When the extent of Greece’s deficit problems became clear in late 2009, European governments within the euro zone, led by Germany, stipulated that Greece would enact severe budget reforms in exchange for emergency funds intended to get the nation back on track. Today, however, Greece is still edging closer to default — the very outcome austerity measures were meant to prevent. Economists estimate that Greece’s economy may have shrunk by about 6 percent in 2011, and the unemployment rate stands at about 18.8 percent, up from 13.3 percent last year. A steep decline in consumer spending has also led to large losses for private businesses. “The result is a dizzying economic plummet and social crisis that is bringing the cradle of Western civilization to its knees,” wrote Anthony Faiola, a reporter at The Washington Post, in an article published on Jan. 10. Mr. Faiola pointed out that public hospitals in Greece, constrained by budget cuts, are shutting down operating rooms and facing shortages of staff and supplies. “Doctors in this country now believe that the Greek crisis is no longer just a financial crisis but a humanitarian crisis,” Dimitris Varnavas, the president of the Federation of Greek Hospital Doctors’ Unions, told The Post. Also, officials have reported that homelessness in Athens has risen about 25 percent in the last year. According to a recent study in The Lancet, the suicide rate increased 40 percent between the first half of 2010 and the same time period in 2011. Officials from troubled countries within the euro zone have lately appealed to Germany to take advantage of low interest rates and invest in infrastructure development and other projects in order to promote more demand in the region. But this is unlikely, some commentators suggest, since the German economic establishment is strongly focused on cutting debt and committed to the notion that austerity promotes growth.
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