Why did Greece fail?

With the Greek economic tragedy still unfolding, there have been countless analyses trying to explain it. Many of them are accurate but, being written mostly by professional journalists bound by political correctness, very few that dare to state the cruel truth as it really is: The majority of Greeks are morons. There, I said it. I’m Greek myself so I’m allowed to.

But how did the country get into this mess in the first place?

After WWII there was a civil war between communists and nationalists. Most Greek families today have lost relatives on one side of the conflict or the other, so it’s still a sensitive subject. Although the nationalists won, there was (and there is still today) a huge communist element in society. So much so that the CIA felt obliged to install a military junta in 1967 to prevent the Soviets from absorbing Greece into their sphere of influence. The dictatorship was finally deposed in 1974.

But our story really begins in 1981. Greece is admitted into the European Economic Community (not EU yet) because of the “historical debt” the West owes her. That sort of discourse was typical of the wide-eyed European visionaries of the time. It also helped to safeguard against any further Soviet influence.

Around the same time, the Panhellenic Socialist Movement (PASOK) scores a landslide election victory and Andreas Papandreou becomes prime minister. I was very young then but I still remember ecstatic crowds celebrating on the back of pickup trucks, waving little plastic flags with the party’s logo: the green rising sun.

“Give it all away” the populace demanded, and Papandreou happily obliged. Free money started raining on everyone, but especially party members. My grandmother was being subsidised by the government (with European money) to grow tobacco while at the same time the EEC was also paying for anti-smoking campaigns. Hundreds of thousands of people were placed in newly-created and totally unnecessary public sector jobs. People started getting extremely generous pensions, and lump sums at retirement that were multiples of the employee’s overall contributions. But free money from Europe wasn’t anywhere near enough. The government borrowed heavily to keep everyone happy and voting for them.

After two terms of that, eight years later, the conservatives (New Democracy) came to power. But guess what? They continued the same populist/socialist “free money” policy. They would never have won otherwise. The country was split between “right wing” and “left wing” not in a real political way, but about which clique would give “their own” public sector jobs.

Reason gave way to populism. Governments were being elected by bribing the electorate with subsidies and public sector jobs. Nepotism, corruption and inefficiency became the status quo and anyone who challenged it was a weirdo. I still shudder when I remember the day after each election that led to a new government. The heads of public organisations had to submit their resignation and be replaced by the new government’s own people. That was considered totally normal. Even in the late 90s, I was talking to a Greek classmate at university in England and he said “I don’t expect to get a great job when I go back to Greece, but New Democracy will win the next election and then we’ll be fine”. “We” as in himself and the rest of his family.

“Profit” became a dirty word. As everyone was used to money falling from the sky, entrepreneurship was frowned upon as antisocial and selfish. People abhorred the “rich” but at the same time they felt entitled to a “comfortable standard of living” without much effort. Effort and risk are an evil capitalist invention, you see.

However, the aversion to risk is sometimes overtaken by greed. 1999 was the year of the Greek stockmarket crisis. The stockmarket kept going up and up and, lured by the prospect of more “free money”, around a third of the working population of Greece bought shares. Share-dealing centres opened even in small villages. The more people bought, the more shares went up. When inevitably the bubble burst, everyone blamed “speculators”. The little guys who had no idea what they doing were the good investors and the big guys who knew exactly what they were doing were the evil speculators: rich and ruthless people… foreign powers… the government… freemasons… George Soros… “The Jews”… It’s everyone else’s fault that we lost our money except ours. It gives you an idea of the financial maturity of the average Greek.

The aspiration of young people was to finish university and then get a job in the public sector, usually as a teacher. By finishing a Maths degree you were guaranteed a place in the queue for a maths teacher position. From time to time people were absurdly complaining about the “thousands of young unemployed teachers”, referring to fresh graduates. How can you be an “unemployed teacher” if you just finished university and you were never a teacher in the fist place? With the same logic I’m an unemployed astronaut.

In 2001 Greece entered the eurozone by blatantly lying about its finances. Prices shot up ridiculously but people were still willing to pay them “because we’re European now”. Besides, pretty much everyone had a secure, guaranteed income with all that borrowed money coming in.

In the early noughties, the Greek government of the time (it was the socialists, but I’m sure the conservatives would have done exactly the same thing) found that with the good credit rating the euro bestowed on the country they could borrow more money to give away at very low interest rates. As if the country wasn’t in deep debt already, they resumed their borrowing with renewed enthusiasm. The country was getting close to the closing act of a comic tragedy that spanned over a quarter of a century.

Eventually, the “free money” ran out.

Theodoros Pangalos of the PASOK party put it succinctly: “We ate it all up together”, meaning both the politicians and the people who voted for them. That statement was as close to the truth as it gets.

Greece is a unique, weird place. A corrupt economy strengthens the power of unions and trade associations, the people put their trust on demagogues, professional “cliques” zealously protect their interests and try to bar newcomers, everyone sees all public services as absolutely necessary (even the railway, which no-one uses and bleeds millions of euros a day) and they want money but they don’t want to make any.

The leader of Syriza, the main leftist/communist party, celebrating becoming the second-largest party in Greece. The hammer-and-sickle flag flies in the background.

The leader of Syriza, the main leftist/communist party, celebrating after becoming the second-largest party in Greece. The hammer-and-sickle flag flies in the background.

There is no easy solution to the crisis. A default and return to the drachma would bring even more suffering and ultimately lead to more long-term misery. The only solution is acceptance of the fact that one ultimately has to stand on their own two feet without expecting government support of any kind. That, and a 30-year austerity plan, combined with leases of currently uninhabited islands, rational privatisation of public companies at the right price, and opening to investment and competition, with stable and predictable tax rates low enough to attract foreign investment.

The parties who support these things didn’t even get one seat in parliament in the last election. The fascist party got almost 7% and the communists (and near-communists) around 35%.

Greece, whatever happens to you, you deserve your fate.

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