STOCK MARKET WATCH -- Friday, 22 June 2012

[Demeter]

12. Austerity Kills: How the EuroCrisis is Being Used to Break the Social Contract

http://www.nakedcapitalism.com/2012/06/austerity-kills-how-the-eurocrisis-is-being-used-to-break-the-social-contract.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

One aspect of the Eurocrisis that has not gotten the attention it deserves is the way it is destroying not just jobs, but the very underpinnings of society. People who took actions that were prudent at the time are increasingly at the mercy of forces beyond their control. And this isn’t a tsunami-type disaster but a man-made one whose severity is worsened by the callous attitudes of the European elites.

We’ve featured stories from time to time on how Greece is unraveling. Suicides have increased sharply. Garbage is not being picked up. Public transportation is largely a thing of the past. Even though Greece always had a large black market, more people are resorting to barter, which shrinks the tax base.

And in some ways worst of all, the health care system is on the verge of collapse. Critical medicines are not being imported and hospitals are short of basic supplies. Not only are people dying unnecessarily due to their inability to get drugs and operations, but worse, the breakdown of healthcare greatly increases the risk of a public health crisis. How many children are being vaccinated, for instance? What happens when curable but silent killers such as syphilis go untreated? Key excerpts from a Reuters story (hat tip Aquifer):

Greece’s rundown state hospitals are cutting off vital drugs, limiting non-urgent operations and rationing even basic medical materials for exhausted doctors as a combination of economic crisis and political stalemate strangle health funding….

Greece imports nearly all its medicines and relies heavily on patented rather than cheaper generic drugs, making it vulnerable to a funding squeeze that would grow sharply worse if it were forced out of the euro after elections on Sunday.

Long queues have been forming outside a handful of pharmacies that still provide medication on credit – the rest are demanding cash upfront until the government pays up a subsidy backlog of 762 million euros, or nearly $1 billion.

“We’re not talking about painkillers here – we’ve learned to live with physical pain – we need drugs to keep us alive,” Mitta, a petite former marathon runner and herself a cancer survivor, said in a voice shaky with emotion…

A doctor at the university hospital in the northwestern Athens suburb of Chaidari cites a lack of basic examining room supplies in her own department, such as cotton wool, catheters, gloves and paper used to cover the examining table.

The shortage of paper, which is thrown out after each patient has used it, means corners have to be cut on hygiene.

“Sometimes we take a bed sheet instead and use it for several patients,” said Kiki Kiale, a radiologist specialising in cancer screening. “It’s tragic but there’s no other solution.”

And the targeting of the health care system was no accident:

Greeks have long had to give medical staff cash “gifts” to ensure good treatment. Nevertheless the health system was considered “relatively efficient” before the crisis despite a variety of problems including a fragmented organisation and excess bureaucracy, according to a 2009 report for the Organisation for Economic Cooperation and Development.

But it has been unable to respond to the growing crisis. The European Union and International Monetary Fund, which provided a 130 billion euro lifeline to Greece in March, have demanded big cuts to the system as part of a wider package of austerity measures.

Greece has been told to reduce health care from its current 10% of GDP to below 6%. Imagine what would happen if the US were told to cut its medical expenditures by over 40% in a one or two year period. And if the IMF boot were put on the US neck, and we were told to get medical spending down to 6% of GDP, we’d need to reduce it by 2/3.

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