Greece: no plan, no future

by New Europe 15.11.2014 - 10:03

After five years of austerity and severe Euro-American monitoring, Greece is the number one country in Europe not to invest in.

Greece, no plan, no future

In April 2010, the then prime minister of Greece, George Papandreou, announced that his country applied for IMF support to avoid bankruptcy. Since then, Greece is in an ever deepening spiral of crisis under the strict control and supervision of the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission (EU).

In addition, Greece ‘enjoys’ the technical assistance of the European Commission’s Task Force, which consists of advisors to Greece’s key government ministers. But the only real and tangible task of such a body (the cost of which is paid entirely by the Greek state) is to cover up the wrong-doings of the European Commission services as regards Greece over the past decades.

Just think that the head of the Commission’s Task Force today is the same person who, as a detached Commission functionary to serve as President of the Cadastre Authority in Greece back in 2001, led the country to pay a combined penalty and recovery to the Commission of €56m.

A Huge Prison

Today, five years after the eruption of the crisis, with none of the necessary structural changes complete, Greece finds itself struggling to escape from inside a labyrinth of traps.

Ordinary people are trapped by...
civil servants, as corruption in the government services is horizontal, vertical and woefully systemic. Subsequently, civil servants are trapped by politicians in a patron-client relationship. Almost every civil servant has a political patron who, in return for his vote and the votes of his or her family members, is allowed to keep the post. A transfer or a change in position would mean a couple of years to get used to the new situation and time is money.

Finally, politicians, the patrons of the administration, are prisoners of a few families of perennial oligarchs, owners of the Greek cartels which include bankers, industrialists, contractors and energy magnates. Oligarchs control ruling and most non-ruling politicians regardless of colour and ideology, thus keeping Greece tight in the Middle Ages and, in practice, are the owners of the Nation.

The Most Cartelised Market of Europe

Greece is the most cartelised country in Europe. After five years of deep cuts to salaries and pensions and mass layoffs, prices set by the cartels are still increasing. Instead of cutting prices, supermarkets keep increasing food prices. The price of many other consumer items is still growing. From dairy products like fresh milk (more than 50% more expensive than in any other EU member state) to cement and other construction materials, and from highway tolls (paid for non-existing roads that are due to be built in the future) to land, air and maritime transport (Greece has over 2,500 islands of which 167 inhabited), are all cartelised.

Banks are assisted to keep the status quo and liquidity, but also remain totally unfriendly to ordinary businesses with the only policy target to confiscate properties serving as collateral for overdue loans.

Furthermore, despite it being explicitly outlined in the reforms package, not a single private university has been issued a licence and not even one of the 814 mostly useless military camps has been abolished. What is more, urban development legislation remains outdated and relies on side payments (bribes) to get things done. And let’s not talk about the taxation laws that are amended almost every week!

To understand the absurdity of the situation, one has only to compare the upward trend in the prices of cartelised products and services with the prices of items that are not affected by the financial Oligarchs.

Souvlaki is the King

Restaurants are making a significant shift toward cheap food. In a country where fish was once most popular, souvlaki is now king.

As for services provided by individuals, fees are going down. For instance, a plumber who used to charge more than €50 for a simple repair is now charging between €5 and €10.

The retail market has also taken a hit as Greeks are no longer going on shopping sprees. They are making do with the clothes they already have in their closet. This means clothing and fashion shops are closing one right after the other.

Salaries and wages have fallen from €900 to €550 per month. The price of a hotel room has dropped to €30. Rents have fallen by 50%.

Despite all the examples listed above, Greece still has room to survive and it stems from two sources. Greeks still have some money left aside for rainy days and they are now spending the last remains. Also, instead of the young generation taking care of older family members, it is the grandparents who are using their reduced pensions to assist the young.

The Day After

The question now is how long this can last. One good thing is that catastrophe is rather unavoidable. This means that once the dust has cleared, Greece might finally be able to start again – from square one. One bad thing is that if the Greek crisis is not defused through a “cleanup” by judges and prosecutors (as was the case in Italy in 1992 with Antonio Di Pietro in the “Mani Pulite” operation) the alternative will be extensive social unrest. This could start with mass social disobedience and riots. Such a development should not be excluded as the next SYRIZA government has no communication lines open with Justice or the public order forces.

Subsequently, the catastrophe could come in the form of a modern civil war. Many EU member states do not even know what a civil war looks like. Greece has had two and both were serious. The most recent one took place after World War Two. It lasted four years (1946-1949) and cost more than 160,000 lives. The first civil war in history was the Peloponnesian war. It lasted 27 years (432-404 BC), involved battles in three continents (Europe, Africa and Asia) and all fighting sides were speaking Greek!

This is the worse case scenario for Greece, the 10th Member State of the European Union. But no matter what the future holds, in the long run Greece will certainly survive. Yet. This is no consolation neither for the Greeks nor for the Europeans. For Greece it will take decades before it returns to normal and for Europe the Greek experiment will result to more Euroscepticism and eventually to painful spill-over effects. The fact that things will return to normal in the long run is irrelevant. Indeed, as John Maynard Keynes claimed: “In the long run we are all dead.”

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