With Greece now in Grimbo, a journalist, James
Angelos, formerly of the Wall Street Journal, has produced a timely
book, The Full Catastrophe: Travels among the New Greek Ruins, which
details the endemic cynicism which brought Greece to its knees.
Millions of people, not just Greek governments,
played their part. Among the many examples: the Athens subway services a
population of five million people but operates in a constant state of
insolvency and subsidy because it uses an honour system, which is routinely
dishonoured.
Then there are the swimming pools. According to tax
records, the affluent suburbs of Athens had 300 swimming pools and the
households paid a resulting luxury tax. When the tax department started using
Google Earth, it discovered 20,000 pools. When word of Google Earth got out,
there was a boom in sales of tarpaulins, to hide the pools rather than pay the
tax.
In the first week of March,
first-year students at the University of Sydney began gathering for their first
lecture in political economy. They found a slide already up on the screen
behind the lectern. It was entitled, 'the Communist Manifesto'. A young man at
the front of the room began espousing the virtues of Marxism. He urged students
to protest against the government and "bring down Tony Abbott".
He was not the lecturer. He was a
member of a Marxist fringe group calling itself Socialist Alternative. When the
actual lecturer turned up, the self-parody departed, knowing he would get away
with his antics.
Imagine what would happen if the
Socialist Alternative, via a twist of Greens, GetUp! and Ricky Muir-type
political machinations, achieved a position of power in Australian politics.
Nightmare. Because this year
Greece chose its own version of the Socialist Alternative as the government.
The country is now in a predictable state of paralysis.
The situation is so dire that it
no longer really matters whether the vote was "yes" or
"no" in the national referendum on how to respond to its
mountainous debt obligations.
Greece has already entered a
condition being called Grimbo.
Greek limbo.
The emergency referendum is so
shambolic that it is a vote about an agreement which no longer exists.
The referendum document is 34
pages of convoluted obfuscation which does not even accurately represent the
agreement proposed to Greece by the European Union, the European Central Bank
and the International Monetary Fund. And the agreement has lapsed.
Chaos has taken precedence.
Greece is now in such a parlous position, with economic paralysis a reality,
that its politics has been overtaken by an economic crisis that requires
foreign intervention to avoid widespread privation.
Without this foreign
intervention, Greece will face economic disintegration and a mass exodus.
Greece may have the most generous
pension scheme in Europe but it ceases to be generous when the font of other
people's money runs out. The Other People have had enough.
The shape of the foreign
intervention in Greece is now what must be negotiated. Greece is now a
mendicant state.
The Greeks are not entirely to
blame for this. At the heart of the crisis is the fundamental flaw within the
European Monetary Union – the eurozone – which at its centre is deeply
undemocratic. Since 2010, the European Union, the European Central Bank and the
IMF have also embarked on a course of action which, to protect the eurozone,
has imposed an economic depression on Greece.
If the Greeks are not entirely to
blame for their predicament, they are still largely to blame.
They borrowed the money. They
wasted the money. They refused to reform. They did not follow the paths taken
by Ireland, Spain, Latvia and Estonia, all much healthier after much sacrifice.
It began with the original sin.
The Greek government lied its way into European Monetary Union in 2001 by
understating its liabilities and giving false commitments to reform its
bloated, unsustainable and inefficient public sector. In the words of Otmar
Issing, the former chief economist of the European Central Bank, "Greece
cheated its way in".
Greece should never have been in
the eurozone, was never equipped, and the eurozone would have been stronger
without Greece, and would be stronger for its exit, known as Grexit. Instead
we'll get Grimbo.
In January, the Greek people held
a national election. The centre collapsed, not a good omen, and the country
elected a Communist-led government with no experience and a platform to end
austerity.
Greece voted against austerity.
It got calamity.
The leader of the victorious
Syriza party, Alexis Tsipras, 40, became Prime Minister on promises to reverse
some reforms already undertaken, oppose further reforms, re-hire 12,000
government employees, protect the most generous pension scheme in Europe and
stand up to the European Union, the European Central Bank and the International
Monetary Fund, who, he claimed, were trying to "humiliate" Greece.
It was never made clear how the
Greek government would pay for its promises or induce its creditors to keep
lending money and wipe out much of the debt.
Tsipras chose Yanis Varoufakis as
his finance minister, an academic economist with no experience in government,
specialising in game theory and with a long record of open contempt for
successful, pragmatic conservative governments.
When their game theory did not
accord with reality, Tsipras and Varoufakis ramped up the rhetoric.
Yet Greece has low borrowing
costs, a manageable debt service burden (2.5 per cent of GDP) and has been
given the widest latitude ever afforded by the IMF.
It is not just Greek governments,
right and left, that refused to reform. It is the Greek people, who have made
tax avoidance and welfare scamming the national sports.
With Greece now in Grimbo, a
journalist, James Angelos, formerly of the Wall Street Journal, has
produced a timely book, The Full Catastrophe: Travels among the New Greek
Ruins, which details the endemic cynicism which brought Greece to its
knees.
Millions of people, not just
Greek governments, played their part. Among the many examples: the Athens
subway services a population of five million people but operates in a constant
state of insolvency and subsidy because it uses an honour system, which is
routinely dishonoured.
Then there are the swimming
pools. According to tax records, the affluent suburbs of Athens had 300
swimming pools and the households paid a resulting luxury tax. When the tax
department started using Google Earth, it discovered 20,000 pools. When word of
Google Earth got out, there was a boom in sales of tarpaulins, to hide the
pools rather than pay the tax.
Sydney Morning Herald columnist
Illsutration: Michael Mucci
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