Dispatch from Greece: A Country in Crisis
It may be too late, but Greece offers lessons on what not to do. Other countries can avoid falling into the same trap.
By Joshua Tartakovsky, 5 March 2017
(All Photos by Joshua Tartakovsky. All Rights Reserved 2017 (C)).
It may be too late for Greece, but its lessons nevertheless should serve as a reminder of what not to do. Other countries can avoid falling into the same trap. Other people, even more so.
(Athens)
A man at a shop in a touristy part of Athens examined with interest the two Samsungs I had with me. One was bought in the US, the other in France. He opened the phones carefully seeking to help me rescue a SIM card. ‘This one is fake,’ he said with certainty, pointing at the pleasant Samsung I purchased at the De Gaulle Duty Free. ‘Why’? I asked. ‘I got it at a Duty Free!’. ‘Do you see the sticker below the battery’? he asked. ‘Here, this one’ pointing to the one purchased in the US, ‘says Made in Vietnam, it has a professional sticker. The other one says Made in China’. It’s a fake.’
I thought he was exaggerating or did not know what he was talking about. But a few days later, a dot appeared in the camera of my phone. Hard as I tried, I could not get rid of it, it would appear in all the pictures I take and as soon as I turn on the camera. It was on the phone that was made in China.
The guy also got his phone, and paid for it about 80 Euro. However, when he tried to insert a SIM card in it, the card could not be read. The phone was blocked, most likely stolen. ‘It’s ok, no big deal,’ he said. ‘Everyone buys stolen phones these days. Why pay 200 or 300 Euro for a phone? No one has this money.’ Seeking to protect his pride, he added: ‘I will just return it and get a new one.’
What is it like to be in a country where the economy gets worse by the day?
It’s like Cuba. Being stuck in a country where there is no future, where the youth has nothing to look forward to, where money is scarce. But while in Cuba things are somewhat stable, in Greece they are getting worse each day. Greeks are stuck, and without a guarantee of homes, healthcare and education that are to be found in Cuba. Greeks are living under the EU taxation regime. A blockade.
I’m nearly done with Game Over: The Inside Story of the Greek Crisis. Its writer, George Papaconstantinou, was the Greek finance minister in 2009, after the socialist Pasok won. He in fact introduced the largest bailout in the country’s history.
Throughout the book one cannot escape the notion that Papaconstantinou knew full well he is bringing the country into even greater poverty but that he felt compelled to do so since he was inflexible, and followed dogmatic economic rules which no longer apply to the Greek situation. He also followed almost blindly, with a sense of inferiority, to any order given by the Germans, French or Juncker himself. In other words, forcing his country into greater austerity in order to show that Greeks can pay (the unpayable) debt and will enact reforms which really mean just cutting down salaries and services while taxes increase. Small businesses were constantly closing and pensions were being sliced, but it didn’t matter, the European bankers were satisfied since the deficit was reduced. Saving the economy was a sure way to kill the economy.
Let’s look at the big picture: Greece had an immense debt, which resulted from years of playing with numbers and pretending it did not. It then realized the problem and had to take on loans to have money. However, it is not an independent country, but part of the EU. Therefore, it is dependent on Germany and the European Central Bank. It cannot issue its own currency since it is part of the Euro.
Greece under Papaconstantinou therefore, followed the laws and rules it was being told. Germany refused to consider debt restructuring, and Greece hoped in vain for some kind of fantasy about European friendship and solidarity to emerge. Greece, therefore, did not even push for the cancellation of some of the debt, and continued to borrow to pay its huge gap while taking on orders from the Troika which are impoverishing its population. In other words, the Greek people are the ones paying for the debt caused by their government mostly. The problem is that the debt is so large, is that it will never be paid but in the mean time everything in Greece will be bought and sold, including homes, fields, ports, everything.
That has been the trend since 2009 and it has not stopped since, not even after Syriza left government got elected and enacted even more austerity.
To understand the Greek crisis, we have to think in non-dogmatic terms and be flexible.
The economic plan followed by Greece goes something like this: privatize everything, ensure there is a 3.5% budget surplus, pay off the debt, and then once your sins are atoned for, the economy will go back to normal growth from zero.
The problem is that the debt can never be paid, and that the more Papaconstantinou took on harsh economic policies that cut down salaries and brought up prices, the more speculators were certain that Greece will never pay and that it will default, which resulted in the Greek economy getting even worse. The more Papaconstantinou tried to save the economy using the traditional methods demanded by Juncker, Schäuble, the ECB and IMF, the more markets didn’t believe that Greece can recover. Since nowadays speculation is a good way to make money, Greece fits as a perfect victim, small enough not to cause too much damage.
So, if Papaconstantinou was a patriot, which he is not, he would have said: well, the debt cannot be paid, speculators are against us anyway, our industries are destroyed since we joined the Euro since our products are too expensive now, so why listen to economists from Brussels? We should default, leave the Euro, and restart the economy. At least we can have some independence that way and provide a basic quality of life to our citizens, which now has vanished. But Papaconstantinou seemed to be, like many Greeks, motivated by a huge inferiority complex and guilt, and constantly sought to prove to others how European Greece can be, how it is not a provincial backward country but part of the modern west.
The price for this is evident for all to see by now.
But still the Greek traditional way has survived, for those who chose not to leave for Germany or the UK (by now, anyone who could have left did so). I’ve seen Greeks pump delicious olive oil from a large box in their own homes, their oregano and mountain tea is fantastic and super healthy (perhaps one more reason why to get it now before its gone 10 years from now), and their natural and cheap cosmetic products do wonders for the skin in a way that no expensive cosmetic product will do. In a few years, all the fields will probably be sold to Monsanto and we will be left with artificial and harmful medicines and cosmetic products, but for now, something has survived.
(Greek mountain tea known for its anti-inflammatory capacities, oregano, and other herbs. Will they exist in the future or will we have Monsanto seeds?)
In the coastal city of Volos, however, one has the impression that the economy is not as bad as elsewhere, though still it is pretty bad. Many nice boutiques and shops in good taste, selling at 70% discount. Graffiti in some places as everywhere in Greece but still the middle class respectability.
(Volos)
Nearby in the magnificent Pelion mountain region, by the sea, delicious fish and seafood can be found. I encountered a new German friend. The economy in Berlin is not good, he explained, things are too expensive. Therefore, he came to Greece to start a hotel. At first thought I figured that it’s funny how there isn’t much difference whatever I do in Greece, I will end up spending money that will go to Germany. But the truth is that many Germans of course have been suffering from wage stagnation and high cost of living. Greece’s debt is not ending in their pockets.
In cafes in Thessaloniki, the ancient city by the sea, where a youthful atmosphere prevails due to the existence of the Aristotle University of Thessaloniki but also in more somber Athens, I encountered more than once waitresses dressed in black. ‘Why do you dress in black?’ I asked the black-cladded woman at one opportunity. ‘Well, it is just faster to dress this way, it is easier. I don’t need to worry about what I wear. And also I feel sad.’
(Thessaloniki)
Most middle class youngsters I talked to seem to be wanting to leave. They gave up on their country. But to my disappointment they did not seem to understand or reflect on why the crisis took place, that there was a problem in the system, and that they have become a colony.
But the elderly have nowhere to go and their pensions are getting smaller and smaller. They are too weak to fight too, and they live long lives. Perhaps they realize something in the system was broken in the first place, that choosing to join the EU was a mistake, that Greece should follow an independent path in line with its culture and tradition, or even that post World War II a wrong path has been taken, perhaps not.
(An elderly woman in Volos).
Dimitris Kazakis, a leader of EPAM, a patriotic movement, recently told me that many people from New Democracy are moving to EPAM, after being disillusioned so many times, they are finally waking up and want their sovereignty back. Perhaps conservatives who woke up will save Greece, most certainly not the liberal Syriza-supporting dying middle class. The latter are fanatic believers in a failed system which no longer serves.
