Monday, March 10, 2014

Outstanding News for Greeks!

The Ekathimerini reported about a speech by Jose Manuel Barroso, where Mr. Barroso had excellent news for Greeks, as follows:

"The eurozone has overcome the crisis and Greece was an example of this success, said European Commission Jose Manuel Barroso during a speech at the European People's Party (EPP) meeting in Dublin on Friday".

I immediately called my friend Yiannis to congratulate him on the country's success. Yiannis, age 58, an architect who had lost his job a couple of years ago, told me

* that he was still unemployed;
* that even though he had only minimal income, he had to pay substantial income taxes because, as the owner of an apartment and a car, the government deemed him to have income;
* that they had to take their 15-year old daughter out of a private school because they could no longer afford it;
* that he had to make contributions to the engineers' pension system for another 12 months without knowing whether he would ever receive a pension;
* and, finally, that he was glad to have parents-in-law who could share with him their pensions.

I guess this proves the old saying that exceptions to the rule prove the rule. Yiannis must be an exception. Otherwise, Mr. Barroso would have told a lie and it is simply inconceivable that the President of the European Commission would tell a lie. Certainly not a couple of months before an important election!


  1. I trust you have a good sense of humour....You know that with 30% official unemployment rate, 43% increase in suicides since 2007 and an estimated 25% of households living below the 'poverty line', your friend might - just might - not be the exception...

  2. While you find it worrying that Mr. Barroso might be lying, I find it worrying that he may believe what he is saying. That would confirm my long time suspicion that he is off his rocker and has no clue.

    1. That's exactly my 1st thought.
      The 2nd one is not appropriate for this honorable blog ...


  3. There is a side of Greek unemployment that nobody really talks about. The vast majority of the unemployed come from 3 sources:the building trade, the small retail sector and the companies that sold the government goods and services. All three had grown out of all proportion and, even with a growing economy, they will never employ such numbers. So many people must either do a dramatic career change or face permanent unemployment. Yiannis probably must either cease being an architect or face lifelong unemployment. This is politically dangerous and it is one of my major fears about the country's political stability.
    At the same time there is a serious lack of manpower in several key areas. My personal gripe of the moment: no specialists in marketing food exports in the EC, especially Austria and Switzerland.Any suggestions about Greek/Greeks in Athens with such know how is welcomed

    1. Well, across the austerity-hit countries there are some common features. It is not very likely that these commonalities are structural defects -- they are merely similar effects of the banking crisis.

      The first is the collapse of the construction sector. I am not sure that I agree that in Greece it had grown out of proportion. Most of the workers employed in it were immigrants, many employed semi-legally with limited insurance protection. Spain has had a much bigger contraction of this sector than Greece, though.

      The second is the very large number of self-employed Greeks with their own shops in the retail sector. This has always been a problem and reflects the failure of Greek economy, society and polity to modernise. Such modernisation required incentives and mechanisms for mergers and increased use of co-operatives, in order to achieve simply economies of scale and avoid absurd waste of resources. Greek people did not want to do this, and politicians and ministries saw no reason to even bother to think about it. This continued for decades, with the retail sector as well as the public sector living off the proceeds of the small productive part of the private sector (and when that was not enough, off borrowed money). Although Spain and Portugal had some of this problem, they modernised since joining the EU.

      The third issue you mention is actually the most serious, in my view, especially in Greece. This is the interconnection of private and public sectors in corrupt and clientelistic relations, to the extent that it would be incorrect to describe the Greek economy as capitalist. When so many private companies are dependent on the state as a main purchaser (and at inflated prices), the structural distortions actually characterise the economy. These companies have been very hard hit by the austerity programme.

      The correct solution to the employment problem is as you say -- that is, responding to market demand for labour in companies that need skilled, semi-skilled or unskilled workers. This probably requires training for specific skillsets, after college education. The concept is alien to many Greek people, who expect to walk into a top job after university, because their family knows the "right people".

      Until this nepotistical and corrupt attitude is removed, I doubt that Greece will be able to make any headway with employment levels. The most likely outcome is that clever young people will emigrate to the UK, Germany, USA etc. and learn new skills, and never come back to Greece. They will not come back unless their skills are respected and rewarded: until now, this has been so rare that we can ignore it.