Wednesday, 6 July 2011

The Media's Greek Myths.

 Greedy, Lazy and Venal.

The narrative which has sprung up around the crisis in Greece has taken a ethnic-cultural line, just as the French claimed that the financial crisis was an "Anglo-Saxon disease" which has nothing to do with the Continent. Now we hear that the Greeks are "venal" as well as "lazy" and "greedy" even from the commentariat and not just from the Right. We are told that the protests are really about keeping the "Greek Gravy Train" flowing, you will have no doubt heard of the rail workers who are paid £60,000 a year and the shameful way hundreds of professionals are being allowed to retire at 50 - though the average retirement is actually 62. What you won't read about is the way that a lot of Greeks have not been paid in months and even more are unemployed. The same goes for the other racist claims, the Greeks are supposedly a "lazy people" and yet they work around 2,120 hours a year compared with about 1,712 hours a year in Britain and 1,473 hours a year in Germany. Out of the OECD countries Koreans are the only people who work longer hours than the Greeks.

The "out of control" spending in Greece amounted to 44.6% of GDP from 2001 to 2007, which was not a huge deviation from the European average for most of the decade. The relatively high level of public debt in Greece, before the crisis, goes back to the 1980s when the country was still recovering from the military junta that ruled the country from 1967 to 1974 with the support of the US. There is a genuine fiscal weakness in Greece and it is not in public expenditure, it is the low level of tax revenue which was exacerbated by the recession that has led to a consequent fall in tax revenues as the level of unemployment rises. So it should not be a surprise that tax revenue is a lot less than predicted as the cuts hit ordinary Greeks. As the crisis hit Greece there was a jump in spending to 50.4% of GDP in 2009 and that is still the average expenditure in Europe. From 2001 to 2007 the total spending of the EU amounted to 50.7% of GDP, out of the 27 member-states 13 had spent more than Greece.

Then there is the line that the greedy Greeks have eaten the bailout funds and have continued to live in an excess of luxury. It is as if these are the spoiled brats of Europe who must be knocked in line with the rest of us! The austerity measures introduced previously have reduced public spending by €700 million than the IMF and the EU had demanded. €110 billion was handed over to European banks and Greece has been saddled with still more debt and rising interest payments. A bailout is not intended to pay for Greek welfare, it is intended to stabilise the European banking system and drive the Greek economy into meeting austerity targets. The impact will be no growth in Greece for years to come and a significant fall in the standard of living. The Greeks are expected to sign on for a €12 billion loan installment which will prevent a default for the time being, the preconditions for the loan are the austerity measures that were only just passed despite popular opposition.

Greece has not been bailed out, but the banks have been and the European country that has defaulted more than any other in the last century is Germany. Germany was excused from reparations to countries that it had invaded. The loans and occupation costs Germany had pressed out of the countries it had occupied in World War II were not paid back. Especially not to the Greeks. Germany didn't even pay back the US for the loans that were used to pay the reparations levied on Germany after World War I. As Albrecht Ritschl said, Germany was the biggest debt transgressor of the 20th Century. The decision on Greece has been delayed on the next bank bailout in the EU, the package could be around €160 billion which is meant to further the cuts that have already bled public services dry in the country. But it is true that a default on the debt is inevitable, it is only a matter of when and how at this point. The default should have come earlier rather than later, which is what is most likely to happen.

It is undeniable that the Greek government has some responsible for the mess, especially in regards to the collection of taxes, but the links of the crisis to the Greek national character and culture are nonexistent. The crisis is an economic one, it is international in scale and the responsibility of all Western politicians. We should keep in mind that it is Sweden that spends the most out of the European countries and yet there is no debt crisis. The reason being that the tax system is a lot better in Sweden, the same is true of France and Denmark. Greece was welcomed into the Eurozone with open arms before being encouraged to give up the Drachma for the Euro. The situation seems to confirm that a monetary union requires fiscal and political union, whilst the average Greek is being forced to pay for the errors of politicians and the recklessness of the European banking system. Naturally the Right has jumped at the opportunity to use this crisis as a stick to bash the European Union with. 


Anonymous said...

I'm sorry, I simply don't agree with your article. I am from the UK, and have lived and worked in Greece.
Greece is just a ridiculous enclave of staggering opulence and greed. Whether or not Railway workers do get paid £60,000 PA, certainly the cleaners at my public sector workplace (in Thessaloniki) were being paid 30 EUR per hour- representing an annual wage of £55,000 a year. In the UK a similar role would attract a salary of around £11,000 a year.
The claims of the metro in this article are totally true, no one pays.
Greek pensions are ridiculously high, with some pensioners receiving as much as 5,000 EUR a month- IN the UK a state pension would be something like 700 EUR a month if you were lucky.

Greek schools are overstaffed and over-resourced (this is where I worked on an EU teacher exchange programme), with far to many teachers spending hardly any time teaching; and getting paid twice what I get paid in the UK to do so. In my school for example, there were more computers than children.
All of the kids have the very latest technology which their parents have bought for them with their high wages; in fact nearly every single child in my class had a iPad as well as one or two iPods.
It is virtually unheard of for a 16-18 year old student at school to have to work. This is the opposite case in the UK.
In addition, the social welfare provisions in Greece are simply staggering. One can receive 440 EUR a month just as basic unemployment benefit; with the paper claiming that some families receive 45,000 EUR a year in benefits. The comment about hours worked is simply untrue; I do not know where you got that statistic from, because official EU statistics show that Greeks work the least amount of hours for the most amount of money. An EU report also shows that, based on *accurate estimates" of income (i.e. including actual income and not stated income), the average earnings of a Greek are the highest in Europe by 5-6,000 EUR a year. And I can believe it. The difference in the standard of my life in Greece compared to in the UK was staggering. Most of my colleagues in the school were frequently making trips to Singapore or the USA.

Its nice that Greece has such a terrifically high standard of living for all, and that the entire population seem to live in a permanent state of luxury and indulgence; but not when other EU countries are footing the bill.


Teacher (Greece and the UK)

Anonymous said...

Further to my previous comment (I am the teacher), I accept the proposition about hours worked after looking. However, regardless of how the media portray Greece (which incidentally a wonderful country, I think it is time that Greeks stopped complaining about their economic situation when they have it so good compared to the UK or Italy.

George said...

I think its not correct to say that Greeks don't earn very much; certainly the ones I knew earned a lot more than they would in say Germany or the UK. Lets be under no illusions, Greece is a poor country full of very rich people. The Health Service is absolutely fantastic by the way.

I think the comments on here are missing the point. I think most people won't deny that Greeks are among the luckiest in Europe in terms of personal economics and social welfare- However, the article does make the point that the austerity measures are also caused by bankers greed.

Perhaps if the banking system had been regulated better, and the government had collected taxes more efficiently Greece could have still maintained such a high standard of living for its citizens, whilst also remaining a strong EU economy. I think that Greece is capable of not being in huge debts, AND managing to pay cleaners 60K a year.