Austerity Pushes Greece Closer to Edge of Chaos Ahead of European Summit

Greek police walk by a burning building in Athens during during protests in February 2012. (AFP Photo/Louisa Gouliamaki)

Austerity Pushes Greece Closer to Edge of Chaos Ahead of European Summit

Recent events throughout Greece suggest the public mood has worsened following the pro-bailout, pro-austerity victory in this month's elections, International Business Times reports Wednesday.

Since the newly elected New Democracy party began to form Greece's latest government, IBT cites several telling incidents such as Tuesday's break-in at Microsoft's Greek headquarters by armed gunmen who poured flammable liquid onto the floor and set the offices ablaze. On the same day, Greece's Supreme Court building was evacuated after two separate bomb threats.

The austerity program has taken a catastrophic toll on the nation, IBT reports. Over 820,000 Greeks are officially out of work as the unemployment rate remains at 22 percent -- more than double the 10-year average. Greece's suicide rate doubled to about 5 per 100,000 this year alone.

"From the end of the Weimar Republic in Germany in the 1930s to anti-government demonstrations in Greece in 2010-11, austerity has tended to go hand-in-hand with politically motivated violence and social instability," say Jacopo Ponticelli and Hans-Joachim Voth in a report published by the Center for Economic Policy Research last year.

"These findings cast doubts on established wisdom. Until the sovereign debt crisis of 2010, the consensus among economists was unambiguous - expenditure cuts can be growth-enhancing...our results question the political economy side of the story - cuts may not imperil re-election, but they create the risk of major social and political instability," Ponticelli and Voth wrote in the Guardian.

This week, the newly elected Greek government will face the European Leaders' Summit in Brussels in an attempt to begin bailout re-negotiations. Prime Minister Antonis Samaras is expected to accept European demands to remain on the Euro and make deeper spending cuts in the country -- a decision that is sure to see more social unrest in response, reports IBT.

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International Business Times: Greece Teeters on the Edge of Chaos Ahead of European Leaders' Summit

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