Day of Epiphany… but not for Hellas!
Today is the Day of Theophania, literally meaning the manifestation or appearance of God. This is the day we commemorate the baptism of Jesus Christ, the Son of God, in the Jordan river. In the tradition of the Greek Orthodox Church, this is a feast of hope.
Epiphany 2010 is though hardly wrapped in hope, when it comes to the worldly concerns of Greeks “on the ground.” The country is broke. She was broke for the longest time of course, but no politician dared hit the panic button for fear of losing in the next election. Now, though, the whole world seems to be coming down hard of the government of the Greeks with the demand that they begin shaping up in order not to ship out – permanently (although, there are some imaginative alternatives that seem open to this country provided her ‘leaders’ prove good in the game of chicken).
Greece is in the red to the tune of some €300 billion. That’s a lot of money. The amount translates into roughly €30,000 in debt per person living in Greece (that would include all barefooted illegal immigrants). There isn’t one single person that counts as member of our “political elite” who is free of responsibility concerning this deep hole we have dug for ourselves. Well done, I say.
In such times of crisis finger pointing is the least of all recommended approaches. Yet, politicians won’t pass the temptation to jab their opponents with a few nasty words now that things have become so bleak. PM Papandreou, the hapless, laptop-totting “Giorgo” (George) of the PASOK socialist party now in power, has been monotonously dropping accusations on his conservative predecessors over the plight of our economy. Not a peep though on the fact that PASOK was in power for nearly 19 years between 1980 and 2004 and actually instituted and unabashedly promoted the headlong borrowing that has broken the Greek economy.
It’s amazing how weak politicians’ memories are, isn’t it?
Our European “partners” are justifiably worried. The Greek predicament has already displayed signs of unnerving markets and impacting on the euro, this strange, hybrid currency that was instituted without any real political convergence of European “union” member countries into a federal scheme. To say that the euro is an “artificial” entity would not even begin to delve into the more esoteric reasons for opposing its creation and implementation.
I am personally not very adept at the Dismal Science to be able to offer any reasonable arguments on the issue, but I can see some of the results of having the euro as the national currency. One of the most prominent such results is that the politicians in charge cannot print banknotes in order to plug the gaping holes in the economy. This is not necessarily a bad thing. Devaluing everything drastically, as Greece did, in order to adopt the euro is.
The PASOK government is lost in space on what to do with the debt and the budget deficits. You see, Greece exists on borrowing. If loans would stop tomorrow, there would be no money to pay the legions of mostly loafing “public servants;” to pay pensions; to keep public hospitals open; to operate ports and airports; to finance “the plan for public investment;” and to keep the lights on.
Every month the Greek Finance ministry needs to sell government bonds in order to gain liquidity. This paper business is now entirely out of control. There is so much Greek government paper in the hands of lenders that this country would be wiped off the map if only some of the lenders would arrive at the doorstep with demands to get their money back.
Our “friends” in Brussels know this, of course, and they are primarily concerned with protecting the “credibility” of the so-called “European Monetary Union,” that is to say, the rate of the euro, not to mention its capacity as safe currency for non-EU members to hold in their vaults. They won’t hang Greece – yet – but they are stepping on Papandreou’s Adam’s apple to pass the message that something must be done NOW !!!
Hence, Papandreou’s “economic team,” comprising some of the most uninspiring and glaringly untalented talking heads, is busy with one thing: forcing more taxes out of a traditionally tax-evading, tax-avoiding public.
Of course, these gurus have missed the chapter in the ECON101 introductory text that says taxation won’t dent enormous deficits, like those faced by Greece, one iota, even if it is implemented with Seljuk determination and concomitant tools (massacres, for example, of those who fail to pay the levies). The gurus, for obvious political reasons, are unable to touch the core of the answer to the problem: shrinking the public sector down to a size that could be seen as “normal” for the overall size of the country.
And so, we sail without compass and without rudder. Papandreou though, like all incompetents faced with crises, is big on talk. His cartoon helpers are also Looney Tunes busy, all the time. There’s much to and fro and flying visits to Brussels. And there are press conferences, always replete with more ominous “thoughts” about tax measures that aren’t “tough,” just “fair.” The net result of this circus is that capital flight has begun in earnest – a suicidal impact under the circumstances – and that the domestic market has fallen into complete catatonia.
Well done, Giorgo!
Today, we should all be praying hard for a revelation. Although, I think, the good Lord has become too exasperated with the Greeks. This time around, Hellas needs to find a solution without the help of divine intervention.
Stavros wrote,
What is required is to exit the EU and throw out the albatross around our neck. Declare a default, round up all the fraudsters that ripped the coffers and squandered the assest, serve them the deserved punishment and start again from zero. If we can not do that, then we shall continue merrily navigating toward the edge of the precipice.
Link | January 6th, 2010 at 14:57
Ismini wrote,
Stavro I don’t think the EU is the problem, in fact many many good things have happened to Greece since joining the EU. It is us the Greek people and our incompetent politicians that are responsible for this mess. I was in Greece very recently and people are now getting desperate and yet you see 4X4’s all over, the airport was full with people travelling to Europe for their Christmas break and the shops selling their goods at full price! I don’t think we should be blaming Europe for our own faults. Greece is a country in crisis with its people refusing to accept it.
I agree with your views Demosthenes!
Link | January 7th, 2010 at 10:38
Ismini wrote,
Oh, I almost forgot: Happy New Year to you All!
Link | January 7th, 2010 at 10:39
Stavros wrote,
If we think and believe the EU is not our problem, then we ought to accept our situation with stiff fortitude and a doe of stoicism. The bottom line is that our nation does not exist as an independent nation. Decisions affecting Greece are taken elsewhere and handed down upon Greece as recipes. The orgiastic loans ,and dependency strings attached to them, Greece was given by the EU over and over was and it could never be justified . If we are bankrupt, the other constituents members in the EU are not far off, relatively speaking. It seems clear that since we are not responsible for our fiscus ( how can we carry responsibility for loans and grants created out of thin air , and ensuring our utter subservient and servile condition to the usurious lenders ? ) we can only carry a limited responsibility in so far as the capacity and acumen of our functionaries to execute the directives of the real masters of the purse . We Greeks are no more corrupt, inept or careless than the serial parade of corrupt officials from the EU power brokers, who patronize and deceptively demonstrate support for us. A Karamanlis or Papandreu or anyone else doing its shift behind the wheel of government, is just as deliberately incompetent, not clueless, functionary as the Browns or Merkels or the buffoon Sarkozy .Our Greece of today has reverted back to the role we had in the age of the Ottoman yoke. We were a hamlet of that enslaving empire. Today we are a piece on the EU chessboard, a spiritless pawn , a hamlet in the EU configuration. Greece’s economic woes can not be resolved on the basis of real economics, the solution will now have to found from an EU political basis, not an economic one. Nothing can irk more the soul of a Greek than seeing the EU burlap flying next to our national flag for ever more. It is the sign of our dependence on others rather than ourselves. This dependency will only become deeper and deeper as long as we remain inside the EU and without our independence. Rather poor , segregated and independent , than “rich”? integrated and interdependent.
Link | January 8th, 2010 at 10:06
Brekis wrote,
“I was in Greece very recently and people are now getting desperate and yet you see 4X4’s all over, the airport was full with people travelling to Europe for their Christmas break and the shops selling their goodsat full price! I don’t think we should be blaming Europe for our own faults. Greece is a country in crisis with its people refusing to accept it.”
Retail in Greece has taken a massive nosedive in the last few months though. Apparently the Christmas shopping was nothing special. Greeks do travel abroad during Christmas, true, but not in great numbers.
I agree with you though that Greeks do overspend and mismanage their money. Greeks crying poor yet it’s ok for them to pay off a new car, or go on a longer vacation etc. It amazes me how quickly Greeks took to this consumerist model. When i first visited the country in the early 90’s, there was nothing like that at all. Then when i returned in 2004, that’s all i saw. People spending money like it’s water. The entire culture had changed.
If Greek doesn’t get its act together soon, it will go the way of Italy, and it’s already heading in that direction as we speak.
Link | January 13th, 2010 at 20:43
Ismini wrote,
A major factor to the easy spending is the availability of credit. I was brought up in Greece and the concept of credit card came in the 90’s and was widely developed the past decade. Mortgages and bank loans suddenly became more and more popular with approachable interest rates. I remember that interest rates for borrowing were at 25% in the early 80’s so not many people borrowed. Now it is so easy to obtain credit.
I have lived in the UK for the past 20 years and it is a similar story. People here have sunk into debt because of the availability of credit.
The difference is that in the UK you see that the shops drop their prices, they replace their cars with cheaper models and cut back on their holidays abroad.
Greece is a poor country with apparently rich inhabitants.
Link | January 13th, 2010 at 22:56
Margaret wrote,
I think there are differences in what the culture of a country values. France, for example, hates vulgarity of any kind (which is why some struggle with Nicholas Sarkozy), and most interaction between people takes place outside their homes, and they are very very proud of their heritage. Almost nobody has a car bigger than a Megane scenic, and driving a car that is not French is difficult indeed. Since nobody sees your house, there is no real competition to have the biggest, and education (specifically, the number of years spent in education, and attending those grandes ecoles) still sets the elite apart. The nice thing about that is, leaving aside the aristocracy, and given that there is almost no tradition of private education, it is possible to rise through the ranks and, with a good education behind you, feel secure about yourself.
The UK. We’ve always had a “company car” culture, so cars define us. We haven’t (until the last decade) had many good restaurants, so we entertain in our homes, and so these become status symbols. It still matters where you went to school, and we have a repulsive tradition of privately education which makes social mobility much more difficult. However, a good degree from a good university will still matter more than your car or your house. So, though to a lesser degree than France, who you are is still more important than what you own, and there is a tinge of the hatred of vulgarity and a denigration of those who use status symbols to replace their educational achievements.
I am sure that America, Greece, Germany all have preferred ‘drivers’ which motivate people to achieve, and it is possible that the motivators that Greece used to espouse (as a completely independent state) changed once it joined the EU, ceded some of its sovereignty and became a junior member of a well-established family. Not a great position, and one that perhaps encourages a desire to show-off, to assert yourself (? Olympics). The most immediate way to show off is to show what you own, since the other things take more time to acquire. Of course, those Greeks who already own the badges that, say, France respects, have no need to compete by showing off their wealth, since their existing badges are already worth more.
It’s human behaviour. Understandable. And, in my view, underlines the priority that should be given to education, especially university education. A priority which my country seems to be ignoring currently. I understand that too. Confronted by seductive bling, it takes a well-reined in ego to remember what is really important. Show me your new, huge, 4×4, and I guarantee I’ll feel a burst of inferiority. Tell me about your fabulous five star holiday, and my rustic holiday hiking will seem grey. For a while.
Link | January 14th, 2010 at 10:38
Brekis wrote,
“I have lived in the UK for the past 20 years and it is a similar story. People here have sunk into debt because of the availability of credit.
The difference is that in the UK you see that the shops drop their prices, they replace their cars with cheaper models and cut back on their holidays abroad.
Greece is a poor country with apparently rich inhabitants.”
The motivations are different i think. Greece has just experienced its first real wave of consumerism comparable to the rest of the West. Now that they have a ‘tastes’, they are more reluctant to give it up. In other countries, we had had plenty of waves and people decide to relieve the stress. Most of my friends are the same. I don’t know anyone in Greece that earns what some of my friends do, and whenever a crisis occurs, they downgrade, regardless of how much they are earning. Greeks have a completely different mentality. They just like to spend.
Also, Greeks don’t spend as much on their homes i’ve noticed. They are more focussed on the external, what people can see, so keeping a nice car is important, even if they can’t afford it, which a lot of them can’t IMO. A lot of these younger Greeks can only afford these luxuries because they live at home. I’ve known of Greeks that make 1200 Euros a month and drive Audi’s and BMW’s. Surely that is not a reflect of their _real_ earning and spending power. It’s easy to acquire these things if your family is still paying the bills.
As for travel, Greeks don’t really travel abroad in high numbers compared to other nations, unless that has changed significantly in the last 3-4 years since i last viewed the statistics. Most Greeks take holidays inside Greece.
Link | January 14th, 2010 at 14:33
Ismini wrote,
“Also, Greeks don’t spend as much on their homes i’ve noticed” I agree with most of what you write but most Greeks still have two houses (a main residence and a holiday house or a house in the village) most of them without a mortgage. Mortgages is a very recent trend.
Link | January 14th, 2010 at 18:21