A CAMPAIGN of civil disobedience called I Won’t Pay is gathering steam in Greece as commuters fed up with rising prices and endless austerity measures barge through underground turnstiles without tickets.
This is the problem that faces almost all governments today - the bond markets are calling for austerity and governments see the long term need for reducing interest rates on the loans they have to service.
But any government has to take the voters with them. If at some stage they withdraw their support, the sensible governors will be replaced by the Refusniks.
At the moment there is widespread belief that the bankers who caused the problem in the first place have got off scot free and are prospering, while the ordinary people are the ones suffering.
So what will the governments do - they can restructure debts, meaning lenders will have to take a haircut. And they can also reduce debts by inflating currency. Long term both these measures are undesirable, but as has been said before, in the long term we are all dead. In the short term, governments will be elected that will take the short term measures to keep their voters happy.
It symbolises the problems awaiting Portugal after its £70 billion European rescue package and the austerity measures that will follow. Faced with higher taxes, reduced public service subsidies and falling living standards, Greeks are refusing to pay up.
A recent rise in Greek road tolls has seen drivers openly disobeying the law by lifting aside barriers at motorway toll booths to drive through without paying the £2.20 fee.
Motorists feel they have been unfairly targeted. Fuel prices have risen by 50% in the past year after tax increases that have pushed unleaded petrol above £1.40 a litre — one of the highest in Europe. Higher road tolls are the final straw and the estimate is that up to 20% refuse to pay.
The protest has spread to public transport as activists have blocked bus and underground ticket machines with stickers and plastic bags in response to a 40% fare rise.
The public is sympathetic. “Most of us don’t have the money to pay and we’re tired of protesting,” said Giorgos Kosmopoulos, a member of the movement.
Worried by the spread of dissent, the Socialist government recently pushed through a law making it a criminal offence to avoid paying motorway tolls and bus and underground fares. Motorway offenders now face a £170 fine and risk having their driving licence suspended, while fare dodgers face a three-month suspended prison sentence.
The protests reflect fears that more draconian schemes are to come in the country’s deepest recession in almost 40 years. There is talk that a fresh round of austerity measures may include tax rises on soft drinks and bottled water.
The Greek economy contracted by 4.5% last year and is expected to shrink by a further 3% this year as harsh austerity measures have deepened the recession and fuelled rising unemployment.
Despite strenuous denials from Greek and European officials, many economists see a debt restructuring in the coming years as inevitable; this year government debt will reach 150% of gross domestic product and is set to peak at nearly 160% next year.
“The government is trying to avoid a debt restructuring but higher taxes will result in higher unemployment while the economy continues to shrink,” said Adonis Livanios, an economist. “Higher unemployment will lead to growing social unrest.”
The government has repeatedly missed debt reduction targets, while measures to cut tax evasion and corruption have made little progress. A recent report from Transparency International found that corruption is down for the first time since 2007, but tax offices are still said to be among the most corrupt institutions in the public sector.
In an effort to turn the tide, George Papandreou, the prime minister, has pledged to carry out a £44 billion privatisation and asset sale programme.
The unions have vowed to step up strike action at a time when unemployment has risen to 14.8% — the highest level for seven years — and is expected to rise further.
Nikos Politis, 27, who has a postgraduate degree in computer science and has been unemployed for three years, said: “I’m tired of sending out up to five job applications a day and not getting any calls back. Many of my friends are facing the same dilemma.”
The package of austerity measures for Portugal will be far tougher than the legislation rejected by its parliament last week, bringing down the minority government of Jose Socrates, the Socialist prime minister. In addition, the European commission will also demand an “ambitious” privatisation programme.
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