital.

ROBERT SIEGEL, HOST:

Greek protesters are outraged by their parliament's vote to impose a new round of harsh austerity measures. Those cuts were demanded by European lenders in exchange for bailout money to keep Greece from defaulting on its debt.

BLOCK: Elena Panaritis is an economist, a member of the Greek parliament, with the socialist PASOK party. She joins us from Athens. Welcome back to the program.

ELENA PANARITIS: Thank you.

BLOCK: There were 80,000 Greeks protesting outside parliament yesterday when you cast that vote to approve the new round of harsh austerity measures. What would you tell the Greek people about why they're necessary?

PANARITIS: I have to tell you it's been and it is an extremely difficult decision. We've been all very torn. I have been very torn because I've done this type of loans before when I was with the World Bank. And it's tough. It's really tough. You're between a rock and a hard place. You just have to take the decision that is the least worse, if you wish, the least difficult.

BLOCK: The prime minister, Lucas Papademos, has been warning about a social explosion if Greece does default on its debts. You could say there's a social explosion going on in the streets of Athens and around Greece right now, anyway.

PANARITIS: Yeah, I know. But it's a matter of magnitude. People just basically - I have to admit to you - became rather upset and disappointed because we have gone through seven austerity measures - reducing people's salaries and reducing people's pensions. Now, people have, you know, a choice between buying medicine or paying the rent. Hearing, however, every time the argument that either we're going to have to take these additional austerity measure or we're going to have a social unrest made them even more angry and more unhappy.

And, of course, we don't really know how a default looks like in Greece. Personally, I have lived through defaults, and that was one of the reasons that I was voting yes.

BLOCK: How confident are you that Greece can avoid default even with the bailout money now?

PANARITIS: Well, I'm not 100 percent confident because it depends a lot on the way the moving parts are going to fall in their places. One very important variable is the way the Greek government is going to implement much of what has been written in the memorandum of understanding of the bailout money. Another moving part is also how the European Union parties are going to keep up with their cooperation to us. And the third one is how the markets are going to be convinced about the stability of Greece and of the European Union to handle the crisis.

So there are a lot of moving parts, but this bailout plan gives us time to at least align them to a common goal, not to default and to actually go into an outing of that crisis.

BLOCK: When you think about the austerity measures, do you fear that they will make the economic problem, in some way, worse? I mean, if you want to get Greece out of a downward economic spiral, how do you grow if you're cutting the minimum wage by 22 percent, cutting 20 percent of government workers?

PANARITIS: You know what, things have to get worse before they get better. And I don't think it's just the cutting of the minimum wage or the reduction of public servants that is going to make things better, per se, like the restructuring of the labor costs and the restructuring of the public sector. And it is going to get worse. I'm afraid to say so, but it is going to get worse before it gets better.

BLOCK: I've been talking with Elena Panaritis, an economist and a member of the Greek parliament, with the socialist PASOK party. Ms. Panaritis, thanks very much.

PANARITIS: Thank you.

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