Greek debt crisis
Thursday, April 29th, 2010
I’ve been increasingly angry about the bigoted Greek-bashing attitude by people that have no idea.
So here’s some myth-bashing:
1. Greeks are lazy and live in luxury. After the introduction of the Euro, multinational and domestic cartels started increasing the prices for basic goods and services. The local producers were blackmailed into giving up their produce for pittance while the final prices at the supermarkets were sky-rocketing. Thus Athens became more expensive than London for basic goods, in just a few years. Because the salaries were about half of what an average Londoner makes, this drove the public sector pay up and a very small proportion of the private sector pay. However, especially in the case of the private sector most of salaries are still survival-only or less, especially for young people. While most people had to work two or three jobs to make ends meet, large corporations were making millions selling the same product in Greece for double the price as other European countries. In fact, with the exception of public-sector workers, for the last decade Greeks are in the top 5 most overworked people in EU27, but amongst the least well paid. Of course, basic goods are not luxury but the few that had anything to do with the big companies did actually share in some of the profits, but that’s the same in every country in the world.
2. Greeks are sneaky tax-evaders and should be punished. Corruption is rampant in Greece, that’s a fact. Greeks just adapted to a situation perpetrated by the political elite which was supported by EU members since they could use the corruption to make multi-million Euro deals – see Siemens scandal. The state of play at the moment is that the ordinary Greek doesn’t trust any politician and immediately assumes that he or she has got their hand in the “pot of honey”. This, in conjunction with corrupt public services (a misnomer as they are neither services nor public), which require thousands of extra cash to function (imagine an UK-style NHS where you need to pay to get the doctor’s “attention”) has made Greeks extremely sceptical about where their tax money is going and where it should be going instead. So, instead of paying taxes to have a decent health service you end up evading your taxes to pay the doctors under the table to look after you. It’s not right but people everywhere adapt to the status quo to survive.
3. Greeks get 14 monthly salaries for 12 months work! No, they don’t. They get a yearly salary in 14 instalments. This is not as good as it sounds for two reasons. Firstly, instead of getting more every month you get lump sums at Christmas, Easter and for your holidays, which mostly go to repaying credit cards. Secondly, now that the 13th and 14th salary is about to be stopped, you lose one seventh of your yearly salary. And it’s not as if it was that big a salary in the first place. This is almost the same as if the UK government asked people to work March and September without pay, but it sounds more acceptable.
3. Greece fudged their statistics to get into the Euro. This is a perfect example of a lie that is repeated by the media so often that it becomes the “truth”. The real truth is that Greece got into the Euro as all other countries (except Germany – perhaps) by getting some help from the Goldman-Sachs-type American financial behemoths. This was not illegal at the time, the fact is that everybody was dumping other currencies and getting Euros. Then a new government came into power and wanted to buy some F16s from the US (a deal that I am sure included some hefty bribes) and changed the rules of accounting (payment on order instead of delivery) retrospectively so that it had the money to do so. What was bizarre was that the rest of the EU didn’t object to that, perhaps there was something in it for them too. Then they changed the rules again to what they were before. The same government is mostly responsible for today’s mess and was ousted from power last October. Strangely, most of the problems started after that.
4. It’s the Greeks’ fault for electing corrupt politicians. The fact is that, as in the rest of Europe, there is a two-party political system that has entrenched itself so well into power that only a revolution would change things. Unfortunately, that’s not allowed in the EU, as such a revolution would probably be either a far-right or far-left affair. So political leaders change and keep promising to battle corruption while they end up doing the same things as before. The rest of the EU is happy to co-operate with whatever Muppet is elected as long as they are nice and quiet.
5. Why should the Germans or any other European pay? There are two good reasons for that, a moral and an economic one. The moral reason is that most of the money Greeks owe were diverted to the big European corporations like Siemens, J&J, and others too numerous to mention, and hence paid for some European jobs. These companies used the Greek status quo to charge extortionate prices for their products and services. In a country with honest politicians they would have been told where to put their products, but a few millions here and there sealed the deals. The economic reason is that if Greece defaults it’s mostly German, French and British banks that would lose their money. Instead, Europeans will get loans at 1.5-3% and give loans to Greece at 5% and make a nice little profit, while they keep selling their “superior quality” products to the Greeks at extortionate prices and keep some jobs going.
6. The IMF is involved because EU cannot handle the crisis on its own. This is a half-truth, that doesn’t explain the situation adequately. The truth is, that the EU cannot tell Greece what to do when it comes to public services and welfare and cannot ask for privatizations. But the IMF doesn’t have such restrictions. The EU (and the US) see massive privatization as a way out of this hole mostly because it suits them. They will get to buy everything for peanuts.
7. Greece should live within its means and not borrow more than it can repay. A recent study in Greece revealed that corruption and mismanagement since 1980 has cost the Greek economy €600 billion. This is double the current debt. Enough said.
What should happen now? I personally think that Greece should default, tell the banks to stuff it, put most politicians in jail and confiscate their property, forcibly drive out the big financial institutions, go back to the countryside and live the simple life growing veggies and fishing. Unfortunately, they will never let them, there’s profit to be made.
Taken from the comments at – Greek debt crisis spreading ‘like Ebola’ and Europe must act now, OECD warns