From Inside(ish) the Greek Disaster

June 21, 2011 § 13 Comments

Pardon my blog silence: been unpacking.

Enough about beaches and thingapitas. A word about the disaster here.

When lefties in America wake up screaming in cold sweat, maybe they’ve been dreaming of Greece: here the middle class works and pays taxes to support a nation that gives the rich all the advantage and fails to get them to pay their share. Greece certainly needs to jail a few millionaires for tax evasion, pour encourager les autres.

Yet the same goes for insomniac American conservatives: this place is the fulfillment of their nightmares too. It is bogged down by a massive public sector, thuggish unions, enormous taxes and inefficient, obstructive, corrupt bureaucracy that seems intentionally designed to stymie growth and prevent investment. I wonder often, What Would Margaret Thatcher Do?

In part, Greece is what happens when the special interests of the right and left both get what they want. Beware.

This economy simply does not work.

Nearly a quarter of the employed population works for the state. Though they’ve suffered cuts in pay, their jobs are constitutionally protected.

Constitutionally!

A third of the population is self-employed. This includes the wealthy: doctors, lawyers, plumbers, anyone who cuts his own check. They operate on a cash economy, get paid under the table and declare as little as legally possible. That’s right: doctors in Greece have been paying tax like babysitters. Their wages are untouched by austerity (though business must be slowing) and higher tax rates mean little if you’re not paying taxes. It’s estimated that, should Greece ever manage actually to collect these taxes, half the deficit could disappear. “The black economy is thought to amount to around 20 to 30 percent of the gross domestic product.”

The rest lucky enough to work work for private companies, which are screwed.

As a member of the European Economic Area, Greece should have been attracting serious investment and business for its goods and services throughout the euro-zone. But here, in one of the easternmost parts of Europe that never fell behind the Iron Curtain, business is still carried out in a style peculiarly Soviet.

Each official interaction in Greece is a seemingly interminable shaggy dog story of paperwork, of signatures and countersignatures, stamps and forms and small dusty offices open to the public only a few hours a week, culminating perhaps in the issue of the wrong permission or an erroneous document, meaning you start all over again.

Comedy and tragedy intermingle on the expat board I’ve been lurking on, as Brits and Yanks and various try gamely to make a go of it in a country that seems positively to discourage foreigners from living here, spending money here or investing in anything at all.

Even if you want to be honest and pay all your taxes, they screw you. For example, if I understand correctly, people must save all their sales receipts through the year to show they’ve spent enough to merit what in the US we’d call the standard deduction. There is a cheerful little website called TaxFriend.gr that offers to help us by letting us record all our receipts online; that means for every bottle of wine you buy from the corner store, you get to type in five different bits of data from your receipt. Or you could just save every receipt from the year, mail it all to the tax office and trust them to add it up right for you. (Can you imagine the size of the tax office that could accomplish such a thing accurately?) If you fail to show enough receipts, there’s a 10% additional tax penalty. Perhaps the state is hoping that Greeks will be so busy with data entry and bookkeeping that they won’t have time to make it to Syntagma Square to tell the government to shove it. I bet some delusional bureaucrat proposed this thinking it would encourage consumption.

In further discouragement, if you are a foreigner resident in Greece and you have money outside Greece—say, your retirement nest egg, or money you’ve otherwise saved to come here and set up in the sunshine—if you buy a home or a vehicle, you are screwed unless you first transfer the money to a Greek bank and pay from that, and get what’s called a pink or white slip, which by the way if you lose you cannot get replaced. No Greek will tell you this because they have no idea. Therefore a well-meaning Greek will happily sell you a car or an apartment without ever mentioning the tax consequences. So what happens if you don’t get this pink or white slip from the Greek bank in time? (And by in time, I mean, before your transaction.) Well, that amount is taxed as income.

That means the cheap, efficient little 9000€ vehicle you buy to drive yourself from little dusty office to little dusty office getting the stamps and signatures you need to get the electricity and phone turned on in your ant-infested home with no appliances is counted as income and you might have to pay, for example, 40% on it, meaning your 9000€ vehicle could end up costing 12600€. Don’t you wish you’d taken that 3600€, had a nice holiday in Naples, bought your car there and driven it over? Welcome to Greece, stranger.

By the way, you can’t really get a Greek bank account unless you have proof of residence. Kind of a pain if you need a Greek bank account to buy an apartment.

Business becomes no more comprehensible if you speak Greek, since even the Greeks can’t figure out how anything works. Example: need to access your bank account online with the national bank of Greece? You need to call an automated phone number. If you press the button for English, you get Greek. If you ask a Greek to navigate it, they press the buttons and nothing comprehensible happens. If you go to the Greek national bank branch near you to ask them how to manage it, you explain your problem to a young female bank employee wearing a semi-transparent dress through which her thong is clearly visible, and she cannot make it work. She calls her supervisor, who also fails to figure it out and must call up a distant superior being, with whom she has a long, cooing, coaxing conversation, and who finally achieves the goal of letting you see your bank balance on the Internet.

And this is how Greece takes advantage of the fantastic efficiency available through the Internet revolution.

Now that the crisis is on, you’d think at least things would be getting cheaper. But no, it’s just as expensive as anywhere else in Europe. No wonder everyone is turning to Turkey and Croatia for their holidays (not to mention much of the place is a bleeding eyesore).

Forty percent of young Greeks are unemployed, by the way.

They also have the right to move freely within the EU, and many have family in Australia or the US and could make their way there. Why would any young person stay who had the means to leave? And then who will pay the bill in years to come?

Unless the useless leadership here is soon miraculously possessed by demons of competence, I foresee a Greece abandoned by every promising young Greek who could have made a difference, left only with unskilled workers, the wretched and the poor, the pharmacists union, civil servants waiting patiently at counters to stamp or sign or tell you you’re in the wrong line, vitriolic pensioners, the patient Bangladeshi guys selling packets of facial tissue at traffic lights, and wealthy yacht club members on islands, having a great time, behind much-needed barbed wire.

The Greeks are right to bitch about austerity. Cutting spending and raising taxes is exactly the wrong response to economic disaster. But they are wrong to bitch about the reforms proposed by Europe and wrong to bitch about the sale of national assets to private foreign investors. There is opportunity here, in these desperate days, to remake the country properly this time, to get money not simply as a loan today but as a partner tomorrow. The grand days of the Athenian empire of which Greece is so proud were made possible (1) by the vast silver mines of Lavrio and (2) trade, also known as selling things to foreigners. And the silver is gone.

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§ 13 Responses to From Inside(ish) the Greek Disaster

  • Persolaise says:

    Thanks very much indeed for this, and for the links as well.

    I’m no economist (how many times have you heard people say those words in the last few years?), but I’ve been trying to construct an understanding of this whole situation by reading various books and watching certain films, and the question I keep coming back to is: how come nobody knew that you can’t go on spending more than you earn forever?

    Anyway, it’ll certainly be interesting to watch how the Greek situation develops.

    Haven’t you got rid of the ants yet?

  • […] comments on yesterday’s post: Thanks very much indeed for this, and for the links as […]

  • Pas mal! I’m impressed. Much more level-headed than the majority of the foreign press who are quick to point out the swimming pools, forgetting to mention that those are mainly situated at the villas at Ekali, and that Ekali is the traditional suburb where all the politicians and rich corrupt officials (and a few tycoons who also control the media and large corporations with off-shore companies exploiting tax paradises to make profit for themselves and not the country) reside!! Not exactly the average tax-paying (yup!) Greek! 🙂

    There is an orchestrated effort on behalf of the international banking consortium to bring Greece to its Nadir, so that everything can be sold at rock-bottom prices. The main opposition from people here isn’t to selling things. It’s to selling things which could potentially generate income at rock-bottom prices (there’s no lower than this!) so that politicians’ and officials’s generated debts can be repaid. Example (one of many): The selling out of shares of the national telecommunications (OTE) was originally thought of to begin at -then- price of 23 euros per share. It’s now down to 7 and they want to drop it even further…That happens with everything and is only going to escalate, worse luck.

    But economics are deeply entangled with politics in Greece, behind each thing there is a political situation that required it. To highlight one point: Civil servants were constitutionally made for life beginning with the Metaxas Regime. There were very solid political populist reasons for that and it was kept later on because it meant that there would be some “control” over the constant change of administrations (few surpassed a couple of years through the whole of the 70 first years of the 20th century in Greece)
    Read: http://en.wikipedia.org/wiki/4th_of_August_Regime

    Our sold-out prime minister Gergios Papandreou (who is actually an American citizen btw and who studied at Harvard, alongside the equally inept and double-crossing leader of the opposition, A.Samaras, with whom they were good friends!) had long agreed to this selling out as it transpires since 2009 and claims by ~hellenophile by all accounts~ Strauss-Kahn before his own scandal erupted (weird timing on that one, isn’t it, and on US soil please note) confirm that this was agreed upon long BEFORE the IMF was called upon! Basically our Prime minister lied to the people that they were doing the best they could, that “there is money in the country” and under no circumstances would they ask for IMF help, while in reality he had ALREADY promised them “earth and water” to recall ancient Greek phraseology 😉 And for what? To repay the exorbitant debts that his OWN father (prime minister Andreas Papandreou, another national traitor IMO) had created by spending extravagantly, augmenting the social sector into the unprecented number of 1 million people (this was early 1980s btw!) and giving money right and left to ensure continuous popularity and voters, because that money came from EU funds….

    The funny thing is Andreas Papandreou is another “son of Papandreou”, this time Georgios Papandreou, the one who made bargains with the British (without telling the Greek people that Greece was predestined to lie with the West and thus furtherting the confusion of Left and Right during the lead-up to the long and hard and catastrophic Civil War!) No need to mention that he too and his son and grandson were American citizens with American passports and could (and would and did) leave the country whenever they wanted! There was no big feeling of “empathy” since they never spent much time in the country to begin with, they didn’t attend Greek schools, they married foreigners, they spoke in English at home etc. You can say the Papandreou family fucked up Greece and it wouldn’t be far from the truth, you know…Only the “converts” (those thuggish unions who vandalise mine & your time and comfort all the time!!) cannot accept or admit that, because they have been handsomely paid off from this peculiar Soviet-type regime that appeared leftish (in order to gain votes), while in reality was sealing agreements with NATO and IMF.
    Of course the people who accepted these lies and voted in hopes of partaking of this “spending of money” are also responsible. But you know…Greece has always been poor. It has always been between wars and political upheaval, never a moment of basking in the warmth of peace and good will. We only have 36 years of continuous peace to show throughout our 4000 years’ history, from 1974 to 2011!
    Read this (with Google Chrome translation in place), it’s really interesting:
    http://deltio11.blogspot.com/2011/06/cds.html

    It’s a totally unique situation and doubly tragic because the geopolitical circumstances of Greece make it a very desirable “hold” for foreign powers for several reasons. Nothing of this sort would dare happen if were situated in the northern edges of Denmark…or at the Pacific rim…
    The current administrator is so traitorous as not to play that “final card” of threatening a default and stop of pays: It’s interesting to see how they follow the exigencies of the Powers above (powers deeply into Goldman Sachs and Standard & Poor’s and such) because -obviously- they have something to gain from them and know full well their time in power in Greece is getting to a close.
    It “reads” to me and my average mind as there is a definitive pact between monetary consortiums & international banking and our worthless politicians into making Greece the guinea-pig of the Euro experiment: The whole axis of the matter lies in devaluing the Euro vis a vis the dollar and it seems to be working so far, terrifying markets and making everyone wanting to get rid of their Greek bonds! All that bad publicity in the press can’t be just random! 23 days of peaceful demonstrations and the 24th day when a stone gets thrown the international media has it on the front page with words about the “agitated climate in Athens” and “street fights in Athens”. I mean, where???? I live five minutes from the city centre. How can that NOT discourage tourists, I ask you?? When it’s touted from the rooftops that Greece should get their act together and expand on what they do well, etc etc. Hypocirsy and Pharisaism.

    And to address the entertaining “oil springing up suddenly” suggestion: Serious studies have been conducted under wraps (of which we’re only privy to a small segment of and only those of us who are in contect with scientists) and the Aegean is in fact full of oil, as is the whole Eastern Mediterranean. :-O
    The main countries who could exploit that would be Greece, Egypt and Turkey. Is it just random that the revolution overthrowing the regime at Egypt happened now after so many years?? I didn’t think so…And we all know that Turkey is the surest ally of the US foreign diplomacy in the area. Now picture this: The far off island of Kastelorizo is getting all of a sudden disputed as a “grey zone” in the Aegean. It was “given” to the Italians at the end of the first war and returned to Greece (it’s Greek soil anyway) at the end of WWII under treaty. Now, all of a sudden, our traitorous prime minister is announcing things re: the national economy from Kastelorizo soil etc. Hmmmmm…..And I’m thinking out loud: The only two geopolitical paragons in the area that could in collaboration and peaceful existance engulf the Aegean exploitation of the oil are Greece and Cyprus (Cyprus is Grecophone and a EU member; the faux Turkish regime which isn’t recognised by international organisations was soil “taken over” during a coup d’etat). But Kastelorizo is smack down in the middle! Cut that off, make it a grey zone, oust Egypt from the area due to political upheaval and the joint exploitation of the Aegean oil becomes a thing to be decided by international monitoring organisations and such… 😉

    It’s all very complicated and while I do admit we the people are responsible for not asking for every damn receipt in hopes of getting a better price at the hairdresser’s and doctor’s without it, I can’t help but feel this is part of a grander scale of things. Don’t you?
    You know what gets to me in the end? That these things are probably discussed for the whole of a 5 minute consultation in secret chambers between bored technocrats who decide on people like pawns in a master-chess. They don’t even give us the time of the day….A whole people who fought so damn hard for each and every one of other nations’ battles (WWI, Balkan wars, WWII,a foreign orchestrated Civila War, Korea, a foreign-puppettered junta) is painted with such a wide brush as “lazy”, “thieves” and “brats”. Basta!!

    • Hello, Elena. I was just at Syntagma today, where people were camping at the square in tents and signs were hung all over. It was quiet. Tourists were thronging in the heat, spilling off the sidewalks. Business was steady in Plaka and on Ermou Street. I bought so many spices on Evripidou that the proprietor asked me if I owned a restaurant. Nothing feels violent or tense. Our beach town is crawling with tourists. No slowdown here. My mother writes me in a panic asking me if we are safe from the riots. What riots? I agree, this is not like last time. The last time we were in Athens a couple of years ago, it was right after the police had killed that kid. Stores were looted, glass broken everywhere, some places burned to a cinder. Walking around the center at that point was surreal. But everyone we talked to said that was not the work of ordinary Athenians but organized criminal gangs, so I have no idea how genuine those riots were either.

      Much of what you say I agree with, and I know of course that the British colonized Cyprus because of its strategic position in the oil-producing regions, so someone’s interest in possible petroleum reserves is always possible. (Though oil isn’t so great either; many countries have been set back decades because oil money made it possible for them to delay modernization.) I also know that the US, in its desperate anti-communist efforts during the 20th century, meddled as much in the politics of Greece as it did in Italy, much to the detriment of democracy in both countries. I know that this place has had a stable functioning democracy only since the seventies. And yes, international bankers are out to make money, of course.

      But I genuinely do not believe there is or needs to be a conspiracy to devalue Greek debt. (I also think that Strauss-Kahn is better off facing his skeletons now than as the president of France, and God bless the NYPD.) It is simply apparent to anyone who does the math that Greece cannot pay.

      Greece did of course lose massive quantities of development funds to waste and corruption. Not that this is the fault of the ordinary punter, but neither did anyone rush on Syntagma before to fix it. Recently I was shown a 2million€ parking lot: it was a patch of gravel on which you could fit a couple dozen cars, and apparently due to bribes and false invoicing it cost the EU, which funded it, 2 mil. They hardly need hard hearts to cast doubt on the prospect of sending more money to Greece. I doubt I had the amazing luck of being led to the worst example of such corruption in all of the country. I was told about businesses who sold timber to the Olympic organization here; the officials in charge would order so much for the Olympics…and then “send a few hundred thousand worth to my house, because I’m building a new extension.” That kind of thing. Over and over. And no one goes to jail.

      Plus there’s no organization; all that bureaucracy and no good records or enforcement! Greece hasn’t even got a central registry of deeds, which is screwing up the entire privatization scheme, since you can’t sell it if nobody knows who owns it. The fact that nobody at the police station or the municipality could even tell me how to get a scooter license is emblematic of the problem with this entire ridiculous sorry country. This place is, from top to bottom, a shameful shambles, despite all the hard work and intelligence of its ordinary people. The politicians are in pocket to the unions and the wealthy, but this is a democracy. Did you all not vote these fools in?

      Who except a crazy romantic or a Greek would start a business in Greece? I can hardly believe this is Europe. Except for it being full of white people, it is indistinguishable from the Philippines. (Since you mention the Pacific Rim.)

      What I am trying to say is that the reason nobody wants to put more money into Greece is not because of international banking and oil conspiracies. It’s the same reason nobody wants to lend the town drunk and gambler the money he’s asking for the fix his roof; he asked before, and for some reason it’s still full of holes.

      And there is genuinely systemic risk with Greek default. That’s why Portugal, Ireland et al are so angry at Greece: you’re making them look bad. This is a bad situation, and it is not merely bad because people in smoky rooms are making it bad.

      I suggested myself that Greece leave the eurozone and default, but it’s easy for me to say. I’m not really Greek. Anyone who lives here had better bone up on the recent history of Argentina before seriously entertaining such a possibility.

      Anyway, I don’t know where this is going, but unless Europe commits to another round of financing and Greece get the balls to do some cleaning up with it, the future does not look good.

  • Tania,

    first of all thanks for taking the time to reply in such length. 🙂

    Glad you found your way to Evripidou, it’s the best destination for spices & herbs. They have almost everything so looking forward to what you’re going to come up with and share. (btw, I’m going to send you some links that might interest you as I’m convinced that tourist-icky tavernas in Athens serve the worst kind of food possible ~not Greek but a bastardised generic mush, please don’t go there, I’m personally embarassed).

    Like you say, it’s peaceful. It’s peaceful because Athenians are peaceful despite what the foreign press likes to “show”. A few years ago it was much better on the whole and 10 years ago I could still walk in the streets late at night anywhere, even seedy places, and never having to think whether I would get mugged or raped or worse. Where else in the world was that possible, barring Muslim countries where they chop off people’s members if they transgress?
    The riots you witnessed in December were followed by vandalism by a very specific small, tight compact group of no more than 100 people who are responsible for all the pillaging and burning you see broadcasted occasionaly (on the eve of Polytechneion anniversary, for instance). These are not regular citizens protesting in the streets. General consensus wants them to be professional thugs of a very young age fueled by very specific centres of power. They all wear hoods. Ask any of your Greek friends and they will tell you so.
    Nor was the man who killed that kid, Alexis Gregoropoulos, a member of the standard state police; he was a “special guard”, part of an elite troupe with different orders and different supervisors. It’s getting interesting, doesn’t it? Some say that the incident was brought to this extreme and a kid’s life was lost so that a goal should be accomplished. I perish the thought that it might be so, I just don’t want to believe it.

    Now, of course Greece cannot pay. We don’t disagree. The math just DOESNT add up! Then WHY the intense austerity measures that get re-introduced every couple of months and have brought the country to its knees? Just so we tally up the interest rates and make the debt get bigger and bigger?
    I (and my parents) have been paying for my land property/real estate taxes since forever (it’s inherited and goes from granparents to parents to children, no one got EU funds for it, the family worked for it for generations) and after I paid for 2010 they’re asking me to pay again now as an “emergency” taxation and then I will pay again for 2011 when the fiscal year ends, unless of course they remember in autumn that I need to pay again some “emergency” added value tax on it etc. I mean, geez….how many times I am supposed to pay before I can no longer do that and I lose the land??? What is the purpose of all this, since there are huge fiscal scandals which involve thousands of acres of land, millions of euros and priceless contracts? Why don’t they “catch” THOSE guys? Ah, because most of them are either politicians, or big enterprisers entangled in media control or such so they can’t have that. Ah, all right, let’s pony up through out measle taxes then…Let’s see, eenie meenie…

    When the country entered in the Euro currency (despite being borderline rejectable as found out later) Goldman Sachs was behind the “cooking” of data alongside the officials who did it, of course. It’s been revealed. They KNEW there was going to be trouble. Why not stop it then and let the situation escalate? If you ask each and every Greek on the street they will tell you they love Europe, they feel they belong in it in spirit, yet the euro damaged their assets and their businesses because everything just boomed up and became so very bloody expensive and we lost our competitive advantage in the markets. So, since people in responsible places KNEW this might happen, WHY didn’t they take precautions? Or why didn’t they warn the people? Because there was profit in it from each side of the bargain and none of it was to the pockets of the average citizen.

    You’re absolutely correct that bureaucracy is atrocious (It has been going forever alas, it’s nothing new; the result of having a very divided history of small parts of the country getting gradually regained and therefore having hundreds of amendments in every law and regulation passed) . You’re absolutely right that foreigners get discouraged from opening a business here (what am I saying, locals are too!) and that they might as well invest elsewhere. I don’t blame anyone else than our own selves for this. I don’t know how this can be remedied. Hopefully by making things more effective through total computerisation? Let’s hope, we ‘re not Canada.
    But what is perhaps more important is that there should be more letting people fulfil their potential and open up businesses and do what they must do: When all my acquaintances are thinking of leaving or leaving (and I have thought so myself), it’s getting hard to think of what the country will become in a few years’ time: full of immigrants and dying pensioners?

    And letting off scott-free is often the case, but not always: the little guys get plenty of retribution, the judicial system is functioning (lagging long though due to paperwork again), it’s the big guys who go off with impunity. Again because they’re entangled in a political mess. Surely, that happens in other countries too. I don’t suppose we’re the only one with corrupt politicians!
    The foreigners who are in contact over businesses with our corrupt politicials are not so virginally pure as they purport to be either: During the HUGE Siemens fiscal scandal (which is in part responsible for much of today’s situation) there were many German officials who let this escalate because they directly profited from it. Why isn’t that mentioned in the foreign press? It takes two to tango!
    Also Greece is Germany’s (and the UK’s and France’s) one out of two-three major importers in Europe: If we stop (or simply can’t!) buy those products any more on’t that impact the other Eurozone countries’ economies? I know it would certainly do to Germany’s (the whole infrastructure here, from public buses to lights in the streets is bought from Germany). Relationships between countries, especially within the EU, are not so clearly cut as presented to be.
    And I bet to differ on how the other countries in the PIIGs (what a nice nickname, genius inventor!) co-allition are viewing us: the Spanish kicked off the “indignant” protesters at Syntagma, they literally nudged us to protest. I have Irish friends in Ireland and Portugeuse friends in Portugal and they’re literally paining for what is going on here and fearing for the future. Have you stayed in those countries for a little while? They’re different in some regards but they have some common traits with our own economy & history. Maybe they could fit into the Pacific rim too?

    But no, the foreign press is spewing venom and spite all over and ignorant, unhistoried commentators make fun of an entire people with no hard facts and plenty of arrogance ~sourced from where? It’s very tinged with a peculiar form of racism. One gets the feeling they never really liked us, you know, and now we’re down they’re getting the chance to let the venom flow fully.

    Is this the height of journalism I ask you? Who OKed that cover? Would you imagine the indignation of Americans if the Statue of Liberty was seen gesticulating like that? Would you blame them?
    http://www.spiegel.de/international/europe/0,1518,758326,00.html

    Is this anything other than ridiculous?
    http://www.businessinsider.com/greek-politicans-want-germany-to-pay-war-reparations-in-order-to-make-up-for-their-debt-disaster-2010-2
    The writer is blissfully ignorant of the fact that the reparations claim is VERY old, it didn’t just come up now due to dire straights. But read how the commentators make fun below.

    A commentator on the link below says: “The austerity conditions were either done to increase unemployment (successful so far!) and to thereby attract business, as Greeks will be eager to work for peanuts and say thank you too; or it was done as punishment, to set an example, etc” I kinda feel it’s not very far off from the truth.
    http://www.nytimes.com/roomfordebate/2011/06/19/draft-the-imf-greece-and-the-argentina-option/the-moral-hazard-in-greece

    The situation is very bad indeed. The democratically elected administrations have relied on last-minute promises, lies and having old people pre-decided for them -by family, unions, football teams, you name it – on what to vote (this happens, it’s not like the US where only the able and the willing go to vote). Result? Straw men who are unable to govern efficiently and bring the country out of this chaos! I just wish they’d stuff it and drop dead, the mass of them, I’m that disgusted. This is the source of the average Greek’s indignation, not the reluctancy to face up to their own responsibilities: I want to make this crystal clear.

    I appreciate the fact that you obviously researched on this before writing your posts. You just caught us in a very bad moment. I genuinely feel bad about that for you and Luca. I wish you would be able to see the good that the country and its people had to offer and really enjoy your stay.

    • I absolutely agree that the ordinary taxpaying Greek is getting tarred, feathered, and then miraculously (considering how unattractive sticky feathers are) screwed.

      So what do you suggest? You include a link condemning the Argentina option, for good reasons. The Argentina situation was exacerbated by terrible experimentation with currency, something impossible so long as Greece stays on the euro. Nobody knows what would happen if Greece left the euro, not to Greece and not to the rest of the eurozone.

      So given that the drachma probably is not going to make a comeback and therefore competitive devaluation is off the table, what do you think should happen?

      Remember: there is no legal way to compel private investors to accept renegotiations of the debt they hold; they can asked but not forced. Banks are not charities. The people with their money in those banks are not there for philanthropic reasons. There is also no conceivable way to fix a price, high or low, if there is open bidding for state assets, and you wouldn’t want to anyway.

      What should be done differently? A more aggressive pursuit of tax evaders? An announcement of a massive bureaucratic reform? I’m not sure what you’re asking.

      LIke I said, austerity is lousy, but so far as I can see it is only in place not because of scheming by the powers that be but because too many politicians and their pet economists believe in bad anti-Keynesian economics. I have an interest especially because of what’s going on in the US: the American congressional Republicans forcing budget cuts at exactly the moment we ought to be putting more juice into the economy. Budget cuts in times of trouble are demanded by idiots because they have an attractively punitive, moral aspect. But they only serve to protect the assets of those who don’t need any help and resent giving it.

      That said, what I object to most about the way budget cuts are done in Greece is that they seem to be done with the eyes closed, in one samurai sweep, instead of with a magnifying lens and a scalpel, to cut away the dead and the cancerous. If done well, a few good cuts could help this place thrive.

      I do believe in the necessity of reforms, in privatisation, and everything else I’ve mentioned. I believe the austerity measures were put in place so Angela Merkel could sell a Greek bailout at home. And as for a magazine cover with the Statue of Liberty flipping everyone else the bird, I have a funny feeling the Republican right would like that.

      • That’s the thing: I don’t have an (easy or any) solution, really!! I’m no economist, although the way economists have messed the situation throughout several countries, it’s probably for the best.

        There was this wonderful little plan proposed (participators/supervisors could be other people, it doesn’t really matter, as long as they were not invested in this mess):
        http://www.intelligencequarterly.com/2011/03/pressure-grows-for-independent-audit-of-greek-debt/

        Now WHY wasn’t that given any thought. I’m absolutely certain there are money demanded that are serving non legit purposes in the debt repayment. A sane debt that could be met and a plea to Greeks’ sense of pride, “filotimo”/φιλότιμο (a unique word and concept) and concern for their children to come who would be otherwise burdened to their ears and something could be done.

        N.Chomsky has been quoted about the whole concept of the IMF a propos Argentina back n 1999 (!) and it’s so relevant to what happens today in Europe:
        “The IMF is a method for paying off investors and transferring the risk to the taxpayers in rich countries. There are two forms of robbery going on: The populations in the debtor countries are being robbed blind by austerity programs, while the taxpayers in rich countries are also being robbed. It’s not as serious for the latter because they’re richer, but they’re still being robbed. The IMF socializes the risk.
        This is quite important. People invest in Third World countries because the yields are very high. So gains are high in a market system if the risks are high. They more or less correlate: the greater the risk, the greater the gain. But here it is largely risk-free. Private investors make enormous profits from very risky investments, but then, through the international financial institutions, they essentially have free “risk insurance.” The structure of the system is such that the people who borrowed don’t have to pay — they socialize it by making the population pay, even though the population didn’t borrow the money. The people who invest — they don’t accept the risk, because they transfer it to their own populations. That’s the way market systems work-through the socialization of risk and through the socialization of cost, with the IMF acting as “the credit community’s enforcer,” as Lissakers puts it.”
        Pause for thought. Nobody gives money unless they think there’s some profit for them. And why should they anyway, eh?

        At the point where we’ve come, I think we might be better off if indeed we returned to the drachma (boost in exports for one!), but of course that is unthinkable for reasons of collapsing of the banking system across the eurozone. Again, it’s not entirely up to us, worse luck.

        You said: “I believe the austerity measures were put in place so Angela Merkel could sell a Greek bailout at home.” Agree. This was both a micro-political concern of Merkel’s (imagine if she just demanded that without presenting measures taken!) and also of OUR OWN politicians who want to play the role of the obedient student for who knows what reward later on.

        “what I object to most about the way budget cuts are done in Greece is that they seem to be done with the eyes closed, in one samurai sweep, instead of with a magnifying lens and a scalpel, to cut away the dead and the cancerous”. Again agree. I sense this is what the average Greek demands as well: Why not raid those Ekali villas and ask for proof of “where hast thou?” as they do with the rest of us!! (the infamous πόθεν έσχες regulation which more or less demands that you can prove your level of living by declared income, which is -of course- then taxable).

        Major rethinking of bureaucracy couldn’t come any sooner (like I say, computerisation of the whole process of EVERYTHING is a good start), privatization at a humanly decent price of some sectors is perfectly OK by me (the national telecommunications could have sold shares at 23 euros a share back then), and we should exploit things we have: making solar energy for Germany for instance (why not?). Also instead of making it difficult for enterpreneurs to open a business, encourage them with several measures so that the economy is given a boost. But to accomplish that there needs to be a cutting off of the present cancerous political system: they’re 300 traitors in that Parliament, nobody is thinking of their country. What happened to their Plato, which they learned at school?
        “”Από τη μητέρα και τον πατέρα και όλους τους άλλους προγόνους, η πατρίδα είναι πράγμα πολυτιμότερο και σεβαστότερο και αγιότερο και ανώτερο και κατά τη γνώμη των θεών και κατά τη γνώμη των ανθρώπων που έχουν φρόνηση”. (i.e. Nation is more precious, more honourable, more respectable, holier and of superior concern than mother and father and all the other forebearers, to both the gods and the people who think sanely)

        It’s funny when you compare with the US because several peoplein cities in the US (so I hear) had been mortgaging their houses and living off huge loans etc. and literally getting on the street when the crisis hit, while here very few people mortgaged their houses (and most own their house to begin with) and most had savings for a rainy day and didn’t loan exporportionally etc. But the general situation for the country was reversed, probably because the US is a country that actually MAKES things, PRODUCES things, even with the Japanese and Chinese antagonism in recent years. We produce nothing for several years now.

        LOL on the Republicans encouraging the Statue flipping the bird. I suppose they’d see it differently….

        It’s been stimulating to see the discussion unfold! 🙂

    • P.S. The massive inflation after joining the euro happened in Italy too. Nobody actually knows why—it was an unpredictable outcome of the currency changeover. Rome and Athens used to be cheap holidays. Now they’re expensive. And we miss those currencies. It makes me think the UK was wise not to switch over, but then again, it’s not like England is cheap.

      Here’s a link describing the situation in Italy a year after the euro replaced the lira.

      • Yeah, I KNOW! I sit to drink coffee at London and it’s cheaper than in Athens! Bonkers! It costs more to travel to an island and stay at a hotel here than travel to Bali and stay at a luxe resort.

        Honest question: Doesn’t it look odd that so many “wise heads” have not been able to sort out what went wrong? And that they shouldn’t go on experimenting *without personal risk*, since it’s proven that they have absolutely no freaking idea what they’re doing?

  • Persolaise says:

    I’ve read your comments (and checked out some of your links) with great interest.

    There is no easy answer, is there… and I mean both easy in the sense of ‘simple to devise’ and easy in the sense of ‘light to bear.’

    I’m not surprised that the situation has led to people citing conspiracy theories and unveiling latent racism. Having said that, I wouldn’t be shocked if there were some truth to the theories… and I know that Europe isn’t entirely the friendly, neighbour-loving institution it likes to think it is.

    I see from today’s news that Mr Cameron has stated that the UK won’t be contributing to any future Greek bail-out.

    Let’s see how things unfold…

  • More interesting thoughts amidst this crisis, if it’s of any interest to any reading party.

    There’s more than meets the eye: France has as much a gigantic public sector as we do. Finnish tax evaders evade just as much as we do, thjough perhaps on different things/scale (instead of pools they buy lakes). That’s merely one side of the problem, although obviously it’s important to tackle it SOME time finally!! (I never denied that)
    But watch these data:

    Greeks sacrificed for the sake of the Euro (French tv discussion):

    Euro at the eye of the storm (technically, that’s the reverse, as the eye of the storm is the quietest place but you know what I mean):

    Conspiracy theories abound…

    (incidentally, George A.Papandreou, Greece’s PM, does happen to be a part of the Bilderberg club and their 2009 meeting was in Athens; I call this eerie timing, don’t you?)
    Some little things are a bit twisted above though: EU is broader than just the monetary union of 2000.
    Haven’t followed how Alex Jones conducts himself in the US, this is from a Russian tv programme. (Opinions?)

    Alas, the final blow…an official statement on a Greek morning TV show the other day: an MP from the governing party admits that there is a secret pact with the EU (rather, some heads who pulls strings, I’d say) to delay Greece’s default ~which is inevitable~ by 3-4 years later.
    It’s inferred, so that everything that can be money-making in the long term ~for those in places of power~ can be devalued to its absolutely rock bottom price, bought off cheap, exploited to infinity, never reliquinshed.
    Get a Greek friend to translate: the admission is shocking.

    Combine “situation bloque” (accent aigu on last syllable) as quoted on French TV and “3-4 years later”….mix them at speed 4. Serve cool. Digest.

    • Sorry, didn’t respond to this before. Just FYI, Alex Jones is a psycho nut job right-wing paranoid. His radio program playing up the (entirely fraudulent) vaccination-autism link nearly led a cousin of mine not to vaccinate her baby. If he says it, consider it a good reason to be skeptical.

  • Thanks Tania for confirming my hunch (it did sound simplistic and more than a little heavy-handed on the conspiracy theory front!) and by all means, I realise it’s not easy to reply asap at each and every comment/question.
    I really had no idea who Jones was exactly, so could only take him at face value. Sometimes desperate people need to grasp from straws (is it the expression? I could be mistaken, anyway), so the above paradigm with vaccination would explain that.

    On another peripheral note, but since I mentioned it upstream, it’s all very interesting how since we talked on this, the whole Strauss Khan case is collapsing!! (I respect the US investigation system and believe that they will get to the bottom of this)
    http://en.wikipedia.org/wiki/Dominique_Strauss-Kahn_sexual_assault_case
    It remains to be seen what happens on July 13th when he’s supposed to announce or not his candidacy.

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