The new Greek coalition government of left-wing and right-wing moderates hasn’t exactly lived up to its (very low) expectations. Greece has repeatedly failed to meet its debt targets (which, admittedly, were seriously flawed to begin with), and it has done little to sort out the, um, byzantine regulations that are strangling businesses and stymieing the recovery. Worse, it has done nothing to persuade restless and unhappy Greek voters that it is competent or that it has their best interests at heart. As a result, we’re witnessing an increase in civil unrest and the rise of fascist and xenophobic parties like Golden Dawn.This week’s news will do little to change this perception. The New York Times reports that the famous Greek investigative journalist Kostas Vaxevanis was arrested on Sunday after he released a list of wealthy Greeks holding Swiss bank accounts. This list was nearly identical to a similar list of potential tax-dodgers given to Greece by IMF Chief Christine Lagarde two years ago, suggesting that the government has done little to crack down on tax evasion by the wealthy over the past few years. Although he was quickly released, the incident put a spotlight on the fact that the government, which continues to support the widely unpopular austerity measures, is unable or unwilling to go after the rich and powerful who may be breaking the law:
Mr. Vaxevanis said he was the wrong target. “Instead of arresting the tax evaders and the ministers who had the list in their hands, they are trying to arrest the truth and free journalism,” he said in a telephone interview that was uploaded on the Internet and widely circulated.Greek blogs posted petitions calling for Mr. Vaxevanis’s release, and they had generated more than 10,000 online signatures by early afternoon.Greeks are skeptical that political leaders will investigate the business elite, with whom they often have close ties, even as middle- and lower-class people have struggled with higher taxes and increasingly ardent tax collectors. Parliament is expected to vote on a new 13.5 billion euro austerity package (about $17.5 billion) that could further reduce standards of living.
This is an extremely dangerous situation for Greece. A 48-hour general strike has been called for November 6 and 7, during which massive demonstrations will offer many opportunities to those seeking violence on the streets. Bad European policy, German self-righteousness, French greed, and Greece’s own dysfunctional political system have combined to push the country into an ugly corner; we are watching the consequences of a massive political failure work themselves out in real time.