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Greek Opposition Party Seizes On Anger Over Austerity Measures

STEVE INSKEEP, HOST:

Europe's economy is a mess again. New figures show consumer prices dropping. Deflation makes it harder for people to pay their debts. Adding to this trouble is new anxiety over Greece. Greek politicians, some of them, want to renegotiate terms under which Greece accepted a bailout a few years ago. Economist Platon Tinios says Greece's economy was finally growing.

PLATON TINIOS: It was not exactly a takeoff, but I mean, it was showing signs of starting to work again. In 2014, well, the last quarter actually - we actually had the first rise in GDP for seven years. Tourism helped a lot - had a very good tourist season last summer. And some of these reforms had started to pay off.

INSKEEP: Sounds good, but Greeks have tired of austerity measures and opposition politicians are denouncing them as an election approaches.

TINIOS: Reform was always seen as something which was imposed from outside by the creditors who have given Greece the largest loan ever given to a country.

INSKEEP: Greece, of course, is preparing for an election in a few weeks, which seems to have come about for reasons not directly related to the economy, but is that intensifying the anxiety here?

TINIOS: It is intensifying the anxiety because there is an insecurity about what the policy stance will be after the election. The government itself did not complete the negotiations with our creditors. And the current support program actually ends on the 28 of February. The new government will probably have two weeks' time to negotiate a new support package, which is very, very hard for - especially for the current opposition party. They're on record saying that they'll try to renegotiate everything, more or less, starting from scratch.

And the loan that was given to Greece, in addition to the money, had a number conditions about structural reforms to the Greek economy. And these structural reforms have meant austerity in the public sector, changes in labor relations - for example, making things much more flexible and privatizations and so on. So what the left-wing opposition is opposing is the conditions that have - that come with the loan.

INSKEEP: You mentioned that some of the reforms that were put in place a few years ago have just begun to work. What's an example of a reform that's beginning to work?

TINIOS: Well, some of the reforms about competitiveness - for example, making sure that the Greek costs are lower relative to competitors in the hope that this might kick-start some exports. There's been spectacular improvement in public sector finances. The thing that actually led us into the crisis was the state was spending far more than it was taking in. Now we're actually collecting more than we were spending.

But those improvements were secured at the cost of social policy, which has been severely cut back. Poverty has increased and average incomes have fallen by a quarter. So, I mean, this is the largest deterioration in any Western country since the Second World War.

INSKEEP: I want to repeat that you said average incomes have fallen by a quarter - 25 percent - and that is an average that's across the country.

TINIOS: That's right, and unemployment is up to 30 percent. Unemployment among young people under 25 is over 50 percent. So the opposition, they point to this and they say that this is a humanitarian disaster.

INSKEEP: Is there some level on which this crisis is just going to have to resolve itself? Germany and the other European powers have the money. Greece needs the money. Greek voters can demand whatever they want, but in the end, Greece is going to have to pay the bill.

TINIOS: The problem about the Greeks' crisis - and this is how it feeds into Europe - is that if we can't pay our bills, the one thing that we could possibly do is try to print money, and if we tried to print money, we would have to exit the euro. So we'll have to essentially give up our currency. This was the situation Greece found itself in 2012, and our European partners then decided that, you know, a Greek exit - what is known as a grexit - was just too painful to countenance. Now we are essentially back to where we were in 2012. Grexit is being talked about the last couple of weeks. The real danger people here are worried about is that we might sort of overplay our hands. We might bluff our way out of the eurozone.

INSKEEP: Platon Tinios is an economist who teaches at the University of Piraeus in Athens. Thanks very much.

TINIOS: Thank you, Steve. Transcript provided by NPR, Copyright NPR.

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