Greece was always a spectacular location for an excursion; The Roman legions under Mummius, the Ottomans directed by the 15th century Sultans, Mussolini and his Julia Alpine Division (although they didn't get very far) and Hitler's Twelfth Army (who did). Of course, since those times more peaceful invasive forces have set their sights on things hellenic, have taken retsina in the tavernas and have left their towels on loungers all the way from the co-capital of Thessaloniki in the north to the teensy-tiny island of Petrota south of Crete. If anything, Greece has not had any difficulty selling itself -we have all at one time or another wanted to go there. The only problem is that now no-one wants their money to go there!
So why has this economic crisis affected Greece quite so badly? Well, unfortunately it's largely the Greeks themselves -they've spent too much and recovered too little and that's affected everyone else in the Eurozone. Let's blame it on 'Greek Culture'. There's something in the old Greek character which is content to cock a snoot at anyone in authority, particularly the government and the tax man. This may be a residue from left-wing political ebbs and flows during the middle years of the 20th century, but it remains a significant self-satisfying factor which the younger generation must overcome and change. God alone knows what the future will hold for young Greeks...
Perhaps I should tell you what's wrong by means of a little story:
Suppose you were Greece back in the 1990s and you were invited by your neighbours to join a mighty-neighbourly club -and bit of an expensive and exclusive European club at that! This club would bring benefits, such as the opportunity to further your own domestic causes by simply chatting to all your new-found friends in the club house(s). It would also bring financial stability by offering the chance to dip into the club's vast finances -all of a sudden the dreams of upping the kids' pocket money, building that much-needed extension and bbq patio and of buying the wife a fur coat would become a reality. Popularity at home (that irresistible political temptress) would be assured. In fact, the more that would be spent, the better things would get.
But then the unexpected occurred -an economic downturn. Everything suddenly became more expensive, your accounts at the shops became worthless and, when you asked around, everyone else moaned in chorus about feeling the pinch. Oh dear. The neighbours in the club were still able to gain access to yet another club (the Money Club), but you couldn't. And you couldn't because although your popularity came at a price, there was no way it could be maintained (something the Money Club didn't like). Support at home began to wane. Your friends said they could help you out, but only if you began improving your much-cherished domestic arrangements (particularly the ability to pay those pesky shop accounts) and completely gave up on popularity. In fact, if you hadn't begun doing this then you would also get your friends into trouble and your club membership review would be brought forward. Your piggy bank was long-since empty and, besides, now belonged to all the other club members (and even some non-members). Some whispered that even if all your friends came to your aid, paid your bills, helped structure your domestic arrangements and somehow encouraged the 'other club' to cough up enough cash to pay the rent then it would be amount to more money than you could ever pay back. In fact, it would be your fault that all the others lost their piggy banks too...
I know this is a slightly silly and flawed rhetorical device, but I hope it makes the point. Greek membership of the European Club may not have caused the crisis in the first place, but their 'culture' (one familiar to many other southern European countries) has been crucial in directing it's demise -borrow lots and don't pay it back. Instigating painful measures from without to remedy the situation on Terra Grecia within will in the end, I fear, become merely punitive to the young (tax paying) Greeks who never acceded to the decisions that got the country in the mess in the first place. These extreme domestic measures will certainly not stop the international monetary system's blessed freedoms from further wrecking an already crumbling edifice.
Our friends the Greeks have been put on the austerity naughty step before. Even before membership was accepted, difficulties in their economy were observed. According to the BBC on 1 Jan 2001, "To qualify for euro membership, the Greek Government had to adopt a tough austerity programme, making deep cuts in public spending." Sound familiar? It's obvious that they just weren't tough enough. Maybe the 'culture' was deeper than the 2001 cuts could reach.
Even worse, the recent statements notwithstanding, the rest of Europe now seems unable to know exactly what to do or how to do it. Charles Calomiris, the Economist who predicted the fall of Argentina back in 2001, recently described the whole sorry state in Greek Economy Watch thus:
Europe is living in denial. Even after the economic crisis exposed the eurozone's troubled future, its leaders are struggling to sustain the status quo. At this point, several European countries will likely be forced to abandon the euro within the next year or two....The only way out of this conundrum is for countries with insurmountable debt burdens to default on their euro-denominated debts and exit the eurozone so that they can finance their continuing fiscal deficits by printing their own currency. Here's a hint for Europe's politicians: If the math says one thing and the law says something different, it will be the law that ends up changing.
So what's to be done? Bugger all as far as I can see. Setting up an artificial pan-European currency seemed like a good idea at the time -one worthy of investment, cooperation and integration. The Old Europe of international and internecine rivalry and bloodshed evaporated in a blending of economic love and well-being. The trend to allow a ridiculous insouciant market lead all our lives for better or worse must be addressed, but I don't think many chancellors or government economists could ensure financial health and certainty on the ground where the real people live. Neither could (or would) many of them have admitted foreseeing that continual borrowing, spending and borrowing again would result in eventual ruin for us all, but it all seems so bloody obvious now -with hindsight.
We're in a right mess that is likely to worsen, that's for sure. Are there any solutions? Probably not. Things are dependant upon wiser minds than governments can usually tolerate. Political solutions untenable with current thinking may be required. In the end, we'll all lose money - lots of it. At least we have our friends and family (which brings a measure of happiness to us all). Of course, that does not mean we should give up and if ever a time was needed when pressure could be brought to bear upon our elected representatives it is certainly now. Without it they can only make things even worse.
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