Friday, August 20, 2010

Why the Greek economy failed . . .

Having now written a fair bit about Greece I often find people asking my opinion about the present economic woes in the country. My first response is to make clear that none of it is my fault, closely followed by the observation that I am not an economist. I also like to point out that anyone who thinks that the current wave of rioting in the streets, and mass strikes, are in anyway unusual, has not spent much time in Greece. In the end, though, I usually tell them the following story; I think it explains a lot.

About 15 years ago I was chatting to a Greek acquaintance late at night, or possibly early in the morning, in a small village taverna. We’ll call him Panos – it might even have been his name. Much beer, wine and tsipouro had been consumed, and Panos had got down to the favourite Greek pastime of setting the world to rights. (I’ll leave out the swearing).

“I’ll tell you what the problem with this country is, Andy. It’s taxes! No-one pays them! Everybody complains: about the schools; about the roads; about the hospitals. Everybody complains that the government does nothing. But what can the government do? It has no money! If people gave the government what it was due, perhaps then they could start to sort out the problems, but instead everyone just looks out for themselves. It is the Greek way.”

I thought this was eminently sensible, and told Panos so. “It must make you angry,” I said, “being one of the few that contributes”.

“Good god,” said Panos, “I don’t pay my taxes either! Why should I, no-one else does . . .”

So there you go. I’d only like to add that, although it may take time, I have no doubt that the Greeks will weather this particular storm, helped, no doubt, by their sometimes insufferable self-belief and pride. I wish them well.


  1. It all depends, Andy, on what you mean by 'weathering the storm'. Yes, Greece will still exist in twenty years, but any thought that the place will be vigorous, dynamic or relevant is probably misplaced. And it probably won't even last long as that mainstay of Southern European wellbeing: the good place to be unemployed.

  2. Twenty years is way past my predictive powers. Twenty years ago I was spending a few drachma on a beer, and the idea that I might seriously consider buying a Skoda would have been insane.Who knows what's next? Also the well-being of the Greeks and that of Greece are not necessarily the same thing.

  3. I plan to do all I can to help the Greek economy by spending as many tourist euros there as possible...

  4. Good call Rose-Anna. Make sure to travel independently so that as much of your money as possible goes into the local economy. I can also recommend a good guidebook to the Peloponnese . . .

  5. And I faithfully promise to purchase that book as soon as the faint hope of a holiday appears on the currently bleak and gloomy horizon! I'm quaking in my high heels about starting the course on Monday...