by Andrew Stuttaford

 Via The Daily Telegraph, a grim report from Greece:

If Greek public sector workers at all levels have been hit by pay and pension cuts, for the middle class – people like the Andreous, both of whom are self-employed – it is tax that is the problem. Tax rises, a property downturn and the collapse of business income has halved their spending power, and that’s before the next round of austerity measures, due to be voted on in parliament on Tuesday, begin. It is this sudden collapse of middle class lifestyles that makes the Greek situation so volatile…Greek politicians have started to worry about something called “anomie” – a pervasive listlessness, low-level social conflict and the erosion of bonds between the country’s citizens and the state.

You can read it in the figures: suicides have soared by 40 per cent in a year. Thefts and break-ins almost doubled between 2007 and 2009. Hostility to migrants – their arrival ignored during the good times after entry into the EU and the euro – has become widespread and unconcealed.At the doors of small charities, queues of single men – ranging from Iraqis to Somalis to Nepalese – form in the early morning to receive free food or medical treatment. Now, to their intense anger, some Greeks are being forced to join these queues: 39 per cent of the country’s under 24s are unemployed.

And there is more austerity to come. With total Greek debt headed for 189 per cent of the country’s GDP – the equivalent of almost two years’ entire economic output – the EU pushed the government and parliament into agreeing a second austerity package on June 29, in return for the promise of a new €159bn bailout.

That was supposed to be the circuit breaker, and its passage was marked by burning barricades in the smart, historic Plaka district of central Athens, manned by shopkeepers and restaurateurs alongside the anarchists. But that deal has fallen apart. Greece needs to raise a further €2bn just to meet this year’s deficit target, which it will do through an emergency property tax, collected through people’s electricity bills. When the energy workers said they would refuse to issue the bills, the crisis escalated. Phone calls, emergency cabinet meetings, walkouts by IMF negotiators – the familiar choreography of a Greek bailout tranche by now – produced a third austerity package. The Andreous now face an extra property tax of between €500 and €1,000 a year until 2014, and a further income tax hike.

After the deal in June the protests had been muted. With general strikes called for this week they will escalate, but Greek commentators are no longer focused on the organised protests: it’s the disorganised and random events that worry them.

Antonis Papayiannidis, who publishes Economic Monthly, warns: “In an almost detached way people have just watched the catastrophe happening to them. They were very displeased but they did not erupt. They became withdrawn and they are still withdrawn. But it could erupt very quickly, because the feeling of helplessness is very intense right now – in a way that makes the petrol bombs and barricades of June look pathetic.”

 Read the whole thing.  It is hard to see how this ends well.