In the universities of Athens, the city where Plato taught and Cicero studied, campuses are covered in anarchist graffiti, stray dogs run through buildings and students take lessons in Swedish with the aim of emigrating.

Higher education in Greece, as in much of Europe, has been battered by the recession and austerity measures. Budget cuts of 23 percent since 2009 mean buildings aren’t heated in the winter, schools have slashed faculty salaries and newly hired professors can wait more than a year to be appointed.

Students say it’s hard to be hopeful with youth unemployment surpassing 50 percent and protesters seizing university buildings.

“People are pessimistic and sad,” said Konstantinos Markou, a 19-year-old law student, speaking in a lobby at the University of Athens, where dogs fought nearby and students say drug dealers and users congregate. “The sadness is all around the air.”
…
As universities in Greece reduce salaries and slow hiring, young academics are rethinking their careers there, said Leonidas Karakatsanis, 39, who received his Ph.D. in political science last year from the University of Essex in England and has a research fellowship at Panteion University in Athens.

“My initial plan was to spend some years abroad and return back to Greece,” Karakatsanis said. “Now it seems like it’s impossible to return to Greece. I’m starting to imagine myself living abroad for the next 15 to 20 years.”

While no one is expecting any U.S. states to follow the path of Greece, there are already some important parallels, namely, how policy makers continue to pass on a disproportionate share of the pain to the younger generation who have little political power and how people are adjusting to recent changes by relocating within the U.S.

… and I guess, since it’s an election year, there won’t be much of an effort to do anything about this until after all the voting is done in the fall, if then. Oh well, as long as the Federal Reserve keeps buying Treasuries, we shouldn’t have any problems…

In November alone 126,000 Greeks lost their jobs in a country of 11 million, equivalent to three and a half million Americans in a single month. The unemployment rate jumped from 18.2pc to 20.9pc.

This has not yet fed through into social breakdown. Greeks receive unemployment support for an average of thirty weeks, with a ceiling of €454 a month, according to Professor Manos Matsaganis of Athens University. Those with civil service tenure are placed on labour reserve for two years at half their basic pay, or a third their actual pay.

Once these cushions are exhausted, Greeks are on their own. The monthly ratchet effect will then become painfully evident. It is why the Orthodox primate Hieronymos II warned in a letter to the prime minister that ever further doses of the same “deadly medicine” is becoming dangerous.

“The voices of the desperate, the voices of Greeks are being provocatively ignored. Fear is giving way to rage and the risk of a social explosion can no longer be ignored by those who give orders and those who execute their lethal recipes,” he said.

Anyone looking for alternative solutions to what ails Greece should consider a recent comment by Jeremy Grantham about central bank policy: “Well, I wouldn’t start from here”.

When the government accounts for 40 percent or more of a nation’s GDP, you’ve basically purchased yourself a one-way ticket to a much lower standard of living and, if you haven’t already done so, have a look at last week’s New York Times story – The Way Greeks Live Now. I finally got around to reading it the other day and it’s well worth a look.

It’s almost comical when you think about it… They’ve been haggling over the level of Greek debt-to-GDP eight years from now after the deals and promises that they previously agreed to over the last two years have all proved to not be worth the paper they were written on.

From the Mike Thomson archive at the Detroit Free Press.

Of course, I know nothing about Greek Finance Minister Evangelos Venizelos in general or about what kind of a job he’s been doing in trying to keep the Greek government from defaulting on its debt and plunging all the world into another Lehman-style financial market meltdown, but, in a world where perceptions are very important, it seems it would help things along a bit if the top finance official of a spendthrift nation being bailed out after years of profligacy they kept hidden from the rest of the world wasn’t morbidly obese.

Also see this related collection of photos from Spiegel and this New York Times Magazine story from yesterday about the rapidly changing Greek lifestyle. It’s not all good.

It seems that European policy makers are not moving fast enough for the credit rating agency, Moody’s chief credit officer Alistair Wilson noting, “We do not think they have done enough to reassure the market that we are on a stable path. What will guide long-term ratings is the clarity and the performance of policy makers and the macro picture”.

All that changed not long after the last vestiges of a gold standard were abandoned in the 1970s and it’s been a three-decade long climb up debt mountain ever since. Moreover, since the graphic above includes only public debt, the picture is significantly worse when including intergovernmental liabilities such as social security (see comment below).

Bond holders will take haircuts of 70 percent on the money they foolishly lent to the Greek government and, for the time being at least, a messy Greek debt default has been averted.