Europe's Big Fat Greek Default

One of the founding cultures of Western Society, where the ancients prized learning independent of ethnic status, where rigorous inquiry flourished in spite of (and because of) the tyranny of the state (think Socrates), Greece has become the face and fallout of big government largesse, welfare state redistribution, and the failure of corruption and graft at the expense of a strong work ethic. And may spell the end of the Eurozone.

In the next week (if not at press time), Hellas, alas, will default on their IMF debt, and exit the Eurozone. Even though the current, left-wing government Syriza proposed a referendum, the Greek voters will have little to refer to, since national and corporate creditors are shouting “Arketa!” (Enough!)

Greece is teetering on the brink, and headed toward default, and becoming a failed state. What has happened to the heart of the Aegean, the home of independent city-states where commerce and culture first thrived, giving birth to the Western World?

I am not Greek myself, but I have spoken with Greek expatriates here in the United States. When I told one Greek that I was meeting another, he laughed, then advised: “Shoot him on sight!”

Wow. Feel the agape (love). And I thought they still had a major beef with the Turks! But seriously, what has brought the Greek economy to its knees?

The first thing that some Greeks tell me: Greeks.  Is the culture dearth of a work ethic really the case? One blogger outlines that a small fraction work little, get little; and there are those who work a lot and get great pay. The problem is that there are many in the private sector (or what’s left of it) who get pitiful pay, and then the scores of government workers. . .:

And there are also many people who are paid lots of money to sit on their assess and do nothing – while getting to retire early and enjoy other perks.

By the way, in Greece, Public “servants” retire on very generous pensions. Houpa!

Another rampant boil in the Greek body politick? Corruption. The New York Times reported on the leniency law now giving corrupted public officials the liberty to report on the multi-million dollar bribes they receive for defective equipment. One former government minister took so many bribes, that he lost count of the amount of money he took in:

Greeks are hardened to stories of corruption. But even they have been transfixed by Mr. Kantas’s confessions since he was arrested recently on a litany of charges including money laundering and behavior that was detrimental to the Greek state. Never before has an official opened such a wide window on the eye-popping system of payoffs at work inside a Greek government ministry. At various points, Mr. Kantas, who returned to testify again last week, told prosecutors he had taken so many bribes he could not possibly remember the details.

 

Rioting in Greece (2011)

 

Other reports detail that Greeks pay nearly one thousand euros a year in bribes.  Such brazen government hustling deserves a standing ovation. Someone throw some plates.

Of course, Greece should never have entered the Eurozone in the first place.

The BBC reported why Greece struggled at first, and was rejected the first time:

In 1999, Greece was left out of the Eurozone for failing to meet the EU's economic criteria.  To qualify for euro membership, the Greek Government had to adopt a tough austerity programme, making deep cuts in public spending.

Haven’t we read this Greek tragedy before? Not Sophocles or Euripides, though.

How did Greece meet the “Maastricht” requirements? The Greek government gave an impression of making tough decisions, but also relying on EU leniency, allowing them to enter but work on maintaining their fiscal and monetary policies in place.

BBC reports that that work turned into accounting tricks from cagey accountants:

Take the Greek state railway. It was losing a billion euros a year," Ms Xafa remembers.

"The Greek railway had more employees than passengers. A former minister, Stefanos Manos, had said publicly at the time that it would be cheaper to send everyone by taxi."

The authorities used a neat conjuring trick to make the problem vanish.

"The [railway] company would issue shares that the government would buy. So it was counted not as expenditure, but as a financial transaction."

Of course, other creative accounting from Goldman Sachs later came in handy, too, and all in time for the 2004 Olympics. A spokesman from the Greek government reminded the BBC reporters that other countries had been engaging in the same budgetary sleight of hand. Furthermore, France and Germany (the largest members) had broken the Eurozone rules already, exceeding the percentage of debt in relation to their Gross Domestic Product. No matter which side one falls on, though, for placing blame, Greece is going bust, and the country’s residents and representatives both had a hand in the handling of their country’s weak finances.

Americans shouldn’t worry. Our Constitution never enshrined democracy as the source of good government, individual liberty, and limited rule. Democracy is always “Two wolves and a lamb voting on what’s for dinner”. Besides, Greek democracy has not aged well. In this clip, a Greek Committee Chairman announces majority approval for a slew of amendments, yet no one even voted. The Current Prime Minister has rebuffed creditors, then put the country’s future to a vote. At least they held Truth Committee meetings on the country’s debt.

Because of a culture of graft and corruption, plus “democratic” confiscatory policies, the Eurocrisis is eating the Greeks’ lunch. . .or should one write baklava?

At least the German, French, and private lenders should feel some pride. Finally, someone is saying “Arketa!” to the endless bailouts. Now, Greek banks have closed and are rationing ATM withdrawals.

Will the “Grexit” tank the global economy? Only if other member states follow suit. How fitting and yet ironic that Greece, the womb of Democracy, may in turn become its tomb, as their last bailout is set to expire. Yasou!