Greece Austerity Blowback: Attack On German Ambassador’s Residence

I asked earlier this month, “What happens when Southern Europe boils over?” Of course, the boiling point in Southern Europe, if you will, is Greece. Today, the violence, which before had been restricted to rioting as far as I can tell, reached a new level. From the New York Times:

Assailants raked the German ambassador’s residence in Athens with gunfire early on Monday in an attack that caused no injuries, Greek police officials said.

The police found 60 spent bullet casings at the scene and detained six people in connection with the incident, which occurred around 3:30 a.m. in an affluent suburb north of Athens. The bullet casings came from two Kalashnikov assault rifles, according to the police.

No one claimed responsibility for the attack, in which four bullets hit a security gate. But anti-German sentiment has been festering among many Greeks struggling with record unemployment and reduced salaries under a harsh austerity plan required for Greece’s international bailout, which Germany had a major role in selecting the terms of.

[…]

Germany is the largest contributor to Greece’s 240 billion euro, or roughly $330 billion, bailout. Recently, Mr. Samaras has been pressing Germany to reduce and renegotiate Athens’s delinquent debts as it grapples with a wrenching five-year recession — something Germany has refused to do.

That has also fed a persistent low-grade anger over hundreds of billions of euros in reparations that Greeks say Germany owes the country from World War II, money that some say should go toward helping to forgive Greece’s debt bill. Greek newspapers regularly run articles on how much money Germany owes Greece.

Greece has made some progress in improving its finances to meet the terms of the bailout — so much so that it is forecast to have a primary surplus before debt payments in 2014 for the first time in five years. But Greece still faces a mountain of debt that economists say is all but unpayable unless some new form of debt forgiveness is extended to Athens.

In a sense Greece is bringing this on themselves by not simply defaulting, leaving the European Union, and restarting their own currency. This would be painful but it would hold out the possibility of rebuilding the economy. By not making that autonomous move they put themselves in a subservient position.

This story misleads the reader by personalizing “Germany.” But the German taxpayers on the hook for the Greek “bailout” (which is not a bailout at all), are not the ones who have any power to set terms of the debt. They can vote the present set of politicians out of office but they probably have a host of issues to worry about when going to the polls. They are being used by the German politicians.

Another group, both inside and outside of Germany, has much more influence with Germany’s government’s policies. These are the bondholders who want to get their money paid back by Greece. Their money is being protected by the “bailout” funds looted from the taxpayers of the other nations.

For many in Greece, this feels like a foreign takeover. Their laws and policies are being dictated from outside their country. While it was wrong for Greece (like virtually every other nation on the planet) to spend more than it could raise in tax revenue, it isn’t clear why they should deal with debts by taking on more debt to foreign creditors.

The violence was wrong and it needs to stop. But no one seems to want to take the obvious step necessary to make it stop: allow a nation to leave the EU and write off the bad debts.