Greece: The Age Of Folly from 1981-2009

At the press conference after his first meeting with Angela Merkel in March, Alexis Tsipras made a statement which went hardly noticed. He said: "Germans are not to blame for the problems in Greece." I never thought that this reflected Tsipras' personal conviction. Rather, I felt it was meant to create positive vibes. Be that as it may, it certainly was a statement which would have deserved more discussion in Greece.

I have read several books about the history of Modern Greece and one of the threads running through all of them is the ambivalent relationship between Greeks and foreigners, particularly with Europe and the USA. Whenever something went wrong in Greece, the reflect was to blame Greek woes on 'foreigners'. One of the best descriptions of this phenomenon I read in Stathis Kalyvas' book on Modern Greece: 

"Most Greeks see Western Europe (and the United States) as unwelcome meddling foreigners, even though they have largely profited from their interventions. Conversely, Europeans (and Americans) are exasperated that Greeks have failed to see those benefits, even though their inverventionism has been driven primarily by their own self-interest and has been imposed over the Greeks."

Notwithstanding what Tsipras said to Merkel, there seems no doubt that the majority of Greeks blames their present woes on foreignes, particularly on Germans. And they have good arguments to support their viewpoint: (a) The EU, since 1981, sent billions and billions of subsidies to Greece without controlling their proper use. Thus, those billions found their way into crony networks (and, as some argue, destroyed Greek agriculture in the process); (b) after Eurozone entry, foreign banks lent billions and billions to Greece not on the basis of an assessment of the country's debt service capability but, instead, on the assumption of implied support from the Eurozone. And no one stopped them from doing that; (c) EU authorities had known all along that Greek statistics had been 'doctored' but, due to political pressure, they chose not to do anything about it; (d) Foreign corporations (Siemens is always the case in point) unleashed corrupt conduct among Greek politicians by dumping bribes upon them; etc. etc.

Most notable of all is the conviction of many Greeks that all of today's problems were caused during the last 5 years, during the Age of the Memorandum. Without the Troika's austerity obsession, so the way of thinking goes, there would have been a relatively smooth way out of the Great Crisis.

Personally, I had an eye-opener back in 2012 when I read the following in Prof. Aristides Hatzis' paper (see below): "When Greece entered the EC, the country’s public debt stood at 28% of GDP; the budget deficit was less than 3% of GDP; and the unemployment rate was 2-3%." I remember the late 1970s very well because I made my first visits to Greece then and formed my opinion about the country. Outside the large cities, Greece clearly showed a level of wealth and living standard way below that of Central Europe. Apart from that, however, Greeks seemed quite satisfied with their conditions of life. Maybe some Greeks spent too much time in cafés and/or were a bit more corrupt than usual but it all seemed to work alright.

Only 13 years later and long before Greece's Eurozone entry, a young Greek university professor by the name of Yanis Varoufakis said in a TV interview during the 1993 election campaign that "the state of the Greek economy is in terminal decline." Well, if the Greek economy was in terminal decline then, the Eurozone entry put a gigantic turbo on that development.

I have become convinced that most of Greece's current problems have their origin during the period 1981-2009; a true Age of Folly. I link two articles below which shed light on my argument. Prof. Hatzis summarizes the Age of Folly as follows:

"Today’s crisis in Greece is mainly the result of PASOK’s short-sighted policies, in two important respects:

(a) PASOK’s economic policies were catastrophic; they created a deadly mix of a bloated and inefficient welfare state with stifling intervention and overregulation of the private sector.

(b) The political legacy of PASOK was even more devastating in the long-term, since its political success transformed Greece’s conservative party (“New Democracy”) into a poor photocopy of PASOK. From 1981 to 2009 both parties mainly offered welfare populism, cronyism, statism, nepotism, protectionism, and paternalism."

Greece as a precautionary tale of the Welfare State, by Prof Aristides Hatzis
Lies, damned lies and Greek statistics, by Sigrún Davídsdóttir