Austerity Kills: How the EuroCrisis Is Being Used to Break the Social Contract

One aspect of the Eurocrisis that has not gotten the attention it deserves is the way it is destroying not just jobs, but the very underpinnings of society. People who took actions that were prudent at the time are increasingly at the mercy of forces beyond their control. And this isn’t a tsunami-type disaster but a man-made one whose severity is worsened by the callous attitudes of the European elites.

We’ve featured stories from time to time on how Greece is unraveling. Suicides have increased sharply. Garbage is not being picked up. Public transportation is largely a thing of the past. Even though Greece always had a large black market, more people are resorting to barter, which shrinks the tax base.

And in some ways worst of all, the health care system is on the verge of collapse. Critical medicines are not being imported and hospitals are short of basic supplies. Not only are people dying unnecessarily due to their inability to get drugs and operations, but worse, the breakdown of healthcare greatly increases the risk of a public health crisis. How many children are being vaccinated, for instance? What happens when curable but silent killers such as syphilis go untreated? Key excerpts from a Reuters story (hat tip Aquifer):

Greece’s rundown state hospitals are cutting off vital drugs, limiting non-urgent operations and rationing even basic medical materials for exhausted doctors as a combination of economic crisis and political stalemate strangle health funding….

Greece imports nearly all its medicines and relies heavily on patented rather than cheaper generic drugs, making it vulnerable to a funding squeeze that would grow sharply worse if it were forced out of the euro after elections on Sunday.

Long queues have been forming outside a handful of pharmacies that still provide medication on credit – the rest are demanding cash upfront until the government pays up a subsidy backlog of 762 million euros, or nearly $1 billion.

“We’re not talking about painkillers here – we’ve learned to live with physical pain – we need drugs to keep us alive,” Mitta, a petite former marathon runner and herself a cancer survivor, said in a voice shaky with emotion…

A doctor at the university hospital in the northwestern Athens suburb of Chaidari cites a lack of basic examining room supplies in her own department, such as cotton wool, catheters, gloves and paper used to cover the examining table.

The shortage of paper, which is thrown out after each patient has used it, means corners have to be cut on hygiene.

“Sometimes we take a bed sheet instead and use it for several patients,” said Kiki Kiale, a radiologist specialising in cancer screening. “It’s tragic but there’s no other solution.”

And the targeting of the health care system was no accident:

Greeks have long had to give medical staff cash “gifts” to ensure good treatment. Nevertheless the health system was considered “relatively efficient” before the crisis despite a variety of problems including a fragmented organisation and excess bureaucracy, according to a 2009 report for the Organisation for Economic Cooperation and Development.

But it has been unable to respond to the growing crisis. The European Union and International Monetary Fund, which provided a 130 billion euro lifeline to Greece in March, have demanded big cuts to the system as part of a wider package of austerity measures.

Greece has been told to reduce health care from its current 10% of GDP to below 6%. Imagine what would happen if the US were told to cut its medical expenditures by over 40% in a one or two year period. And if the IMF boot were put on the US neck, and we were told to get medical spending down to 6% of GDP, we’d need to reduce it by 2/3.

In a Real News Network interview, Rob Johnson of the Roosevelt Institute describes further how the EuroCrisis has become a tool to break the social contract:

This post originally appeared at naked capitalism and is posted with permission.

4 Responses to "Austerity Kills: How the EuroCrisis Is Being Used to Break the Social Contract"

  1. Guest   June 18, 2012 at 7:11 pm

    The problem is the rotten bureaucracy insensitive to the people's needs as long as they get their fat paycheck, and early retirement. Money for nothing. Just as in California where the terrorist government holds our children hostage: "more money or we cut school days"…

  2. Really?   June 18, 2012 at 8:52 pm

    Really? What part of the "social contract" gives the people of a country the right to consume goods and services which they cannot afford? And more plainly, it is not like the Greeks just had a couple of years of exuberant, debt-financed spending. This is their very lifestyle, characterized by very high participation in public employee unions and massive tax fraud. It has been going on for decades. Unfortunately, when they were given access to cheap credit via the EU, they started spending even more than they had the previous decades. A social contract cannot exist when the state is bankrupt, the bureaucracy is corrupt, and the citizens have an entrenched entitlement mentality.

    • Shaleen Khanal   June 30, 2012 at 1:46 am

      Does that mean we should let them die without food, shelter or medicine? If you want the Greeks to be punished then even prisons feed their inmates, give them jobs and pay them money. It is indeed because of heartless people like you filled with cynicism and self righteousness that greed is taking over humanity.

  3. No, really!   June 19, 2012 at 12:48 pm

    No matter how self-righteous you feel, Greeks are feeling real pain and destruction of their society. Greece is becomming untennable. Others will feel their pain more intimately when the resulting wave of emmigration begins.