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CHAPTER 6 ... 33
6.1 Correlation between unemployment and psychosomatic phenomena ... 33
6.2 From unemployment to social exclusion ... 36
6.3 The role of the family during the Crisis ... 39
6.4 Immigration-Brain drain ... 40
CHAPTER 7 ... 43
7.1 From an economic crisis to a crisis of democracy? ... 43
7.1.2 Greek political turbulence ... 44
7.1.3 The political déficit in Spain ... 45
7.2 Whose fault is for the crisis? ... 46
7.2.1 Did the money exist? ... 47
7.2.2 Austerity in Spain ... 48
CONLCUSION ... 50
APPENDIX A: Interview Questions ... 52
APPENDIX B: List of Abbreviations ... 54
Bibliography: ... 55
1
CHAPTER 1
1.1 Introduction
The current financial crisis can rather be characterised as a `complex syndrome' of a systemic
fault which is caused by a widely spread of capitalism. Simply the crisis phases are inherent
in the logic of the financial system. (Agglietta, 2009) Equally Charles Kindleberger in his
book A history of financial crisis, describes that crises are emerging as a result of consecu-
tively phases of the financial system, which are occurred after phases of booms, intense
enthusiasm, fear and complete infusion, reformation and finally a new phase of boom. (2005)
An exceptional analysis that followed by Heilbroner in his book Beyond Boom and Crash,
who had foreseen the crisis of 1980's, illustrates that crises are products of capitalism "capi-
talism has always been as critically ill as it has been intensely alive...(...) "Convulsions" and
"revulsions", as the older political economists called them, "crises", as Marx identified
them, "recessions" and "depressions", they have been as prominent features of capitalist
development as its dizzying succession of technical advances, its enormous material produc-
tivity, its irresistible global expansion. So there is nothing new in the fact of crisis. (1978:11)
Even though the characteristics of the different phases of the financial system may differ, their
consequences are very similar with those of the past crises and the same paradigmatic as the
one of the Great Depression. The similarities of the financial crisis of 2008 and the Great
Depression can be seen to its extent, duration and the aftermaths which follow countries to
mass devastation, but also caused "discredited unsupervised capitalism" as Samuelson in
Washington Post describes. (2009) The Great Depression taught that deregulated markets
without government intervention can be proved seriously unstable for capitalism. (Mitchell,
2011)
The range of ideologies embodied around the causes of the current financial crises is hidden
in different perspectives about the idealistic world of laise-faire that the proponents of liberal
economies support and due to the accumulation of capital to the private sector.(Bonefeld in
Macartney,2009) Under the same philosophical framework the turbulence in the financial
sector is more a result of financial speculation caused by this overaccumulation, as integral
part of eoliberal capitalism.(Hirsch & Wissel, 2011)
The subprime mortgage crisis in the United States is the `evil' creation of investors' specula-
tion and the banking system, partially caused due to extensive lending to households with
junk status, which were previously considered unable to respond to any kind of financial
2
incumbency. While the housing bubble to an extent affected the subprime crisis, (Schiller,
2008) and the assumption of too big to fail financial institutions followed the unsupervised
financial system, the global financial crisis had spill-over effects not only to vulnerable
European economies but also to the Eurozone and the EU as an economic entity. The `bubble'
effect transformed to economic, political and social emergency. The crisis generated waves of
political and social instability and has caused high rates of unemployment.
The current crisis was the product of high levels of aggregated risk taken by bankers and
financial investors in a free market economy. The economic orthodoxy of that time has
transformed a financial crisis to an economic, political and social, increasing the levels of
unemployment. The aim of this paper is to investigate the social implications of the crisis in
marginalised populations whose voice remains unconsidered by the financial and political
strata.
For this reason particular attention will be given to young unemployed university graduates,
who experience the crisis as the product of many failures responsible for the uncertainty
provided for their future and the psycho-social implications occurred. This book will examine
the unheard voices of young graduates from Greece and Spain experiencing the high levels of
unemployment combined with uncertainty, the fear of social exclusion, and the indirect
effects of immigration. A clear insight will be provided in the experiences of the young
unemployed about the crisis as crisis of values and democratic deficit. Due to the continuing
upheavals of the day by day facts, this papers will examine the facts happened until the 17
th
of
June when the second national elections held in Greece.
1.2 Motivation for the study
The motivation to investigated and analyse the social implications of the crisis in youth
unemployed university graduates is inspired by multiple discussions followed with young
people who were feeling victimized by the political and economic arena and vulnerable to
react against the global financial system, facing the consequences of a lost generation. The
study has been motivated by the experiences and the views of young university graduates
who have been influenced by the facts mainly related to the high unemployment levels,
although they have invest by means and dreams to their future.
3
1.3 Structure of the Study
The Chapter Two involves a micro-economic analysis of the causation of the crisis and
potential theories related to this as they deployed by the current and previous studies. Refer-
ring to the crisis as a matter interrelated with the architecture of the European Union and the
economic imbalances but also as a production of dysfunctional national economies. Accord-
ingly, a short description is provided about the impact of the crisis on labour markets.
The Chapter Three contains a documentation of the social implications of the crisis on the
populations of Greece and Spain as they have been reported in media coverage but also in
recent studies which tackling the problem of social welfare dismantling as the aftermath of the
crisis.
In Chapter Four it follows a justification of the methods used in order this research to be
named qualitative, the selection process of the sampling according to non-biased methods,
and the ethical considerations emerged during the collection of primary and secondary data.
The Chapter Five analyses the impact of the crisis in youth populations directly related to
youth unemployment as the most profound effect. It examines how the labour market changes
have influenced the difficulty for university graduates to find employment, creating wage
desperation and aversion of young graduates to work in their home countries. It is explored
the inadequate state support provided to youth populations.
The Chapter Six aims to investigate the social impact of the crisis and unemployment to the
university graduates, by exploring the psychological phenomena occurred due to the limited
opportunities. Furthermore more personal experiences are explained associated with social
exclusion, immigration and decisions based on the current facts. What will also be examined
is the incorporated role of the family in serving as protective net and job network for youth
unemployed.
The Chapter Seven includes a reference to political, European and global political govern-
ance and the level citizens' trust to the politicians in respect to the crisis. A reference will be
made to the causalization of the crisis and who is to the blame for, according to the views of
the young participants. Furthermore it will be discussed cultural concepts and national and
external factors that have contributed to the political dissatisfaction of the citizens but also to
the democratic deficit created.
The Chapter Eight includes concluding remarks of the study focusing on the main topic
analysed in the text.
4
CHAPTER 2
2.1 How a global financial crisis became a Eurozone crisis
The expansion of the crisis from the United States to Europe occurred in a very abruptly way.
The global literature has documented many different factors contributed to the crisis, among
others turbo-capitalism, deregulatory markets, policy errors, banking lending and technocratic
elites, (Wood: 2012) but what was revealed was the many systemic weakness of the European
financial institutions (Dabrowski: 2009) and the lack of not only economic but also political
integration which has transformed to a democratic deficit. (Klaus: 2012) Despite the different
arguments about the crisis which can be contradictory between them, the analysis adopted in
this paper is focused on the efforts of the EU to tackle the crisis and to combat market
speculation, taking into consideration the social factors.
In one side, the Euro-crisis has mostly affected the countries of periphery characterised by
`vulnerable' economies. But also the architecture of the Eurozone itself was built upon
economic imbalances of the member-states and it was not well-constructed to prevent such a
crisis. When the euro introduced, it was only Luxembourg that met all the criteria, while
many counties indulged in `creative accounting' to nominally meet the criteria of insertion
into the monetary union. (Martino, 2012) As Vaclav Klaus in one of his speeches said "The
undergoing Eurozone debt crisis is an inevitable consequence of one currency, one exchange
rate, and one interest rate for countries with very diverse economic parameters." (2012:5)
Since the creation of the EMU, the `artificially' created Eurozone has three basic weaknesses.
In first place, the common Monetary Union consisted by members with major economic
imbalances. This proved problematic for the economies of the periphery that were lacking
competitiveness. Another very substantial problem was that in the EMU, the monetary policy
was officially formed by the ECB but the economic and fiscal policies were remained in the
purview of national governments. (Wood: 2012; Hirsch Wissel: 2011) The Monetary
Union limited the capacity of the Eurozone members to have control over their own monetary
and economic policies (Lapavitsas et al, 2010). This constituted Eurozone members unable to
control their monetary policy in case that a sovereign debt crisis would emerge.
This scenario was not well-predicted by the founders of the Eurozone. When the global
financial crisis broke, many European banks and financial institutions were heavily exposed
to financial `toxic' assets. The policy responses were chaotic and mainly on national level
despite the cross-national effects. Most of the countries were exposed to fiscal deficits but the
5
decisions had to be taken by the national governments due to the limited, almost non-existed
fiscal capacity at EU level. (Dabrowski, 2009)
The countries of the Southern periphery which their government revenues had brokedown and
had a history of high borrowing levels, during the crisis turned to the markets for more
borrowing in order to stabilize their fiscal capacity. (Buiter Rahbari, 2010; Lapavitsas et al,
2010; Dabrowski, 2009) This boosted their public expenditure (Buiter Rahbari, 2010;
Lapavitsas et al) but also exposed them to the market speculation.
The severe criticism emerged from the fact that until May 2010, the EU did not have a
mechanism to deal with a debt crisis and could not possibly have one. (Antoniadis, 2011) The
ECB was not allowed to purchase national governments' bonds neither to intervene to
sovereign debts of Eurozone member states because that would weaken the euro currency in
the global markets (Martino, 2012). Neither Eurozone governments could control their
monetary policy in national level. Also ECB did not provide any resistance to the speculation
towards the member states. (Lapavitsas et al, 2010) The situation worsened due to the slow
rhythm decisions taken in European political level. European solidarity were buried under the
interests of elitist and technocratic approaches followed by market speculators and neoliberal
thinkers in the European political arena, imposing austerity in countries that their economies
presented structural imbalances and high deficits as in the case of southern Europe. (Padilla
Casais, 2012) At this point, Germany played a significant role.
As Andrew Moravcsik, professor of Politics and International Affairs, very controversially
says "Ten years after adopting a common currency, Europe is still not an optimal currency
area. Instead, the single currency exaggerates existing differences and eliminated the policy
instruments required to overcome them. Bankruptcy in southern Europe and prosperity in
Germany are two sides of the same coin." (2012:60)
Another critical judgment is that the emergency measures taken in European level had the
form of bailouts and loans involving the interference of IMF (Antoniadis, 2011). The Memo-
randum of Understanding that countries were conditioning to sign by IMF, imposed to
governments and citizens strict structural adjustments which dismantle the social model.
2.2 The sovereign debt crisis in Greece and Spain
The sovereign debt crisis in Europe developed as countries started experiencing high deficits
and public debts. (Harrington, 2011) The accumulated sovereign debt in Southern Europe has
its roots in two factors. One was the high levels of public spending and extensive borrowing
and the other was that the financial crisis deteriorated the public finances of these countries,
6
for reasons already explained. In parallel, the late response of the Eurozone and its insuffi-
ciency to provide the stricken countries with the essential tools to fight the markets' specula-
tion had negatively contributed to the already heavily atmosphere. (The Economist,2009;
Lapavitsas et al, 2010)
2.2.1 The Greek Crisis
The Euro-crisis started in Greece in October 2009, when the newly elected government of
George Papandreou announced the actual numbers of budget deficit which was 12.7% of
GDP rather than of 6.0% as it had been reported by the old government which had manipulat-
ed the fiscal figures. (Voigt, 2010; Antoniadis, 2010; Buiter Rahbari, 2010) Eurostat in its
late estimation put Greek government deficit in 13.6% of GDP. Considering that while the
sovereign debts of most of the countries deteriorated, Greece entered the crisis with an already
large underlying public deficit, (Buiter Rahbari, 2010) owned to well-known fiscal imbal-
ances and structural weaknesses (Athanassiou, 2009; Antoniadis, 2010; Escribano, 2010).
This created a very unprivileged position for Greece and in spite of the austerity measures that
were announced the markets were not impressed, partly due to the country's poor credibility.
The result was that the Greek debt ratings downgraded, the spread of the German debt in
secondary markets rapidly increased, and the speculative attacks of the markets obliged the
EU and IMF to rescue Greece, (Escribano, 2010; Antoniadis, 2010; Voigt, 2010) even if the
response was quite deceiving in scope and timing.
The next round was including a series of `rescue packages' from the EU, ECB and IMF,
(referred as troika) which accepted to bailout Greece under the obligation of following
austerity measures which are enshrined in two joint agreements know as Memorandums of
Understanding (MoU) (Antoniadis, 2010). Both MoU hold of great importance because from
an economic aspect outline the challenges that the Greek government faces regarding policy
reforms and fiscal adjustments, but at social level have largely been opposed by the Greeks as
they mean dismantling of the social welfare leading the country into deep recession and high
levels of unemployment.
From a political aspect, the adherence of the two MoU mean that Greece will remain to the
Eurozone but will be followed years of great austerity as it has been agreed by the European
leaders and the Greek government. At the time that this paper was written Greek people were
confronted with the great dilemma of staying or exit the Eurozone, something that would be
7
defined by the results of the most crucial election of the last decades for Greece, the one of the
17th of June. (The Economist, 2012)
2.2.2 Spain on its own run
Spain had a flourished economy before the crisis started. That was a fact of an advanced
economy which was mainly based its activities in services and construction sector due to the
high aggregate demand for housing. Spanish as the Greeks after the insertion in the Eurozone
were enjoying low levels of interest rates which increased their borrowing capacities. (Har-
rington, 2011) That resulted in indebted households that in case of Spain was primarily due to
housing boom and to high levels of lending by smaller or regional banks, known as `cajas'.
(Harrington, 2011; BBC News, 2012)
Spanish economy started to decline after the global financial crisis manifested itself in
September 2008. The housing bubble real estate sector had experience a very dynamic cycle
which was reflected in growing prices and the advanced role of construction sector in the
economy. (Padilla Casais, 2011) The housing boom in Spain has similar characteristics as in
the U.S., driven by liberal bank and mortgage institutions' lending and high mortgage
products, followed by securitization of the markets. (Padilla Casais, 2011; Stratfor, 2009)
When the construction sector collapsed, Spanish government had to confront major problems;
the implications from the collapse were tremendous as the levels of unemployment had
significantly increased. The government in an attempt to spur economic activity and to create
new jobs increased its public expenditure. Additionally, the banking system in Spain para-
lysed when the housing market crashed, and debtors felt into bankruptcy. The `cajas' were
lacking liquidity because of the indebted households and the construction industry which
owed billions to the Spanish banking system. (Padilla Casais, 2011; Harrington, 2011;
Stratfor, 2009)
The Spanish debt has ballooned and almost doubled since the beginning of the crisis. That has
contributed to the downgrade of Spain from ratings agencies, making a start with Standard
Poor's decision to downgrade Spain in 2009. The Spanish debt continued to rise by reaching
the 72.1% of GDP. (MarketWatch, 2012). The latest developments that have been document-
ed when this paper was written, found Spain to have requested a bailout of up to 100 billion
from the European Union to recapitalise its banks. (The Economist, 2012)
8
2.3 How has the crisis affected the labour markets in Europe?
The recession has deteriorated the conditions of labour markets in Europe. The numbers of
unemployed rose since the crisis started and decline has been reflected in the hours of the
employed population. (OECD, 2010) Some of the profound characteristics of the changes in
the labour market are the more `neoliberal' policies introduced is European states. This fact
confronts the insecurity and flexibility on labour markets.
According to Eurostat, the decline in employment hit particularly the temporary workers
whose contracts are doubtful to be renewed, the young people and the less educated workers
who were employed in the construction and automotive industry. (79/2009)Also wages have
declined in many countries due to the fiscal discipline imposed to some countries of Europe.
In a report published by ILO, is stated that the austerity measures aiming to boost the econo-
mies have adversely effects especially in Southern Europe. In fact that has resulted in weaker
economic growth, lower investment and more job losses, unfavorably the possibilities for new
job creations is limited. (ILO World Report, 2012)
2.3.1 The labour market situation in Greece
In the case of Greece, the impact of the crisis on the labour markets has one of the most
negative consequences for the economy and the society. The levels of unemployment have
extremely increased reaching 21.7 percent and youth unemployment has grown to 51.2
percent, the highest in Europe. (Eurostat, May 2012)
The structural forms of IMF and the austerity policies have been devastated for the Greek
labour markets and have implications for the well-being of the citizens and the social cohe-
sion. According to the statements of the GSEE
1
president Mr.Panagopoulos, the workers'
rights in income have been pushed down as `a bottomless pit of Troika demands' (Lanara,
2011). A short explanation given for the implementation of such measure is that deep wage
cuts in Greece and Spain have been seen as the means to increase competitiveness.(Onaran,
2010) A report by Reuters states that the government is expected to pass into force, a law
which will impose a reduction of 22% in the minimum wage of 751. More brutal cuts of 32
% will be imposed for youth workers under 25. (2012)
1
GSEE: General Confederation of Greek workers
9
The public sector in Greece has extremely curtailed, and a further reduction has been done in
the overall workforce by 150.000 workers, including extension of weekly working
hours...(...) introduction of part-time and unpaid leave and transfers of excess employment to
a labour reserve.(Hellenic Ministry of Finance) Flexicurity is the new concept introduced in
the Greek labour market by the European Union (Business Europe,2011) as the `necessary'
method for labour reforms, having a real cost for the working conditions and safety nets of the
workers.
As labour market fact, job creation is limited in conditions of deep recession because of the
almost non-existed private investment. Greece relies heavily on private consumption account-
ing for more than 70% of the economic output but people who have lost their jobs or their
incomes has been declined by the austerity and are also imposed to pay higher taxes, have lost
their consumer confidence. (Malkoutzis, 2011a) The job losses "have a negative impact on
confidence, leading to lower spending and investment." (Tschentscher, 2011:33) The social
costs have been disastrous; the safety nets have been undermined increasing the poverty
levels.
2.3.2 The labour market situation in Spain
Spain follows the same `austerity' path as Greece. While Spain tries to save its own economy
from stagnation and default, its unemployment rates are increasing with extreme velocity.
Spain's unemployment rates remain the highest among EU-27, with 24.1 percent and the
second highest in youth unemployment following Greece, with 51.1%. (Eurostat, May 2012)
Spanish government has also adopted labour market reforms much owned to the collapse of
the construction sector where a massive percentage of the population was em-
ployed.(Bentolila Dolado Jimeno, 2012; Jimeno, 2011; Stratfor,2009) The Spanish
labour market is characterised by duality, or better `insiders-outsiders' effects. A more
neoliberal approach presented by OECD and IMF, highlights that reforms including the
abolition of collective bargaining agreements and reduction of permanent workers could be
proved successful in combating unemployment and
the high percentages of temporary
workers, which was the 30% of the employed population before the crisis. (IMF, 2011;
OECD, 2011)
Such labour measures which implemented in Spain led to massive protests in the country. The
reforms emphasizing in 5 % decrease in wages for public employees and freeze in 2011, 15%
wage cut for government members, raise of retirement age from 65 to 67(Elteto, 2011), tax
10
reductions of the employers, reduction in the redundancy payment to 33 days instead of 45
days per annum, employment modifications with less regulation by the government. (CCG-
Spain, 2012) Spanish government stated that these reforms have been put into force to boost
employment and economic competitiveness but they promote the protection of the employers
by giving them more rights in hiring and firing. Further reforms will give to the employers the
possibility to make redundancies out of the traditional collective bargaining arrangements.
(BBC News, 2012)
11
CHAPTER 3
Previous studies on the past financial crises have been documented that apart from fragility on
the financial systems, crises are responsible for disruption on the welfare states, (World
Bank,2008) causing major socio-psychological problems on the affected populations. The
impacts can be pervasive among individuals and households of all economic statuses, but
more severely for the poor and for those who have experienced significant income cuts.
Most of the crises of the previous century such as the Great Depression, the economic
collapse of the ex-Soviet Union, and the Asian Crisis have been characterised by social
shocks that have caused blows to the social cohesion and social fabric. The current crisis has
characteristics of the same size; rising levels of unemployment, income cuts, general insecuri-
ty, and public spending cuts in many social services including health provision. (Catalano
Bellows, 2005; Murphy Athanasou, 2010; Butterworth Rodgers Windsor, 2009) Social
issues also emerge, connecting unemployment and income decline with mental health
problems, increases in suicidal and death levels, poverty and inequality. (Giotakos et al, 2011;
World Bank, 2008)
3.1 The social impact on welfare system of Greece
According to the previous analyses, the current crisis has afflicted Greek society to a degree
that endangers social democracy and transforms an economic turndown to a social. Greece
has always been a country lacking the fundamental resources to provide social protection to
all layers of population but recently the situation presents a total absence of safety nets.
(Bouras Lykouras, 2011) The strong pressure to re-calibrate national welfare states into a
more neoliberal fashion has triggered numerous social problems. It is abundantly clear that
the `memorandum nightmare' and the strict fiscal austerity eliminated the social cohesion
creating an alarming situation.
The official statistics have shown that unemployment is the second highest in Europe,
combined with income cuts everyday life has become a matter of survival for many families.
The Hellenic Association of Social Workers (
) confirms the deterioration in all social
indicators where malnutrition, failure of health coverage and access to health services,
increased incidents of domestic violence, the rise of mental illness, drug use, the increase in
12
suicides, the dramatic increase in homelessness have become evidence of their everyday
practice.(2012)
2
Poverty levels have been dramatically increased in Greece, since the beginning of the crisis.
In the official statistics of Eurostat about the living conditions of European citizens, the level
of poverty in Greece was 20% in 2008 whereas in the same report published in 2012 the
levels of poverty had been increased in 27, 7% placing in risk almost 3million people.
(Eurostat, 2012; Eurostat, 2010)
Matsaganis Leventi (2011) in their research focused on Spring 2010, found that the poverty
rates varied widely, 0% for households whose head workers is employed on public or banking
sector to 40% for the households whose head was unemployed or farmer. Considering that the
unemployment levels have almost doubled the last two years, poverty must have been
increased proportionally.
Similar results have been found in a recent survey conducted in June 2010 by Eurobarometer,
for monitoring of the social impact of the crisis in Greece. An overriding majority of the
respondents 74%, answered that poverty has strongly increased in their country, 58% an-
swered that their households finding difficulty in responding to their financial commitment
and pay bills, 29% responded that they have run out of money to buy food or other essential
goods and services whereas 54% reported that they cannot bear the costs of general healthcare
for them and their families. In most of the responses Greece had the highest levels of negative
responses, very close to those of Romania. (European Commission, 2010)
Considering that Greek society is very much based on solidaristic mechanisms including
family networks but also societal efforts to reduce poverty, the case of people being homeless
prior to the crisis was extreme. Lately, it has become an overseen phenomenon. In response to
published figures from Klimaka and the Red Cross around 20,000 people are living on the
streets, both native Greeks and immigrants.(The Guardian, 2011) It has also been an increase
of 20% in demand of homeless services (CECONDHAS, 2012)
3
, while FEANTSA
4
reports
high levels of `hidden homelessness' among young people who due to uncertain economic
conditions are unable to secure independent living, therefore live with their families.(2011)
2
Press released on the official website of the Hellenic Association of Social Workers. (
) Publication date
12/06/2012 09:22
3
CECONDHAS 2012: Housing Europe's Observatory
4
FEANTSA 2011: European Federation of National Organisations working with the Homeless
13
The only service which was providing social housing at low cost to poor workers and vulner-
able social groups is OEK
5
. After two years of discussion for the restructuring of the organisa-
tion, the new memorandum signed by the Greek government on the 12
th
of February 2012
removes OEK. The justification given instates OEK as an `entity providing social benefits
that are not on first priority.' Moreover, the memorandum establishes that OEK should be
closed down within six months after the adoption of new legislation. (CECONDHAS, 2011)
A positive aspect is the creation of social care networks by private initiative, the Church or
NGOs, to provide help for vulnerable people and people who lack the financial sources to
cover their basic needs in food, housing and healthcare. The number of people asking for this
kind of support has been increased. Long queues standing outside the branches of Doctors of
the World for cure or vaccination (To Vima, 2012), or outside churches which organise soup
kitchens.
The numbers of soup kitchens (syssitia) organised by the Orthodox Church, has been multi-
plied due to the increased participation of Greek people. Proportionally, an indication in
numbers means that soup kitchens have been increased from 5.000 to 10.000 a day, only in
the area of Athens. Accordingly, the number of Greek people participating on them is about
35 to 40%, covering the age groups between 50 to 70 years old. This phenomenon is consid-
erably connected with the rise in unemployment demonstrating that the majority of people
belonging to this age group were close to retirement age but they lost their jobs, and is rather
unlike to find another one. (Bouras Lykouras, 2011)
Health care provision in Greece is devastating. The financial tightening has triggered the
problems in public hospitals whose budget has been reduced by 40%. The lack of financial
resources in health care reflected in supply-sided problems, reported shortages of medical
supplies, understaffing and dysfunctional clinics. (Stuckler et al, 2011) Panos Papanikolaou,
Neurosurgeon at the General Hospital of Nikaia highlighted a `dangerous' implication of the
current situation in Greece "under official, scientifically proven data, all the countries that
received financial `support' by IMF, have shown a drop of 5 to 10 years in the life expectancy
in some cases."
6
5
OEK: Organismos Ergatikis Katoikias (The Hellenic Workers' Housing Organisation)
6
Quoted in the documentary Debtocracy
14
Another more recent example that has afflicted the Greek society is the lack of medication for
the cancer sufferers. The outstanding balance of payment of the public state to the pharmacists
and pharmaceutical companies and the collapse of EOPP
7
caused disastrous implications for
the health of cancer sufferers who have been left without medication and in many cases they
have to buy themselves the high-costly medicines. (Kathimerini, 2012)
While the collapse of the Public Health system is profound, there is a rise on the number of
admissions in the public hospitals. Stuckler et al (2011) indicated an increase of 24% in 2010
compared to 2009, and 8% in 2011 compared to 2010. An outstanding research by Giotakos
et al (2011), associated the visits in the hospital with the unemployment rise, and psycho-
related diseases with income losses. Significant findings of the same research combine
adversely income declines with suicide rates, (Giotakos et al, 2011) whereas Bouras
Lykouras support that the financial desperation, the insecurity, and the lack of employment
prospects, leads more people in committing suicides. (2011) According to unofficial data by
the Ministry of Health, it has been recorded a 40% rise on suicides, while the national suicide
helpline stated that 25% of the callers had financially related issues. (Stuckler et al, 2011;
ISSA, 2011)
The financial desperation is also related with increased drug use which according to estima-
tions of the Greek Documentation and Monitoring Centre for Drugs,
8
the prevalence for
heroin users rose by 20% in 2009. The overall number given is 24,100 in 2011 comparing to
20,200 in 2009. Relatively, the age group of 30 to 40 years old has presented increases in
participation in rehabilitation programmes from 2009 until the examined period which is the
first 7 months of 2011. Although many efforts have been done for the rehabilitation of the
users, budget cuts in 2009 and 2010 have considerably affected the number of drug users who
have access on them. A survey held in the centre of Athens with 275 participants-drug users
found that 85% of them were not in rehabilitation programmes. (Stuckler et al, 2011)
Deterioration in finances has also resulted to a rise of crimes rates, violence and homicides.
Incidents have been multiplied as indicated by media reports. Violence has also risen, thefts
and homicides have been almost doubled from 2007 to 2009.( Stuckler et al, 2011) The
official statistics of Hellenic Police, have been presented 0,8% increase in homicides in 2011,
7
EOPPY: Hellenic National Organisation of Healthcare Provision
8
Annual report 2011
15
while growing tendency have shown the number of robberies from 6.079 in 2010 to 6.636 in
2011 according to the latest available data.
9
3.2 The social effects on Spain
Spain, as the country which records the highest levels of unemployment in Europe has
followed the path of austerity on its own. The austerity measures are diminishing the living
conditions of the Spanish citizens. The social impact of the crisis in Spain approaches similar
levels with those in Greece. The cuts made to social spending endanger the protection levels
and affecting the social rights. Concerns expressed by UN officials target the inadequate
measures adopted by the State to mitigate the negative impact of the crisis, which has been
felt by marginalised and vulnerable social groups. The disproportionate harm that these
measures occur in specific societal groups has negative consequences and undermines the
right to housing, health, education and work. (CESR, 2012)
The crisis has affected all households, but the income declines and job losses is more preva-
lent on particular societal groups such as single-parents households, young people who live
alone and large families. (AntiPOVERTY Mag, 2009) Furthermore, the distinction applies to
the different regions in Spain, creating an income gap among the richest and poorest areas in
the country. The estimation in 2008 was including 2,434,983 households which were in
poverty line. 1,831,017 of them belong to the classification or real poor both in national and
regional levels. Extremadura, the poorest region is Spain suffers 32% of unemployment
whereas the GDP income per capital in this area is 12,502 lower that in Slovakia or in Czech
Republic. (Calvo Gonzales Cortiñas Vázquez Sánchez Figueroa, 2012)
The latest figures published by Caritas Spain in the report ` Exclusion and Social Develop-
ment 2012' show that 22% of Spanish households live under poverty line with a further 30%
facing serious difficulties in making ends at the end of month and nearly 3,3% receives no
income at all. (MercoPress, 2012)
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Statistics of the same report reveal that 34% of the
citizens' budget is being used for mortgage debts, and 7% of the population cannot afford to
pay their expenses on time.
Although poverty affects the poorest regions in the country, in Catalonia one of the richest
areas of Spain, child poverty is particularly alarming. The Federation for the Care and
9
Hellenic Police Press Release 11/03/2012
10
24/02/12
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- , 2015, The social impact of the crisis on youth unemployment: Comparative study Spain and Greece, Hamburg, Bedey Media GmbH, https://www.anchor-publishing.com/document/312673
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