Sunday 15. December 2019
#140 July-August 2011

 

The Greek Crisis:  archaic practices and cover-ups

 

As it trundles on, the Greek crisis has been anything but transparent. After months of frenetic negotiations it is still safe to bet that Europe will not leave Athens in the lurch.

 

In recent months, the EU leaders declared that they were getting ready to grant additional help to Greece in return for even greater austerity and, on top of that, the pace of privatising companies had to be stepped up. At the request of some Member States, following the lead given by the Netherlands, these operations will be taken over by a private agency that is independent of the Greek government.  This new help is to the tune of €120 billion and – a sensible move – will be done in association with private banks and insurance companies, which have been invited to renew their support when the Greek shares they hold arrive at their next due date.

 

Throughout this delicate rescue mission quite a few archaic practices and cover-ups have been revealed in this drama, akin to an Aeschylean tragedy, acted on the European stage with the whole world as its audience. Initially there had been a degree of ambiguity, with homage paid to Greece’s place in history together with a great deal of fuzziness about the true situation of this country’s economy: weak administrative bodies, misleading statistics, high level of tax avoidance, etc. Greece’s entry into the European family owed a great deal to artists such as André Malraux and the policies of Valéry Giscard d’Estaing. How could one possibly refuse entry to this country, they said, which had discovered the art of rhetoric and science thanks to its understanding of the mind, which produced Socrates and Plato and was the first to implement democracy as created by Demosthenes? But in paying these well-intentioned compliments to the ‘mother of European democracies’, people chose to ignore the lack of transparency and certain archaic practices in the way its economy functioned.

Most people only became aware of the Greek crisis during 2010. Spawned by the world crisis, it continues to be fed by factors of its own, factors that have proved to be too burdensome for this middle-sized country: extremely high level of debt (120% of GNP), budget deficit exceeding 13% of GNP. What made things worse was the deliberate masking of the real figures, and that is what has made the Europeans so angry, especially the Germans, almost reaching the level of boos and catcalls.  Clearly this piling up of little white lies, orchestrated by the drum beat of the media, really has not helped at all to build a climate of confidence.

 

The Greek Finance Minister is setting aside some €10 – 15 billion per year to combat tax evasion, with greater urgency since the hunting down of fraud and the loss of confidence in Athens’ capability to get itself back on its feet for good.  In a recent article in the German economic daily Handelsblatt, a Greek government source declared that “in the past eighteen months €38 billion have disappeared from current accounts in Greece, mostly transferred to Switzerland.”

 

Georges Constantinou, the current Greek Finance minister, speaking at a conference-debate in Paris at the Maison de l’Europe (Europe House), made a laundry list of the eccentricities of Greek society before the country went into its current austerity phase: an overabundance of public officials ranging from effective to useless, above all in diplomatic posts abroad, the earliest retirements in Europe with salaried employees retiring between 50 and 55, and very low rates of corporate taxation and generous tax bonuses for individuals. “Out of 8500 income tax declarations, 5500 will pay no tax at all.”  Let us add to this ossified picture a system of loopholes and a strong level of corporatism for professional occupations ranging from pharmacists to bakers, dockers and psychologists. The outstretched hand of other donor countries and of the IMF must detect in the ranks of indebted countries the desire to abandon the defence of long-held positions that are graven in the marble of immobility like statues of Greek antiquity.

 

The EU has not yet arrived at the stage of solidarity that would require that the profits of the richest countries be used to remedy the deficits of the poorest countries. The hope remains that these trial-and-error approaches will prepare for the moment when a new generation of Europeans will be able to move smoothly towards a genuine federalism of economic and financial behaviour, which is just another way of saying that Europe will have become a political Europe.

 

Henri Madelin SJ

Jesuit Office

 

Translated from the original French

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