Obama Keeps Hope Alive for Crisis-Ridden Greece

  • Greek journey to brink of bankruptcy was a key event for Obama
  • Economy shrank 25% since last change of power in U.S.

When a U.S. president last visited Greece, the economy was booming, Athens had been awarded the Olympics and the country was preparing to join the euro.

QuickTake Greece’s Financial Odyssey

That was in 1999, and as Barack Obama gave his keynote speech on Wednesday defending democracy in its birthplace, the spotlight fell on Greece’s deterioration. Its journey to the brink of bankruptcy, dragging down financial markets worldwide, was among the defining international events of Obama’s eight years in office and few places better show the ensuing forces of populism that ultimately brought in Donald Trump to replace him.

Obama and Tsipras in Athens, Nov. 15.

Photographer: YUorgos Karahalis/AFP via Getty Images

“You have to manage anger, but the result is that this anger grows even bigger when all these promises fail to be realized,” said Dora Bakoyianni, who was Greece’s foreign minister when Obama was elected and whose brother is leader of the opposition New Democracy party. “Seen pessimistically, the price the world will pay for populism is the price the Greeks have paid for their decisions.”

If Americans thought their problems warranted replacing Obama with Trump, spare a thought for a NATO ally and European Union member whose economy has shrunk by more than a quarter since the last change of U.S. leadership.

Broken Promises

Greece’s freefall shattered the old political order and propelled Prime Minister Alexis Tsipras to power last year on a promise to repudiate the country’s debt and ditch the fiscal austerity imposed by European creditors and the International Monetary Fund. After he too was forced to capitulate, polls show that if elections were held today Tsipras would be replaced by the eighth prime minister of Obama’s tenure.

“If reforms here are going to be sustained, people need to see hope and they need to see progress," Obama said in his speech in Athens on Wednesday. “Economics is something that will be central to preserving our democracy. When our economies don’t work, our democracies become distorted and, in some cases, break down.”

Among other grievances, the perception among ordinary people is that they are being squeezed to repay debts to banks which themselves received public bailouts. That resentment is echoed from Greece’s heartland through continental Europe to Brexit Britain and across swathes of the U.S.

Spartan King monument

Photographer: Kostas Tsironis/Bloomberg

Away from the Obama tour, Thermopylae captures the reality of Greece in 2016. Like most of the country, it’s a blend of proud ancient history and modern economic catastrophe.

300 Spartans

The village is where Spartan soldiers held up the advance of Persian King Xerxes almost 2,500 years ago. The 300 heroes were turned into a Hollywood movie in 2007, just as the global financial crisis arrived. Three years later, Thermopylae got a new tourist center, missing the boost to visitor numbers.

Then Greece hit the rocks.

“Life was really good here,” said Andreas Makris, 39, a farmer who is president of the local community association in the village of Thermopylae. “There were two or three coffee houses and people would go to them. We’d eat and drink out each night. Today you see four guys having a cup of wine before heading home.”

Members of the far-right Golden Dawn party, whose crest resembles a swastika, now gather every year in front of the statue of Spartan King Leonidas in Thermopylae as its leader Nikolaos Michaloliakos gives speeches denouncing everyone from immigrants to Europe’s leaders.

Hotel used as a refugee shelter.

Photographer: Kostas Tsironis/Bloomberg

Two derelict state-owned hotels at the nearby thermal springs house about 500 refugees fleeing war in Syria and stranded when countries north of Greece shut their borders. An attempt by the privatization fund to attract developers in 2013 led nowhere.

“You see Germans coming here in camper vans and staying all winter long, and you realize the site is being underutilized,” Giorgios Maniotis, 64, a retired teacher and now farmer, said as he sat in Makris’s office. “Before elections politicians always promised to do something, but it never happened. Now with the crisis no one wants to invest.”

New Greece

Obama reiterated his call for Greece to get debt relief and thanked the country’s people for the support they’ve given to refugees. He departed for Germany Wednesday after his speech and a tour the Acropolis, which the ancient Athenians rebuilt after its sack by Xerxes when he eventually overcame the Spartan resistance at Thermopylae.

In the meantime, officials from the IMF, European Commission and European Central Bank returned to Athens this week as the government tries to close the country’s bailout review to have any hope of winning some short-term debt relief next month. Agreement on labor market reforms in a country with 23 percent unemployment remains a barrier.

For Iliana Ziogas, it hit home that her country had changed for good when a 77-year-old retired pharmacist shot himself outside Parliament in 2012, leaving a note saying he was taking his life because of economic hardship.

“My hair stands on end when I remember seeing people in Athens sleeping on the streets and searching the trash cans for food,” said Ziogas, 28, who commutes from the town of Lamia 15 kilometers (9 miles) away to work at Thermopylae’s visitor center for 400 euros ($429) a month. "Then I think, where have we come to?"

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