Regarding the Greek situation

Soon, the Greek debt will rise at $500bn. That’s the kind of debt that no small country can repay, unless it has invented, internationally patented, and marketed anti-gravity. So, let’s see why we’re where we are today, and what can be done about it.

The origins of the problem

One thing you have to understand about Greece is that since it became independent, 190 years ago, there hasn’t been a single time when the Greek economy and standard of living was “good”. See, if you look at Germany, France, UK, and even Russia and Romania, you will find stretches of time that measure in years where you could say that these countries had a “mini-golden age”. Greece never had such a golden age in the modern times. It was always under the danger of defaulting. And it has, at least 3-4 times. From the Irish Times: “According to a study by economic historians Carmen Reinhart and Kenneth Rogoff, the Greek state has been in default for almost one out of every two years since it was founded in the 1820s.

This financial situation has led to dictatorships, kings, and democracies come and go, like on a vicious cycle. And until the 1980s, this has kept the Greek people from living at the same standard as their European counterparts. In the 1920s, the bureaucracy had become so big that the public sector grew not only in numbers, but also in power. A law was enacted where from the moment you became a civil worker, you effectively couldn’t get fired.

This quickly created a two-tier citizenship in Greece. The powerful civil workers (who retire early, some of them work few hours, some of them working in offices are indeed lazy etc), and the private sector, which remained very underpaid, very hard working, and who’d retire at the age of 65. When Europeans today complain about the lazy Greeks, they must understand that Greece has a virtual cast system, and that not everyone is equal in it.

So, because of this social schism, the private sector had to resort in tricks to stay alive. They’d avoid taxes as much as they could. As the years went by, this whole mentality of corruption and “under the table business” was spread to every part of the state. From the poor workers, to the richest. Tax evasion is what everyone does, from the poor worker who pumps gas to your car, to the biggest construction company of the country. Being street smart was now how everyone was getting by in Greece. Want to see a doctor? Pay him under the table. Want to have your car pass the yearly examination? Pay the guy who does the checks. Want to get your case be heard at some civil office? Pay the clerk to just move his/her ass to go and find the file. In all truth, this kind of mentality was in Greece for centuries, but it amplified with the rise of the civil workers in the 1920s.

I was born in 1973 in Athens. In the first years of my life I lived in both big cities (Athens, 1-3 yo), small cities (Preveza, 4-7), towns (Louros, 12-18), and mountain villages (Skiadas, 3-4 & 8-11). One thing I remember very clearly from that early time is how many times I’d eat beans during the week. It was bordering to 5-6 times a week. Beans were our staple. And not just my family’s, but most of the people we knew too. We’d be lucky if some goat broke a leg, and my uncles had no option but to kill the goat, and share the meat among the family. The standard of living was a bit better in Athens, but not a whole lot better.

But after the inclusion of Greece’s in the European Community in 1981 something happened. Money poured in from the European countries to Greece. FREE MONEY, that is, in almost the most literal definition of the words. Not once in the past a country was ever so lucky to receive so much free money. That was such a major opportunity for Greece to get it right. Europeans wanted Greece to be part of the future European Union, and to be able to be as developed, money had to be given to Greeks, to make roads, businesses, develop more their agriculture etc, etc. In three decades, 240 billion Euros of European subsidies were given away to Greeks.

Instead, the money found three destinations. Divided, 1/3 went where it was supposed to go. Indeed, some new roads were made, some new athletic infrastructure etc. The other 1/3, the one that was given to businessmen to modernize their business and bring them to a European standard, went into building new houses for their family and buying cars. See, that money was like candy change for a street kid. Money was poured in to very poor people, so the natural reaction was to buy “luxuries” (if you can call a house that its floors are not made out of cow manure, a luxury — that was the case for many houses in Louros up to the late ’80s). Because the socialist PASOK wanted to be re-elected, they didn’t do anything about the situation. They just let the people “become happy”, so to get votes again. And they did.

The last part of that 1/3 (and maybe even more than just 1/3), was eaten away. By people who had access to it. Be it politicians, civil workers, the mob, rich people, it doesn’t matter. The point is, billions of dollars were eaten away, and that money never went where it was supposed to. They are probably in some Swiss banks right now, if they were not always spent away in cars, swimming pools and what have you. The point is, Greek lost a unique opportunity with that money back then, to modernize the country.

Another thing that was and is part of the problem, is the oligarchy in Greece. The career politicians are coming from families of politicians. While there are similar examples in the US too (e.g. the Kennedys), Greece has taken that to the extreme. 90% of same people are getting elected and re-elected all the time, and when they die, their kids, or their proteges, are taking over. The Greek political parties are like football clubs, with fan clubs, and fans that can be trusted to make trouble when asked. They are all populists, they are shouting at each other in a way that would land them in jail in any other parliament in this planet, they are short-sighted, and they are incapable of understanding what they’re into (consider that Greek ministries are NOT offered to academics or people of knowledge, but to these elected — so a dentist that got elected, might end up become head of the Education Ministry). Not to mention that the title of Greek President had true powers before 1988, and became just a ceremonial title after constitutional amendments that the Prime Minister of the time passed, ensuring that there’s only “one” person in power. The whole thing is power-gripped, and corrupted. Unfortunately, even if a new government takes over, the same underground people will still move the pawns. The only way for Greece to free itself from this political mob, is to not allow any of the politicians, behind-the-scene workers and their immediate families of these political clubs to be elected for 30 years. Take away their be-voted citizen right, destroy all political parties that have more than 5% of popularity. Politically, Greece must start from scratch in that front.

As much as I’d like to put all the blame to politicians and call it a day (as many Greeks do), the truth is that Greece is a form of democracy (yes, just a form). And as such, the citizens are responsible as to who they vote. Back in the ’80s and ’90s, you could have this bright chemist, or theoretical physicist, or mathematician just finishing up his university studies, and instead of trying to setup a research company to try and create “the next big thing in the world”, he has to go through almost two years of mandatory army service (doing nothing all day after the first 3 months of basic training, killing any urge to change the world via a new product, and forgetting what he learned at school), he then comes back to mom & dad and asks them to go and kiss the ass of their local politician to get him a job as a civil worker — sitting down all day, doing nothing of note, that is. And politicians did put these bright people in dumb, filling and data-entry positions, because they wanted to re-elected. Everyone was winning in their microcosmos they lived in.

But the country was losing in the big picture. Greece became a country that did not produce anything. Except feta, olive oil and tourism, the country was just living on virtual growth. And the civil workers made it difficult to get out of this terrible situation, by asking the government to “lock” certain modern professions (so only civil workers could do them), and by making it difficult to incorporate an LLC. Do you remember that Greek Android company that Google bought last year? The reason its two guys left Greece and tried their luck in the Silicon Valley wasn’t because they couldn’t get an internet connection from Athens, but rather because creating a new private company in Greece was a pain in the ass until recently, when finally Papandreou made it easier with a new law (acknowledged by the two engineers in a separate video interview).

At the same time, Europe has part of the blame too. They poured all this money to Greece, and they never checked it properly if the money was going where it was supposed to. They trusted Greece to be an adult, while Greece was just a little poor kid on the streets, and was just learning to become a spoiled teenager after it got adopted. As much as I’d like to put all the blame to “external forces”, zombies, Europe, vampires, and politicians in the last 30 years, the truth is that a lot of the blame goes to every Greek citizen. Every single one of them. They brought all this on to their heads for the last 90 years, and especially during the last 30 years.

Ah… the ’80s. What a nice time (*chillwave music plays in the background*). The time that we switched from beans and wild vegetation soups to chicken, beef, pork and Prada belts. Guess what kids: you now have to pay for a standard of living that was not symmetrical to what you generated as a country.

The blame of Europe does become more apparent and more serious in the last 10 years, when they started lending Greece even more money, on the promise that they will get their money back. There was no collateral, and they kept lending. That was not just a financial mistake on their part and for their customers, it was a crime against Greece. Every responsible bank is supposed to do the math if someone has the money (or the will) to pay back. ECB didn’t do the obvious math, even after Goldman Sachs helped Greece to cook the books. That’s how far the Greek corruption went, as to making illegal business with the GS sharks. Instead, Greece is now paying the price and GS still strongly sits in Wall Street like nothing happened (a bank that should taken apart by the US government in my opinion, for the problems they created to at least the American people recently).

And if the lending of money wasn’t enough, the paranoia that Turkey (also a member of NATO) will invade Greece has led to an arms race. Think of what was going on: France was lending money to Greece, to buy French arms. Let alone that most (all?) of the 12 Phantoms Greece bought in 1988 have crashed since during exercises (second grade quality?), killing most of their pilots. Not to mention that because of bribery to civil servants from foreign medical companies, Greece pays 3x the amount of money for medicines and medical instruments than any other European country.

So what can we do?

There are only two things that can be done, and unfortunately, Greeks today are opting for the wrong option. When will the citizens see the big picture? Don’t get me wrong, both options are SHIT. There’s no way back to the old standard of living. But there is a difference between SHIT and SHITTIER.

Shit option #1: Austerity measures, more bail-out debt

This is the solution that the current Prime Minister is trying to pass. The advantages of this plan is that, at last, more laws will pass that will make free enterprise and growth a possibility (but definitely not a certainty). At the same time, crazy pensions, 14 months of payments for 11 months of work, and other crazy civil worker benefits like these, are all cut out. Personally, I’m looking forward to these kinds of social changes. For the long run, even if it stings 1 million civil workers who have learned to expect a specific standard of living that is not analogous to what they offer, it’s the right decision. If bankruptcy fear is what drives Greece to corrects the sins of the past, well, then that’s what it takes. The truth is, the kind of civil worker system that Greece has is not sustainable. It must be shrinked considerably.

The disadvantage of this plan is that Europeans are asking to privatize all national wealth. From transportation to healthcare, from banks to selling islands. I’m all for privatization of certain elements, but as a socialist myself I believe that a righteous government should have the upper hand when it comes to resources that are important for its citizens in the next 100 or 200 years. For example, while I’m for selling a few small dry islands that no one is living on them, I’m against of selling water. With the dangers of global warming, overpopulation, and the decline of the sea life, owning potable water is very important.

Greece must be bailed out, but without selling out its main life lines. These must remain property of the people. Papandreou should only sell parts that are not vital to life in the future.

Shittier option #2: Bankruptcy and back to drachma

This is the easy solution. But easier said than done. See, with bankruptcy, and going back to the newly devalued drachma, Greeks can start anew. Unfortunately, this is not what is going to happen. Have you ever seen what happens when you remove the Hi-Fi system from the room of your teenager kid? Hell, that’s what. He comes back and trashes the place out of anger.

I’m Greek, I love Greece as my birthplace, and I terribly miss its beauty. But I do NOT trust the Greek people to live like Zimbabweans do. Because that’s what is going to happen if Greece exits the Euro. Forget buying a new cellphone every year, or a new computer. These will all be parts of the past. Instead, the standard of living will go back 20 years, and the country will need between 30 and 100 years to get back to its feet — if civil war doesn’t tear it apart before that time. Expect a lot of violence. Lootings, rapes, robbings. When Argentina defaulted 10 years ago (an argument that many Greeks bring as a positive example), 25% of its citizens had to live (and some still are) under extreme poverty.

In my opinion what Greeks ask today when they riot, or when they write such half-truth articles, is not a viable policy. It’s a pipe dream. They think that if they are left to their own devices, and Europe ungrips, things will be good. No. Things will be way, way worse. The international market is like a web, and no country can live alone. Greece does not even have oil, it imports 100% of it. Greeks who riot to leave the European Union and NATO are romantics, their idea of how to proceed can not work. Unless they want everyone to live the way people in North Korea do, which is not very nice, to say the least.

Instead, they strike, bringing the country to its knees even more, which results to requiring more bail out money to pay for these un-worked days. The more these idiots strike, the more the country dysfunctions. Strikes is the worst thing a citizen can do to an almost dead country. I’m extremely sad that the Greek citizens don’t see this. It shows great irresponsibility.

Some further ideas

What Greece needs to do is simply:
1. Get bailed out by Europeans, by convincing them that Europe without Greece will crumble. Get their money, but this time use it right. So far, Europeans do want to bail out Greece, but this will change in the next few weeks (mark my words). There’s no time to waste, from the Greek point of view, bailout is better than bankruptcy. With the right measures, the debt will be paid back eventually. Refuse to pay a part of the debt if lawyers find that some of it was illegal (like Ecuador did). But this “trick” can’t be done for all the debt.
2. Austerity measures where it matters, where it makes the country stronger, no matter if some civil workers don’t like it. Lower civil servant pays (it makes no sense that a private worker gets paid $800, when a civil servant gets paid $1950 on average), cut off the big pensions to no more than $1000 etc.
3. Privatization of only non-essential parts of life (current and future life). Fight corruption at all levels. Transparency everywhere.
4. Like India, become an off-shoring center for many things, not just software.
5. Start industries, make smart people create companies and products that international markets would care to buy.
6. Cut out the army service to 3 months. Stop buying arms, only parts if needed.
7. Ask people to go back to the villages where they came from. Ask them to use the land, make food. Athens holds 1/2 the Greek population, a negatively unique situation in the world.
8. Clean up the political system. Disallow all politicians and people currently in power from getting re-elected or serving for a number of years. Instead, the people who are eligible for that period should be under 50 years old, and never have been part of any political association before. Bring new blood into politics and put smart specialty people as heads of the various ministries.
9. Go back to the tax books, find the holes, and make the citizens and corporations pay of what they owe (there are terror cases of corporations paying $0 when they should have paid $15mil in taxes). While that money might have left Greece for Switzerland long ago, I wouldn’t be surprised if what is owed to the state by its own citizens and especially its companies, reaches to the heights of a trillion dollars.
10. Tourism, tourism, tourism. Put people to work, remove the Acropolis, and move it to a secure location. Rebuilt the Acropolis from scratch, according to how the archaeologists think it looked like in 400 BC. Rebuilt the Colossus of Rhodes. Greece’s landscape is also unique for extreme sports. But as my mom says, who I always found her to be the epitome of the very average Greek (in a bad way): “Allo ti tha kanoume. Tha paroume to ale3iptoto kai tha pame na pidisoume apo tis speles na pame na skotothoume. Den mou fernoun fai aftes oi vlakeies”.

Oh, and Greece is not just the islands. So far, 90% of all tourists go to islands, and that’s stupid. I bet most non-Greeks have never heard of Vikos, even if it’s as deep as the Grand Canyon (if not more). Except goats and a few know-hows, no one visit it. There’s another wasted opportunity to make money off of tourists. I can find about 100 such opportunities, that if I had all the money the Ministry of Tourism had in the ’80s in its hand (or was supposed to have), Greece would not be in this situation today. Even with all the rest of its problems in its back!

Heck, the place I come from, Epirus, is one of the best “blind spots” in the whole of Europe that can do astronomy better than any other place (especially because there are high mountains, clean non-polluted atmosphere, and weather is good too). And what has been done for that? Absolutely nothing. Instead of building roads that go up a mountain, and facilities up there so European amateur astronomers know about it and visit, I’m pretty sure that the idea has not even crossed anyone in Greece’s Ministry of Tourism, ever.

As much tourism Greece has (and has quite some), and Greeks think that their tourism is top notch, the truth is that tourism in Greece SUCKS. There are so many things missing, so much missing infrastructure (from public toilets to golf terrains — there are none). There is so much opportunity there, that make my eyes cry. If all that is not enough, there you have the Greeks essentially banning kite-surf. If this last part doesn’t show how short-sighted Greece can be, nothing will.

Make no mistake, I love my country. I close my eyes at night, and before Morpheus has taken me away, I’m that kid again, chasing hens in my village. I love my birthplace. But the good citizen is the citizen who says it like it is. Unfortunately, it’s my fellow Greeks who I disagree with in this case — and this puts me at odds, because unlike most blogs discussing the situation, I put the blame on the citizens too. I disagree with the Greeks’ expectations about entitlement, their beliefs about other countries owing Greece just for being Greek and having invented democracy (I didn’t know patents can last 2000 years), their kind of non-sustainable aspirations of getting a job that you can’t be fired etc. But I do love them for being so open, for always saying what they think, for being laid back and cool. But I can’t stand this short-slightness, both at a personal and national level. I left Greece to get a better future (since there was nothing to do there for the business of my then-fiance, and after I specifically commanded my parents to NOT go kiss ass to try to make me a civil worker), but I always, always dreamed of going back. The people at the day to day basis are lovely, the nature is beautiful. Hopefully, one day the political and financial climate there will be stable-enough for once. I hope during my lifetime I see this coming to fruition, and Greece becoming a true 1st World country. Not in the name only.

Additional reading: this article by Vanity Fair. A lot of Greeks hated it and found it anti-Greek, but the author has his head screwed on perfectly. Kudos.

Update: Another good article, saying it like it is.


alexandre wrote on June 20th, 2011 at 6:02 PM PST:

just a small rectification: USD 500 billion was the Brazilian international debt in 1982 ( that year alone, given the international oil crisis, the inflation was 95% with a peak in 1989 of over 1000% )… it all started in 1824 with a british loan of GBP3million, and it grow…

So, that is not unheard of such a debt being paid ( with 30 years of severe social damage… ) a gross simplification: our currency changed its name ( about ) 5 times over that period, each time being divided by 1000 ( so the prices would fit into the calculators’ displays ). Then the entire economy was indexed ( the currency no longer meant anything, just the index ) and then the index became the new currency to erase the inflationary culture…

Ivan wrote on June 20th, 2011 at 11:39 PM PST:

Great analysis E!
I hope many Greeks read this, because I think that you living away from Greece, has given you a clarity of view that most people in Greece are missing right now.
Today, it was in the news that Greece entered the EU based upon a fraudulent budget pronoses, with EU mandatories in the knowing. Why not start with putting these guys (literally) in jail?

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Eugenia wrote on June 20th, 2011 at 11:54 PM PST:

The cooking of books is mentioned in the article. It was done with the help of Goldman Sachs. It’s also explained in the linked Vanity Fair article in more detail. In a similar way the Lehman Brothers created a huge debt for Ireland too. It’s funny that whenever Europeans try to get into legally gray areas, they ask American banks to do it for them. 😉

Miloš wrote on June 21st, 2011 at 12:29 AM PST:

About tourism, I’ve been to Greece last two summers (Zakynthos, had a great time, and Lefkada, twas ok) and I think your are spot on about the need for more investment in tourism. There is a problem though, Turkey and Croatia (both not far away) have invested enormous amounts of money in their tourism.

Turkey doesn’t have as nice geography but they built some very impressive resorts with golf courses, water parks, great service and are often noticeably cheaper than hotels in Greece. Croatia with it’s numerous islands is very popular in the last couple of years, but it’s a bit expensive for my taste.

Greece’s chance, this year at least, is the Arab uprisings in Egypt, Tunisia, Morocco which made most people not particularly keen to go there for their vacation, but what do Greeks do, first they raise their prices. Fuel, food, accommodation, everything is more expensive than last year. Then they insist on these strikes which also make people think twice about coming even though the strikes are only in Athens and Thessaloniki, everybody else seems to go on with their business because they actually have to work for a living.

You are missing the number 9. under further ideas.

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Eugenia wrote on June 21st, 2011 at 12:43 AM PST:

Thanks, I added it.

Vassilis Perantzakis wrote on June 21st, 2011 at 5:50 AM PST:

Nice article, but you forget to mention a few things.

First of all, Greece had begun forming an industrial base for its economy from the late 1960s until the early 1980s. That changed when the newly elected prime-minister Andreas Papandreou (the father of today’s prime-minister) swaped his anti-EU views for a more “let’s take what we can from them” kind of view.

In exchange, however, Europe demanded that Greece changes from an emerging industrial economy to a service oriented one. As long as money kept pooring in it was accepted. So Papandreou based his whole social reforms on the money coming in. It was then that the public sector begun growing without any control, not in the 1920s.

Keep in mind that in 1981 Greece’s debt was under 20% of GDP, stable, and public officials where under 10% of the country’s work force.

20 years later, in 2001, the year before Greece entering Euro, public officials are almost 25% of the country’s work force. 1 out of 4 people is working for the state. During those 20 years, PASOK, Papandreou’s party had 16 years in power. The debt now has exceeded 100% of GDP.

So why don’t the other parties that come in to power fix the problem? Well, first there is only 1 other ruling party. When it ruled between 1991 and 1993, it took austerity measures that are comparable to the ones being taken now. However, it had a small majority of 1 (yes one) parliament member and it was opposed by a very strong labour union that were headed by the opposition party, led by Andreas Papandreou. Every change was sabotaged and Papandreou agreed to nothing. That government of course was doomed and collapsed. Then another 10 years of PASOK (2 with Papandreou and 8 with Simitis) began until the scandals of mismanagement and corruption brought it down in 2004, just before the Olympics. At this time, debt is about 105% of GDP.

The newly formed government led by Karamanlis has a difficult time making any kind of progress as it is opposed by the son of Andreas, George and the unions it controls. Mass Media had always been on the side of the “socialist” party and are making up scandals as they go. Even the personal indiscretion of a public official that attempts a suicide becomes a major issue, when a few years ago Andreas Papandreou’s indiscretion was the stuff legends are made off!!!

Karamanlis now tries to bring Russia and China, both emerging economic powers closer to Greece and the EU. With Russia he creates a new energy pact and with China a new commerce pact. This way, production will be coming to Greece again. At this time the opposition has managed to create a misleading view of Greece and Karamanlis is ready to fall. BUT he did make a few mistakes himself. He hid the fact that Simitis had put a great debt of 80 billion Euros in future budgets from 2004 to 2008. Those 80 billion, together with new debt and old interest brought the sum owed by Greece to a staggering 114% of GDP.

Add to that the global economic crises (that George Papandreou didn’t recognize as a cause for Greece’s problems until the start of 2010) and you have collapse. The party that led the governments that created the problem is now trying with the wrong recipe to correct it.


varometro wrote on June 21st, 2011 at 10:04 AM PST:

Dear E, Ι truly like you. I’m watching you for years and I think you are one of the most important people in the field of ​​technology. Let me tell you though that your political analysis is very weak and superficial. I do not want to confront your arguments because the conversation for the Greek economy can be huge. I’ll stay only in one of your suggestions: “Remove the Acropolis, and move it to a secure location. Rebuilt the Acropolis from scratch, according to how the archaeologists think it looked like in 400 BC.”. Rebuilt the Colossus of Rhodes. “.

I laughed a lot with this “american” aspect for the history. Beyond that is impossible in practice you have to know that the Acropolis for us Greeks are much more than a tourist destination and I am not a nationalist nor chauvinist. The people who work there and make superhuman efforts to preserve and to restore (and have gained international recognition for their effort) do not have the impression that they are working in a thematic park for sure. Archaeology is a science that has nothing to do with the image. Replicas of the Acropolis and Colossus can be seen in Las Vegas. You don’t have to come to Greece. 

Greece has financial problems but we will not sell are souls to the devil to overcome (I’m sure that politicians would have no hesitation to do it but people won’t let them). The situation is serious but not as it dramatized by the media. We may bleed but sooner or later, will stand on our feet.

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Eugenia wrote on June 21st, 2011 at 12:16 PM PST:

@Vassilis Perantzakis

>Europe demanded that Greece changes from an emerging industrial economy to a service oriented one

Europe never demanded anything like this. If anything, Europe poured all that free money in the country in order to become better and more modern in every aspect.

>It was then that the public sector begun growing without any control, not in the 1920s.

The 1920s was the time that the constitution changed so that civil servants couldn’t get laid off. That was the beginning of the end. Indeed, it was the ’80s that the numbers grew out of control, as I also wrote in my blog, just so PASOK could get re-elected. But this continued for 25 years.

>Keep in mind that in 1981 Greece’s […] public officials where under 10% of the country’s work force.

Which was already very high. Consider that the number is just 6% in France.

>The newly formed government led by Karamanlis has a difficult time

Karamanlis is the biggest weasel I’ve ever seen. He had nothing of the greatness of his uncle. Don’t try to paid him, and New Democracy, in any good light, or as victims. They are as fucked up as PASOK was. There was never a single political party in Greece that it ever had more than 5% of the votes and it was “good, and for the people”. The Communist parties, even more for laughs.


>I laughed a lot with this “american” aspect for the history.

There is nothing Americanized about it. It is just common sense, on how to bring money into the country.

>Replicas of the Acropolis and Colossus can be seen in Las Vegas. You don’t have to come to Greece.

Replicas in Vegas are not full size, and they are not true replicas anyway (they look fake, made of fake materials). There is absolutely nothing wrong with building “true” replicas to get more tourists. It is this nationalism and big idea about themselves that is eating Greeks, and your post shows it. Right now, Greece NEEDS tourism, which is the singlest most important piece of income for the country. Acropolis is a bunch of fallen stones right now, there is absolutely nothing to see there. Tourists leave unhappy and unfulfilled.

>We may bleed but sooner or later, will stand on our feet.

If by that you mean, in the next 100 years, maybe. If you’re lucky. This is not just “a bad period” for Greece. If the country defaults, await civil war, or at least African-style life quality. Aftes oi 3eromagies “a, mwre, ti tha pathoume”, den pernane pia. Ta pragmata einai skata auti tin fwra. Einai pragmatika lypyro otan vlepw tous Ellines mesa stin Ellada na min katalavainoun to megethos tou provlimatos.

Thom Holwerda wrote on June 21st, 2011 at 2:22 PM PST:

Greece isn’t alone. Basically everyone except for The Netherlands, the Nordic countries and to a lesser extent Germany (the former DDR is an economic wasteland also), everyone has been making a structural mess of their budget and social security. Greece, Spain, Italy, Portugal, France, the UK, and Ireland have all demonstrated a complete lack of any financial sense or long-term thinking.

Back in the ’90s, when the euro started, it was The Netherlands who introduced the ‘Zalm standard’ (named after our minister of finance), which was a collection of very strict rules regarding government budgets and finances, all designed to keep the euro strong and to ensure countries wouldn’t suffer too much from possible economic downturns.

This standard was instated during the good times of the ’90s, but right away, the first country to bail out of this standard was… France. They refused to implement it. Most other southern countries soon followed – short term thinking (keep the people happy today) won over long-term thinking (keep the country, and thus the people, financially sound tomorrow). This has had a disastrous effect on the entire eurozone.

The economic crisis hit several European countries hard. Which country endured it as one of the best? Even though it has a large financial sector, and an economy almost entirely dependent on international trade (and thus, should be very vulnerable to a worldwide downturn)?

Exactly. The Netherlands.

We endured the crisis so well because of our strict budget rules and conservative government spending – even though we have a welfare state that is far more comprehensive and sound than most other countries in the world. Us Dutch have been warning the other countries of the dangers of overspending during the good times for a very long time now. But nobody listened. France didn’t. Italy didn’t. The UK didn’t. Why on earth would Greece listen?

And now, when all hell has broken loose, we Dutch are supposed to just hand over big bags of money to southern Europe? So they can continue to live their leisurely entitled structurally tax-evading lifestyles while we work our asses off, properly paying our 40-50% income tax, only to have it sent to southern Europe so they won’t have to modernise a damn thing?

With all due respect – fcuk that. It just isn’t fair. You should’ve listened. Should’ve modernised. Should’ve updated your welfare system. Should’ve invested in the economy. Southern Europe has had its chance. It didn’t listen, and now, when they finally have to endure about 40 years of backlog in modernisation – they protest and scream bloody murder?

I have NO problems helping those in need. I have no problems paying 40% income tax to support our welfare state so that the sick and poor can have a good, dignified life. However, I refuse to work until I’m 67, paying loads of taxes, while the rest of Europe have jobs where they can’t be fired from, don’t have to pay taxes because evading them is so easy, and retire at 53.

My solution is simple: the countries that have consistently proven to be able to have sound financial management are the ones to be calling the shots right now. This means The Netherlands and the Nordic countries lead, the rest follows and shuts the fcuk up:

– retirement age to 67 for the entire euro zone

– tax evasion strictly punished

– all taxes evaded over the past 20-30 years collected anyway

– sell all government assets (in structures similar to The Netherlands; our water, electricity and transportation stuff is privatised, but under strict government oversight, with the ability for the government to intervene when necessary)

– Zalm standard re-instated for all euro countries. Failure to comply results in complete cut-off from European money and power (no say in EU talks and such)

– complete modernisation and overhaul of all welfare systems in southern Europe

– end the EU agricultural subsidy system which is currently the only reason why France matters in any way, shape, or form, and makes up the vast majority of EU spending. I’m sick and tired of paying taxes only to support the French ageing and failing agricultural sector

– no more fancy getaways for European leaders. A convention room in Brussels is more than enough. Symbolic, I know, but it sends the wrong message to have European leaders stay in super-expensive resorts while us normal folk have to face budget cuts

These rules apply to ALL euro states – not just Greece. We’re all singling out Greece right now, but the other southern countries and the UK and Ireland are NO better.

Neiluj wrote on June 21st, 2011 at 2:39 PM PST:

could not have been written better 🙂 they need a change. the industry needs innovations, the tourism need real ‘service’ and there is nothing wrong with rebuilding ancient sights if it’s not kitch of course. the idea with using the sun for electricity is not bad at all. concerning germany, being raised in both cultures i can tell you, germany was unable to make it 3 times the last 90 years and it was only because of the usa who even had financial crises because of it that germany survived. they also didn’t have to pay to other europeans for the mess of ww2. in this point the greeks are right to have a little angry at. but of course to use the word ‘nazi’ for everything is nonsense. concerning the situation now the strong nations need to built up greece economically instead of doing bashings. the problem now with germany is that it has debts going out of control, too and after the reunification and the euro things are very tight too in germany. the idea of the euro is based on economical strong coutrnies so there is the first conflict as you state. i would not pay attention to the low level press which exists in all countries and in any topic tries to create scandals. after all it’s the germans and all other philhellenes who re invented greece about 100 years ago. in any terms.. we are waiting for the chinese to come sooner or later to take all over 🙂 i agree and disagree on turkey. it is not a coincidence that turkey is hated by all its neighbours without exeptions. ALL! the european union could have taken this security aspect over for example instead of having presidents and ministers sent over to sell armeries..

ClassAction wrote on June 21st, 2011 at 2:43 PM PST:


Since Norway has the money OF COURSE it should be taken away to help less wealthy countries. It’s the Socialist way!

This is the admin speaking...
Eugenia wrote on June 21st, 2011 at 2:45 PM PST:

Norway is not part of the EU. It owes us nothing.

ClassAction wrote on June 21st, 2011 at 2:50 PM PST:

Sorry, when Thom said welfare state I just automatcally thought Norway. Thom said Netherlands. So if the Netherlands has the money OF COURSE it should be taken away to help less wealthy EU countries. It’s the Socialist way!

This is the admin speaking...
Eugenia wrote on June 21st, 2011 at 2:57 PM PST:

Please stop trolling. Netherlands is not governed by a socialist party at the moment. Socialist or no socialist, each country needs to take care of its own citizens. No European, or any other country, owes nothing to the likes of Greece. They did give their money for free in the ’80s. It was up to Greece to make a good use of that money. Now, “the bird flew away”, as it’s the Greek saying.

Memson wrote on June 21st, 2011 at 4:13 PM PST:

Thom – one flaw to your plan…. The UK will never enter the Euro, so Zalm is a moot point, our retirement age is currently increasing, and will soon be 66 for both sexes (like, very soon) and is planned to rise to something like 70. We have privatised everything already – rail, public transport, electricity, gas, telephone…. What else is left? It is almost impossible to tax dodge, and this that do ( and this that commit social security fraud) and punished heavily with custodial sentences. We tax petrol and diesel highly. All we have that is still government owned is the Royal Mail (post office) and NHS (healthcare) and you can indeed fcuk you self if you believe we would ever privatise the NHS.

Stefan wrote on June 21st, 2011 at 7:20 PM PST:

I speak as a Romanian. The legacy of the ottoman empire, combined with the passivity and dogma of the orthodox church (there hasn’t bee a “revolt” in the orthodox church like protestantism to the roman catholic since the great schism) is not a good combination. In Romanian, there are three words for “bribe”, all three of turkish origin, and Romanian is 80% latin.
The euro was a big mistake in my opinion which unfortunately cannot be rolled back.

Ricardo Mercer wrote on June 21st, 2011 at 7:42 PM PST:

Why do anything? Greece needs to deal with their own issues. Europe won’t crumble if they make measures to not let it spread.

There is no evidence that Greece will learn their lesson.

Maybe sell themselves to some billionaire.

Dino wrote on June 22nd, 2011 at 1:29 AM PST:

Great article on the Greek situation, Eugenia.

I am so fucking tired of people using “the Ottoman legacy” for all the bad in their countries (particularly the Balkans). I hear it all the time, also in my homeland Bosnia. Ottomans did have a great impact on social, political and economical life in the Balkans, of course, they ruled the region for almost 500 years. But their era ended (in many countries) more than 150 years ago. So please, stop blaming others, namely Ottomans or Turks, or any other nation/. Problems of Romania, Greece, Serbia, Bulgaria, Albania, Bosnia, Montenegro (…) lies in – the people! Just as Eugenia pointed out.

varometro wrote on June 22nd, 2011 at 4:08 AM PST:

Be sure that the vast majority of Greeks are aware of the problem 100% and the country will overcome quickly without having to replace the Acropolis with a replica. The crisis brings not only dangers but opportunities for Greeks. We have an opportunity to understand and change the things that brought the country here and build a better future with strong foundation. Anyway is better if someone is aware of his illness and make efforts to get well than to pretend that he is well.

I still think your view about Acropolis is tragic. Think about it. What if someone in Vegas or anywhere else decide to build an exact marble copy? Will it be the same? And after all Acropolis is not just the Parthenon but a very wide area with many buildings and constructions, hundreds thousands tons of solid rock at the top of a hill in a slopping terrain. Is it technically possible -without extraterrestrial forces- to be moved and exactly rebuild inside a museum or another place? Or they will be removed packaged and stored in a warehouse?

Stefan wrote on June 22nd, 2011 at 4:59 AM PST:

Dino, unfortunately the cultural ramifications run deep. Yes, the people are to blame, but why are the people like that have you ever wondered? Why the passivity, fatalism and extreme nationalism sometimes? We are a product of our own culture and our leaders the ones we deserve.
Milosevic could not emerge in Switzerland BTW

varometro wrote on June 22nd, 2011 at 7:30 AM PST:

The Wall Street Journal: Don’t Believe These Greek Myths

Ivan wrote on June 22nd, 2011 at 8:47 AM PST:

Being a Belgian myself, I would NEVER accept any ‘rules’ set out by The Netherlands. Reason: you Dutch people are protestant extremists that can only be happy in a hypocritical way, by abiding the rules no matter what. We southerners, Belgians included, are not like that, it is not part of our cultural identity, and your Dutch identity is in no way superior to ours, so you better stop using the F-word. Your hypocritical mentality and failing multicultural society is breeding murderous psychopaths!
Stop being pretentious. Why not start by cleaning out all corrupt and incapable politicians instead? Next, clean out the lobbies and the multinationals corrupting all governments.

William Peña wrote on June 23rd, 2011 at 3:16 AM PST:

I suppose you’ve seen Inside Job, the Oscar award winning documentary. After that, do you really think the best solution for greece is doing what the politicians say? Everything is arranged, fixed, and this is the way the wanted it. The IMF want greece on it’s knees, after them, Ireland, Spain, Portugal… They (the power) want to be as healthy or more than before, and they’re ‘forcing the machine’. Now it is the time of poverty for the people. And what’s the real strategy? In Spain, for example, politicians are making people loose all the social rights acquired since the beginning of the 20th century. No free education, no free doctors (careful you get sick, or spend 1000 dollars one night in the hospital, as in the US), and the worst of all, only the Real people paying taxes and giving that money to the banks.

AND… they wanted Greece to be anything else but a tourists destination! The same with Spain, Portugal, that was fixed since the beginning of the EU. What Greece must do from scratch is creating businesses that can compete with Germany, France, creating industry, technology. But that’s a matter of the politicians will.

What’s gonna be the next step? after seeing all those riots of people become uncontrollable, they’ll impose new ‘security’ laws that will eliminate the little freedom we have.

Thank you for this blog and for your HV20 forum presence.

(in case you haven’t seen it, try the documentary Rebellion: The Litvinenko case. The only chance we have is to tell the people what they’re doing)

alison wrote on June 23rd, 2011 at 5:06 AM PST:

Thanks for taking the time to write such an in-depth rant.

Phil wrote on June 23rd, 2011 at 2:28 PM PST:

Thom, has it dawned on you that London is Europe’s (and one of the world’s) major financial centre? What do you think happens to a financial centre when there is a US based banking crisis? The same would have happened to Holland if it had a financial sector the size of the UK.

Forex Signals wrote on June 29th, 2011 at 6:07 AM PST:

Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with more information? It is extremely helpful and beneficial to your readers. wrote on June 29th, 2011 at 3:33 PM PST:

Dear Eugenia,

thank you very much this very informative article. With all these riots in Greece right now it is good to hear a realistic voice like yours. I just asked myself the other day “What is Eugenia actually thinking about all this mess in her home country?”. And here it is. Thanks again.

Lindemann, Miguel wrote on June 30th, 2011 at 11:18 AM PST:

Dear Eugenia, I came via Google to your blog yesterday and read it in one go and also read 2 of your inserts, the long one in Vanity Fair (which reads like a novel…,who cares if all of it is true or not,most of it probably is)and the one with the stats which “experts” may disagree with.I don’t take so seriously your”update”of Acropolis and other(which has disturbed quite a few of your readers…)
I will allow myself(and hope you will not mind)to insert your article in today’s (30.06.11) post of my blog (,which I started only 3 months ago.You will notice if you have a look that I write and will continue doing so on a series of macro subjects,and therefore have been writing about the Greek”problem” which we all understand goes much further than your country. Being some kind of a positivist,I find it a waste to cry on spilled milk, preferring to”go” for realistic solutions,which agreed are definitely not easy,but then what is… I had fun with one comment:that the IMF guys had trouble in counting how many public employees had to”disappear”,not knowing how many existed(this happens in a lot of countries,like 2 where I live and lived and are”quite”different(France and …Uruguay).I am neither an economist(no Nobel prize)nor a politician(would have been a disaster),but an experienced businessman having worked (and”lived”)in 3 continents and 7 countries “in situ”. I firmly believe that the”Greek case” could be a starting point in determining whether Europe or the Eurozone should be a well working(which is not the case)commercial/monetary union,or should become an economic union with political power,which I have great doubts will be the case because unfortunately no solidarity exists between member countries(see some comments on your post)and therefore no”will”exists to create the”Euro United States”).As for Greece, YOUR country,I am afraid that your list of proposals is very ambitious,but if only 50% happens,it would be a great step forward,since as you say NOBODY will go back to a non smart phone world…I hope one day you can return to your country to live a satisfactory life there. Best. Miguel

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